Anthony John Warner in his Capacity as Trustee in Bankruptcy of the Estate of Brian McMillan v McMillan

The Full Federal Court of Australia heard an appeal concerning a dispute between Anthony John Warner, in his capacity as Trustee in Bankruptcy of the estate of Brian McMillan, and Brian McMillan. The core of the dispute involved the Trustee's claim to certain assets, specifically a property and a motor vehicle, which Mr. McMillan alleged were held on trust for his children. The Trustee sought declarations that these assets formed part of Mr. McMillan's bankrupt estate.

The primary legal issue before the Full Federal Court was whether Mr. McMillan had successfully established a valid express trust over the property and the motor vehicle for the benefit of his children, thereby removing them from the reach of his creditors. This required the Court to consider the elements necessary for the creation of an express trust, particularly the intention to create a trust and the certainty of subject matter and objects. The Court also had to determine whether any purported trust was void for uncertainty or otherwise unenforceable.

The Court's reasoning focused on the established principles for the creation of express trusts, requiring clear and unequivocal intention to create a trust, certainty of the trust property (subject matter), and certainty of the beneficiaries (objects). Applying these principles, the Court found that Mr. McMillan had failed to demonstrate the requisite intention to create a trust at the relevant times. The evidence did not establish that he had intended to divest himself of beneficial ownership of the property and the motor vehicle in favour of his children. Consequently, the Court concluded that no valid express trust had been created, and the assets therefore formed part of the bankrupt estate.

The Full Federal Court allowed the appeal, setting aside the orders of the primary judge. It declared that the property and the motor vehicle were assets of the bankrupt estate of Brian McMillan and ordered that Mr. McMillan pay the Trustee's costs of the appeal.