Legal Research
Cases
Marsella v Wareham (No 2)

Marsella v Wareham (No 2)

Case [2019] VSC 65 15 February 2019

No judgment structure available for this case.

Type to search within this case.

IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE
COMMON LAW DIVISION
TRUSTS, EQUITY & PROBATE LIST

S CI 2017 01826

IN THE MATTER of s 48 of the Trustee Act 1958

-and-

IN THE MATTER of the estate of HELEN FREETH MARSELLA (also known as HELEN FREETH SWANSON)

RICCARDO GIACOMO MARSELLA (who sues both personally and as Executor of the estate of HELEN FREETH MARSELLA) (also known as HELEN FREETH SWANSON)	Plaintiff
-and-
CAROLINE ELIZABETH WAREHAM and MARTIN WAREHAM (as Trustees of the Swanson Superannuation Fund)	Defendants

---

JUDGE:	McMillan J
WHERE HELD:	Melbourne
DATE OF HEARING:	12 November 2018
DATE OF JUDGMENT:	15 February 2019
CASE MAY BE CITED AS:	Re Marsella; Marsella v Wareham (No 2)
MEDIUM NEUTRAL CITATION:	[2019] VSC 65

---

TRUSTS — Self-managed superannuation trust — Where power of appointment a special power — Where first defendant resolved as trustee to pay herself the whole benefit of the fund — Where defendants as co-trustees resolved as trustee to pay first defendant the whole benefit of the fund — Whether defendants exercised the power of appointment in good faith, upon real and genuine consideration and for a proper purpose — Whether defendants acted in conflict of duty — Superannuation Industry (Supervision) Act 1993 (Cth) — Curwen v VanbreckPty Ltd (2009) 26 VR 335.

---

APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Mr S P Newton	Stidston Warren Lawyers
For the Defendant	Dr B Orow	Hill Legal

---

HER HONOUR:

Introduction

Helen Marsella (‘the deceased’) died on 27 April 2016. She was survived by her husband of 32 years (‘the plaintiff’) and her two children from her previous marriage, the first defendant and Charles Swanson. The second defendant is the first defendant’s husband.

Prior to her death, the deceased managed her retirement funds via the Swanston Superannuation Fund (‘the fund’). When the fund was established, the deceased and first defendant accepted appointment as trustees and the deceased was the sole member. The deceased was also the founder of the fund. Upon the deceased’s death, the first defendant became the sole trustee of the fund. At the time of the deceased’s death, the death benefit payable was estimated to be $450,416. Although the deceased executed a death benefit nomination on 12 May 2003 to the benefit of her grandchildren, it is accepted that the nomination has expired, and in any event, purported to direct the benefits to persons other than dependants. No other written nomination was executed by the deceased.

On 17 April 2017, the first defendant resolved as ‘surviving trustee’ to pay the entire benefit of the fund to herself. Also on 17 April 2017, the first defendant purportedly appointed the second defendant as a trustee of the fund pursuant to s 41(1)(b) of the Trustees Act 1958 and the trustees resolved to distribute the fund to the first defendant.

Plaintiff’s application

By originating motion, the plaintiff in his personal capacity and in his capacity as the executor of the deceased’s estate, seeks removal…

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 Marsella v Wareham (No 2)

Details

AGLC: Re Marsella; Marsella v Wareham (No 2) [2019] VSC 65
Case: [2019] VSC 65
Decision Date: 15 February 2019

CaseChat Overview and Summary

The case of Marsella v Wareham (No 2) involved a dispute over the management of a self-managed superannuation fund. The first defendant, Wareham, as a trustee of the fund, resolved to pay herself the entire benefit of the fund. The second defendant, who was also a trustee, along with Wareham, subsequently resolved to pay Wareham the whole benefit of the fund. The plaintiff, Marsella, sought to challenge these resolutions on the grounds that they were made without proper consideration and for improper purposes, in breach of fiduciary duties owed to the fund. The case was heard in the Supreme Court of Victoria.

The primary legal issue before the court was whether the defendants exercised the power of appointment in good faith, upon real and genuine consideration, and for a proper purpose. Additionally, the court needed to determine whether the defendants acted in conflict with their fiduciary duties. The case hinged on the interpretation of the relevant statutory provisions under the Superannuation Industry (Supervision) Act 1993 and the application of case law, particularly the principles set out in Curwen v Vanbreck Pty Ltd.

The court found that the power of appointment held by the defendants was a special power, requiring a high degree of scrutiny. It was established that the defendants had failed to act in good faith and had not given real and genuine consideration to their decisions. The court held that the resolutions were not made for a proper purpose and that the defendants had acted in conflict with their fiduciary duties. The court relied on the principle that trustees must exercise their powers for the sole benefit of the fund members and not for personal gain. The court's decision was influenced by the precedent in Curwen v Vanbreck Pty Ltd, which emphasised the importance of trustees acting in the best interests of the beneficiaries.

As a result of the findings, the court ordered that the resolutions made by the defendants were invalid and that the defendants were liable to account for the benefit of the fund to the plaintiff. The court also granted the plaintiff an injunction to prevent the defendants from further misapplying the fund's assets. The court's decision underscored the necessity for trustees of self-managed superannuation funds to adhere strictly to their fiduciary duties and to act in the best interests of the fund members.

Orders