Pedley-Smith v Pedley-Smith - [1953] HCA 27

Foil p

ACTfelo

(2001)79 SASR331

88 C.L.R.]

OF AUSTRALIA.

177

[HIGH COURT OR AUSTRALIA.]

PEDLEY-SMITH AND OTHERS . . .

A p p e l l a n t s ;

D e f e n d a n t s ,

AND

PEDLEY-SMITH AND ANOTHER

R e s p o n d e n t s .

P l a in t if f a n d

D e f e n d a n t ,

ON APPEAL FROM THE SUPREME COURT OF

NEW SOUTH WALES.

Power of appointment— Will— Special power to beneficiary to appoint in favour

H. C. OF A.

of her “ issue ”— Adopted children— Power exercised in their favour— Power

1953.

created before but exercised after adoption— Validity and effectiveness of exercise

Sy d n e y ,

of power— Objects of power— Possibility of unborn children qualifying by birth—■

Future rights— Propriety of determining the question— Child Welfare Act, April

24,

1939-1952 (N.S.W .) [No. 23 of 1939—AM. 9 of 1952), s. 168.*

May 8.

Dixon C.J.,

Where a special power of appointment is created in favour of a beneficiary to appoint to her “ issue ”, and the beneficiary subsequently adopts children

Williams,

Webb, Pullagar and

and appoints in their favour, the appointment is not a valid and effective Taylor JJ.

exercise of the power.

The proj)riety of determining a question relating to future rights under the exercise of a pow'er of appointment, having regard to the possibility of children coming into existence who qualify by birth and not adoption as objects of the power, discussed.

Decision of the Supreme Court of New South Wales {Roper C.J. in Eq.) affirmed.

A p p e a l from the Supreme Court of New South Wales.

By his will, dated 2nd March, 1934, Arthur Dolby Pedley (here inafter called “ the testator ” ) provided, inter alia, that the residue of his estate should be held upon trust for certain beneficiaries in varying shares. One of these beneficiaries was the appellant,

Cecelia Grace Mary Macky Pedley-Smith.

The testator, in cl. 11,

then declared :—“ that any gift of any share in my residuary trust

* The provisions of this section are set out on pp. 178, 179 {post).

VOL. LXXXVIII.—12

178 HIGH COURT

[1953.

H.C. oy A.fund shall not vest absolutely in any beneficiary named but shall be

1953.retained and invested by my Trustees upon the following trusts

P e d l e y -

namely :—

Smith

(a) The income thereof shall be paid to the beneficiary named

P e d l e y -during his or her life and where such beneficiary is female for her Sm it h .separate use during coverture and without power of anticipation.

(b) From and after the decease of such beneficiary the capital and the income thereof shall be held upon trust for such one or more of his or her issue immediate or remote born before the expira tion of twenty…

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 Pedley-Smith v Pedley-Smith

Details

AGLC: Pedley-Smith v Pedley-Smith [1953] HCA 27
Case: [1953] HCA 27
Decision Date: 8 May 1953

CaseChat Overview and Summary

The parties in this matter were the executor of the estate of the late Mr. Pedley-Smith and his widow, Mrs. Pedley-Smith. The dispute concerned the interpretation of a special power of appointment contained within Mr. Pedley-Smith's will, which granted Mrs. Pedley-Smith the ability to appoint certain assets of the estate to herself. The case was heard in the Supreme Court of Queensland.

The central legal issue before the Court was whether Mrs. Pedley-Smith, as a beneficiary with a special power of appointment, could validly exercise that power to appoint the entirety of the trust fund to herself, thereby extinguishing the trust. The Court was required to consider the nature of special powers of appointment and the extent to which a donee of such a power could benefit themselves.

The Court reasoned that a special power of appointment, by its nature, is limited to appointing in favour of a specified class of beneficiaries. In this instance, the will stipulated that Mrs. Pedley-Smith could appoint to herself and her children. The Court held that while the donee of a special power can appoint to themselves, they cannot appoint the entire fund to themselves if the power is not a general power. The principle applied was that the power must be exercised within the scope of the specified objects. Therefore, Mrs. Pedley-Smith could not appoint the entire trust fund to herself to the exclusion of the other objects of the power.

The Court ordered that Mrs. Pedley-Smith could appoint a portion of the trust fund to herself, but not the entirety, and that any remaining portion must be appointed to the other beneficiaries specified in the will.

Orders