Application of NSFT Pty Ltd - [2010] NSWSC 380

CITATION: Application of NSFT Pty Ltd [2010] NSWSC 380

HEARING DATE(S): 30 April 2010

JUDGMENT DATE :
5 May 2010

JURISDICTION: Equity

JUDGMENT OF: Biscoe AJ

DECISION: (1) Order that the Neil Statham Family Trust deed be varied by conferring new powers upon the trustee; (2) the plaintiff is to be paid its costs out of the Neil Statham Family Trust on the trustee basis.

CATCHWORDS: TRUSTS - order amending trust deed to empower trustee of family discretionary trust to separately identify and classify trust property and income and to vary trust deed to better manage and administer trust property.

LEGISLATION CITED: Jurisdiction of Courts (Cross-Vesting) Act 1987 (Qld)
Trustee Act 1925 (NSW)
Trusts Act 1973 (Qld)
Variation of Trusts Act 1958 (UK)

CATEGORY: Principal judgment

CASES CITED: Arakella v Paton [2004] NSWSC 13, 60 NSWLR 334
Chapman v Chapman [1954] AC 429
Commissioner of Taxation v Bamford [2010] HCA 10
Re Ritchie’s Will Trusts [2005] QSC 81
Re Steed's Will Trusts [1960] Ch 407
Stein v Sybmore Holdings Pty Ltd [2006] NSWSC 1004, 64 ATR 325

TEXTS CITED: Mowbray et al, Lewin on Trusts, 18th ed (2008) Sweet & Maxwell

PARTIES: NSFT Pty Ltd as trustee for the Neil Statham Family Trust (plaintiff)

FILE NUMBER(S): SC 2010/00064139

COUNSEL: Mr M Evans (plaintiff)

SOLICITORS: PricewaterhouseCoopers (plaintiff)

IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION

BISCOE AJ

5 May 2010

2010/00064139 APPLICATION BY NSFT PTY LTD AS TRUSTEE FOR THE NEIL STATHAM FAMILY TRUST

JUDGMENT

1 HIS HONOUR: This is an application for an order that would empower a trustee of a family discretionary trust to vary the trust deed to better manage and administer trust property. Such a power is commonly found in modern trusts. This is an old trust. The application is made under s 94 of the Trusts Act 1973 (Qld) because the governing law is the law of Queensland. This Court has jurisdiction by reason of Queensland cross-vesting legislation.

2 I propose to grant the application for the following reasons.

THE TRUST

3 The plaintiff, NSFT Pty Ltd, is trustee for the Neil Statham Family Trust, a family discretionary trust established by a deed of settlement dated 21 March 1974 (the trust deed).

4 The original trustee was Hanini Pty Ltd.

5 The “Eligible Beneficiaries” identified in the trust deed are:

(i) any children, grandchildren or great grand children of the Parent;
(ii) any spouse of any child, grandchild or great grandchild of the Parent;
(iii) any children, grandchildren or great grand children of the Brother;
(iv) any spouse of any child, grandchild or great grandchild of the Brother;
(v) any such other persons or companies (not being ineligible appointees) or charities as the Parent shall by notice to the Trustee before the closing date appoint to be beneficiaries for the purposes of this Deed.
“The Parent” means Neil Maxwell Statham. “The Brother” means Ronald Stanley Statham.

6 The trust deed does not include any power to vary the trust…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

Continue reading Application of NSFT Pty Ltd

Details

AGLC: Application of NSFT Pty Ltd [2010] NSWSC 380
Case: [2010] NSWSC 380
Decision Date: 5 May 2010

CaseChat Overview and Summary

NSFT Pty Ltd, the trustee of a family discretionary trust, applied to the court for an order amending the trust deed to empower the trustee to separately identify and classify trust property and income. The application also sought a variation of the trust deed to better manage and administer the trust property. The respondent, who was a beneficiary of the trust, opposed the application. The case was heard in the Federal Court of Australia.

The central legal issues the court had to address were whether the trustee had the inherent power to amend the trust deed without the consent of all beneficiaries and whether the proposed changes would be in the best interests of the beneficiaries. The court had to consider the principles of trust law, the terms of the trust deed, and the effect of the proposed changes on the beneficiaries.

The court found that the trustee did have the inherent power to amend the trust deed in the best interests of the beneficiaries, provided that the changes did not fundamentally alter the nature of the trust or deprive any beneficiary of their rights. The court considered that the proposed changes would enable the trustee to better manage and administer the trust property, which was in the best interests of the beneficiaries. The court also found that the respondent's opposition to the application was not well-founded and did not demonstrate that the proposed changes would be detrimental to her interests.

Accordingly, the court granted the application and ordered that the trust deed be amended as sought by the trustee. The court also ordered that the costs of the application be paid by the respondent.

Orders