Belfield v Belfield

Case [2012] NSWCA 416

Court of Appeal


Supreme Court


New South Wales

Medium Neutral Citation: Belfield v Belfield [2012] NSWCA 416
Hearing dates:9 November 2012
Decision date: 13 December 2012
Before: Campbell JA at [1];
Sackville AJA at [87]
Young AJA at [88]
Decision:

(1) Appeal allowed.

(2) Set aside the orders of Macready AsJ in the court below.

(3) Pursuant to s 23 of the Family Provision Act 1982, order that the twenty fully paid ordinary shares in the issued capital of the Second Respondent owned by the Third Respondent as Trustee of the CH Belfield Family Trust No 1 be designated as notional estate of the late Madge Clarendon Belfield to the extent necessary to satisfy orders 4 and 5.

(4) Order that the Appellant receive the payment of a legacy in the sum of $300,000 from the notional estate of the late Madge Clarendon Belfield.

(5) Order that the Appellant's legacy referred to in order 4 be charged against the shareholding in the Second Respondent held by the Third Respondent.

(6) Order that the Respondents pay the Appellant's costs of the proceedings below and of this appeal.

(7) Order that the Respondents have a certificate under the Suitors Fund Act 1951, if qualified, concerning the costs of this appeal.

[Note: The Uniform Civil Procedure Rules 2005 provide (Rule 36.11) that unless the Court otherwise orders, a judgment or order is taken to be entered when it is recorded in the Court's computerised court record system. Setting aside and variation of judgments or orders is dealt with by Rules 36.15, 36.16, 36.17 and 36.18. Parties should in particular note the time limit of fourteen days in Rule 36.16.]

Catchwords:

FAMILY PROVISION AND MAINTENANCE - property in respect of which order may be made - notional estate - "prescribed transaction" - property of deceased held on discretionary trusts for younger son and his progeny - deceased empowered to direct trustee to alter list of eligible beneficiaries, distribute property and exercise other discretionary powers - older son made application for provision on basis that failure before the death of the deceased to enlarge the eligible beneficiaries to include deceased or himself or to distribute property to deceased or him was a "prescribed transaction" under the Family Provision Act - application granted - shares held on trust to be designated as notional estate sufficient to satisfy provision and costs

FAMILY PROVISION AND MAINTENANCE - principles upon which relief is reviewed on appeal - decision of primary judge on jurisdiction and quantum to be reviewed by principles applicable to discretionary judgments

TRUSTS AND TRUSTEES - discretionary trusts - where person appointed to direct trustee to exercise discretionary powers in certain ways - whether attorney appointed under enduring power to the appointee able to exercise powers in relation to the trust - whether exercising power "as a trustee" - consideration of s 163B(2)(a) Conveyancing Act 1919 - ability to direct exercise of trust powers distinguished from possessing trust powers - legislation intended to cover only powers…

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AGLC
Belfield v Belfield [2012] NSWCA 416
Case
[2012] NSWCA 416
Decision Date

CaseChat Overview and Summary

This case concerned an appeal from an order made by Macready AsJ in the Supreme Court of New South Wales. The appellant, an older son of the deceased, sought provision from the deceased's estate under the *Family Provision Act 1982* (NSW). The deceased had established a discretionary trust for the benefit of her younger son and his progeny, retaining significant powers to direct the trustee, alter beneficiaries, and distribute property. The appellant argued that the deceased's failure to exercise these powers to benefit him or herself constituted a "prescribed transaction" under the Act, rendering the trust property notional estate available for his claim.

The primary legal issues before the Court of Appeal were whether the deceased's failure to exercise her powers in relation to the discretionary trust constituted a "prescribed transaction" for the purposes of the *Family Provision Act 1982*, and consequently, whether the trust property could be designated as notional estate. A related issue involved the capacity of an attorney acting under an enduring power of attorney to exercise powers to direct the trustee of a discretionary trust, particularly in light of s 163B(2)(a) of the *Conveyancing Act 1919* (NSW). The court also considered the principles applicable to the review of a primary judge's decision on jurisdiction and quantum in family provision matters.

The Court of Appeal allowed the appeal, setting aside the orders of the primary judge. The court reasoned that the deceased's retained powers over the discretionary trust, including the ability to direct the trustee and alter beneficiaries, were such that her failure to exercise them in favour of the appellant or herself could be considered a "prescribed transaction" under the *Family Provision Act 1982*. The court distinguished between possessing trust powers and having the ability to direct the exercise of trust powers, finding that the attorney acting under the enduring power of attorney was capable of exercising the latter. Consequently, the court ordered that shares held by the trustee of the discretionary trust be designated as notional estate of the deceased to the extent necessary to satisfy the appellant's provision and costs. The appellant was awarded a legacy of $300,000 from this notional estate, charged against the specified shareholding, and was awarded costs of the proceedings.

Orders

Orders of the court

(1) Appeal allowed.

(2) Set aside the orders of Macready AsJ in the court below.

(3) Pursuant to s 23 of the Family Provision Act 1982, order that the twenty fully paid ordinary shares in the issued capital of the Second Respondent owned by the Third Respondent as Trustee of the CH Belfield Family Trust No 1 be designated as notional estate of the late Madge Clarendon Belfield to the extent necessary to satisfy orders 4 and 5.

(4) Order that the Appellant receive the payment of a legacy in the sum of $300,000 from the notional estate of the late Madge Clarendon Belfield.

(5) Order that the Appellant's legacy referred to in order 4 be charged against the shareholding in the Second Respondent held by the Third Respondent.

(6) Order that the Respondents pay the Appellant's costs of the proceedings below and of this appeal.

(7) Order that the Respondents have a certificate under the Suitors Fund Act 1951, if qualified, concerning the costs of this appeal.

[Note: The Uniform Civil Procedure Rules 2005 provide (Rule 36.11) that unless the Court otherwise orders, a judgment or order is taken to be entered when it is recorded in the Court's computerised court record system. Setting aside and variation of judgments or orders is dealt with by Rules 36.15, 36.16, 36.17 and 36.18. Parties should in particular note the time limit of fourteen days in Rule 36.16.]

Background

Background to the litigation

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Evidence

Evidence Before The Court

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Decision

Reasons for decision

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Ratio Decidendi

Legal Principle Established

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