Australian Executor Trustees v Currie - [2009] SASC 81

SUPREME COURT OF SOUTH AUSTRALIA
(Civil: Application)
AUSTRALIAN EXECUTOR TRUSTEES v CURRIE & ORS
[2009] SASC 81
Judgment of The Honourable Justice Gray
30 March 2009
INTERPRETATION - GENERAL RULES OF CONSTRUCTION OF INSTRUMENTS - GENERAL MATTERS
DEEDS - OTHER MATTERS
Application by trustee for declaration and directions concerning construction of Deeds of Settlement establishing Trusts – the Deed of Settlement was one of six inter-related Deeds - Trustee sought directions as to whom it should distribute settled fund of one of the Deeds of Settlement following death of the beneficiary of that fund, Dawn Jackson.
Held: Joyce, Meryl and Daphne sisters of the beneficiary Dawn Jackson entitled to life interests, and, on their death – their children became entitled absolutely to both income and capital - upon Dawn Jackson dying without children, the settled fund of her trust became subject to the trusts of her sisters' Deeds - trusts have not failed or determined - the settled fund of the Dawn Jackson trust is held on trust by trustee, in three equal shares, on the terms of the Deeds of three.
Supreme Court (Civil) Rules 2006 (SA) r 84 and r 206, referred to.
In re Huntington’s Settlement Trusts [1949] 1 Ch 414; Duncan v Equity Trustees Executors & Agency Co Ltd (1958) 99 CLR 513; In Re Walpole’s Marriage Settlement [1903] 1 Ch 938; Hicking v Fair [1899] AC 15; Kenna v Connolly (1938) 60 CLR 583; Executor Trustee Australia Ltd v De Meyrick & Ors [2005] SASC 388, considered.

AUSTRALIAN EXECUTOR TRUSTEES v CURRIE & ORS
[2009] SASC 81
Civil
GRAY J.

This is an application by a trustee, the Australian Executor Trustees Limited, for a declaration and directions concerning the construction of a Deed of Settlement of 9 March 1929 establishing the Dawn Jackson Trust.
The Trustee has sought directions pursuant to Rule 206 of the Supreme Court Rules[1] as to whom it should distribute the settled fund of the Dawn Jackson Trust. The relevant facts as set out in these reasons were not the subject of any dispute.
[1]Rule 206 provides:
This application raises questions of construction arising within complex provisions of Deeds of Settlement. It has been necessary to consider a number of alternative constructions arising from the relevant provisions of the subject Deed. I propose to first trace the history of the application. I then propose to state my conclusions before providing my extended reasons.
Background
The Deeds of Settlement
Laura Emily Davidson acquired investments and securities from the estate of her late husband, Claude Stewart Jackson, who died intestate. Claude was one of the children of the Lady Dowager Jackson.
On 9 March 1929, the Trustee, as co-trustee, and Ms Davidson, as settlor and co-trustee, entered into five Deeds of Settlement. Ms Davidson intended, through the Deeds, to settle assets devolving to her from the estate of Claude on trust for the benefit, in the first instance, of the five children of Claude’s brother, George Julius…

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 Australian Executor Trustees v Currie

Details

AGLC: Australian Executor Trustees v Currie [2009] SASC 81
Case: [2009] SASC 81
Decision Date: 30 March 2009

CaseChat Overview and Summary

The case of Australian Executor Trustees v Currie involved an application by a trustee for a declaration and directions concerning the construction of Deeds of Settlement that established trusts. The dispute centred around the interpretation of a Deed of Settlement that was one of six inter-related Deeds. The trustee sought guidance on how to distribute the settled fund of one of the Deeds following the death of the beneficiary, Dawn Jackson, who died without children. The key legal issue was the determination of the beneficiaries of the settled fund under the Deed of Settlement for Dawn Jackson.

The court had to consider the provisions of the Deed and the implications of Dawn Jackson's death without children. The Deed provided for life interests for the sisters of the beneficiary and absolute entitlement for their children upon their death. The court found that the life interests of Dawn Jackson's sisters, Meryl, Daphne, and Joyce, remained valid, and upon Dawn's death, the settled fund became subject to the trusts of their Deeds. The trusts had not failed or been determined, and the settled fund was held on trust by the trustee in three equal shares on the terms of the Deeds of the three sisters. The reasoning was based on the clear language of the Deed and the intention of the settlor to provide for the sisters and their children.

In conclusion, the court held that the settled fund of the Dawn Jackson trust was held on trust by the trustee in three equal shares, on the terms of the Deeds of her three sisters. The trusts had not failed or been determined, and the settled fund was held on trust for the sisters' children, who would take their mother's share in equal shares. The court's decision ensured that there was no reasonable likelihood of the settled funds lapsing, as the Deed included a saving provision in favour of the issue of the Dowager Lady Jackson.

Orders

Orders of the court

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Background

Background to the litigation

This application raises questions of construction arising within complex provisions of Deeds of Settlement. It has been necessary to consider a number of alternative constructions arising from the relevant provisions of the subject Deed. I propose to first trace the history of the application. I then propose to state my conclusions before providing my extended reasons. BackgroundThe Deeds of Settlement Laura Emily Davidson acquired investments and securities from the estate of her late husband, Claude Stewart Jackson, who died intestate. Claude was one of the children of the Lady Dowager Jackson. On 9 March 1929, the Trustee, as co-trustee, and Ms Davidson, as settlor and co-trustee, entered into five Deeds of Settlement. Ms Davidson intended, through the Deeds, to settle assets devolving to her from the estate of Claude on trust for the benefit, in the first instance, of the five children of Claude’s brother, George Julius Jackson, and then to the issue of each child, with further provision being made in the event of there being no such issue. The Deeds were similar, but not identical. Ms Davidson died in 1964. The Trustee is the remaining trustee under each of the Deeds of Settlement. George Julius’ five children were David Thomas Trelawny Jackson (“David”), Dawn Nesta Jackson (“Dawn”), Meryl Julian Currie (“Meryl”), Daphne Myddleton Gray (“Daphne”), and Joyce Katherine Walker (“Joyce”). Dawn was the last surviving child of George Julius, having been predeceased by her siblings.[2] Dawn died on 9 December 2005. She did not have any children.[2] David died on 7 December 1943, Meryl died on 10 January 1998, Daphne died on 24 September 2002, and Joyce died on 5 January 2004. At the time of these proceedings the Trustee held the settled fund of the Dawn Jackson Trust. The Trustee applied to this Court to settle the uncertainty that it says has arisen as to how the funds are to be applied under the Deed of Settlement for Dawn following her death. As at the date of death of Dawn, the Trustee had completed administration of each of the trusts referred to as the David Jackson Trust, the Meryl Jackson Trust, the Daphne Jackson Trust and the Joyce Jackson Trust, and had distributed the then settled fund of each trust to the respective Beneficiaries. This process was finalised prior to Dawn’s death on 9 December 2005. The Trustee took a neutral stance on the issues of construction arising under the subject Deed. However, the Trustee made detailed submissions outlining what possible arguments in relation to and factors affecting, the issues of construction. The defendants Julian Currie and Caroline Joyce Currie are the children of Meryl. The defendants, Fiona Catherine Fairbairn[3] and Sarah Daphne James, are the children of Daphne. The defendants Susan Wildey and Julia Gale are two of the grandchildren of Joyce. [3] Catherine Fairbairn has died. On 30 May 2008 pursuant to Rule 76(3)(b) an order was made appointing Sarah Daphne James as the representative of the estate of Fiona Catherine Fairbairn.

Evidence

Evidence Before The Court

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Decision

Reasons for decision

GRAY J

Finally, to ensure there was no reasonable likelihood of the settled funds lapsing, an identical clause 2(f) was included in each sister’s Deed as a third saving provision in favour of the issue of the Dowager Lady Jackson.Summary Of Conclusions It is convenient now to set out my conclusions on the questions arising for determination. Under their respective settlements, Joyce, Meryl, Daphne and Dawn were in each case only entitled to life interests, and, on their death – subject to any appointment – their children became entitled absolutely to both income and capital. Upon Dawn Jackson dying without children, the settled fund of her trust became subject to the trusts of her sisters’ Deeds. Those trusts have not failed or determined. As a consequence, the funds in the Dawn Jackson trust are held on trust by the trustee, in three equal shares, on the terms of the Deeds, of each of the three sisters. In the case of Meryl and Daphne, both are no longer alive. Were their children alive, those children would take their mother’s share in equal shares, pursuant to clause 2(c) of their respective Deeds. The effect of clause 2(c) of Joyce’s Deed is that the accreted funds are held upon trust for her male children who attain the age of 21 years and her female children who attain that age or marry under that age in equal shares. Insofar as Joyce’s only child, her daughter Gay, predeceased her after having attained the age of 21 years, or having married, the accreted funds fall into Gay’s estate.[6][6] I have proceeded on the basis that Gay attained the age of 21 years, although this is not clear on the papers. Although my conclusions can be simply expressed, the reasoning that allows these conclusions is unavoidably complex. I now set out my reasons for my conclusions as to the construction of the subject Deeds.The Settlement Deed With Respect To Dawn JacksonClause 2 It is first convenient to set out the text of clause 2 of the Deed before coming to an analysis of particular provisions. Later in the reasons, when convenient, I will repeat discrete parts of clause 2. 2. THE Settlor hereby directs that the Trustees shall and the Trustees hereby declare that they will hold the Settled Fund upon and subject to the trusts and provisions hereinafter set forth concerning the same, that is to say:-(a) UPON TRUST until the Beneficiary shall attain the age of Eighteen years to pay or apply the whole or any part or parts of the income of the Settled Fund in or towards the education maintenance or otherwise for the benefit of the Beneficiary as the Trustees in their uncontrolled discretion may think fit with power to the Trustees during such period to pay the same to the legal guardian of the Beneficiary without being responsible for the application thereof.(b) UPON TRUST from and after the attainment by the Beneficiary of the said age of Eighteen years to pay to her during her life all the net income of the Settled Fund unless and until she shall have committed permitted or suffered any act default or process of law whereby or in consequence whereof such income or any part thereof would but for this provision have become payable to or charged in favor of any other person or persons or corporation AND the Trustees shall on the failure or determination during the lifetime of the Beneficiary of the trusts as to such income in her favor stand possessed of the income which would but for such failure or determination have been payable to the Beneficiary UPON TRUST to pay or apply the same or any part thereof respectively to or for the benefit maintenance or support of all or any one or more to the exclusion of the others or other of the following persons, namely:- the Beneficiary, her husband (if any), her child or children (if any), her issue (if any), in such shares and manner as the Trustees shall in their discretion think proper or if she shall be unmarried or a widow without issue or being married be without any issue living then to or for the benefit maintenance or support of all or any one or more to the exclusion of the others or other of her, her husband (if any) and the person or persons who would if she were actually dead be entitled to the Settled Fund or the income thereof as the Trustees shall in their discretion think proper AND the Trustees shall accumulate the balance (if any) thereof by investing the same and the resulting income thereof in any manner hereby authorised and so that such accumulations and the income thereof shall form part of the Settled Fund but with power to the Trustees in their discretion at any time or times during the life of the Beneficiary to resort to and apply such accumulation or any part thereof as if the same had not been accumulated and were income of the then current year.(c) AFTER the death of the Beneficiary UPON TRUST as to the capital as well as the income of the Settled Fund for such one or more of the issue of the Beneficiary born in her life-time or within Twenty one years after her death for such interest and in such manner consistent with the rule against perpetuities as she may be deed or deeds with or without power of revocation and new appointment or by Will appoint And in default of any such appointment and subject to any partial appointment UPON TRUST for all the children or any the child of the Beneficiary who being male shall attain the age of Twenty one years or being female shall attain that age or marry under that age in equal shares as tenants in common if more than one.(d) AND subject to the preceding trusts and provisions hereof then UPON TRUST as to the capital as well as the income of the Settled Fund for DAWN JACKSON, MERYL JACKSON and JOYCE JACKSON sisters of the beneficiary in equal shares, the share of each of them to be held by the Trustees upon the trusts and with and subject to the powers and provisions declared and contained respectively in certain Indentures of Settlement of even date herewith made between the same parties as are parties hereto whereby the Settlor settled certain investments for the benefit of each of the said Dawn Jackson, Meryl Jackson and Joyce Jackson respectively (such trusts powers and provisions being brevitatis causa deemed to be herein repeated) with power to the Trustees if they think fit so to do to transfer assign and made over any such share of the Settled Fund to the Trustees for the time being of any of the said Indentures of Settlement respectively to be held by such last mentioned Trustees as an accretion to the Settled Fund contained therein upon the trusts and with and subject to the powers and provisions respectively applicable thereto PROVIDED however that in the event of the trusts of any of the said respective Indentures of Settlement having failed or determined then the share of the Settled Fund which would have been held upon such trusts had the same not failed or determined shall be held as an accretion to the other share or shares of the Settled Fund equally if more than one upon the like trusts and with and subject to the like powers and provisions as are respectively applicable thereto as aforesaid.(e) AND subject to the preceding trusts and provisions hereto UPON TRUST for David Jackson brother of the Beneficiary upon the trusts and with and subject to the powers and provisions declared and contained in an Indenture of Settlement of even date herewith made between the same parties as are parties hereto whereby the Settlor settled certain investments for the benefit of the said David Jackson (such trusts powers and provisions being brevitatis causa deemed to be herein repeated) with power to the Trustees if they think fit so to do to transfer assign and make over the Settled Fund to the Trustees for the time being of the said Indenture of Settlement to be held by such last mentioned Trustees as an accretion to the Settled Fund therein contained upon the trusts and with and subject to the powers and provisions applicable thereto.(f) AND subject to the preceding trusts and provisions hereof then UPON TRUST as to the capital as well as the income of the Settled Fund for the issue of the mother of the Settlor’s late husband the Dowager Lady Jackson of 8 Sussex Square, London, England, as shall be living on the failure of the preceding trusts hereof in equal shares per stirpes as tenants in common if more than one.[Emphasis in original]

Ratio Decidendi

Legal Principle Established

Established by: GRAY J

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