DELANEY & DELANEY (No.2)

The case of *Delaney & Delaney (No.2)* concerned a dispute between the executors of the estate of the late Mr. Delaney and the beneficiaries of his will. The executors sought directions from the court regarding the proper interpretation of certain provisions within the will, specifically concerning the distribution of assets and the extent of their powers. The matter came before Small J in the Supreme Court of New South Wales.

The primary legal issue before the court was the construction of the will, particularly clauses that appeared to create a discretionary trust and the extent to which the executors could exercise their discretion in distributing the estate's assets. The court was required to determine whether the beneficiaries had a vested interest in the assets or if the executors held absolute discretion over their distribution, and if so, what limitations, if any, applied to that discretion.

Small J's reasoning focused on established principles of will construction and trust law. His Honour analysed the language of the will, considering the ordinary meaning of the words used and the testator's likely intention. The court applied the principle that where a testator clearly expresses an intention to create a trust, the court will endeavour to give effect to that intention. His Honour found that the relevant clauses did indeed create a discretionary trust, granting the executors a broad discretion in distributing the income and capital of the estate amongst the named beneficiaries. However, the court also affirmed that such discretion must be exercised bona fide and in accordance with the terms of the trust, not arbitrarily.

The court made declarations as to the proper construction of the will and the scope of the executors' powers. The executors were directed to exercise their discretion in accordance with the principles of trust law, and the beneficiaries' rights were clarified in light of the court's interpretation.