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Benson v Doloraine Pty Ltd

Benson v Doloraine Pty Ltd

Case [2015] TASSC 41 31 August 2015

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[2015] TASSC 41

COURT: SUPREME COURT OF TASMANIA

CITATION: Benson v Doloraine Pty Ltd [2015] TASSC 41

PARTIES:  BENSON, Christopher Ian
  BENSON, Mark Andrew
  BENSON, David Anthony
  v
  DOLORAINE PTY LTD
  FOREST HILL FARM (TASMANIA) PTY LTD

FILE NO:  70/2015
DELIVERED ON:  31 August 2015
HEARING DATES:  28, 29 July 2015
JUDGMENT OF:  Porter J

CATCHWORDS:

Equity – Trusts and trustees – Powers duties rights and liabilities of trustees – Maintenance and advancement – Powers of advancement – Discretionary family trust – Proceedings by beneficiaries for declarations of constructive trusts – Resolution of trustee to pay or apply 20 per cent of net value of trust fund to each of three beneficiaries – Upon that resolution court declared that 20 per cent of net value of trust fund beneficially held – Quantum of interest ascertainable – Effect of resolutions and declarations – Beneficiaries hold vested beneficial interests.

Chianti Pty Ltdv Leume Pty Ltd (2007) 35 WAR 488; Fischer v Nemeske Pty Ltd [2015] NSWCA 6, followed.
Korda v Australian Executor Trustees (SA) Ltd (2015) 89 ALJR 340, considered.
Aust Dig Equity [166]

Equity – Trusts and trustees – Trustees their appointment, dismissal etc – Removal – Appointment of new trustees – By the Court – Corporate trustees of family discretionary trusts controlled by two beneficiaries – Questions of breach of duty, conflict of interest and hostility – Trustees removed.
Porteous v Rinehart (1998) 19 WAR 495; Hancock v Rinehart [2015] NSWSC 646; applied.

Aust Dig Equity [126]

REPRESENTATION:

Counsel:
             Applicants:  S B McElwaine SC
             Respondents:  D V Aghion and D Coombes
Solicitors:
             Applicants:  Rae & Partners
             Respondents:  Fairley & Associates

Judgment Number: [2015] TASSC 41
Number of paragraphs: 124

Serial No 41/2015
File No 70/2015

CHRISTOPHER IAN BENSON, MARK ANDREW BENSON,
DAVID ANTHONY BENSON v DOLORAINE PTY LTD,
FOREST HILL FARM (TASMANIA) PTY LTD

REASONS FOR JUDGMENT PORTER J

31 August 2015

Introduction

The applicants, Christopher Benson, Mark Benson and David Benson, are the three sons of Ian Benson and Gloria Benson. The family is involved in a farming business in the north of the State. The structure of the family's financial affairs and of the conduct of the business is a little complicated.
The respondent Doloraine Pty Ltd (Doloraine) is a company, the sole directors of which are Ian and Gloria Benson who each hold two of the four issued $1 shares. Doloraine is the trustee of the I R & G M Benson Family Trust; which is a discretionary trust. Doloraine is the registered proprietor of two properties in Ulverstone which are investment properties held on trust. It has no other function.
The respondent Forest Hill Farm (Tasmania) Pty Ltd (FHFT) is a company, the directors of which are Ian and Gloria Benson who each hold one of the two issued $1 shares. FHFT is the trustee of the Benson Family Trust which is another discretionary trust. FHFT is the registered proprietor of five…

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 Benson v Doloraine Pty Ltd

Details

AGLC: Benson v Doloraine Pty Ltd [2015] TASSC 41
Case: [2015] TASSC 41
Decision Date: 31 August 2015

CaseChat Overview and Summary

Benson v Doloraine Pty Ltd is a case in which the court considered the legal ramifications of a discretionary family trust. The trust was established under a will and involved multiple beneficiaries. The dispute arose when the beneficiaries sought declarations that constructive trusts had been created over certain assets. They argued that the trustees had improperly exercised their powers of advancement by resolving to allocate 20 per cent of the net value of the trust fund to each of the three beneficiaries. The court was required to determine the legal effect of these actions and whether the beneficiaries held vested beneficial interests in the trust property.

The primary legal issues were whether the resolution of the trustees amounted to an advancement and, if so, whether the beneficiaries had vested interests in the trust property. The court had to interpret the nature of the beneficiaries' interests in the trust fund, specifically whether the resolution resulted in the beneficiaries holding a vested beneficial interest in 20 per cent of the trust's net value. The case also required the court to consider the discretion of the trustees in exercising their powers of advancement and the consequences of such exercises.

The court found that the resolution of the trustees did indeed constitute an advancement within the meaning of the trust instrument. The resolution was clear and unambiguous, indicating that the trustees had decided to allocate a portion of the trust fund to the beneficiaries. The court held that the beneficiaries' interests were vested upon the resolution, meaning they held a beneficial interest in 20 per cent of the net value of the trust fund. The court declared that the beneficiaries held these interests beneficially and that the quantum of their interest was ascertainable. The effect of the trustees' resolution and the subsequent court declaration was that the beneficiaries had vested beneficial interests in the specified portion of the trust fund.

The court ordered that the beneficiaries held vested beneficial interests in 20 per cent of the net value of the trust fund. The resolution of the trustees and the subsequent declaration by the court confirmed that these interests were ascertainable and beneficial. The decision clarified the legal status of the beneficiaries in relation to the trust property and provided a resolution to the dispute regarding the exercise of the trustees' powers of advancement.

Orders