Mandie v Memart Nominees Pty Ltd

SUPREME COURT OF VICTORIA

COURT OF APPEAL

S APCI 2018 0160

EDWARD NICHOLAS MANDIE & ORS (according to the attached Schedule)	Applicants
v
MEMART NOMINEES PTY LTD (ACN 005 024 617) (as trustee of the DAVID MANDIE FAMILY TRUST)	Respondent

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JUDGES:	TATE, NIALL and EMERTON JJA
WHERE HELD:	MELBOURNE
DATE OF HEARING:	14 and 17 August 2020
DATE OF JUDGMENT:	13 November 2020
MEDIUM NEUTRAL CITATION:	[2020] VSCA 281
JUDGMENT APPEALED FROM:	[2018] VSC 719 (Ginnane J)

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TRUSTS – Family discretionary trust – Trustee’s removal of some family members as General Beneficiaries by exercise of exclusion power – Whether exercise of exclusion power invalid for going beyond power or for improper purpose – Disclaimer of interests under discretionary trust – Effect on grandchildren’s possible interests – Doctrine of acceleration.

PRACTICE AND PROCEDURE – Leave to amend pleadings – Issue of ambit and scope of power unavoidable – Civil Procedure Act 2010.

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APPEARANCES:	Counsel	Solicitors
For the Applicants	Mr A J Myers QC with Mr A P Young QC and Mr R W Short	Cornwalls
For the Respondent	Ms W A Harris QC with Mr P D Herzfeld SC	Allens

TATE JA
NIALL JA
EMERTON JA:

TABLE OF CONTENTS

Introduction and summary.............................................................................	2
The facts.............................................................................................................	6
The Trust.............................................................................................................	6
Dispute in the family...........................................................................................	12
Information proceeding.......................................................................................	16
The Trustee seeks advice from counsel................................................................	16
The Western Australian regulatory requirement................................................	21
The May Declaration...........................................................................................	22
The September Declaration..................................................................................	23
Broad overview of issues and findings of the judge...................................	25
Ground 1:  Are the grandchildren takers in default of the Trust property?	29
The judge’s reasons..............................................................................................	30
The authorities	32
Applicants’ submissions on Ground 1/Notice of Contention.............................	40
Respondent’s submissions on Ground 1/Notice of Contention..........................	40
Consideration  .....................................................................................................	41
(1)  Disclaimers...........................................................................................	41
(2)  Do the applicants have an interest under cl 5(2)?...........................	42
(3)  How does cl 5(2) work?.......................................................................	44
Ground 2:  Is the May declaration invalid?.................................................	50
Consideration  .....................................................................................................	52
(1)  Principles..............................................................................................	52
(2)  Analysis.................................................................................................	55
Ground 3:  The September Declaration — should leave to amend have been granted to allege absence of power?..............................................................	59
The September Declaration..................................................................................	59
The judge’s rulings on the amendments on power – proposed [26D].................	62
Parties’ submissions at trial on leave to amend..................................................	64
The judge’s ruling on amendment.......................................................................	66
Parties’ submissions on the appeal, [26D], Ground 3(a) and (b).......................	67
Analysis...............................................................................................................	68
Was the September Declaration beyond power? Ground 3(c)............................	70
Grounds 4, 5 and 6:  Was the September Declaration made for an improper purpose?.............................................................................................................	73
Ground 5 — Should the applicants have been entitled to rely on [164] to support the allegation of improper purpose?..........................................................................	74
Parties’ submissions on the appeal in relation to [164]......................................	79
Analysis...............................................................................................................	79
Ground 6 — Should the judge have drawn a Jones v Dunkel inference?...........	81
Ground 4 — Should the judge have…