Power v Ekstein - [2000] NSWSC 905

CITATION: Power v Ekstein [2000] NSWSC 905

CURRENT JURISDICTION: Equity Division

FILE NUMBER(S): SC 2395 of 1998

HEARING DATE(S): 29 August 2000

JUDGMENT DATE: 14 September 2000

PARTIES :

Kaaren Jarmila Power (Plaintiff)
Paul George Ekstein (First Defendant)
Paul Ward-Harvey as executor of the Estate of the late Otto Ekstein (Second Defendant)

JUDGMENT OF: Windeyer J at 1

COUNSEL : Mr J C Campbell QC with him Mr D A Smallbone (Plaintiff)
Mr P Hallen SC with him Mr S Burchett (First Defendant)
Mr D Fagan SC (Second Defendant)

SOLICITORS: Holman Webb (Plaintiff)
Horowitz & Bilinsky (First Defendant)
Paul Ward-Harvey & Co (Second Defendant)

CATCHWORDS: TRUSTS - whether distribution of trust assets by will - testator trustee of discretionary trust where powers of trustee could be exercised by will - whether testator by will effectively exercised powers that he had as trustee of a discretionary trust - whether will exercised powers of trustee to determine distribution date determine entitlements of beneficiaries and amendments to list of beneficiaries - whether power to appropriate assets to beneficiaries exercised by will - TRUSTS - whether new trustee is bound to give effect to wishes of original trustee as set out in his will - clause inserted into trust deed by amendment required the trustee to give effect to the wishes of the original trustee as far as possible as evidenced by will - whether fetter on discretion - POWERS - powers of appointment - special power exercisable by will - whether power exercised - WILLS - special power of appointment - whether exercised by will

LEGISLATION CITED: Trustee Act 1925 s85
Wills Probate & Administration Act 1898 s46B(1)
Thomas: Powers 1998 7/42 - 7/47

CASES CITED: Busk v Aldam [1874] LR 19 Eq 16
Kearns v Hill (1990) 21 NSWLR 107
In re Weston's Settlement [1906] 2 Ch 620
In re Knight deceased [1957] 1 Ch 441

DECISION: Paragraphs 1, 2, 3 and 4 on pages 19 and 20

1
IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION
WINDEYER J
THURSDAY 14 SEPTEMBER 2000
2395/98 KAAREN JARMILA POWER v PAUL GEORGE EKSTEIN & PAUL WARD-HARVEY AS EXECUTOR OF THE ESTATE OF THE LATE OTTO EKSTEIN
JUDGMENT
General Outline
1 The questions for decision in this action are whether a testator by will effectively exercised certain powers that he had as trustee of a discretionary trust, thereby effectively bringing about a distribution of trust assets by will; or whether, if he failed to do so, the present trustee is bound to give effect to the wishes of the testator as set out in the will.
Facts
2 The Otto Ekstein Family Trust (the Trust) was established by deed dated 1 April 1975, between Sydney George Frish as settlor and Otto Ekstein as trustee. It is in conventional terms with provisions as to distribution date, beneficiaries, powers of accumulation and distribution of income, distribution of capital, appropriation and the like. Otto Ekstein was married three times. Paul Ekstein and Helen Ekstein are children…

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 Power v Ekstein

Details

AGLC: Power v Ekstein [2000] NSWSC 905
Case: [2000] NSWSC 905
Decision Date: 14 September 2000

CaseChat Overview and Summary

In the case of Power v Ekstein, the dispute arose from the interpretation of a will and the operation of a discretionary trust. The case was heard in the Supreme Court of Victoria. The central issue was whether the testator, who was also the trustee of a discretionary trust, had effectively exercised certain powers as trustee through his will. Specifically, the court had to determine if the testator's will exercised the powers to determine the distribution date, beneficiaries, and amendments to the list of beneficiaries. Additionally, the court examined whether the power to appropriate trust assets to beneficiaries was exercised by the will. Another key issue was whether the new trustee was bound to give effect to the wishes of the original trustee as set out in his will, given that the trust deed included a clause requiring the trustee to do so as far as possible.

The court's reasoning focused on the nature of the powers of appointment and whether they were special powers that could be exercised by will. The court held that the testator did exercise the powers of appointment by will, thereby determining the distribution date and beneficiaries of the trust. The court found that the clause in the trust deed that required the trustee to give effect to the original trustee's wishes as evidenced by the will did not constitute a fetter on the discretion of the trustee, as the clause allowed for the exercise of discretion within the limits set by the will. Consequently, the court concluded that the new trustee was required to implement the testator's wishes as set out in the will, to the extent permissible under the trust deed.

The final orders of the court confirmed that the executor of the will was required to distribute the trust assets in accordance with the testator's directions in his will. The court's decision underscored the importance of the specific wording of the trust deed and the will in determining the extent to which the new trustee could be bound by the original trustee's wishes. The court's interpretation and application of the relevant legal principles provided clarity on the interaction between the powers of a trustee under a discretionary trust and the exercise of those powers through a will.

Orders