Perpetual Trustees Victoria Ltd v Barns - [2012] VSCA 77

SUPREME COURT OF VICTORIA

COURT OF APPEAL

S APCI 2011 108
IN THE MATTER OF an application under s 63A of the Trustee Act 1958 and IN THE MATTER OF the Will and Estate of JOHN FREDERICK BARNS, DECEASED BETWEEN
PERPETUAL TRUSTEES VICTORIA LIMITED (ABN 47 004 027 258)	Appellant
and
TIMOTHEA BARNS (by her administrator KIM POWER re-appointed pursuant to VCAT order made 6 September 2007)	Respondent
and
THE ATTORNEY-GENERAL FOR THE STATE OF VICTORIA	Second Respondent

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JUDGES:	BUCHANAN and BONGIORNO JJA and WILLIAMS AJA
WHERE HELD:	MELBOURNE
DATES OF HEARING:	7 February 2012
DATE OF JUDGMENT:	2 May 2012
MEDIUM NEUTRAL CITATION:	[2012] VSCA 77
JUDGMENT APPEALED FROM:	[2011] VSC 314 (Robson J)

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TRUSTS – Testamentary trust – Testator’s widow and daughter life tenants of residuary estate – Gift over for charitable purposes – Income from residuary estate insufficient to meet living expenses of daughter – Trustee power to advance capital for benefit of widow – Arrangement to vary trust to give trustee power to advance capital for benefit of daughter – Daughter lacking capacity to consent to arrangement – Application by trustee under s 63A Trustee Act 1958 for approval of arrangement on behalf of daughter – Attorney-General a respondent not opposing application – Role of Attorney-General in proceeding – Attorney-General representing Crown as protector of charity – Intention of testator to provide for daughter – Appeal allowed – Section 63A Trustee Act 1958.

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APPEARANCES:	Counsel	Solicitors
For the Appellant	Ms K McMillan SC with Mr P J Pascoe	Maddocks
For the Respondent	Mr T P Warner	DLA Piper Australia
For the Second Respondent	Mr R T Waddell	Victorian Government Solicitor’s Office

BUCHANAN JA:

I agree with Williams AJA.

BONGIORNO JA:

I also agree with Williams AJA.

WILLIAMS AJA:

The appellant (‘Perpetual’) is a trustee appointed by the will, dated 18 May 1983, (‘the will’) of the late John Frederick Barns (‘the testator’). The first respondent, Ms Barns, is the only child of the testator and the surviving life tenant in relation to his residuary estate. She suffers from a form of autism. She is represented in this appeal by Dr Kim Power, who has been appointed her Administrator by the Victorian Civil and Administrative Tribunal. The Attorney-General is the second respondent and represents those who might benefit under the trusts for charitable purposes created by the will.

Ms Barns is entitled to the income from the residuary estate for life, but that income is insufficient for her needs. Because she is incapacitated, she is unable to give her consent to an arrangement varying the trust upon which the residuary estate is held to allow for access to capital to meet her needs.

Perpetual applied to a judge of the Court for an order under s 63A of the Trustee Act 1958 approving, on her behalf, an arrangement varying the trust by amending clause 5 of the will, to permit Perpetual to advance capital to her from time to time (‘the arrangement’). Perpetual…

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.

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Details

Case: [2012] VSCA 77
Decision Date: 2 May 2012

CaseChat Overview and Summary

In the case of Perpetual Trustees Victoria Ltd v Barns, the respondent, as trustee, sought approval under section 63A of the Trustee Act 1958 to vary the terms of a testamentary trust. The trust was established by a will, with the testator's widow and daughter as life tenants of the residuary estate, and the remainder for charitable purposes. The widow and daughter experienced financial difficulties due to insufficient income from the trust. The trustee proposed to vary the trust to include a power to advance capital to benefit both the widow and daughter. However, the daughter, who lacked capacity to consent, was a significant beneficiary of the trust. The Attorney-General, who was not opposing the application, represented the Crown as the protector of the charitable purpose. The central legal issue was whether the court should approve the variation of the trust terms to allow the advancement of capital to the daughter despite her lack of capacity to consent.

The Court of Appeal considered the role of the Attorney-General in proceedings where the charitable purpose was at stake. It noted that while the Attorney-General had an interest in protecting the charitable purpose, the primary consideration was the intention of the testator. The Court held that the testator intended to provide for the daughter's benefit, and the daughter's incapacity did not negate this intention. The Court also found that the proposed variation aligned with the testator's intention and would not undermine the charitable purpose. Therefore, the Court approved the variation under section 63A of the Trustee Act 1958, allowing the trustee to advance capital to benefit the daughter.

The Court of Appeal allowed the appeal, affirming the trial judge's decision to approve the variation of the trust terms. The Court emphasised the importance of considering the testator's intention and the overall benefit to the daughter, who was the primary beneficiary of the trust. The Court also recognised the Attorney-General's role in safeguarding the charitable purpose but determined that it did not override the need to fulfil the testator's wishes. The final orders of the Court included the approval of the variation of the trust terms to enable the trustee to advance capital for the benefit of the daughter.

Orders