Edwards v Brougham - [2022] SASC 8

SUPREME COURT OF SOUTH AUSTRALIA
(Civil: Application)
EDWARDS & ANOR v BROUGHAM
[2022] SASC 8
Judgment of the Honourable Chief Justice Kourakis
DEEDS - DEED POLL
EQUITY - TRUSTS AND TRUSTEES - APPOINTMENT, REMOVAL AND ESTATE OF TRUSTEES
Application for declarations concerning the administration of the Brougham Farm Trust. The Brougham Farm Trust includes a family farm referred to as the ‘Lipson Farm’. The applicant is both the executor of the will of Mr Peter Brougham and trustee of the Brougham Farm Trust. The respondent, on the applicants’ submission, is a former trustee of the Brougham Farm Trust.
The applicants submit that the respondent, purportedly relying on clause 11 of the Trust Deed, distributed the Lipson Farm to himself (transfer) and that the transfer is null and void.
Held:
1.The Deed of Appointment is valid, such that Mr Peter Brougham and Mr James Edwards became the Trustees with effect on 15 October 2020.
2.The Deed of Transfer executed by Mr John Brougham purporting to distribute the capital in specie to himself is null and void on the grounds inter alia that:
a.      It was not in writing and not irrevocable as required by cl 11.2 of the Trust Deed;
b.      Mr John Brougham was not at the relevant time the Trustee; and
c.      The Deed of Transfer could not be backdated.

Trustee Act 1936 (SA) ss 35, 36(1)(a), 36(2), 37, referred to.
Hudson v Hudson (1735) Cases T. Talbot 127; 25 ER 700, considered.

EDWARDS & ANOR v BROUGHAM
[2022] SASC 8
Civil

KOURAKIS CJ: This is an application for declarations concerning the administration of the Brougham Farm Trust. The first applicant, James Edwards, is the trustee of the Brougham Farm Trust. The second applicant, Peter Brougham, together with his wife Pamela Brougham (Pamela) was an appointor under the terms of the Brougham Farm Trust Deed (the Trust Deed). As appointors Peter and Pamela were empowered pursuant to cl 18 of the Trust Deed to appoint a new trustee, and by cl 8.1.2 of the Trust Deed could grant or withhold consent to a proposed declaration by the Trustee that a person, or class of persons, no longer be included as a beneficiary. Pamela died on 3 March 2018.
At the time the proceedings were commenced on 25 November 2020 Peter Brougham (Peter) was terminally ill and by that time had purportedly exercised his power of appointment to appoint himself and his accountant, Mr Edwards, as Trustees of the Brougham Farm Trust in place of his son, the respondent, John Brougham. Peter died on 29 November 2020 and James Edwards, as executor of the will of Peter Brougham, replaced Peter Brougham as the second applicant.
John Brougham (John) was the sole and inaugural trustee of the Brougham Farm Trust when it was first constituted by the Trust Deed on 9 May 2016. Peter and Pamela were beneficiaries pursuant to cl 7 of the Brougham Farm Trust, together with John, and all persons related to them. Peter, Pamela and John…

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 Edwards v Brougham

Details

AGLC: Edwards v Brougham [2022] SASC 8
Case: [2022] SASC 8
Decision Date: 2 February 2022

CaseChat Overview and Summary

In Edwards v Brougham, the applicant, Mr James Edwards, who is the executor of the will of Mr Peter Brougham and a trustee of the Brougham Farm Trust, sought declarations concerning the administration of the trust. The trust includes a family farm known as the Lipson Farm. The respondent, Mr John Brougham, a former trustee of the trust, is alleged to have improperly distributed the Lipson Farm to himself. The dispute hinges on the validity of a Deed of Transfer executed by Mr Brougham and whether it was compliant with the terms of the Trust Deed.

The legal issues before the court were whether the Deed of Appointment was valid, whether the Deed of Transfer executed by Mr Brougham was properly executed, and if the distribution of the Lipson Farm was valid. Specifically, the court had to determine if the Deed of Transfer complied with clause 11 of the Trust Deed, whether Mr Brougham was the trustee at the time of the transfer, and if the deed could be backdated. The applicant argued that the Deed of Transfer was null and void for various reasons, including its failure to be in writing and irrevocable, the lack of authority of Mr Brougham as a trustee, and the impossibility of backdating the deed.

The court held that the Deed of Appointment was valid, thereby confirming that Mr Brougham and Mr Edwards became trustees on 15 October 2020. The Deed of Transfer executed by Mr Brougham was found to be null and void because it was not in writing and irrevocable as required by clause 11.2 of the Trust Deed, Mr Brougham was not a trustee at the relevant time, and the deed could not be backdated. The court concluded that the distribution of the Lipson Farm was invalid and ordered the conveyance of the Lipson Farm to Mr Edwards.

Orders

Orders of the court

Application for declarations concerning the administration of the Brougham Farm Trust. The Brougham Farm Trust includes a family farm referred to as the ‘Lipson Farm’. The applicant is both the executor of the will of Mr Peter Brougham and trustee of the Brougham Farm Trust. The respondent, on the applicants’ submission, is a former trustee of the Brougham Farm Trust.

The applicants submit that the respondent, purportedly relying on clause 11 of the Trust Deed, distributed the Lipson Farm to himself (transfer) and that the transfer is null and void.

Held:

1. The Deed of Appointment is valid, such that Mr Peter Brougham and Mr James Edwards became the Trustees with effect on 15 October 2020.

2. The Deed of Transfer executed by Mr John Brougham purporting to distribute the capital in specie to himself is null and void on the grounds inter alia that:

a. It was not in writing and not irrevocable as required by cl 11.2 of the Trust Deed;

b. Mr John Brougham was not at the relevant time the Trustee; and

c. The Deed of Transfer could not be backdated.

Background

Background to the litigation

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Evidence

Evidence Before The Court

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Decision

Reasons for decision

A question arises as to why the power to distribute should be limited to the making of the allocation as between the beneficiaries. That may be connected to the irrevocable allocation and the revocable allocation when a termination date has been fixed.Conclusion I will make the declarations sought by the applicant. I would hear the parties on the orders necessary to effect the conveyance of the Lipson Farm to Mr Edwards.

Ratio Decidendi

Legal Principle Established

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