For expenditure for benefit, furtherance and advantage of business-Trust unrestricted as to time-Declaration in previous proceedings that trust not void for uncertainty or otherwise-Res judicata-Rule against perpetuities-The Accumulation Act (39 &40 Geo. III. c. 98)-Destination of released income- Residue-Particular residue-Issue estoppel.

By his will a testator who died in 1904 gave "all my real estate and the May 27.

residue of my personal estate of every kind and nature whatsoever in the State

Tasmania save and except " a sweep business carried on by him to certain persons, called the Hobart-property beneficiaries. He directed his trustees to carry on the sweep business and provided that eight-tenths of the profits should be divided in one-tenth or one-twentieth shares between twelve named

62 CLR 465

persons. The trustees were directed to stand possessed of one-tenth of the H. C. OF net profits of the sweep business and of any part or parts of the said net profits which may for the time being for any reason be unapplied or undisposed of upon trust to accumulate the same but without being bound to invest the same or any part thereof" and to use such accumulations or any part of them for the furtherance and benefit and advantage of the business according to their discretion, and for the aid and assistance of any persons to whom, in the opinion of the trustees, aid or advantage at the particular time would be a benefit and advantage in this life and for supposed charities, the objects of which in fact went outside the scope of legal charities. The testator provided that if any of the named sweep beneficiaries should die in his life- time leaving a widow him surviving, then the proportion of profits to which he would have been entitled had he survived the testator should be paid to the widow during her lifetime. In the event of the winding up and realization of the business the trustees were directed to hold the proceeds upon trust for the named sweep beneficiaries in the same proportions as they were to take the net profits. He declared that any shares of the sweep beneficiaries either in the net profits or in the net proceeds of winding up and realization or in moneys which had been accumulated which should fall in or lapse owing to the death of a beneficiary during the testator's lifetime or owing to the death of a widow should be held upon trusts in favour of supposed charities which were held to be invalid (Attorney-General (N.S.W.) v. Adams, (1908) 7 C.L.R. 100). Two of the sweep beneficiaries, R. and B., predeceased the testator, leaving widows. By a decretal order on an originating summons issued out of the Supreme Court of New South Wales in 1907 Street J. made declarations…

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 Blair v Curran

Details

AGLC: Blair v Curran [1939] HCA 23
Case: [1939] HCA 23
Decision Date: 27 May 1939

CaseChat Overview and Summary

The case of *Blair v Curran* involved a dispute over the distribution of income from a sweep business established by a testator. The testator's will directed his trustees to carry on the business and to accumulate one-tenth of its net profits. This accumulated fund was to be used at the trustees' discretion for the benefit of the business, for aiding individuals, or for supposed charities. The remaining nine-tenths of the profits were to be distributed among named beneficiaries, with provisions for their widows. Previous proceedings in the Supreme Court of New South Wales had declared certain charitable trusts void for uncertainty and had determined that the accumulated funds, if not used for the business, would follow the same destination as the proceeds of the business upon realization. The current proceedings were initiated in the Supreme Court of Tasmania to determine the entitlement to the accumulated profits after twenty-one years from the testator's death, and the entitlement to a specific share of profits previously enjoyed by a deceased beneficiary's widow.

The legal issues before the High Court of Australia included whether the trust for accumulation of one-tenth of the sweep business's net profits was void under the *Accumulation Act* (39 & 40 Geo. III. c. 98) after twenty-one years from the testator's death. The court also had to determine who was entitled to the income released from this accumulation trust, and who was entitled to a one-twentieth share of profits that had been paid to the widow of a deceased beneficiary for her life. Further questions arose regarding the effect of a previous declaration by Street J. in New South Wales, specifically whether it created an issue estoppel or *res judicata* on the interpretation and validity of the accumulation trust and the destination of released income.

The High Court, by majority, held that the trust for accumulation was void as from the expiration of twenty-one years from the testator's death by virtue of the *Accumulation Act*. The court reasoned that the previous declaration by Street J. did not preclude the application of the *Accumulation Act*. The majority found that the "Hobart-property beneficiaries," who were entitled to the testator's Tasmanian real estate and residue of his personal estate (excluding the sweep business), were entitled to the income released from the accumulation trust. This conclusion was based on the principle that the previous declaration by Street J. regarding the destination of proceeds upon realization should be followed as a long-standing decision on the construction of the will, and also on the basis that the decretal order created an estoppel. The court also determined that the Hobart-property beneficiaries were entitled to the one-twentieth share of profits released by the death of the widow, with some judges holding this passed directly as Tasmanian residue and others that it was caught by the accumulation clause.

The High Court affirmed the decision of the Supreme Court of Tasmania, subject to modifications. The trustees were authorized to continue accumulating the one-tenth of net profits and the one-twentieth share of profits, but only while the authority granted by a deed of arrangement remained in force. Upon the revocation of this authority, or upon the expiration of the period permitted by the *Accumulation Act*, the released income was to be distributed to the Hobart-property beneficiaries.

Orders