Augustus v Permanent Trustee Co (Canberra) Ltd

[1971] HCA 25

HIGH COURT OF AUSTRALIA

Barwick C.J., McTiernan, Windeyer, Owen and Walsh JJ.

AUGUSTUS v. PERMANENT TRUSTEE CO. (CANBERRA) LTD.

(1971) 124 CLR 245

30 June 1971

Private International Law

Private International Law—Choice of law—Voluntary settlement of movables—Essential validity—Law governing—Whether express choice of law—Public policy—Conveyancing Act, 1919-1967 (N.S.W.), s. 36*.

Decisions

June 30.
The following written judgments were delivered :-
BARWICK C.J. I have had the advantage in this matter of having read the reasons for judgment prepared by my brother Walsh. I agree with his conclusions and his reasons therefor. I do not desire to add anything in respect of the ground covered by those reasons. However, I desire to say that had the deed of settlement dated 25th June 1956 not contained cl. 5 which is set out in my brother's reasons, there would remain for me nonetheless the substantial question as to what in the circumstances should be held to be the proper law of the settlement. However having regard to the presence of cl. 5 in the deed of settlement and the views as to its effect with which I agree, I find no need to consider whether the view as to the proper law of the settlement expressed by the Supreme Court of the Australian Capital Territory is correct. (at p249)

2. I agree that the appeal should be allowed and affirmative answers given to questions 1 (a) (ii) and 1 (c) in the originating summons. (at p249)

McTIERNAN J. I agree with Walsh J. and concur in his reasons and in the order which he proposes. (at p249)

WINDEYER J. I have had the advantage of reading the judgment to be delivered by Walsh J. I agree in his Honour's conclusion and in his reasons. (at p249)

OWEN J. I have had the advantage of reading the judgment prepared by my brother Walsh. I agree with the order proposed by him and with his reasons. (at p249)

WALSH J. On 25th June 1956 a deed was executed on behalf of Stewart Walter D'Arrietta, now deceased (the settlor) and on behalf of the respondent, Permanent Trustee Co. (Canberra) Ltd. (the trustee). It was executed in the Australian Capital Territory (the Territory). It was a voluntary settlement. It recited that the settlor had paid to the trustee at Canberra the sum of 42,314.11.3 Pounds to be held upon the trusts declared in the deed. That sum was referred to as the trust funds. After the execution of the deed, the trustee paid that sum to the settlor as the price of shares and stock owned by him, most of these being on registers in the Territory, and they were transferred to the trustee, which was incorporated in the Territory and has not been registered as a foreign company in New South Wales. (at p250)

2. The settlor was domiciled and resided in New South Wales, as did his children and grandchildren. There were two children, Margaret and John. Margaret was then and continued to be a spinster. She died in 1966. Her last will contained a general devise and bequest of all her estate to her trustee and a disposition of her residuary estate (subject to an annuity and to a life interest) in trust for her named nephews and niece "as shall survive me and attain the age of twenty-five years in equal shares as tenants in common absolutely". There was a proviso to which I need not refer. At the date of the settlement John was married and had three children who were at that time sixteen, fourteen and three years of age respectively. (at p250)

3. The settlor died on 8th May 1963 and probate of his will was granted to the respondent, Permanent Trustee Co. of New South Wales Ltd. (at p250)

4. Clause 2 of the deed of settlement, after providing that the trustee should hold the trust funds and the investments for the time being representing the same upon trust to divide them into two equal parts and to pay the net income of one part to the settlor's son for his life and the net income of the other part to the settlor's daughter during her life, continued as follows:

"(b) UPON TRUST from and after the deaths respectively of the said son and the said daughter both as to the capital and the income of their respective parts for such child or children of the said son and the said daughter respectively as are living at their parent's death and as being male attain or shall have attained the age of twenty-five years or being female attain or shall have attained that age or shall have married under that age and if more than one in equal shares as tenants in common PROVIDED HOWEVER that if the said son shall die leaving no child or children him surviving who shall attain a vested interest THEN the Trustee shall hold the said son's share of the Trust funds both as to the capital and the income thereof UPON TRUST for such person or persons as he may by his last will appoint and failing appointment THEN for the said son's next of kin as though he had died intestate PROVIDED FURTHER that if the said daughter shall die leaving no child or children her surviving who shall attain a vested interest THEN the Trustee shall hold the said daughter's share of the Trust Funds both as to the capital and the income thereof UPON TRUST to pay the same to such of the grandchildren of the Settlor as shall survive her and attain twenty-five years of age in equal shares and failing any such grandchildren living to attain a vested share THEN UPON TRUST for such person or persons as the said daughter by her last Will shall appoint and failing appointment THEN for the said daughter's next of kin as though she had died intestate and unmarried."

When the settlor's daughter died unmarried, questions arose as to the trusts upon which the share, described in the said clause as her share of the trust funds, and which will herein be called "the daughter's share", was thereafter held. If the trusts set out in the clause operated according to their terms, there would be no problem, since the daughter was survived by three grandchildren of the settlor. One of these (the appellant Anne Margaret Augustus) had then attained the age of twenty-five years. Another of them (the respondent Peter Michael D'Arrietta) has since attained that age. The third of them (the respondent Stewart John D'Arrietta) was then and still is under the age of twenty-one years. (at p251)

5. It is not in dispute between the parties that if the rule against perpetuities is applicable, unaffected by any special statutory provision, it invalidates the gift to the grandchildren of the daughter's share. If that gift be invalid, further questions must be considered as to the validity and the operation of the subsequent trust for such person or persons as the daughter shall appoint and of the ultimate gift to the daughter's next of kin. If, however, the provisions of s. 36 of the Conveyancing Act, 1919-1967 (N.S.W.) apply to the disposition in the deed of the daughter's share in favour of the grandchildren, it will take effect as if the disposition had been for the benefit of such of the settlor's grandchildren as should survive his daughter and attain the age of twenty-one years. There can then be no invalidity and, in the events which have happened, there can be no failure of objects of the gift, so that the subsequent trusts need not be considered. At the date of the settlement, no such provision as s. 36 had been enacted as part of the law of the Australian Capital Territory. (at p251)

6. The trustee instituted proceedings by originating summons, in the Supreme Court of the Australian Capital Territory, for the determination of questions relating to the daughter's share. The first question was (in effect) whether the disposition of that share in trust for the settlor's grandchildren was to be construed and to have legal effect according to the law of the Territory or the law of New South Wales. The Supreme Court (Fox J.) declared that it is to be construed and to have legal effect according to the law of the Territory (1969) 14 FLR 246 . It was held, also, that that disposition is wholly invalid, that the direction in the deed creating a trust for such person or persons as the daughter by her last will should appoint is invalid, that the property does not vest in the next of kin of the daughter and that there is a resulting trust of the said share for the estate of the settlor. (at p252)

7. It is clear, as the learned primary judge observed, that when the settlement was planned and executed the purpose of the settlor and of those advising him was to avoid the impact of certain provisions of the revenue laws of New South Wales. The property given was money, which was paid to the trustee in the Territory. The trustee was incorporated in the Territory. The trust funds, after the shares had been purchased, were outside the State and no doubt were intended to remain there, although power was given to the trustee to make investments outside the Territory. The deed itself was executed and remained in the Territory. Some or all of those features must have been considered necessary or desirable in aid of the purpose of escaping duties imposed by the law of New South Wales, having regard to Vicars v. Commissioner of Stamp Duties (N.S.W.) (1945) 71 CLR 309 and to similar cases relating to death duty upon "notional" estate, and (since the settlement created life interests) having regard, also, to the case, then recently decided, of Johnson v. Commissioner of Stamp Duties (1956) AC 331 , dealing with the operation of par. (g) of s. 102 (2) of the Stamp Duties Act, 1920-1952 (N.S.W.). It is clear enough, therefore, that it was intended that duties which would otherwise have become payable under the laws of New South Wales would be avoided. But this does not require, in my opinion, that the question whether the law of the Territory or the law of New South Wales is to be applied in determining the rights and obligations created by the deed should be approached with any presumption in favour of the applicability of the law of the Territory. (at p252)

8. It has not been disputed by any of the parties to the appeal that the general rules established in relation to contracts are applicable in deciding questions of the choice of law in relation to such voluntary settlements as that which is contained in the deed. In my opinion, those rules are applicable. That means that, subject to qualifications to which some reference will be made later herein, it was open to the parties to make their own choice of law. If they have expressed their intention on that matter, effect will be given to it : see Vita Food Products Inc. v. Unus Shipping Co. Ltd. (1939) AC 277, at p 290 . If they have not expressed an intention, the law to be applied must be ascertained as "a matter of implication to be derived from all the circumstances of the transaction": see Bonython v. The Commonwealth (1951) AC 201, at p 221 . (at p252)

9. In reaching his conclusion that the law to be applied in resolving the first question raised by the originating summons was the law of the Territory, Fox J. decided that no actual intention as to the law by which the question should be determined was expressed or implied in the deed. In particular, he held that cl. 5 of the deed did not contain any relevant statement of intention (1969) 14 FLR, at p 251 . Clause 5 is in the following terms :

"In addition to the express powers hereby conferred on the Trustee the Trustee shall be entitled to exercise in respect of the trust funds wherever situate all or any of the powers authorities and discretions conferred on Trustees by the law of the State of New South Wales as if the same were expressly included in these presents and the rights and liabilities of the Trustee and of the beneficiaries as between themselves and as against the Trustee and the administration of the trusts of this Settlement shall be regulated in the same manner as they would be under the laws of the said State." (at p253)

10. Counsel for the appellant and counsel for the trustee have submitted that cl. 5 includes an express statement which makes applicable to the problem created by the gift to the grandchildren the provisions of s. 36 of the Conveyancing Act and thereby solves that problem, since the effect of applying those provisions is to make the gift valid. Counsel for the trustee of the settlor's will has submitted that the learned judge was correct in construing cl. 5 as not being concerned with the substance of the dispositions or with their validity and as not expressing any relevant intention. I proceed to consider whether that view of the effect of the clause should be accepted. (at p253)

11. Clause 5 begins by making a provision which refers only to the powers, authorities and discretions conferred on trustees by the law of New South Wales. But the remainder of the clause deals with the "rights and liabilities" therein described and it deals also with "the administration of the trusts" of the settlement. It provides that both "shall be regulated in the same manner as they would be under the laws of the said State". (at p253)

12. One question raised by the clause is : What is meant by "the administration of the trusts"? It is an expression which may have different meanings in different contexts. It may be used to refer to the practical steps taken by a trustee in the execution of his duties, such as the payment of debts and expenses, the getting in or investment of assets, the keeping of proper accounts and the like. But it may be used also to mean, or to include, the distribution or payment of trust property or money to those who are, according to the terms of the trust instrument, entitled to receive it. When a decree was made by the Court, in an administration suit, for general administration, the Court would decide, whenever it was necessary to do so, any disputed or doubtful questions as to the construction and operation of the trust instrument. When the procedure by originating summons was introduced, its object was, as stated by North J. in In re William Davies; Davies v. Davies (1888) 38 Ch D 210, at p 212 , to provide the means for obtaining a decision in a summary way of particular questions "affecting the administration of an estate or a trust where it would previously have been necessary to have a decree or judgment for the administration of the estate or execution of the trust". (See also In re Royle; Royle v. Hayes (1889) 43 Ch D 18 ; In re Medland; Eland v. Medland (1889) 41 Ch D 476, at p 488 ; Evans v. Evans (1910) 10 SR (NSW) 594, at p 597 ). In the Rules providing for the taking out of an originating summons for these and other related purposes, which are copied from the Rules adopted in England, one of the paragraphs is in these terms: "(g) The determination of any question arising in the administration of the estate or trust": see Rules of the Supreme Court of the Australian Capital Territory, 0. 58, r. 1 and cf. Equity Act, 1901 (N.S.W.), Fourth Schedule. It seems clear that questions such as those which were submitted to the Court in the present case could be brought before the Court by originating summons by virtue of par. (g), although it may be that they would fall, also, within par. (a) or par. (b) of the Rule. If there is a dispute or doubt as to the persons entitled to receive payment of the whole or a part of a trust fund, the trust cannot be fully administered until that question is resolved. Its resolution, whether by the trustee himself with such advice as he may think it proper to obtain or by the Court, may properly be described, in my opinion, as a part of the administration of the trust. (at p254)

13. Therefore, I think that a direction in a trust deed that the trusts are to be administered according to the law of a specified country or State may be sometimes construed as governing the determination of questions concerning the validity and the operation of the trust dispositions, in order that the beneficiaries and the interests taken by them may be ascertained. Nevertheless, I think that a more limited construction of the words "the administration of the trusts of this Settlement", as they appear in cl. 5, is to be preferred. A narrower construction of those words makes it easier to give effect to the words which precede the reference to the administration of the trusts. The matters that are to be "regulated" in the same manner as they would be under the laws of New South Wales include (in conjunction with the administration of the trusts), (a) the rights and liabilities of the trustee; (b) the rights and liabilities of the beneficiaries as between themselves; and (c) the rights and liabilities of the beneficiaries as against the trustee. Since the words describing all those rights and liabilities are followed conjunctively by the reference to the administration of the trusts, it seems better to treat the latter phrase as relating to what may be called the machinery aspects of the execution of the trusts, rather than to treat it as including in its meaning the ascertainment of the beneficial interests and the distribution of the trust funds in accordance with the true effect of the trust dispositions. (at p255)

14. If the part of the clause which begins with the words "the rights and liabilities" had been followed by some such words as "shall be governed by the laws of New South Wales", I am of opinion that this provision would have been apt, in its natural meaning, to express the intention that a question whether some person or class of persons, named or described in the deed as an object of benefit, was or was not entitled to receive a share of the capital or of the income of the trust funds, should be determined by the law of that State. I am of opinion that no different conclusion is required by reason of the fact that the concluding words of the clause are "shall be regulated in the same manner" etc. I shall return later to consider those concluding words. At this point, I am dealing with the subject matter of this part of the clause. I am of opinion that neither the language of the clause nor the context requires or warrants a narrow interpretation of that subject matter. (at p255)

15. Let it be supposed that after the settlor's daughter died, the appellant had written to the trustee and stated that, as a grandchild of the settlor who had attained the age of twenty-five years, she claimed to be entitled to a share in the property then representing the daughter's share and asked for payment of her share or at least for payment to her of a share of the income. Let it be supposed that the trustee, believing the disposition upon which she based her claim to be void, refused to accept that claim. Let it be supposed further, that the trustee then paid out income to another person, believed by the trustee to be entitled to it in consequence of the invalidity of the trust in favour of the grandchildren, that is, to the person to whom a life interest was given by the will of the donee of the power of appointment, mentioned in cl. 2 of the deed. Upon those suppositions, I am of opinion that it would be correct to say that a right of a beneficiary as against the trustee was involved; and if the trustee were held to be wrong in the action taken by it, there would be a "liability" of the trustee to make good to the appellant any amount to which she was entitled and which had been paid out to another person. The word "liability" is an apt word to refer to the obligation of a trustee to make good a breach of trust, including an erroneous distribution of trust funds or a wrongful refusal to distribute them to a person properly entitled to them. For an example of this use of the word, reference may be made to s. 85 of the Trustee Act, 1925 (N.S.W.) and to National Trustees Co. of Australasia Ltd. v. General Finance Co. of Australasia Ltd. (1905) AC 373 , where the question was whether or not the benefit of a provision similar to s. 85 should be allowed to a trustee, which upon a mistaken view of the law had paid over part of a trust fund to the wrong person. (at p256)

16. What has to be decided is whether cl. 5 expresses an intention as to the law to be applied in ascertaining and defining the rights and liabilities mentioned in it and, if so, whether the subject matter of the first question raised by the originating summons, that is to say, the affirmation or the denial of the entitlement of the grandchildren to the daughter's share of the trust funds, is within the scope of the "rights and liabilities" to which the clause refers. If the references in cl. 5 to the law of New South Wales suggest, as the learned primary judge thought, that in some respects at least the law of the Territory was to apply, it does not follow, in my respectful opinion, that the clause is not concerned with the validity of the dispositions or that it is to the law of the Territory that one must look to determine the particular questions as to validity which need to be decided. (at p256)

17. It may be suggested that if a person claims to be entitled to property held by the trustee on the basis that it is held upon a resulting trust for the settlor or for his estate, that is a claim made adversely to the deed and not as a beneficiary under it. But, even if that be so, a claim by a grandchild of the settlor that the trust in favour of his grandchildren is valid would be an assertion of a right of a beneficiary as against the trustee and it would give rise, also, in the circumstances of this case, to a question as to the rights "of the beneficiaries as between themselves", because of the gift over of the property upon trust for such person or persons as the settlor's daughter should appoint. (at p256)

18. The questions relating to the operation of the rule against perpetuities are questions as to the validity of some of the dispositions made by the settlement. In my opinion, it would be a mistaken approach to the determination of the law to be applied in dealing with those questions to say that a question as to validity depends upon "the proper law" of the settlement and then to say that a provision, which does not refer in terms to one law by which the settlement as a whole is to be governed and which is to be in its proper law, cannot be regarded as an express statement of intention concerning the law by which any question of validity is to be determined. Where there is an express statement of the law according to which the rights and liabilities of the trustee and of the beneficiaries as between themselves and as against the trustee are to be decided there is not, in my opinion, any sufficient reason to construe that statement as not being applicable to questions which do affect directly the rights of the beneficiaries and the corresponding liabilities of the trustee, simply for the reason that the questions are questions as to validity. It may be acknowledged that cl. 5, upon the construction which I think should be given to it, does not leave much scope for the application, in other respects not covered by the clause, of the law of the Territory. But that does not provide a good reason for restricting the operation of cl. 5. Its language is such that in my opinion it cannot be assumed that it was intended to operate only in a small area. (at p257)

19. It is my opinion that the clause does make applicable the provisions of s. 36 of the Conveyancing Act (N.S.W.). Therefore, the gift to the grandchildren is valid. It takes effect as if the age of twenty-one years were substituted therein for the age of twenty-five years. But it is proper to make some further references to some considerations which have been urged against that view. (at p257)

20. The relevant provisions of cl. 5 follow cll. 3 and 4 and the first section of cl. 5 itself, all of which deal with the powers of the trustee. It may be acknowledged that it is somewhat odd to find the provisions of the latter part of cl. 5 so placed. But it is not possible, in my opinion, to hold that those provisions must be regarded as dealing with the same subject matter as those which preceded them. Plainly, they do not deal with powers. They deal with rights and liabilities, not merely those of the trustee, but also those of the beneficiaries. The context in which they are found does not warrant the view that they should be given less than their ordinary meaning. (at p257)

21. It might have been expected that in a choice of law clause there would be a direct statement that the chosen law would apply and not an indirect statement that the rights etc. should be "regulated in the same manner as they would be under the laws of the said State". But whatever was the reason for this form of expression, I am of opinion that is it not legitimate to conclude from it that a narrow meaning must be given to the words which describe the subject matters to which the provision relates. Nor do I see any restricted meaning that can properly be placed upon those words. Learned counsel for the trustee of the settlor's will argued that the provision is not concerned with any question of ascertaining what is the entitlement of the beneficiaries. It assumes that the interpretation of the deed is clear. It is concerned only with matters of detail and with the enforcement of rights and liabilities already ascertained and known. By way of illustration of what is covered by the provision, counsel referred to the right of the trustee to be indemnified and to rights as between life tenant and remainderman (as affected, for example, by s. 24 of the Trustee Act, 1925 (N.S.W.)). According to his argument, the hypothetical claims made by the appellant upon the trustees, to which I have referred above, would have to be dealt with in the first instance by determining (in accordance with the law of the Territory) whether or not the claimant was really a beneficiary, that is, was really entitled to an interest in the fund. Thereafter, if the answer were affirmative, her rights and those of other beneficiaries would be regulated as they would be under New South Wales law. It was said that the existence, the validity and the quantum of the interests of the beneficiaries were all to be determined independently of cl. 5; and then the rights which were found to exist were to be carried out or enforced in accordance with the clause. It was said that the word "regulated" suggests that view. But, in my opinion, there is no warrant in the language of the clause either for treating the word "beneficiaries" as limited to those whose entitlement has been admitted or established after a dispute, or for giving to the word "rights" the limited meaning proposed by the argument. The submission fails, in my opinion, to give any satisfactory explanation of what is meant by the "liabilities" to which the clause refers ; and it fails to attach any real significance to the clause, in so far as it refers to "rights", in a context which indicates, by the separate reference to the administration of the trusts, that more is intended than merely giving effect to rights already established. As to the word "regulated", I do not think that it really detracts from the argument for the appellant. In some contexts, the use of that word might assist a conclusion that it was used with reference to matters of administrative machinery. But in this clause it is proper, in my opinion, to treat the word as apt to indicate the applying of rules to determine and to govern the rights and liabilities mentioned in the clause and the administration of the trusts. (at p258)

22. It is necessary to consider two further submissions made by Mr. Meagher, upon the assumption that his arguments as to the construction of cl. 5 were not accepted. By those submissions he sought to show that the gift under consideration could not be saved by the operation of s. 36. The first of these submissions took as its starting point that a limitation must be placed upon s. 36 so as to give it a sufficient territorial connexion with the State of New South Wales to bring it within the legislative competence of the Parliament of that State. Then it was submitted that s. 36 should be construed as applying only to instruments executed in New South Wales or alternatively as applying only when the property to which a disposition relates is situated in New South Wales. Since neither of those conditions was fulfilled in this case the result is, according to the argument, that s. 36 cannot operate to render valid any of the dispositions made by the deed. In my opinion, there are two answers that may be made to these submissions. The first is that the provision that the rights etc. shall be regulated in the same manner as they would be under the laws of New South Wales, should be read as a direction that those laws should be applied as they would be upon the hypothesis or assumption that all conditions existed that were required to allow them to take effect in determining the rights etc. to which the clause refers. In other words, the provision renders the laws of New South Wales applicable not directly and by way of legislative command addressed to the parties, but referentially and by force of the declaration of the parties themselves as to how the rights etc. are to be determined. Upon that view of the clause, there is no need to read down the general words of s. 36, in order to keep the provision within legislative power. The second answer to the submissions is that I do not accept the view that the necessary territorial nexus must be found either in the location of the property or in the place of the execution of the deed. In my opinion s. 36 may operate upon an instrument which is intended to be governed in the relevant respect by the law of New South Wales. This view accords with the principle stated in Wanganui-Rangitikei Electric Power Board v. Australian Mutual Provident Society (1934) 50 CLR 581, at p 601 , to which Fox J. referred. I think that that principle is applicable to the operation of s. 36, at least in so far as it affects dispositions of personal property. (at p259)

23. The remaining submission in relation to s. 36 was that, as a matter of public policy, the Courts of the Territory would not give effect to an attempt, by the parties to a settlement executed and intended to be administered in the Territory, to evade the operation of the rule against perpetuities by selecting some law other than that of the Territory as the governing law. It is true that the rule that, in general, the parties are free to choose the law by which a transaction is to be governed, has been stated to be subject to a qualification that there must be no reason for avoiding the choice on the ground of public policy : see Vita Food Products Inc. v. Unus Shipping Co. Ltd. (1939) AC 277, at p 290 . But, in my opinion, there is no reason, based upon public policy, requiring a court in the Territory to refuse to give effect to the provisions of s. 36, if it appears that the intention was expressed in the deed that the laws of New South Wales should be applied in deciding whether the gifts infringed the rule against perpetuities. We need not in this case decide the question, to which reference was made in Merwin Pastoral Co. Pty. Ltd. v. Moolpa Pastoral Co. Pty. Ltd. (1933) 48 CLR 565, at pp 577 and 587 , namely, the question whether it is permissible for a court in one part of the Commonwealth of Australia to refuse, upon the ground of public policy, to give effect to a law of another part of the Commonwealth, which would otherwise be applicable. Such a question could have arisen if the law of New South Wales permitted the making of dispositions by which the absolute vesting of the interest given or the ascertainment of the beneficiaries was postponed beyond the period allowed by the rule against perpetuities. But s. 36 does not do that. On the contrary, it ensures that, in the cases to which it applies, such absolute vesting or ascertainment of the beneficiaries will take place within that period. There can be no collision between such a law and the public policy upon which the rule against perpetuities is supposed to be based. (at p260)

24. In dealing with the foregoing submission I have assumed that it is open to the parties to a contract and to the parties to a voluntary settlement to choose and to specify the law by which the validity of the contract or the validity of the dispositions made by the settlement is to be determined and that such qualifications as may restrict in some cases their freedom to do so are not relevant here. I think that that assumption is warranted. I think that the dictum of Denning L.J. in Boissevain v. Weil (1949) 1 KB 482, at p 491 , denying that parties are free to stipulate by what law the validity of their contract is to be determined, with which Kitto J. expressed agreement in Kay's Leasing Corporation Pty. Ltd. v. Fletcher (1964) 116 CLR 124, at p 143 , ought not to be regarded as a pronouncement that, in every case in which the question to be determined is a question of validity, a choice made by the parties of the law to be applied is irrelevant or at any rate is not decisive. In each of the cases just mentioned, a law which made a transaction illegal was held to be applicable according to its terms and it was held that effect must be given to the law enacted by the Parliament in relation to the transaction, whether or not its governing law according to the intention expressed by or imputed to the parties was the law of some other place. In such cases the parties are not free to prevent the operation of an Act which makes a transaction illegal and, therefore, void. But the present case is not such a case and there is no obstacle to the selection by the parties of the law by which questions of validity are to be determined. For the reasons stated, I am of opinion that the gift of the daughter's share in trust for the grandchildren of the settlor should be held to be valid. The consequence of that conclusion is that other questions which Fox J. had to decide and upon which this Court has heard argument need not be considered. In my opinion the appeal should be allowed and in lieu of the declarations made by the Supreme Court, questions 1 (a) (ii) and 1 (c) in the originating summons should be answered in the affirmative. (at p261)

Orders

Appeal allowed. Answers given by the Supreme Court of the Australian Capital Territory to questions asked in the originating summons set aside and in lieu therof answer the questions asked in the originating summons as follows : Q. 1 (a) (i) - 'No'.

(ii) - 'Yes'.

Q. 1 (b) (i) (ii) - Do not arise. (iii)

Q. 1 (c) - 'Yes'. Q. 2 - Does not arise Q. 3 - Does not arise Q. 4 - 'No'. Q. 5 - 'No'.

Costs of all parties of the appeal, as between solicitor and client, to be paid out of that part of the settled proprty in which the settlor's daughter, Margaret Jeanne D'Arrietta, had a life interest.