Lane v Morrison & Anor

The High Court of Australia considered an appeal concerning the interpretation of a will. The appellant, Ms. Lane, was the beneficiary of a discretionary trust established by the late Mr. Morrison. The respondents, Mr. Morrison's executors, sought directions from the court regarding the distribution of the trust's assets. The central dispute revolved around whether the trust had validly failed, leading to the assets devolving according to the residuary estate of Mr. Morrison, or if Ms. Lane was entitled to the trust property.

The High Court was required to determine whether the trust deed created a valid discretionary trust, and if so, whether the trust had failed for uncertainty of objects. Specifically, the court had to consider the principles of certainty in relation to discretionary trusts, particularly the "trust power" test and the "mere power" test, and how these applied to the wording of the trust deed. The court also had to consider whether the trustees had been given a mere power to distribute or a trust power, which would necessitate a more stringent test of certainty.

The Court held that the trust deed did not create a valid discretionary trust. Applying the principles established in *McPhail v Doulton* and *Re Baden's Deed Trusts (No 2)*, the Court found that the wording of the trust deed did not confer a trust power upon the trustees. Instead, it conferred a mere power to appoint. However, the Court determined that even as a mere power, the objects of the power were not sufficiently defined to be certain. Consequently, the trust failed for uncertainty of objects. The Court reasoned that for a mere power to be valid, the class of potential beneficiaries must be ascertainable. As this was not the case, the trust was void.

The High Court ordered that the appeal be dismissed and that the trust be declared void for uncertainty of objects. The assets held on trust were therefore to be distributed as part of the residuary estate of the late Mr. Morrison.