Ballantyne v Ballantyne

Case [2010] SASC 273

SUPREME COURT OF SOUTH AUSTRALIA

(Civil)

BALLANTYNE v BALLANTYNE & ORS

[2010] SASC 273

Judgment of The Honourable Justice White

3 September 2010

EQUITY - TRUSTS AND TRUSTEES - GENERALLY - OTHER MATTERS

The trustees of a family trust purported by deed poll to vest certain property of the trust in particular beneficiaries and in the estate of the survivor of the two trustees - vesting to occur on the death or earlier incapacity of the survivor - whether vesting authorised by the terms of the trust deed - whether term relied upon by the trustees formed part of the trust deed at the time the deed poll was made - whether the trust deed otherwise authorised the vesting - whether the estate of the survivor of the trustees was a beneficiary for the purposes of the trust deed - whether deed poll invalid because it was testamentary in character and had not been executed formally as a will, or because it was conditional and uncertain.

Held:  term relied upon by trustees did not form part of the trust deed, but vesting was (in part) permitted by other provisions in the trust deed on the basis that it avoided circuity of action - estate of the trustees' survivor not a beneficiary - that part of the vesting was invalid - deed poll not otherwise invalid or ineffective - plaintiff's claim dismissed.

SUCCESSION - WILLS, PROBATE AND ADMINISTRATION - THE MAKING OF A WILL - TESTAMENTARY INSTRUMENTS - TESTAMENTARY CHARACTER

Two defendants claimed that the deed poll was of a testamentary character, and as such did not comply with necessary formalities.

Held:  deed poll not of a testamentary character.

Inheritance (Family Provision) Act 1972 (SA) ; Turstee Act 1936 (SA), s 33A; Wills Act 1936 (SA) s 10(1), s 8, s 4(1),, referred to.
Butler v Butler (1880) 7 LR (I) 401, discussed.
In Re Collard's Will Trusts [1961] 1 Ch 293; In Re Hain's Settlement [1961] 1 WLR 440; Locke v Dunlop (1888) 39 Ch D 387; Australian Broadcasting Commission v Australasian Performing Right Association Ltd (1973) 129 CLR 99; Zirkler v McKinnon [2002] NSWSC 285; Union Bank of Australia v Harrison, Jones & Devlin Ltd [1910] 11 CLR 492; Russell v Scott (1936) 55 CLR 440; In Re Barnett [1908] 1 Ch 402; Freme v Clement (1881) 18 Ch D 499; In Re Pauling's Settlement Trusts (1964) 1 Ch 303; Re Beckett's Settlement [1940] Ch 279; Briginshaw v Briginshaw (1938) 60 CLR 336; Jones v Dunkel (1959) 101 CLR 298; Makita (Australia) Pty Ltd v Sprowles [2001] NSWCA 305; (2001) 52 NSWLR 705; Pilkington v Inland Revenue Commissioners [1964] AC 612, considered.

WORDS AND PHRASES CONSIDERED/DEFINED

"Testamentary character"

BALLANTYNE v BALLANTYNE & ORS
[2010] SASC 273

Civil

  1. WHITE J:             The members of the Ballantyne family are in dispute about the present ownership of certain farming land near Gladstone. 

  2. The first and second defendants, Lee and Scott, contend that the…

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AGLC
Ballantyne v Ballantyne [2010] SASC 273
Case
[2010] SASC 273
Decision Date

CaseChat Overview and Summary

In the case of Ballantyne v Ballantyne, the dispute centred around a Deed Poll executed by the trustees of a family trust, which purported to vest certain property of the trust in specific beneficiaries and in the estate of the survivor of the two trustees, contingent on the death or earlier incapacity of the survivor. The validity of this Deed Poll was challenged by the plaintiffs, who sought various declarations regarding the trust and the Deed Poll. The case was heard in the Supreme Court of South Australia.

The central legal issues in this case involved the interpretation and validity of the Deed Poll and its compatibility with the terms of the trust deed. Specifically, the court had to determine whether the term relied upon by the trustees formed part of the trust deed at the time the Deed Poll was made, whether the trust deed otherwise authorized the vesting of property, whether the estate of the survivor of the trustees was a beneficiary for the purposes of the trust deed, and whether the Deed Poll was invalid due to its testamentary character or because it was conditional and uncertain.

The court found that the term relied upon by the trustees did not form part of the trust deed. However, the vesting of property was partially authorized by other provisions in the trust deed, as it avoided circuity of action. The court determined that the estate of the survivor of the trustees was not a beneficiary for the purposes of the trust deed, rendering that part of the vesting invalid. The court concluded that the Deed Poll was not invalid or ineffective due to its testamentary character or conditionality, and dismissed the plaintiff's claims.

The final orders were to be determined, with the court indicating it would hear from the parties to determine the appropriate orders to give effect to the conclusions reached.

Orders

Orders of the court

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Background

Background to the litigation

The sixth defendant is the principal of the firm of solicitors who prepared the Deed of Settlement establishing the Trust (the Trust Deed) and a later Deed Poll which was intended to vest property owned by the Trust.Factual Background Each of the parties to these proceedings, apart from the sixth defendant, is a child of Robert and Valmai Ballantyne. Robert died on 1 September 1999 and Valmai on 16 January 2006. In late 1997, Robert and Valmai arranged with the sixth defendant to establish the Trust. On or about 4 December 1997, the sixth defendant as settlor and Robert and Valmai as trustees, executed the Trust Deed by which the sixth defendant settled upon Robert and Valmai the sum of $100 to be held on trust and subject to the provisions of the Trust Deed. It was stamped at the stamp duties office on 1 May 1998. The Trust is a discretionary family trust. The Trust Deed bears the date 20 October 1997. I am satisfied, however, that it was in fact executed on 4 December 1997 at the office of the sixth defendant. The Trust Deed identified Robert and Valmai, their children and grandchildren and remoter issue, together with the spouses, widows and widowers of these persons, as the beneficiaries of the Trust (whether as specified or general beneficiaries) (cll 1.1, 1.2. 1.4 and 1.10). It did not, however, contain any provision indicating that the heirs, successors or assigns of a beneficiary should also be regarded as a beneficiary. At the time of, or shortly after, the establishment of the Trust, Robert and Valmai transferred a number of farming properties to it. At the time of Valmai’s death in January 2006, the Trust held some 11 farming properties. On 13 April 1999 Robert and Valmai executed a Deed Poll, the intended effect of which was to provide that upon the death of the survivor certain land held by the Trust would vest in Lee, certain land in Scott, and certain land would become part of the residuary estate of the survivor. These proceedings concern a dispute about the validity of this Deed Poll. The Deed Poll contains three Recitals. I set out the terms of those Recitals in the form of the Deed Poll contained in the folder of original documents relating to the Trust maintained in the sixth defendant’s office until after the commencement of the present proceedings.WHEREASA.By Deed dated the 20th day of October 1997 made between PAUL IGNATIUS BOYLAN of 138 Florence Street Port Pirie in South Australia as Founder and and ROBERT PETER BALLANTYNE and VALMAI JUNE BALLANTYNE of Gladstone a trust fund was established for the benefit of ROBERT PETER BALLANTYNE and VALMAI JUNE BALLANTYNE and their children and remoter issue.B.The Trustee has the power pursuant to clause 6.1 of the Trust Deed to distribute the assets and income of the Trust Fund.C.The Trustee is desirous of distributing a portion of the assets of the Trust Fund. It can be seen that Recital “A” refers to a deed dated 20 October 1997. However, when the Deed Poll was first executed, the Recital referred to a deed dated “20th day of October 1998”. The year 1998 has since been changed to 1997 in circumstances not explained in the evidence.

Evidence

Evidence Before The Court

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Decision

Reasons for decision

However, the evidence of legal incapacity involves a question of fact, and it is one which is capable of determination on proper evidence. Legal incapacity being a state which is capable of ascertainment, I do not consider that the Court should find that cl 2 of the Deed Poll is so uncertain as to invalidate the whole Deed Poll. As has been said in other contexts, courts should endeavour to give effect to contractual and like arrangements, rather than being astute to strike them down.[30] Accordingly, I do not consider that the reference to the legal incapacity of a sole trustee was so uncertain as to invalidate the Deed Poll.[30] Locke v Dunlop (1888) 39 Ch D 387 at 393; Australian Broadcasting Commission v Australasian Performing Right Association Ltd (1973) 129 CLR 99 at 109.Conclusion For the reasons given earlier, I consider that the Deed Poll of 13 April 1999, apart from cl 2(c), was authorised by cl 6.1 of the Trust Deed. I decline to make the declarations sought by the plaintiff. I will hear from the parties as to the orders which are appropriate to give effect to these conclusions.

Ratio Decidendi

Legal Principle Established

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