Australian Youth & Health Foundation v Perpetual Trustee Company Ltd

The Australian Youth & Health Foundation (AYHF) sought judicial advice from Perpetual Trustee Company Ltd (Perpetual) regarding the construction of a charitable trust established by a will. The core of the dispute concerned whether Perpetual, as trustee, was justified in forming an opinion under a proviso within the will, which would permit the use of trust funds for purposes other than those strictly outlined in the main clause. AYHF also questioned whether Perpetual had properly considered the implications of section 63 of the *Trustee Act 1925* (NSW) on its right to litigate the propriety of any such opinion.

The Court of Appeal was required to determine several key legal issues. These included whether the question posed by AYHF for judicial advice was a proper question under section 63 of the *Trustee Act*. Furthermore, the court had to consider whether Perpetual had erred in its advice regarding its justification for forming an opinion under the proviso, and whether it had failed to adequately consider the impact of section 63 on the right to challenge the trustee's opinion. The court also had to determine the proper construction of the relevant clause in the will, and whether Perpetual had erred in finding that it was arguable that a beneficiary had utilised funds for a purpose not set out in the clause, and whether Perpetual had an obligation to reconsider an opinion it had already formed under the proviso.

The Court of Appeal found that the question posed by AYHF was a proper question for judicial advice under section 63 of the *Trustee Act*. The court reasoned that Perpetual had erred in its construction of the proviso and had failed to properly consider the implications of section 63, which preserved the right of beneficiaries to challenge the propriety of a trustee's opinion. The court also found that Perpetual had erred in its construction of the clause and in its finding that it was arguable that funds had been misused, and that Perpetual had an obligation to reconsider its opinion.

The Court of Appeal directed the parties to bring in short minutes of orders within seven days to give effect to its judgment. If the parties could not agree on the orders within that period, they were to file draft short minutes of orders and supporting submissions within fourteen days.