Court of Appeal
Supreme Court
New South Wales
- Summary available
Medium Neutral Citation: Fischer v Nemeske Pty Ltd [2015] NSWCA 6 Hearing dates: 21 November 2014 Date of orders: 11 February 2015 Decision date: 11 February 2015 Before: Beazley P at [1]; Barrett JA at [2]; Ward JA at [148] Decision: Appeal dismissed with costs.
Catchwords: EQUITY – trusts and trustees – powers of trustees – maintenance and advancement – power of trustee to “advance or raise any part or parts of the whole of the capital or income of the Trust Funds and to pay or to apply the same as the Trustee shall think fit for the maintenance education advancement in life or benefit of any of the Specified Beneficiaries” – where trustee revalued sole asset constituting the trust property and resolved to “distribute” the whole of the resultant revaluation reserve to two beneficiaries jointly – whether the particular power was thereby exercised – whether those beneficiaries could bring an action in debt against the trustee – whether the trustee had by a subsequent deed validly covenanted to make payment to the particular beneficiaries – LIMITATION OF ACTIONS – covenant to pay on demand – time runs from time of covenant notwithstanding absence of demand – whether the cause of action was acknowledged within the originally applicable limitation period so as to cause a renewed limitation period to apply – EQUITY – trusts and trustees – terms of trust – express power to vary in any way – particular power to alter vesting date – purported exercise of the general power so as to alter the vesting date retrospectively – whether the general power was available in the face of the express power – whether a particular limit upon the general power operated to preclude the variation purportedly made Legislation Cited: Companies (New South Wales) Code
Limitation Act 1969 (NSW)
Trustee Act 1925 (NSW)Cases Cited: AF & ME Pty Ltd v Aveling (1994) 14 ACSR 499
Allen v Gold Reefs of West Africa Ltd [1900] 1 Ch 656
Bartlett v Dimond (1845) 14 M & W 49; 153 ER 385
Chianti Pty Ltd v Leume Pty Ltd [2007] WASCA 270; 35 WAR 488
Chief Commissioner of Stamp Duties (NSW) v Buckle [1998] HCA 4; 192 CLR 226
Clark v Inglis [2010] NSWCA 144; 79 ATR 447
Collins v Benning (1700) 12 Mod 444; 88 ER 1440
Commissioner of Inland Revenue v Ward [1970] NZLR 1
Edwards v Lowndes (1852) 1 E & B 81; 118 ER 367
Global Custodians Ltd v Mesh [2002] NSWSC 47
Gra-Ham Australia Pty Ltd v Perpetual Trustees WA Ltd (1989) 1 WAR 65
HCK China Investments Ltd v Solar Honest Ltd [1999] FCA 1156; 165 ALR 680
Lawrie v Bankes (1858) 4 K & J 142; 70 ER 59
MSP Nominees Pty Ltd v Commissioner of Stamps [1999] HCA 51; 198 CLR 494
Ogilvie v Adams [1981] VR 1041
Pepe v City and Suburban Permanent Building Society…
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- AGLC
- Fischer v Nemeske Pty Ltd [2015] NSWCA 6
- Case
- [2015] NSWCA 6
- Decision Date
CaseChat Overview and Summary
The dispute in *Fischer v Nemeske Pty Ltd* concerned the exercise of powers by a trustee under a trust deed. The applicants, beneficiaries of the trust, sought to recover funds from the respondent trustee, alleging improper distribution of trust assets. The matter came before the Court of Appeal of New South Wales.
The primary legal issues before the court were whether the trustee had validly exercised its power to advance or raise capital or income for the benefit of specified beneficiaries by distributing a revaluation reserve, and whether the beneficiaries could bring an action in debt against the trustee. Further issues included whether a subsequent deed constituted a valid covenant to make payment, and whether the trustee's actions in purporting to alter the vesting date of the trust retrospectively were valid, particularly in light of an express power to alter the vesting date and a limitation on the general power to vary the trust. The court also considered whether the cause of action was acknowledged within the applicable limitation period, thereby renewing the limitation period.
The Court of Appeal found that the trustee's purported distribution of the revaluation reserve did not constitute a valid exercise of the power to advance or raise capital or income. The court reasoned that the power was intended to be exercised for the maintenance, education, advancement in life, or benefit of beneficiaries, and a mere revaluation reserve did not fall within the scope of this power. Furthermore, the court determined that the subsequent deed did not create a valid covenant to pay, and that the trustee's attempt to retrospectively alter the vesting date was ineffective. The court held that the general power to vary the trust was not available to achieve what was specifically provided for in an express power, and that the purported variation was precluded by the express limitation on the general power.
The appeal was dismissed with costs.
The primary legal issues before the court were whether the trustee had validly exercised its power to advance or raise capital or income for the benefit of specified beneficiaries by distributing a revaluation reserve, and whether the beneficiaries could bring an action in debt against the trustee. Further issues included whether a subsequent deed constituted a valid covenant to make payment, and whether the trustee's actions in purporting to alter the vesting date of the trust retrospectively were valid, particularly in light of an express power to alter the vesting date and a limitation on the general power to vary the trust. The court also considered whether the cause of action was acknowledged within the applicable limitation period, thereby renewing the limitation period.
The Court of Appeal found that the trustee's purported distribution of the revaluation reserve did not constitute a valid exercise of the power to advance or raise capital or income. The court reasoned that the power was intended to be exercised for the maintenance, education, advancement in life, or benefit of beneficiaries, and a mere revaluation reserve did not fall within the scope of this power. Furthermore, the court determined that the subsequent deed did not create a valid covenant to pay, and that the trustee's attempt to retrospectively alter the vesting date was ineffective. The court held that the general power to vary the trust was not available to achieve what was specifically provided for in an express power, and that the purported variation was precluded by the express limitation on the general power.
The appeal was dismissed with costs.
Orders
Orders of the court
Appeal dismissed with costs.
Background
Background to the litigation
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Evidence
Evidence Before The Court
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Decision
Reasons for decision
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Ratio Decidendi
Legal Principle Established
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