Allen v Smalberger
[2021] WASC 306
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CIVIL
CITATION: ALLEN -v- SMALBERGER [2021] WASC 306
CORAM: MASTER SANDERSON
HEARD: 24 AUGUST 2021
DELIVERED : 6 SEPTEMBER 2021
FILE NO/S: CIV 1246 of 2021
BETWEEN: SUZANNE GAYE ALLEN
First Plaintiff
RIVERSIDE ASSET PTY LTD
Second Plaintiff
AND
THOMAS MARTHINUS SMALBERGER
First Defendant
DAVID PETER SELDEN
Second Defendant
NICOLE MAREE BINGHAM
Third Defendant
KRISTIE LOUISE SELDEN
Fourth Defendant
MARK LIONEL SELDEN
Fifth Defendant
Catchwords:
Trust & perpetual amendment to Trust Deeds for replacement of Appointor - Turns on own facts
Legislation:
Nil
Result:
Declarations made
Category: B
Representation:
Counsel:
| First Plaintiff | : | M Curwood SC |
| Second Plaintiff | : | M Curwood SC |
| First Defendant | : | Mr A Van der Vyver |
| Second Defendant | : | JJ Hockley & JW Fickling |
| Third Defendant | : | No appearance |
| Fourth Defendant | : | No appearance |
| Fifth Defendant | : | No appearance |
Solicitors:
| First Plaintiff | : | Frichot Lawyers |
| Second Plaintiff | : | Frichot Lawyers |
| First Defendant | : | Fort Knox Legal |
| Second Defendant | : | D'Angelo Legal |
| Third Defendant | : | Croftbridge |
| Fourth Defendant | : | Haynes Leeuwin |
| Fifth Defendant | : | In Person |
Case(s) referred to in decision(s):
Mercanti v Mercanti [2015] WASC 297
MASTER SANDERSON:
By originating summons filed 30 March 2021, the plaintiffs sought relevantly the following orders:
1.a declaration that:
(1)immediately upon the death of Peter John Selden, Suzanne Gaye Allen was the lawful trustee, appointor and guardian of the Peter Selden Family Trust;
(2)immediately upon the death of Peter John Selden, Suzanne Gaye Allen was the lawful appointor and guardian of the Peter Selden Family Trust No 2;
(3)as a consequence of the execution of a:
a.Deed of Retirement of Trustee and Appointment of New Trustee; and
b.Deed of Retirement of Appointor and Appointment of New Appointor,
for the Peter Selden Family Trust, that from 6 October 2020 the Trustee of the Peter Selden Family Trust is (and has been) Riverside Asset Pty Ltd, the Appointor, Riverside Asset Pty Ltd, and the Guardian, Suzanne Gaye Allen;
(4)as a consequence of the execution of a Deed of Removal of Trustee, Retirement of Appointor and Appointment of New Trustee and Appointor for the Peter Selden Family Trust No 2, that from 6 October 2020 the Trustee and Appointor of the Peter Selden Family Trust No 2 is (and has been) Riverside Asset Pty Ltd and the Guardian, Suzanne Gaye Allen.
The relevant facts were not in dispute. What follows is taken from the affidavit of the first plaintiff sworn 30 March 2021 and filed in support of the application. There are a number of documents which are relevant to the resolution of this dispute. When summarising the facts, I will refer to these documents in passing and later in these reasons I will come back to individual documents as and when necessary.
Peter John Selden (Peter) passed away on 11 February 2019. The plaintiff had been in a defacto relationship with Peter for a number of years prior to his death. Peter made a will on 17 December 2018. Probate of that will was granted to the first defendant, a solicitor, on 26 June 2019. On 5 May 2015, Peter executed a document entitled 'memorandum of wishes Peter John Selden'. Immediately prior to Peter's death, Peter was the trustee, guardian and appointor of the Peter Seldon Family Trust (PSFT). Peter was also the director and owned shares in the company Exran Pty Ltd. Exran was the trustee of the Peter Selden Family Trust No 2 (PSFT No 2).
The PSFT was established by a Deed of Settlement executed on 23 November 1993. A full copy of that Deed of Settlement is not available. What is available is a document dated 6 October 2001 entitled 'First Deed of Variation of Trust'. Further, the first page of the Deed of Settlement and the original Schedule, which has a handwritten note, dated 23 December 1993, is still in existence.
The first Deed of Variation of the Trust was executed by Peter on 6 October 2001 (First Variation Deed). The plaintiff says this document was executed by Peter in his capacity as trustee on the one part and in his capacity as a guardian on the other part. There is a dispute about the effect of the First Variation Deed which I will deal with in due course. However, for present purposes, the existence of that dispute need only be noted.
By a further Deed of Variation executed on 8 June 2011 entitled 'Deed of Variation for the Peter Selden Family Trust' (Second Variation Deed), other updates and variations of the PSFT Trust Deed were made.
On 2 May 2016, a discretionary trust known as the Peter Selden Family Trust No 2 was established. The Deed of Trust provided that Exran Pty Ltd was the trustee. On 6 October 2020, certain further deeds were executed by the plaintiff. The purpose of these deeds was to appoint the second plaintiff as appointor, guardian and trustee of both of the trusts. There is no dispute between the parties in relation to these deeds. The second defendant accepts - and it is only the second defendant who took any part in these proceedings - that if the first plaintiff was at law the appointor, guardian and trustee of both trusts as at the date the deeds in favour of the second plaintiff were executed, then those deeds are proper and effective.
It is clear then there are two separate trusts, and that different questions arise with respect to each. At par 21 of his written submissions, counsel for the plaintiffs set out what he saw as the issues arising for determination at the hearing. That paragraph reads as follows:
21.The issues which arise for a determination of who is the lawful appointor and guardian of the PSFT and the PSFT No 2, are as follows:
(1)is the Deed of First Variation of Trust made on 6 October 2001 with respect to the PSFT valid? The determination of this question relies upon an assessment of the fact that clause 10 of the original Trust Deed which established the PSFT is not available and there is no evidence of what clause 10 said. As such, in those circumstances, can an assumption be made that clause 10 of the original Trust Deed of the PSFT permitted an amendment of the terms of the trust in the form of the Deed of Substitution that 6 October 2001?...the plaintiffs' position is that the deed made 6 October 2001 is valid.
(2)second, based upon the express wording of clause 27(2)(a) of the Trust Deed of the PSFT (as substituted), and clause 18(7) of the PSFT No 2, was the Deceased's appointment of Suzanne as the Deceased's "successor controller" effective? Further, does any issue turn on the fact that the Deceased's will misdescribes the PSFT and the PSFT No 2?...the plaintiffs' position is that the Deceased's appointment of Suzanne as the Deceased's "successor controller" is effective.
(3)thirdly, is the July 2011 Deed, to the extent that the deed purports to change the definition of appointor and guardian in the schedule to the PSFT, a valid amendment and variation to the PSFT Trust Deed, or was that amendment and variation beyond the express power of the trustee and guardian of the PSFT? This gives rise to an issue that may be colloquially described as a "Mercanti" issue….the plaintiffs' position is that the purported amendment of the definition of appointor and guardian in the schedule to the PSFT is invalid and was beyond the power conferred by the deed;
(4)if the plaintiff's position on issue 3 is not accepted such that that the definition of appointor and guardian in the schedule to the PSFT was validly amended by the 8 July 2011 Deed, is the effect of that amendment that, prior to the Deceased's death, he ceased to be the appointor and guardian of the trust due to incapacity? This is a position raised by the second defendant.
During the course of his submissions, I asked counsel for the second defendant whether he accepted par 21 fairly set out the issues between the parties. He was of the view it did not do so. However, he failed either in written or oral submissions to state precisely why it was the questions posed by counsel for the plaintiffs were not acceptable. However, what counsel did do was file a minute of proposed declarations. That document reads as follows:
PETER SELDEN FAMILY TRUST ('PSFT')
The Second Defendant seeks declarations as follows:
1.The deceased became incapacitated on 21 January 2021.
2.The Appointor of PSFT became jointly Mark Lionel Selden and David Peter Selden from the time the deceased became incapacitated pursuant to the nomination of conditional appointment contained in the paragraph beginning 'If Peter John Selden' on page 2 of the 8 July 2011 deed ('the Nomination').
3.In consequence, the deceased was not the 'sole Controller' of PSFT 'as at the date of [his] death', 11 February 2019, and the Will at clause 4(b)(i) (def. clause 4(c)) did not cause a change in Appointor for the PSFT. Suzanne Allen and Riverside Asset Pty Ltd have no control over the PSFT.
ALTERNATIVES ONLY ARISING IF THE ABOVE DECLARATIONS DO NOT SUCCEED (on a cascading basis)
4.In the alternative that the deceased death was prolonged from 21 January 2019. to 11 February 2019 (which is denied), then the expression in the Nomination 'upon the death' took operation from the date on which the deceased began the process of death, and in consequence, paragraph 2 holds for the reason that 'upon the death' took effect first and paragraph 3 holds that the deceased was not the 'sole Controller' of PSFT 'as at the date of [his] death'.
5.In the further alternative, if the Nomination was not a nomination but was a variation in trust (which is denied), then the variation in trust was authorised by clause 27(2)(d) or clause 20 of the 6 October 2001 amended trust deed terms or alternatively by the original 23 November 1983 schedule and the 6 October 2001 schedule, and took effect, so that paragraph 2 operates the same but as a variation in trust, and paragraph 3 follows.
6.In the further, further alternative that the Nomination was not a nomination but a variation of trust and invalid (see clause 27(2)(d) 6 October 2001 amended trust deed terms) (which is denied), then the Will at clause 4(b)(i) (see clause 27(2)(a) 6 October 2001) was also a variation in trust and also invalid, and so in default of a successor appointor, the executor is the Appointor (pursuant to the 6 October 2001 schedule) or failing that, Margaret Ann Selden is the Appointor (pursuant to the 23 November 1983 schedule).
7.In the further, further, further alternative, the Will at clause 4(b)(i) does not describe the PSFT by correct name or settlement date and accordingly is void and of no effect. Accordingly, the executor is the Appointor (pursuant to the 6 October 2001 trust deed schedule) or failing that, Margaret Ann Selden is the Appointor (pursuant to the 23 November 1983 trust deed schedule).
PETER SELDEN FAMILY TRUST No 2 ('PSFT')
The Second Defendant seeks declarations as follows:
8.The deceased became incapacitated on 21 January 2021.
9.The Appointor of PSFT2 became the children of the deceased, upon the deceased becoming of unsound mind.
10.In consequence, the deceased was not the 'sole Controller' of PSFT2 'as at the date of [his] death', 11 February 2019, and the Will at clause 4(b)(i) (def. clause 4(c)) did not cause a change in Appointor for PSFT2. Consequentially, Riverside Asset Pty Ltd was never validly appointed as trustee of PSFT2.
ALTERNATIVE ARISING ONLY IF THE ABOVE DECLARATIONS DO NOT SUCCEED
11.In the alternative that the deceased death was prolonged from 21 January 2019 to 11 February 2019 (which is denied), then the expression on page 2 of the 26 April 2006 PSFT2 trust deed 'upon the death' takes operation from the date on which the deceased began the process of death, and in consequence, paragraph 9 holds for the reason that 'upon the death' took effect first and paragraph 10 holds in that the deceased was not the 'sole Controller' of PSFT2 'as at the date of [his] death'.
The position so far as PSFT No 2 is concerned is rather more straight forward than the position with respect to PSFT. There are two definitions in the Deed of Trust for the PSFT No 2 which are relevant. The first is the definition of 'appointor'. That is found in cl 1(1) of the Deed and reads as follows:
'Appointor' Peter John Selden or the persons for the time being holding the office of Appointor and upon the death, winding up or insolvency of the last Appointor if no other appointment has been made then the children of the Appointor, (An Appointor immediately loses the position of Appointor if that Appointor is wound up, insolvent or becomes of unsound mind.)
The other relevant clause is cl 18(7). That clause reads as follows:
18(7)The Appointor may (in writing) appoint another or replacement Appointor. Subject to any specific clause to the contrary, all additional and replacement Appointors have all the powers of the original Appointor, including the power to appoint further appointors.
It is the position of the second defendant that Peter became of unsound mind prior to his death and that accordingly the children of Peter became the Appointors. It is the position of the plaintiffs, that Peter did not become of unsound mind prior to his death and Peter's will appointed the first plaintiff as the Appointor of the Trust. In part, determination of this issue depends upon medical evidence as to Peter's condition prior to his death. That medical evidence is also relevant to the decision in relation to the PSFT.
Turning then to the PSFT, although flagged as an issue between the parties in the plaintiff's written submissions, by the time the matter came on for determination, it was agreed the original Deed allowed for amendment and the amending Deed of 6 October 2001 was effective. Clause 2 of the Deed reads as follows:
The Schedule to the Trust Deed shall be amended as follows:
…
(3)The reference to the Guardian and Appointor shall be deleted and replaced with the following:
'The said peter John Selden or any person or Corporation which he may by Deed or Will appoint whether revocable or irrevocable and whether taking effect in the future or at present or subject to conditions but failing any such appointment then, the personal representative of the said Peter John Selden as contained in the Will of the said Peter John Selden.
Also of relevance is cl 1. That reads as follows:
1.The parties agree that the Trust Deed shall be amended as follows:
1.1The Table of Clauses at the commencement of the Trust Deed and clauses 1 to 30 shall be deleted in their entirety.
1.2The Index and Clauses 1 to 28 as are contained in attachment 'A' to this Deed shall from and including the date of execution of this Deed by the Trustee and Guardian be and become the terms and conditions of the Trust and the same shall together with the Parties, Recitals and Schedule to the Trust Deed remaining and as varied by this Deed constitute the Trust Deed.
Of further relevance is cl 27(2)(d) of the Schedule. That reads as follows:
(2)(d)the person for the time being holding the office of Appointor hereunder may by notice in writing to the Trustee from time to time appoint conditionally or otherwise some other person to succeed him as Appointor from the time of that notice or from some other time and from time to time revoke such appointment and make a further appointment.
There is a clear inconsistency between clause 2(3) of the Deed and cl 27(2)(d) found in the schedule. Clause 2(3) requires a new appointor to be appointed 'by Deed or Will'. Clause 27(2)(d) of the Schedule allows a new appointor to be appointed by 'notice in writing' for the purpose of this application it is not necessary to determine which provision applies. Both parties accept Peter purported to change the appointor by a deed - the Second Deed of variation.
All parties also accept then it was open to Peter as the Appointor under the 6 October 2001 variation to nominate an Appointor other than himself. He was not required to do so but if he chose to do so, the power was available. If he did not do so, then on his death the Appointor would be the person nominated in his will.
By the Second Deed of Variation, there was a purported change to the provisions dealing with Appointor. Relevantly, cl 1.2 reads as follows:
1.2Updating Appointor
Deleting the definition of Appointor and Guardian in the Schedule to the Trust Deed and replacing it with the following definition of Appointor and Guardian:
The Appointor and Guardian
Peter John Selden or the persons for the time being holding the office of Appointor and Guardian subject to the following:
If Peter John Selden from time to time personally or through any of the business entities of Peter John Selden suffers an Insolvency Event or becomes incapacitated or is subject to divorce proceedings or is otherwise separated from her (sic) spouse, partner or defacto, whichever is the case, or upon the death of Peter John Selden, then Peter John Selden shall no longer be Appointor and Guardian and in his place Mark Lionel Selden and David Peter Selden shall be the Appointor and Guardian.
At the end of the Deed there are two signature provisions. The first reads:
'Signed by Peter John Selden in front of'.
There is then Peter's signature and the signature of a witness. Below that there appears the following:
'The Guardian/Appointor below accepts this variation'.
Once again, there is a signature of Peter together with the signature of the witness.
The controversy then comes down to this. The plaintiffs say this Deed was not signed by Peter in his capacity as Appointor. Rather, they say it was signed by him in his capacity as trustee. It is accepted there are other provisions of the Deed which do vary the terms of the trust. The second defendant says that argument promotes form over substance. He says Peter had the power to vary the provision relating to the Appointor and that is what he has done. The failure to actually state in the first signature clause that Peter was signing as the Appointor is really of no consequence. The intent is clear on the face of the document.
The plaintiffs' position is clearly expressed in par 41 of counsel's written submissions. They read as follows:
41.The reasons for this conclusion are as follows:
(a)The crucial words of clause 20 …are that the trustees may '.... vary .... the trusts hereinbefore provided;'
(b)Clause 3 of the Substituted Terms of the Trust sets out the declaration of trust. In that clause there is a declaration that the trustee 'shall stand possessed of the Trust Fund and the income of the Trust Fund upon the trusts' and with subject to the powers and provisions expressed;
(c)the 'trusts hereinbefore provided' are the trusts provided for in the earlier provisions of the trust deed. Specifically, clause 3 declares that the trustee shall stand possessed of the Trust Fund and the income thereof upon the trusts and with and subject to the powers and provisions hereinafter expressed. The trusts and powers expressed are found in clause 3 (Declaration of Trust), clause 4 (to pay any part or parts of net income of the trust fund), clause 7 (trustee general powers) and clause 9 (additional trustee powers);
(d)Clause 1(j) defines the Appointor or to mean 'the person or persons successively named or described as such in the schedule or determined according to the provisions hereof';
(e)The identity of the Appointor is not any part of 'any of the trusts hereinbefore provided …'. Rather, the identity of the Appointor is informed by the terms of the Schedule of the PSFT deed;
(f)The identity of the appointor as defined in the schedule to the deed (which the 2011 amendment purported to substitute by way of the amendment power) does not form part of the trust deed characterised as 'any of the trusts hereinbefore provided.' The amendment and variation power of clause 20 only relates to varying 'the trusts hereinbefore provided'. The office of appointor contained in the schedule is separate to the trusts created by the trust deed.
In support of their position, the plaintiffs rely upon the first instance decision of Le Miere J in Mercanti v Mercanti [2015] WASC 297. It is said that a similar amendment variation power as cl 27(2)(d) of the PSFT in a trust known as the FW Trust Deed contained a similar declaration of trust clause and a comparable clause for variation to the PSFT Trust Deed. His Honour said (at par 101):
[101]In my opinion the natural and ordinary meaning of the words 'the Trustee may … vary … the trusts hereinbefore provided' does not extend to varying the terms and conditions of the trust deed dealing with the office of Appointor as distinct from the trusts created by the trust deed. The FW Trust Deed distinguishes between 'the trusts' and 'the trusts powers and provisions' of the trust deed. The definition clause defines 'Trust' to mean 'the trusts powers and provisions as constituted by this Deed of Settlement'. The word 'Trust' appears in cl 15.4 which refers to persons claiming a beneficial interest in over or upon 'the property subject to this Trust'. Clause 15.10 specifies that the law applicable to 'this Trust' shall be the law of the place of the residence of the Trustee. In contrast, the power of amendment in cl 14 refers to varying 'the Trusts' herein before provided not 'the Trust'. Perhaps more persuasive is that cl 2.1, in which the Settlor declares the trust, distinguishes between 'the trusts' and “the powers and provisions” in the trust deed. Similarly, cl 3.1, which is concerned with indemnity and exclusion of liability, distinguishes between 'Trusts' and 'authorities, powers and discretions' of the trust deed by referring to the execution or failure to exercise 'any of the trusts authorities powers and discretions' of the trust deed 'by virtue of being Trustee of the Trust'. Section 8 of the trust deed, which deals with trustee’s powers, distinguishes between 'trusts' and 'powers' and 'powers and provisions'. Clause 8.19 refers to questions arising under or in relation to the execution of 'the trusts and powers of this Deed'. Clause 8.29 refers to the trustees appointing the whole or any part of the Trust Fund to be held upon other trusts and thereupon 'the trust herein declared concerning that property' shall cease and the property shall be subject to 'the trusts powers and provisions contained in the other settlement'.
In his submissions the second defendant made three points. First, in Mercanti, the trustees sought by variation of trust to remove an Appointor which was not open under the terms of the Trust Deed. Second, in this case the Appointor was not removed. Rather, the 2011 Deed contingently nominated a successor Appointor. A contingent nomination was wholly open under cl 27(2)(d). To that extent, this case differed from Mercanti. Thirdly, the 2011 Deed was signed by Peter in his role as a trustee but also separately signed in his role as Appointor/Guardian.
Ultimately, the outcome in this case is entirely dependent upon the proper interpretation of cl 27(2)(d) of the terms of the PSFT which appear as a Schedule to the First Deed of Variation. What that clause requires is that the Appointor from time to time change the identity of the Appointor, and must give notice in writing to the trustee. It is not to the point that the Appointor and the trustee may be one and the same person. They each have difference rights and obligations. An Appointor to make a valid appointment, must make it clear he or she is exercising his powers as Appointor. It is not necessary for the trustee to acknowledge the Appointor has exercised his power. The requirement is not that any change must be by deed. What is necessary is that the Appointor notifies the trustee in writing of the change. It could be done by letter - perhaps even by email. It cannot be done verbally. But it must be done by the Appointor exercising his or her rights.
That is the clear intent of cl 27(2)(d). But that is not what the Second Deed of Variation actually does. The trustee - who happened to be Peter - appears to have exercised certain rights. Peter - in his capacity as Appointor/Guardian - has accepted this is a proper right exercised of the rights of a trustee. But the Deed cannot be construed as a notice in writing from the Appointor to the trustee of a variation to the position of the Appointor.
Accordingly, the Second Deed of Variation, so far as it applies to the Appointor, is of no force and effect, and the First Deed of Variation, so far as it relates to the Appointor, applies.
Had it been the case, the purported variation in relation to the Appointor in the Second Deed of Variation applied, then an issue arises which requires consideration of the medical evidence. It is convenient at this point to turn to that evidence.
The second defendant sought to rely on two affidavits of Dr Daphne Tsoi. The first sworn 3 August 2021 and the second sworn 18 August 2021. Counsel for the plaintiff objected to the final two paragraphs of Dr Tsoi's first affidavit and the whole of the second affidavit. After hearing argument, I struck out the two paragraphs complained of in the first affidavit, and refused to admit into evidence the second affidavit. I said at the time I would provide reasons for my decision. Those reasons are as follows.
The two paragraphs of which a complaint was made in Dr Tsoi's first affidavit read as follows:
13.Based on my review of the medical notes provided and my recollection of events from 4 February 2019 only at this time, I am of the opinion that Mr Peter Selden lacked legal capacity from at least 4 February 2019.
14.Whilst I do not presently have access to the deceased's medical file for the period from 21 January 2019, I did have access to the same when I prepared my report dated 1 July 2021 and I remain of the belief that Mr Selden did not have legal capacity at the date of his admission on 21 January 2021.
It was counsel's submission these two paragraphs were conclusions of law and not either expert evidence or evidence based on Dr Tsoi's observations. On behalf of the second defendant, it was said that while there was reference to 'legal' capacity, really what Dr Tsoi was doing was offering an expert opinion as to the mental capacity of Peter at the time.
These two paragraphs were impermissible expressions of a conclusion of law. If Dr Tsoi had detailed Peter's medical condition and concluded based upon her experience and expertise, as at a certain date, Peter lacked the capacity to make decisions because he was unable to process relevant facts, the evidence would of course be admissible. But that is not this case. The way Dr Tsoi has expressed the conclusion is not a statement of her medical opinion.
As to the second affidavit of Dr Tsoi, it was filed too late in the day. No leave had been given to file a further affidavit and the plaintiff rightly complained an adjournment would have been necessary to further investigate the contents of the affidavit. While I accept submissions made on behalf of the second defendant that all that was being done by the second affidavit was to expand upon views expressed by Dr Tsoi in her earlier affidavit, I am not satisfied it was in the interests of justice to allow the affidavit into evidence.
Looking at the evidence of Dr Tsoi, it is pars 9 to 12 which are relevant. They read as follows:
9.Mr Selden was formally assessed by our on call medical officer on 5 Feb 2019 at 0045 hrs. It was documented that he was able to converse, although his cognition was limited. He was not orientated to place. Over the course of the day, Mr Selden was noted by the nursing staff, medical officer, palliative care team and me to have limited response to simple questions only, and he was noted to be increasingly drowsy by the evening.
10.By 6 February 2019, Mr Selden's condition deteriorated with increasing drowsiness and was minimally responsive.
ll.Mr Selden was noted to be unresponsive by the morning of 8 February 2019 and he never regained consciousness.
12.Mr Selden was certified as deceased on 11 February 2019 at 0910 hours.
So far as the PSFT No 2 is concerned, the question is whether based upon this evidence, Peter had become 'of unsound mind'. In my view, he had not. The use of that expression suggests a person suffering from a mental impairment, perhaps in the nature of dementia. Peter died of terminal brain cancer. It is true that the later stages of that disease meant that at least from 8 February, and perhaps even as early as 6 February, Peter was not functional. However, there is no diagnosis of 'unsoundness of mind'. On that basis, the automatic discharge from the office of Appointor, found in PSFT No 2, does not operate.
In relation to PSFT, the operative word is 'incapacitated'. That is a word of wide general import. An individual who loses the use of an arm might be said to be 'incapacitated'. But clearly that is not what the term means. It must relate to impaired mental capacity. Afterall, it can be assumed the definition is an attempt to protect the trust. If the Appointor is not in a position to make a rational decision about what is in the best interests of the trust - if he or she is 'incapacitated' - then a replacement should be appointed.
In this case, the evidence of Dr Tsoi makes it plain that at least from 6 February, Peter was not in a position to make an informed decision as to what might be in the best interests of the PSFT. He was incapacitated. Therefore, had the provisions of the Second Deed of Variation applied, Peter would have ceased to be the Appointor of the Trust and his two nominated children would have assumed that office. As I have concluded, the Deed did not operate to amend the Appointor provision of the earlier Deed, I include that assessment of the position for the sake of completeness only.
It is appropriate to make orders largely in terms of those sought by the plaintiff. However, I will give the parties the opportunity to consider the form of orders and the issue of costs. Subject to hearing from the parties, I am of the view the costs of all parties to this application ought be taxed and paid out of the assets of the PSFT. Any party taking issue with that proposed order should file short submissions on costs within 7 days of the publication of these reasons.
I certify that the preceding paragraph(s) comprise the reasons for decision of the Supreme Court of Western Australia.
MM
Court Officer
6 SEPTEMBER 2021