Custodial Ltd v Greig

Custodial Ltd, a trustee of a discretionary trust, brought an application to the Supreme Court of Victoria against Greig, one of the trustees of the same trust. The dispute centred on the retirement of Greig from his position as a trustee. Greig had initially given notice of his intention to resign from the trust, but later purported to revoke this notice. The application sought a determination as to whether Greig had the unilateral right to withdraw his notice of intention to resign.

The legal issue before the court was whether a trustee could unilaterally withdraw a notice of intention to resign from the trust. This required the court to consider the principles of equity, specifically those governing the appointment and removal of trustees, and the authority of trustees to bind the trust. The court needed to determine if the power to resign was also accompanied by the power to unilaterally revoke that resignation.

The court found that once a trustee had given a valid notice of intention to resign, the power to withdraw that notice was not unilateral. Instead, the withdrawal of a resignation notice typically required the consent of the other trustees or the beneficiaries, depending on the terms of the trust deed and applicable law. The court relied on established principles that trustees act in concert and that significant changes to the trust, such as the resignation of a trustee, require cooperation among the trustees. The court emphasised that the power to resign did not equate to an unfettered power to unilaterally revoke that resignation. Consequently, the court dismissed the application, holding that Greig did not have the unilateral right to withdraw his notice of intention to resign.