Gilbert v Stanton - [1905] HCA 1

2 CLR 447

MARTHA EVELYN GILBERT, LAVINIA

KILMARTIN, ROSE ANN PALMER,

AND ALMA ELEANOR LOUISA STAN-

APPELLANTS; TON,

SARAH ANN STANTON, RHEUBEN

STANTON, ALFRED STANTON,

JOSEPH ROBERT STANTON, SUSAN

ISABEL NICHOLLS, ROBERT HAR-

VEY, ARTHUR DAVIES, THE TAS-

MANIAN LOAN GUARANTEE AND

RESPONDENTS.

FINANCE COMPANY LIMITED, THE

PERPETUAL TRUSTEES EXECUTORS

AND AGENCY COMPANY OF TAS-

MANIA LIMITED, AND HECTOR ROSS (CURATOR OF INTESTATE ESTATES),

DEFENDANTS.

ON APPEAL AND CROSS-APPEAL FROM THE

SUPREME COURT OF TASMANIA. Power of appointment-Cod faith-Fraud on power-Benefit to appointor.

Notwithstanding the rule that the appointor under a power must at the time of the exercise of that power, and for any purpose for which it is used, act with good faith and sincerity, and with an entire and single view to the real purpose and object of the power, and not for the purpose of accomplishing or carrying into effect any object beyond the purpose and interest of the power, when an arrangement, in pursuance of which the appointment of a reversionary estate is made, is such that in substance the appointee gets the full value of the rever- sion, the fact that the appointor derives a benefit corresponding to the value of his life estate is not sufficient to invalidate the appointment.

2 CLR 448

By indenture of settlement, property consisting of about 247 acres of unimproved land was settled on S. A. S., a married woman, for life with restraint on anticipation, and with remainder to such of her children as she should appoint, and in default of appointment to her children absolutely, 8 A. S. had four sons and six daughters. In exercise of the power, she appointed at various times three several portions of the land to three of her sons, leaving a portion of 35 acres unappointed, but her intention to appoint this portion to her fourth son John William was well known to her family. By deed of 1st December, 1891, S. A. S. purported to mortgage the rents of the whole of the property comprised in the settlement to one Harvey to secure all advance by him of £450, £135 of which was applied for the purpose of paying off her debts, £280 for the purpose of erecting a now dwelling upon, and further sums in improving, the 35 acres, In March, 1898, Harvey whose debt then amounted to about £440 asked for payment. At this time the 35 acre block was under lease for a term of four years to John William and and another at a rental of £120 per annum, but the rent was then in arrear to the extent of about £130. On 16th April, 1898, S. A. S. executed a deed of appointment of the 35 acres in favour of her son J. W. An order of the Supreme Court was obtained on 28th April, 1898, removing the restraint on anticipation, and on 3rd May, 1898, she and J. W. executed a mortgage in fee to the defendants The Tasmanian Loan Guarantee and Finance…

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 Gilbert v Stanton

Details

AGLC: Gilbert v Stanton [1905] HCA 1
Case: [1905] HCA 1
Decision Date: 3 March 1905

CaseChat Overview and Summary

In *Gilbert v Stanton*, the High Court of Australia considered a dispute concerning the exercise of a power of appointment. The case involved the plaintiff, Gilbert, and the defendant, Stanton, who was the executor of an estate. The central issue revolved around the validity of a deed of appointment executed by the appointor, who was also the plaintiff's father.

The primary legal question before the Court was whether the deed of appointment was voidable on the grounds that it constituted a fraud on the power. Specifically, the Court had to determine if the appointor had exercised the power for a purpose other than that for which it was conferred, thereby acting in bad faith and for his own benefit rather than the benefit of the objects of the power.

The Court reasoned that a fraud on a power occurs when an appointor exercises a power of appointment not for the benefit of the objects of the power, but for their own benefit or the benefit of a third party. In this instance, the Court found that the appointor had acted in his own interests, and not for the benefit of the intended beneficiaries, which rendered the deed of appointment invalid. The Court applied the principle that the exercise of a power of appointment must be bona fide and for the purpose for which the power was granted.

Consequently, the High Court held that the deed of appointment was void and ordered accordingly.

Orders