ACN 005 490 540 Pty Ltd v Robert Frederick Jane Pty Ltd
[2016] VSC 219
•12 May 2016
| IN THE SUPREME COURT OF VICTORIA | Not Restricted |
AT MELBOURNE
COMMERCIAL COURT
LIST C
S ECI 2015 000420
| ACN 005 490 540 PTY LTD (ACN 005 490 540) MAINLINE TRANSPORT PTY LTD (ACN 006 154 150) | First Plaintiff Second Plaintiff |
| v | |
| ROBERT FREDERICK JANE PTY LTD (ACN 167 419 516) ROBERT FREDERICK JANE | First Defendant Second Defendant |
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JUDGE: | CROFT J |
WHERE HELD: | Melbourne |
DATE OF HEARING: | 4 May 2016 |
DATE OF JUDGMENT: | 12 May 2016 |
CASE MAY BE CITED AS: | ACN 005 490 540 Pty Ltd v Robert Frederick Jane Pty Ltd |
MEDIUM NEUTRAL CITATION: | [2016] VSC 219 |
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TRUSTS – Appointment of new trustee – Validity of purported appointment of trustee by one of several appointors – Acceptance of or disclaimer of appointment by appointor – Evidence of acceptance of appointment by appointor by conduct in the absence of evidence of express acceptance or express disclaimer of appointment.
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APPEARANCES: | Counsel | Solicitors |
| For the Plaintiffs | Mr I.G. Waller QC with Mr J.S. Mereine | HWL Ebsworth |
| For the Defendants | Mr J. Levine | Templeton Fox Rothchild Lawyers |
TABLE OF CONTENTS
Introduction......................................................................................................................................... 1
Procedural and evidentiary matters................................................................................................ 1
The Mimulus Trust............................................................................................................................ 5
The Troyes Trust.............................................................................................................................. 12
Conclusion and orders.................................................................................................................... 24
HIS HONOUR:
Introduction
The only question for determination at trial is whether, on 11 November 2014, Robert Frederick Jane (“Robert Jane”) had power to remove the incumbent trustees and appoint Robert Frederick Jane Pty Ltd, the First Defendant, as trustee of each of The Mimulus Trust and The Troyes Trust.
The Mimulus Trust was established by Deed of Settlement made on 21 December 1978 between Donald William Kerr, as settlor, and the First Plaintiff, ACN 005 490 540 Pty Ltd (“ACN”)—which company was, at the time, known as Mimulus Pty Limited—as trustee (“Mimulus Trust Deed”).[1]
[1]Constituent Trust Documents 1 (“Court Book”).
The Troyes Trust was established by Deed of Settlement made on 12 December 1979 between Donald William Kerr, as settlor, and Troyes Pty Ltd (ACN 005 106 605) (“Troyes”) as trustee (“Troyes Trust Deed”).[2]
[2]Court Book 43.
This proceeding was commenced by Originating Process dated 20 November 2015. The principal relief or remedy sought is in the form of a declaration that ACN is the trustee of The Mimulus Trust, and a declaration that the Second Plaintiff, Mainline Transport Pty Ltd (ACN 006 154 150) (“Mainline Transport”) is the trustee of the Troyes Trust.
Procedural and evidentiary matters
Prior to the trial in this proceeding, there were a number of interlocutory applications by both the Plaintiffs and the Defendants.
As a result of an application by the Plaintiffs, an order was made on 26 November 2015 restraining the First Defendant, Robert Frederick Jane Pty Ltd, until the hearing and determination of this proceeding or further order, from dealing with any of the assets of the Mimulus Trust and the Troyes Trust.
The Defendants also made applications in this proceeding with respect to obtaining, what was described in general terms, as a complete set of constituent trust documents. It is not necessary for present purposes to rehearse the history of these applications, including various subpoenas sought and rejected in these proceedings, save to note that a book of what the Plaintiffs say is a complete set of constituent trust documents of both The Mimulus Trust and The Troyes Trust has been provided for the purposes of this proceeding. Rodney Bruce Jane gave oral evidence to the effect that, to his knowledge, the book of constituent trust documents, together with the exhibits to his affidavit, dated 20 November 2015, not otherwise included in the book of constituent trust documents provided, constitutes the complete set of constituent or relevant trust documents of both of the Trusts for the purposes of this proceeding. For present purposes, this book of “Constituent Trust Documents” is referred to in these reasons as the Court Book, and the documents contained in that book are numbered sequentially, page by page.
The Defendants continued to assert, in the course of both interlocutory hearings and at the trial hearing itself, that there were further constituent trust documents which they had been unable to obtain. These assertions have, however, always been bald assertions, marked by a lack of identification of actual or possibly outstanding documents in specific or general terms. It appeared to be asserted that paragraph 10 of the affidavit of Robert Frederick Jane dated 9 December 2015 went some way to identifying outstanding documents. However, neither the contents of that paragraph nor the exhibits to that paragraph[3] go to this issue. Rather, if anything, this material goes to the operation or administration of the Trusts.
[3]Affidavit of Robert Frederick Jane (9 December 2015) Exhibits RFJ-3, RFJ-4 and RFJ-5.
On 15 December 2015 Mr Levine’s very clear instructions were that the documents produced by the Plaintiffs did not constitute “all of the trust documents”.[4] Mr Levine told the Court “[w]e don’t have all of the constituent documents because we’re missing the documents that provide that [Robert Frederick Jane] is given the power of appointment in relation to the Mimulus Trust[5] … but he is aware of what they state”.[6] As a result of the Defendants’ position, as expressed on 15 December 2105, they were given leave to issue subpoenas to Clayton Utz, Ken Glynn, Deloitte and Kahns Lawyers and, with this leave, did issue those subpoenas.
[4]Transcript (15 December 2015) 6.
[5]Transcript (15 December 2015) 6.
[6]Transcript (15 December 2015) 7.
Since 15 December 2015, Robert Jane has not produced to the Court any additional constituent documents either himself or through the four subpoenas. None of the four subpoenas, in fact, produced a single document additional to the documents contained in the Court Book or the additional exhibited document to which reference has been made. Moreover, the Defendants’ Outline of Submissions, dated 3 May 2016, do not point to any other documents which Robert Jane says constitute The Mimulus Trust or The Troyes Trust, or which give him “the power of appointment in relation to The Mimulus Trust”.
This proceeding also saw an application by the Defendants seeking an order restraining the Plaintiffs’ solicitors from continuing to act and also with respect to a third party notice which the Defendants filed recently seeking to join Clayton Utz. The third party notice was struck out by Judd J. The background to the application heard by Judd J is conveniently set out in the following paragraphs of his Honour’s oral reasons delivered on 28 April 2016.[7]
2.The proceeding was commenced by originating process on 28 November 2015. The Plaintiffs, ACN 005490540 Pty Ltd and Mainline Transport Pty Ltd, seek a declaration that they are trustee of the Mimulus Trust and the Troyes Trust respectively. The Defendants are Robert Frederick Jane Pty Ltd and Robert Frederick Jane, the individual. The central issue is control of the Troyes Trust. Robert Jane has purported to unilaterally remove the Plaintiffs as trustees of both trusts.
3.The Plaintiffs rely substantially on the appointment of Rodney Jane to replace Maurice Ryding, as an appointor under the Troyes Trust, and the fact that Robert Jane is not an appointor under the Mimulus Trust. The case is listed for trial before Croft J on 4 and 5 May 2016. The trial is by affidavit. Rodney Jane has filed an affidavit sworn 20 November 2015 in support of the Plaintiffs’ case, and Robert Jane filed an affidavit on 9 December 2015, responding to Rodney’s affidavit. I was informed by the Defendants that at trial they will contend that the appointment of Rodney was invalid, or should in some way be disregarded, because a deed of renouncement under which he was appointed, which formed part of a suite of documents executed at settlement of the Ryder proceeding in November 2007, was not authorised by Robert Jane, or was procured by his then solicitors, Clayton Utz, in breach of duty owed to him.
4.There is no claim by the Defendants in this proceeding for invalidity, or other relief challenging the appointment of Rodney as an appointor. During submissions this morning, I was informed by the Plaintiffs’ counsel of another proceeding (2015/6256) commenced on 9 December 2015, between the Defendants in this proceeding as Plaintiffs, and Rodney Jane and others as Defendants. I was informed that in the proceeding a claim is made challenging the validity of the deed of renunciation, and for the removal of the Plaintiffs in this proceeding as trustees of the Mimulus and Troyes Trusts.
5.The other proceeding, also under the management of Croft J, has not been fixed for trial. I was informed by the Plaintiffs’ counsel that the Plaintiffs in the other proceeding have failed to comply with an order of the Court that they file a statement of claim. The Defendants’ counsel did not contradict that allegation, described the other proceeding, as a ‘back-stop’ in case they lose the proceeding for trial next week. The deployment of a proceeding for such a purpose is cause for concern.
[7]Transcript (28 April 2016).
The “other proceeding” to which reference is made by Judd J in the passage set out above is, as indicated, proceeding number 6256 of 2015. As observed in the oral reasons of Judd J, the Defendants have not pursued this other proceeding. Nevertheless, at the trial of this proceeding, the Defendants sought to rely upon a variety of matters raised in the affidavit of Robert Frederick Jane dated 9 December 2015, which could only have possible relevance to the other proceeding, number 6256 of 2015.[8] These matters were the subject of objection by the Plaintiffs on the basis, principally, of relevance because the matters to which Robert Frederick Jane deposed are irrelevant to this proceeding, given the narrow question to be determined. The Plaintiffs’ objections were upheld for these reasons.
[8]Affidavit of Robert Frederick Jane (9 December 2015) [16] (save for the first sentence), [21]–[28].
In terms of evidence, the Plaintiffs rely on the affidavit of Rodney Bruce Jane sworn on 20 November 2015 (“RBJ Affidavit”), and the Defendants rely upon the affidavit of Robert Jane sworn 9 December 2015 (“RFJ Affidavit”). As indicated, parts of this affidavit of Robert Jane were the subject of successful objections by the Plaintiffs. This resulted in substantial parts of this affidavit being struck out—together with a number of exhibits which were annexed in these excised parts of the affidavit.
The Mimulus Trust
On 21 December 1978, ACN, the First Plaintiff, was appointed as the trustee of The Mimulus Trust.[9]
[9]Affidavit of Rodney Bruce Jane (20 November 2015) [9], Exhibit RBJ-4; Affidavit of Robert Frederick Jane (9 December 2015) [7].
The critical provision of The Mimulus Trust in the context of these proceedings is sub-cl 17(1), including the proviso to that sub-clause. These provisions are as follows:
17.(1) All of the class Appointors jointly (and on the death of the last surviving class Appointor for a particular class the legal personal representative of that class Appointor shall be entitled to exercise the powers in this Clause referred to) by instrument in writing at any time and from time to time shall be entitled to:-
(a) remove any Trustee hereof;
(b) appoint any additional or substitute Trustee;
PROVIDED THAT:-
(i)If and so long as a class Appointor is a Beneficiary that class Appointor shall not be eligible to be appointed as a Trustee hereof;
(ii)If there are no class Appointors or if there is no one entitled to exercise the power herein conferred the Statutory and other rights of removing and appointing the Trustee hereof shall to the exclusion of any other person or persons be exercised by the Trustee or by the legal personal representatives of the last surviving Trustee or if the Trustee be a corporation the liquidator of that corporation.
Paragraph 1(1)(xi) of The Mimulus Trust Deed provides for the meanings of a variety of expressions, “unless the context otherwise indicates”—including the expression “the class Appointors”, in the following terms:
‘the class Appointors’ means successively the person or persons named and described as such for each class of Beneficiaries in the Eighth Part of the Schedule.
The Eighth Part of the Schedule to The Mimulus Trust Deed, which is referred to in paragraph 1(1)(xi) with respect to the meaning of “class Appointors”, makes provision in the following terms:
Class Appointors: CLASS A BENEFICIARIES:
Firstly -Maurice Graham Ryding but only during his lifetime provided that the said Maurice Graham Ryding may by Deed (whether revocable or irrevocable) nominate any person or persons in substitution for himself to exercise all of the said powers during any period (whether or not extending beyond the life of the said Maurice Graham Ryding).
Secondly -After the death of the said Maurice Graham Ryding and in default of any nomination by Deed as aforesaid Alan Roy Coleman.
Thirdly -After the death of Alan Roy Coleman and in default of any nomination by Deed as aforesaid the legal personal representative of Maurice Graham Ryding.
CLASS B BENEFICIARIES:
Firstly -Alan Roy Coleman but only during his lifetime provided that the said Alan Roy Coleman may by Deed (whether revocable or irrevocable) nominate any person or persons in substitution for himself to exercise all of the said powers during any period (whether or not extending beyond the life of the said Alan Roy Coleman).
Secondly -After the death of the said Alan Roy Coleman and in default of any nomination by Deed as aforesaid Maurice Graham Ryding.
Thirdly -After the death of Maurice Graham Ryding and in default of any nomination by Deed as aforesaid the legal personal representative of Alan Roy Coleman.
Maurice Graham Ryding died on 25 May 2004, leaving his wife, Joyce Eileen Ryding as the executrix of his Will.[10] Alan Roy Coleman died on 16 September 2004, leaving his wife, Beverly Anne Coleman, as the executrix of his Will.[11]
[10]Affidavit of Rodney Bruce Jane (20 November 2015) [16]; Affidavit of Robert Frederick Jane (9 December 2015) [9].
[11]Affidavit of Rodney Bruce Jane (20 November 2015) [17]; Affidavit of Robert Frederick Jane (9 December 2015) [9].
There is no evidence to suggest that either Alan Roy Coleman or Maurice Graham Ryding nominated any person or persons in substitution for themselves as class Appointors of The Mimulus Trust.
Prior to 19 November 2015, the day before the Originating Process commencing these proceeding was issued, Rodney Jane did not know about, had not seen, and was not aware that on 11 November 2014, Robert Jane completed a Deed of Variation of Trustee whereby Robert Jane purported to appoint Robert Frederick Jane Pty Ltd, the First Defendant, as the trustee of The Mimulus Trust.[12]
[12]Affidavit of Rodney Bruce Jane (20 November 2015) [32]; Affidavit of Robert Frederick Jane (9 December 2015) [15].
As indicated previously, Robert Jane does not point to any other documents which he says constitutes The Mimulus Trust, other than those to which reference has been made. Moreover, Robert Jane does not say, or point to any evidence which establishes that he is a class Appointor of The Mimulus Trust. He does not positively state that the basis upon which he unilaterally purported to remove ACN, the First Plaintiff, as trustee of The Mimulus Trust on 11 November 2014.
The Defendants contend that the Plaintiffs’ position is that the current Appointors of The Mimulus Trust are Joyce Eileen Ryding and Beverly Anne Coleman because they were appointed the legal personal representatives of their husbands’ deceased estates upon the deaths of their husbands in 2004. Moreover, it is said that the Plaintiffs assert that Joyce Eileen Ryding and Beverly Anne Coleman remain the Appointors, despite it being approximately 12 years from the deaths of their husbands and despite their families having no beneficial interest in The Mimulus Trust. The Defendants contend that the Plaintiffs’ assertions are misconceived as Joyce Eileen Ryding and Beverly Anne Coleman are Appointors by virtue only of them being and remaining the legal personal representatives of their respective husbands’ estates. Thus, it is contended that upon their husbands’ estates being fully administered though no longer their legal personal representatives or, consequently, class Appointors. Reference is also made to s 34 of the Administration and Probate Act 1958, which provides for the Court removing an executor or administrator of an estate. The latter point, with reference to this Act, does not, however, assist the Defendants’ position. First, because there is no evidence of the Court having exercised this power with respect to either of these estates and, secondly, for the reasons which follow, the continuation or otherwise of the administration of these estates and any effect this may have on the status of the legal personal representatives is irrelevant in the present context.
Turning to the substance of these contentions advanced by the Defendants, they are, in my view, misconceived. Paragraph 1(1)(xi) of The Mimulus Trust Deed, which is set out above, provides that “the class Appointors” means “the person or persons named and described as such”.[13] In my view, it is clear from this definition of “the class Appointors” that the reference in the Eighth Part of the Schedule to The Mimulus Trust Deed to “legal personal representative” is used merely to describe the person who is to become the class Appointor following the death of Maurice Graham Ryding and Alan Roy Coleman, respectively. The office to which reference is made is merely a descriptor and there is no temporal limit placed on that person holding that office. It follows that once a person has become an Appointor by succession, they do not cease to hold that office merely because their husband’s estate has been fully administered; or, it follows, upon their removal by the Court under s 34 of the Administration and Probate Act 1958. An additional reason for regarding the reference to the office or status of legal personal representative as merely a descriptor—a means of identifying a particular individual—is that there is no reason why the holding of that office or status is in any way a necessary prerequisite to acting as a class Appointor.[14] They are distinct and unrelated functions in the present context.
[13](Emphasis added by Plaintiffs).
[14]Compare the different situation and circumstances discussed in E Sugden, Sugden on Powers (H Sweet, 8th ed, 1861) 128–9; and the reference to Forbes v Peacock (1843) 11 Mees & Wels 630; 152 ER 957.
Moreover, the interpretation contended for by the Defendants would have the potential for creating a hiatus or lack of continuity in the office or position class Appointors which, having regard to the function of the class Appointors under The Mimulus Trust, is unlikely to reflect the intention of the settlor; a position reinforced when consideration is given to paragraph (ii) of the proviso to sub-cl 17(1) of The Mimulus Trust Deed. It will be seen from the terms of that paragraph, which is set out above, that careful provision has been made to ensure that there is no failure in class Appointors, with a succession of persons identified to hold that office or appointment in the circumstances provided for. Clearly though, these are last resort provisions intended to cater for the unexpected failure of the Eighth Part of the Schedule machinery.
The Defendants also submitted that as Joyce Eileen Ryding and Beverly Anne Coleman no longer have an interest in The Mimulus Trust and if they are no longer the legal personal representatives of their husbands’ estates, then they have impliedly disclaimed their interest as “trustee”. The Defendants relied in this respect on the judgment of Ginnane J in Orlanski v Spiegel with reference to the following passage, particularly the reference to Lewin on Trusts:[15]
[15][2015] VSC 662 [88]-[92].
88.The following facts are known. The Deed that appointed Ms Eschell and Jacob and Ziona Moszkowicz as “joint Appointors and Guardians of the Trust” was signed for her by her brother, Jacob Moszkowicz, as her attorney under power. She had lived in Israel for many years before she was named as a Guardian. She was a director and shareholder of Getema. I have set out previously the statements contained in Mr Joseph’s affidavit as to his conversations with Ms Eschell.
89.Lewin on Trusts states under the heading “Acceptance and Disclaimer of Trusts”:
Right to disclaim
No one can be compelled to accept a trust. Thus the intended trustee can disclaim the office as a whole at any time before acceptance, but not afterwards.[16]
90.And Lewin on Trusts further states, that disclaimer can occur by deed, by writing under hand, by a defence, at the bar of the court or by an oral refusal to act. A disclaimer can also be implied from conduct inconsistent with acceptance.[17] I apply those principles to the office of Guardian under a trust.
91.The parties other than the fourth and fifth Defendant contend that Ms Eschell never took office as a Guardian. They rely on the absence of evidence that she played any role as Guardian in connection with No 3 Trust.
92.I am not prepared to find at present that Ms Eschell was not in office as a Guardian in 2009 and 2010. I take into account that she was living in Israel when she was appointed a Guardian. It appears that she appointed her brother as her attorney. It was not suggested that the death of Ziona Moszkowicz had the effect that all of the Guardians of the No 3 Trust lost office.
[16]L Tucker et al (eds), Lewin on Trusts (Sweet & Maxwell, 19th ed, 2015) 560.
[17]L Tucker et al (eds), Lewin on Trusts (Sweet & Maxwell, 19th ed, 2015) 560–1.
Although the Defendants, in their written submissions, refer to the alleged disclaimer by Joyce Eileen Ryding and Beverly Anne Coleman of their interest “as a trustee”,[18] it appears that the intention was to refer to their position as appointors by analogy with the position with respect to trustees. In their responsive submissions, the Plaintiffs contend that even if the reasoning of Ginnane J extending the concept of disclaimer by a trustee to the office of guardian can be further extended to the office of appointor, the principle only applies “at any time before acceptance, but not afterwards” referring to the passage from Lewin on Trust set out in the passage quoted by Ginnane J.[19] In my opinion, this is the correct view and is also, pursuing the trustee analogy, the position set out in Jacobs’ Law of Trusts in Australia—to which I made reference in the course of the trial in discussions with respect to the Defendants’ submissions with the Defendants’ counsel. The passage from which I read appears in Jacobs’ as follows:[20]
[1573] Before any property can indefeasibly vest in a transferee, that person must assent. If property is transferred to a transferee without the transferee’s knowledge, then that property will vest in the transferee subject to the transferee’s right, when informed, to disclaim it.
These principles govern the law relating to the acceptance and disclaimer of trusts.
A person who has been appointed a trustee does not assume that office until that person has accepted the trust, which that person may do expressly, as by executing the trust instrument or expressly accepting the trust, or impliedly. Acceptance will be implied from acts which are inconsistent with disclaimer, such as interference with the trust property; or allowing actions to be instituted in the trustee’s name; or exercising any other acts of ownership; or acting in the trusts or part of them; or having been appointed executor and trustee, taking out probate.
A person cannot, however, be compelled to accept appointment as trustee even if that person has promised to act as such, but that person must disclaim the trust before having done anything which indicates an intention to accept it. One cannot, after accepting appointment as trustee and acting in the trust, disclaim the office of trustee and the trust property.
The usual method of effecting a disclaimer is by deed, but a trustee may impliedly disclaim to act as trustee by refusing orally or by conduct. Merely remaining quiescent is equivocal and may, according to circumstances, be evidence of disclaimer or acceptance, but it would appear, although the position is by no means clear, that a presumption of disclaimer is strengthened by every year of inaction.
[18]See Defendants’ Outline of Submissions (3 May 2016) [4].
[19](emphasis added by the Plaintiffs).
[20]J D Heydon and M J Leeming, Jacobs’ Law of Trusts in Australia (LexisNexis Butterworths, 7th ed, 2006) 344–5 [1573] (citations omitted).
The Defendants conceded that there is no evidence of any express disclaimer, but they also assert that there was no evidence of acceptance by these individuals of their appointment as a class Appointor. It is, however, clear, in my view, that there is evidence of acceptance of appointment by conduct on the part of these individuals with respect to The Troyes Trust, as discussed in the reasons which follow. In my opinion, it is clear that these trusts, The Mimulus Trust and The Troyes Trust, are closely related entities; as appears from the identity of individuals named in both trust deeds and in similar capacities, beneficial and otherwise, and having regard to the very close correlation of the provisions of those trust deeds, both in terms of their substantive parts and the more tailored provisions of their Schedules. In the absence of any evidence of disclaimer, it is, in all the circumstances, verging on being fanciful to suggest that where individuals have acted in the capacity of a class Appointor in another closely related trust, The Troyes Trust, that it should not be inferred that they had agreed to assume that capacity in The Mimulus Trust.
Finally, in relation to the disclaimer point, it is clear, in my view, that if the trustee analogy put by the Defendants is accepted, then any disclaimer must occur before a person appointed a trustee or an appointor assumes the office. Having regard to the conduct of these individuals to which reference has been made in their capacity as class Appointors of The Troyes Trust, it is not necessary to pursue these, what might be described as, timing issues with respect to disclaimer. A related point was also raised by the Defendants, namely, that the burden of proving the appointment of these individuals as class Appointors and their continuation in that office lay on the Plaintiffs. In my view, this is a fallacious argument in all the circumstances, as the documentary evidence provided by the provisions of The Mimulus Trust—and also The Troyes Trust in this respect—provides the very instrument of appointment in the provisions of the Eighth Schedule. Moreover, as indicated, there is an absence of any evidence of express or implied disclaimer and there is evidence of conduct on the part of these individuals which is evidence of acceptance of the office of class Appointor. In any event, if burden of proof issues were to be pursued in this respect, it would follow that in the evidentiary context to which reference has been made, the burden of establishing disclaimer would fall upon the Defendants. However, that is not a matter that is necessary to pursue. There is no evidence that either Joyce Eileen Ryding or Beverly Anne Coleman disclaimed the office of class Appointor before they succeeded to that office on the death of their respective husbands and, further, in terms of evidentiary matters, the fact of the death of their husbands and the date of their deaths is not a matter in controversy. It also follows for these reasons that there was no necessity for the Plaintiffs to have joined any of the class Appointors as a party to these proceedings with respect to either Trust.
For these reasons, it follows that:
(1)Robert Jane is not, and never has been, a class Appointor of The Mimulus Trust;
(2)Robert Jane had no power to unilaterally remove ACN, the First Plaintiff as trustee of The Mimulus Trust and appoint Robert Frederick Jane Pty Ltd, the First Defendant, as the new trustee;
(3)Robert Frederick Jane Pty Ltd, the First Defendant, was not validly appointed as the trustee of The Mimulus Trust; and
(4)ACN, the First Plaintiff, is the trustee of The Mimulus Trust.
The Troyes Trust
On 12 December 1979, Troyes Pty Ltd was appointed as trustee of The Troyes Trust.[21]
[21]Affidavit of Rodney Bruce Jane (20 November 2015) [20], Exhibit RBJ-8; Affidavit of Robert Frederick Jane (9 December 2015) [12].
Again, as with The Mimulus Trust, sub-cl 17(1) of The Troyes Trust is critically relevant in the present proceeding. The provisions of that sub-clause, including the proviso, are as follows:
17.(1) All of the class Appointors jointly (and on the death of the last surviving class Appointor for a particular class the legal personal representative of that class Appointor shall be entitled to exercise the powers in this Clause referred to) by instrument in writing at any time and from time to time shall be entitled to:-
(a) remove any Trustee hereof;
(b) appoint any additional or substitute Trustee;
PROVIDED THAT:-
(i)If and so long as a class Appointor is a Beneficiary that class Appointor shall not be eligible to be appointed as a Trustee hereof;
(ii)If there are no class Appointors or if there is no one entitled to exercise the power herein conferred the Statutory and other rights of removing and appointing the Trustee hereof shall to the exclusion of any other person or persons be exercised by the Trustee or by the legal personal representatives of the last surviving Trustee or if the Trustee be a corporation the liquidator of that corporation.
These provisions do, as do the corresponding provisions of The Mimulus Trust, provide for the class Appointors acting jointly with respect to the removal, appointment or substitution of any trustee of The Troyes Trust.
Paragraph 1(1)(xi) of The Troyes Trust provides that the term “class Appointors” means:
‘the class Appointors’ means successively the person or persons named and described as such for each class of Beneficiaries in the Eighth Part of the Schedule.
The Eighth Part of the Schedule to The Troyes Trust, to which reference is made in paragraph 1(1)(xi) is as follows:
Class Appointors:
Class A Beneficiaries:
FirstlyROBERT FREDERICK JANE but only during his lifetime PROVIDED THAT the said Robert Frederick Jane may by Deed (whether revocable or irrevocable) nominate any person or persons in substitution for himself to exercise all of the said powers during any period (whether or not extending beyond the life of the said Robert Frederick Jane).
SecondlyAfter the death of the said Robert Frederick Jane and in default of any nomination by Deed as aforesaid, THE LEGAL PERSONAL REPRESENTATIVE of Robert Fredrick Jane.
Class B Beneficiaries:
FirstlyMAURICE GRAHAM RYDING but only during his lifetime PROVIDED THAT the said Maurice Graham Ryding may by Deed (whether revocable or irrevocable) nominate any person or persons in substitution for himself to exercise all of the said powers during any period (wehther (sic) or not extending beyond the life of the said Maurice Graham Ryding).
SecondlyAfter the death of the said Maurice Graham Ryding and in default of any nomination by Deed as aforesaid, ALAN ROY COLEMAN.
ThirdlyAfter the death of Alan Roy Coleman and in default of any nomination by Deed as aforesaid, THE LEGAL PERSONAL REPRESENTATIVE of Maurice Graham Ryding.
Class C Beneficiaries:
FirstlyALAN ROY COLEMAN but only during his lifetime PROVIDED THAT the said Alan Roy Coleman may by Deed (whether revocable or irrevocable) nominate any person or person in substitution for himself to exercise all of the said powers during any period (whether or not extending beyond the life of the said Alan Roy Coleman).
SecondlyAfter the death of the said Alan Roy Coleman and in default of any nomination by Deed as aforesaid, MAURICE GRAHAM RYDING.
ThirdlyAfter the death of Maurice Graham Ryding and in default of any nomination by Deed as aforesaid, THE LEGAL PERSONAL REPRESENTATIVE of Alan Roy Coleman.
Also of relevance with respect to The Troyes Trust is a Deed of Retirement and Appointment of New Trustee, which it is common ground was made and executed by all parties, but on some unspecified day in June 1992. As it is of some importance for the reasons which follow, the provisions of this Deed are set out in full, apart from the execution clauses. In the latter respect, it is noted that the Deed was signed, sealed and delivered by Robert Jane (signed on his behalf by Maurice Graham Ryding under a power of attorney dated 15 March 1983), by Maurice Graham Ryding and by Alan Roy Coleman. The common seals of Troyes Pty Ltd and Mainline Transport Pty Ltd were also affixed and attested by way of execution. Otherwise, the provisions are as follows:
THIS DEED OF RETIREMENT OF TRUSTEE and APPOINTMENT OF NEW TRUSTEE
Is made the day of June, 1992
BETWEEN:ROBERT FREDERICK JANE
of “Charlotte”, Holden Road Sydenham
in the state of Victoria.
MAURICE GRAHAM RYDING
of 11 Garden Road, Donvale
in the state of Victoria.and
ALAN ROY COLEMAN
of 3 Honyoun Court, Donvalein the state of Victoria.
(herein after called “the Appointors”)
on the first part
AND:TROYES PTY. LIMITED a company having its registered office at 155 Roden street, West Melbourne in the state of Victoria.
(herein after called “the Retiring Trustee”)
on the second part
AND:MAINLINE TRANSPORT PTY. LIMITED
A Company having its registered office at 155 Roden Street, West Melbourne in the state of Victoria.
(herein after called “New Trustee”)
on the third part
WHEREAS:
A.By a Deed of Settlement made the 12th day of December, 1979 between DONALD WILLIAM KERR (“the Settlor”) of the one part and the Retiring Trustee of the other part the Settlor settled the sum of FIFTY DOLLARS ($50.00) on the Retiring Trustee on the trusts set out in the said Deed of Settlement.
B.The Retiring Trustee desires to be discharged from the trusts and powers reposed in and conferred on him by the said Deed of Settlement.
C.Clause 17 of the said Deed of Settlement empowers Robert Frederick Jane to appoint, inter alia, a replacement trustee of the Trust Fund as desired in the said Deed of Settlement.
D.The Appointor desires to appoint the New Trustee to be the Trustee of the Trust Fund.
NOW THIS DEED WITNESSETH AS FOLLOWS:
1.The Retiring Trustee hereby declares that it is desirous of retiring from and being discharged from the trusts constituted by the said Deed of Settlement and retires from the position of Trustee accordingly.
2.Pursuant to Clause 17 of the said Deed of Settlement and every other power so enabling the Appointor hereby appoints the New Trustee to be Trustee of the trusts constituted by the said Deed of Settlement in place of the Retiring Trustee.
3.The New Trustee shall hold the Trust Fund upon the trusts and subject to the powers and provisions contained in the said Deed of Settlement insofar as they are now subsisting and capable of taking effect.
IN WITNESS whereof this Deed of Retirement of Trustee and Appointment of New Trustee was duly executed the day and year hereinbefore written.
On 12 November 2002, by a Deed of Renouncement, Alan Roy Coleman resigned as a class Appointor under The Troyes Trust Deed and irrevocably appointed Robert Jane in his place. The critical provisions in this respect are contained in cl 3 of that Deed, as follows:
3. Troyes Trust
3.1 Waiver of Beneficiaries Interest
On and from the Effective Date, the Trustee at the request of and with the consent of each of Coleman and the Coleman Beneficiaries, pursuant to clause 16 of the Troyes Trust Deed, declares that Coleman and the Coleman Beneficiaries shall not be beneficiaries of the Troyes Trust and the Troyes Trust Deed shall be read and the trusts constituted in the Troyes Trust Deed shall be given effect as if Coleman and the Coleman Beneficiaries were not named or described in the definition of “Beneficiaries” in the Troyes Trust Deed.
3.2 Appointor
On and from the Effective Date:
(a)Coleman resigns as a class appointor under the Troyes Trust Deed and irrevocably appoints Jane in his place; and
(b)Jane accepts the appointment of a class appointor under the Troyes Trust Deed.
Prior to 19 November 2015, noting that the Originating Process in this proceeding was issued on 20 November 2015, Rodney Jane did not sign, did not know about, had not seen and was not otherwise aware that on 11 November 2014, Robert Jane completed a Deed of Variation of Trustee where Robert Jane purported to appoint Robert Frederick Jane Pty Ltd, the First Defendant, as trustee of The Troyes Trust.[22]
[22]Affidavit of Rodney Bruce Jane (20 November 2015) [33]; Affidavit of Robert Frederick Jane (9 December 2015) [16].
On 2 November 2007, Joyce Eileen Ryding, as executrix of the Will of Maurice Graham Ryding, and in her personal capacity, appointed Rodney Jane as a class Appointor of The Troyes Trust. The critical provisions of the Deed of Renouncement, are contained in cl 3, which provides as follows:
3. Troyes Trust
3.1 Waiver of Beneficiaries Interest
On and from the Effective Date, the Trustee at the request of and with the consent of each of Ryding and the Ryding Beneficiaries, pursuant to clause 16 of the Troyes Trust Deed, declares that Ryding and the Ryding Beneficiaries shall not be beneficiaries of the Troyes Trust and the Troyes Trust Deed shall be read and the trusts constituted in the Troyes Trust Deed shall be given effect as if Ryding and the Ryding Beneficiaries were not named or described in the definition of “Beneficiaries” in the Troyes Trust Deed.
3.2 Appointor
On and from the Effective Date:
(a)Ryding resigns as a class appointor under the Troyes Trust Deed and irrevocably appoints Jane in his place; and
(b)Jane accepts the appointment of a class appointor under the Troyes Trust Deed.
The acceptance by Rodney Bruce Jane of this appointment is evidenced by his execution of this Deed.
The Defendants attack the proposition advanced by the Plaintiffs that Rodney Jane was appointed a class Appointor under The Troyes Trust Deed pursuant to the Deed of Renouncement of 2 November 2007 on a number of bases.
First, it is submitted that the Deed of Renouncement was signed as part of a suite of documents that was signed to settle the matter of Ryding v Jane.[23]It is submitted that Rodney Jane had nothing to do with the settlement and the benefit of the Deed of Renouncement should have been made in favour of Robert Jane. Moreover, it is contended that the Deed of Renouncement was not explained to Robert Jane by his solicitor. It is also said that the Deed of Renouncement was made in breach of the solicitor’s fiduciary duties to Robert Jane, as a result of instructions received from Rodney Jane, and thus the benefit of the Deed of Renouncement should be held in trust for Robert Jane, as Rodney Jane received the benefits of the Deed through a breach of fiduciary duty of which he was aware. Alternatively, or additionally, it is contended that Rodney Jane knowingly induced or procured the breach of fiduciary duty—and reference was made to the decision of Sloss J in Australian Super Developments Pty Ltd v Marriner.[24]
[23]Supreme Court Proceeding S CI 2007 4675.
[24][2014] VSC 464.
These submissions are, however, misconceived, in my view, for the reasons submitted by the Plaintiffs; namely, that Robert Jane has not proved any such breach of fiduciary duty and cannot do so in this proceeding.[25] It follows that there is no basis to assert, in this proceeding, that Rodney Jane holds the benefit of the Deed of Renouncement on trust for Robert Jane. The Plaintiffs also submit that the notion that powers of appointment can be held on trust is without foundation and that, further, none of the authorities cited by the Defendants support that proposition. I share the view that none of the authorities cited by the Defendants support that proposition but, in any event, it is not necessary to embark on that issue for the reasons already indicated.
[25]Plaintiffs’ Outline of Submissions in Reply (3 May 2016) [12].
The other bases upon which the Defendants attack the Deed of Renouncement are set out in their written submissions as follows:[26]
(a)the Legal Personal Representative did not have the power to transfer the office of appointer, which is deliberate as the first named appointers do have the capacity to transfer the office of appointer, and the intention of the trust deed is that the current Legal Personal Representative should be the appointer (Eighth part of the Schedule to the Troyes Trust deed).
(b)the Deed of Retirement and Appointment of the New Trustee for the Troyes Trust dated June 1992 states that “Clause 17 of the deed of settlement empowers Robert Frederick Jane to appoint inter alia a replacement trust deed” and thus there was no other appointers of the trust deed (Recital 2 and Clause 2) (Exhibit “RBJ 9” of the affidavit of Rodney Jane dated 20 November 2015).
(c)the Ryding beneficiaries waived their beneficial entitlements to the C Class portions (and other beneficial interests) in the trust, and thus the appointer of the C Class portions has been impliedly revoked/renounced (paragraph 26 (b) of the affidavit of Rodney Jane dated 20 November 2015). In Connell v The Colonial Mutual Life Assurance Society Ltd[27] Hodges J held that the power of appointment was appurtenant to the life interest in the property, and that when the life interest was lost, so was the power of appointment. Thus, the power of the C Class portions is dependent upon there actually be C Class portions.
[26]Defendants’ Outline of Submissions (3 May 2016) [7].
[27](1889) 15 VLR 743.
Finally, on the basis of these contentions, the Defendants submit that the sole beneficiary of The Troyes Trust is Robert Jane, ”as both Ryding and Coleman disclaimed their beneficial interests (and thus he has the power to call in the trust property)”.[28] As was made clear in the Defendants’ oral submissions, the submission to this effect is based upon the empowering provisions of cl 16 of The Troyes Trust, a provision which is in the following terms:
16.The Trustee may at any time, at the request or with the consent in writing of any Beneficiary, sui juris declare in writing that such Beneficiary shall thereafter not be a Beneficiary for the purpose of the trusts hereby constituted; and thereafter this Trust Deed shall be read, and the trusts herein constituted given effect, as if such person was not named or described in the definition of Beneficiaries PROVIDED HOWEVER that declaration shall not affect any beneficial entitlement of that person to any amount set aside and/or paid to him prior to the date of such declaration.
[28]Defendants’ Outline of Submissions (3 May 2016) [8].
Dealing with the latter submission first, whether or not cl 16 would enable Robert Jane to act as contended, the provision of cl 16 require action on the part of the Trustee “at the request or with the consent in writing of any beneficiary, sui juris”. In the context of the present proceedings, this matter might be regarded as extraneous to their limited scope, as indicated previously, and, further, does, in this context, beg the question because it is clear that cl 16 requires an act by the trustee. This is, of course, one of the central questions to be resolved by these proceedings. Moreover, as submitted by the Plaintiffs, the assumption on the part of the Defendants which underpins the latter submission is not correct. Robert Jane is not the sole beneficiary of The Troyes Trust. The definition of “General Beneficiaries” in paragraph 1(1)(v) of The Troyes Trust Deed includes the brothers, sisters, children and grandchildren of Robert Jane, including any “illegitimate child”. In any event, I emphasise again, that whether or not this issue is one to be pursued between the various parties, that is a matter for another proceeding once it has been determined which entity is the trustee of The Troyes Trust.
I turn now to these earlier submissions made by the Defendants, submissions which, for the reasons which follow, I reject.
First, insofar as the Defendants’ submissions concern the “Class B Beneficiaries”, on a proper construction of the Eighth Part of the Schedule to The Troyes Trust Deed, the power to nominate any person or persons in substitution to exercise all of the powers of appointment applies at all three levels. At the third level, the words “in default of any nomination by Deed as aforesaid” can only refer to a nomination having been made at the second level, because if Maurice Graham Ryding had made a nomination at the first level which extended beyond his life, then Alan Roy Coleman would never have become a class Appointor at the second level. Accordingly, if a power of nomination is implicit at the second level, it must also be implicit at the third level. Another way of looking at these provisions, as discussed with the Plaintiffs’ Senior Counsel during the hearing at trial, is that, rather than focusing on these powers as being “implicit” at the second and third levels of these provisions, the very structure of these provisions indicates that the second and third level provisions operate by, in effect, placing the persons provided for as a class Appointor under those provisions “into the shoes” of Maurice Graham Ryding at the first level of these provisions. It follows from these provisions that the person thus placed has the power to nominate any person or persons in substitution for himself or herself, as the case may be. As observed previously in relation to The Mimulus Trust, it is clear, in my view, that the Trust deed was drafted to maintain the continuous operation and effectiveness of the class Appointor provisions, hence the carefully drawn, but last resort, provisions in paragraph 17(1)(ii).[29] On any view, therefore, on 2 November 2007, Joyce Eileen Ryding did have the power to nominate Rodney Jane, and he duly became a class B Appointor under The Troyes Trust.
[29]See above [23].
The second aspect of these submissions by the Defendants, those with respect to the effect of the Deed of Retirement and Appointment, cannot, in my view, assist the Defendants’ position. Having regard to these submissions, the Deed of Retirement and Appointment has already been set out in full. As is clear from that document, it is contemplated as having a limited scope, namely, with respect to the retirement of a trustee and the appointment of a new trustee. It is also clear from the provisions of Recital A that it is a deed made in the context of the provisions of The Troyes Trust Deed. There is no suggestion in the operative parts of that Deed, particularly cl 2, that the powers other than those conferred under the provisions of cl 17 of The Troyes Trust Deed were being invoked. No other power is evoked—particularly no power to vary the trust deed provisions, under cl 16 or any other provision of The Troyes Trust Deed (including sub-cl 5(2)). The Defendants seek support for their position on the basis of Recital C of the Deed of Retirement and Appointment because that Recital refers only to Robert Jane as an Appointor. In any event, this Deed was executed by all the Appointors, as required by cl 17 of The Troyes Trust Deed, a position which is at odds with the effect contended for by the Defendants with respect to Recital C. Moreover, it is well accepted that, in construing deeds, a recital will yield to provisions of the operative part of a deed in the absence of some ambiguity in the operative part.[30] In this case, the operative part, in the context of provisions of the Deed, is clear and unambiguous in its provisions and purpose. Consequently, Recital C, which is, in any event, at odds with the express provisions of cl 17, is clearly a mistake. Additionally, the recitals themselves might be regarded as internally inconsistent, because Recital A, as indicated, indicates clearly that the Deed is in the context of the provisions of The Troyes Trust Deed as they stand; with no suggestion that they have in any respect been, or are to be, varied. Recital C is inconsistent with this position, which is a further indication of its contents being mistaken.
[30]J A Morrison & H J Goolden, A Treatise on Deeds (Sweet & Maxwell, 2nd ed, 1928); K Lewison, The Interpretation of Contracts (Sweet & Maxwell, 5th ed, 2011) 530–1 [10.14].
Finally, to the extent that there was a waiver produced by the Deed of Retirement and Appointment, it can only operate prospectively and not retrospectively. Accordingly, any persons who were Class B Beneficiaries prior to 2 November 2007, and who were not parties to the Deed of Renouncement dated 2 November 2007, continued to be Class B Beneficiaries thereafter. This is, in my view, made clear by the provisions of cl 16 of The Troyes Trust Deed, which is in the following terms:
16.The Trustee may at any time, at the request or with the consent in writing of any Beneficiary, sui juris declare in writing that such Beneficiary shall thereafter not be a Beneficiary for the purpose of the trusts hereby constituted; and thereafter this Trust Deed shall be read, and the trusts herein constituted given effect, as if such person was not named or described in the definition of Beneficiaries PROVIDED HOWEVER that declaration shall not affect any beneficial entitlement of that person to any amount set aside and/or paid to him prior to the date of such declaration.
The example provided by the Plaintiffs in their submissions is illustrative of this point:[31]
By way of example, clause 1(1)(v)(c) of the Troyes Trust Deed provides that “‘General Beneficiaries’ shall mean and include… [t]he brothers sisters and children of the Primary Beneficiaries in each class and the children of such brothers sisters and children of the Primary Beneficiary or the Primary Beneficiaries in each class.”[32] Accordingly, any such brother, sister, child or grandchild of Maurice Graham Ryding who was a “Class B Beneficiary” before 2 November 2007 and who did not execute the Deed of Renouncement remains a “Class B Beneficiary”.
[31]Plaintiffs’ Outline of Submissions in Reply (3 May 2016) [18].
[32]Court Book 45.
Moreover, it follows that any waiver could not, and did not, apply to any Class B Beneficiary who was not sui juris at that time. It follows that any minor children or grandchildren of, for example, Maurice Graham Ryding as at 2 November 2007, would fall into this category. The Defendants do, in my view, bear the onus of establishing that no such Class B Beneficiary existed when the Deed of Renouncement was executed on 2 November 2007. This onus has not been discharged.
A further important point is that the office of class Appointor under The Troyes Trust Deed is independent from the persons who may be class beneficiaries from time to time. For example, at a point of time the class Appointor of the Class B Beneficiaries could have been Alan Roy Coleman, notwithstanding that Alan Roy Coleman had no connection with the beneficiaries of that class. The independent role of a class Appointor is further reflected, in my view, in paragraphs 1(1)(x), (A), 5(2) and 17 of The Troyes Trust Deed.
Additionally, with respect to these submissions, reliance by the Defendants on Connell v Colonial Mutual Life Assurance Society[33] is, in my view, misplaced. The case turns on its own facts and, in particular, the construction of the will that was then before the Court. It does not stand for the general proposition that the power of appointment is dependent on there being class beneficiaries or class beneficiaries who are related to, or associated with, the Appointor. Indeed, such a proposition would be at odds with the attributes of various species of power of appointment.[34]
[33](1889) 15 VLR 743.
[34]See P Young, C Croft and M Smith, On Equity (LawBook Co, 2009) 626 [8.800].
Finally, and critically telling against the Defendants’ position, even if there was some basis to set aside the appointment of Rodney Jane as a class Appointor of The Troyes Trust, Rodney Jane would not be the only class Appointor of The Troyes Trust. Joyce Eileen Ryding would also be a class Appointor of The Troyes Trust and, consequently, the requirements of sub-cl 17(1) of The Troyes Trust Deed would not have been satisfied with respect to the appointment of a new trustee by Robert Jane alone.
For these reasons, it follows that—
(1)Robert Jane is not, and has never been, the sole class Appointor of The Troyes Trust;
(2)Robert Jane had no power to unilaterally remove Mainline Transport, the Second Plaintiff, as trustee of The Troyes Trust and appoint Robert Frederick Jane Pty Ltd, the First Defendant, as the new trustee;
(3)Robert Frederick Jane Pty Ltd, the First Defendant, was not validly appointed as the trustee of The Troyes Trust; and
(4)Mainline Transport, the Second Plaintiff, is the trustee of The Troyes Trust.
Conclusion and orders
For the preceding reasons, I find that the Plaintiffs are entitled to the declaratory relief sought in the Originating Process dated 20 November 2015, by which these proceedings were commenced.
The parties are to bring in orders to give effect to these reasons. The issue of costs is otherwise reserved and I will hear the parties further in relation to that issue.
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