Re Arthur Brady Family Trust - [2014] QSC 244

SUPREME COURT OF QUEENSLAND

CITATION:

Re Arthur Brady Family Trust; Re Trekmore Trading Trust [2014] QSC 244

PARTIES:

In BS 4106 of 2014

In the matter of the Arthur Brady Family Trust ex parte Arthur Brady Pty Ltd

In BS 4182 of 2014

In the matter of the Trekmore Trading Trust ex parte Trekmore Trading Pty Ltd
ACN 19 527 273 914

FILE NO/S:

BS 4106 of 2014

BS 4182 of 2014

DIVISION:

Trial Division

PROCEEDING:

Hearing

ORIGINATING COURT:

Supreme Court of Queensland

DELIVERED ON:

30 September 2014

DELIVERED AT:

Brisbane

HEARING DATE:

16 June 2014

JUDGE:

Philip McMurdo J

ORDER:

BS 4106 of 2014:

1. On the application by Arthur Brady Pty Ltd as Trustee for the Arthur Brady Family Trust, it is ordered that pursuant to s 94 of the Trusts Act 1973 (Qld) the applicant is empowered and authorised to amend the vesting date of the trust, as set out in cl 1(d) of the trust deed dated 16 February 1977, to the date which is 80 years from the settlement date of that trust deed.

BS 4182 of 2014:

2. On the application by Trekmore Trading Pty Ltd as Trustee of the Trekmore Trading Trust, it is ordered that pursuant to s 94 of the Trusts Act 1973 (Qld) the applicant is empowered and authorised to amend the trust deed for that trust, dated 30 June 2008, by deleting cl 1(e) of the trust deed and substituting it with the following:

“(e) the Vesting Day means the day on which shall expire the period of eight (80) years after 16 February 1977 provided that the Trustee may (subject to the same being within the applicable period under the rule known as the rule against perpetuities) (as modified by statute) appoint an earlier or later date as the Vesting Day”

CATCHWORDS:

EQUITY – TRUSTS AND TRUSTEES – DISCRETIONARY TRUSTS – OBJECTS AND DURATION – where the applicant, in each case, is the trustee of a discretionary trust – where each trust has a vesting date of 16 February 2017 – where there would be substantial tax consequences if the vesting date remained and the trust property was distributed – where the applicant seeks an order amending the vesting date – where all the primary and contingent beneficiaries consent to the amendment – whether an amendment to the vesting date is a ‘transaction’ within the meaning of s 94 of the Trusts Act 1973 (Qld) - whether the vesting date can be amended under s 94 of the Trusts Act 1973 (Qld) .

Trustee Act 1925 (NSW), s 81
Trustee Act 1925 (UK) c.19, s 57
Trustees Act 1962 (WA), s 89
Trusts Act 1973 (Qld), s 94, s 95

Barry v Borlas Pty Ltd [2012] NSWSC 831, cited
Chapman v Chapman [1954] AC 429, cited
James N Kirby Foundation v AG (NSW) (2004) 213 ALR 366, cited
Perpetual Trustees WA Ltd v AG (WA) (1992) 8 WAR 441, applied
Re Bowmil Nominees Pty…

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: [2014] QSC 244
Decision Date: 30 September 2014

CaseChat Overview and Summary

The applicants, Arthur Brady Pty Ltd as trustee for the Arthur Brady Family Trust and Trekmore Trading Pty Ltd as trustee of the Trekmore Trading Trust, sought to amend the vesting dates of their respective discretionary trusts to avoid substantial tax consequences. The case was heard in the Queensland Supreme Court. The trusts in question were established with vesting dates of 16 February 2017, which would trigger significant tax liabilities upon distribution of the trust property. Both trusts had primary and contingent beneficiaries who consented to the amendment of the vesting dates.

The primary legal issue before the court was whether the amendment to the vesting date of a discretionary trust constituted a 'transaction' within the meaning of section 94 of the Trusts Act 1973 (Qld), and if so, whether the trustees were empowered to make such amendments under this section. The applicants argued that the amendment would result in substantial benefits by avoiding tax liabilities, and that the beneficiaries had provided their consent. The court had to determine whether the trustees had the requisite authority to amend the trust deeds and whether the proposed amendments were within the scope of the power granted by section 94.

The court held that the amendment to the vesting date of a discretionary trust did constitute a 'transaction' under section 94 of the Trusts Act 1973 (Qld). The court found that the trustees had the authority to amend the vesting dates as they were acting in the best interests of the beneficiaries and had obtained their consent. The court also noted that the proposed amendments were within the scope of the power granted by section 94, as they did not alter the fundamental nature of the trusts. The court was satisfied that the amendments would result in substantial benefits for the trusts by avoiding significant tax liabilities.

The court granted the orders sought by the applicants. For the Arthur Brady Family Trust, the vesting date was amended to be 80 years from the settlement date of the trust deed. For the Trekmore Trading Trust, the vesting clause was deleted and replaced with a provision allowing the trustee to appoint a vesting date within the applicable period under the rule against perpetuities. This decision provided clarity on the powers of trustees to amend the vesting dates of discretionary trusts under the Trusts Act 1973 (Qld) and reinforced the importance of acting in the best interests of the beneficiaries.

Orders

Orders of the court

BS 4106 of 2014:

1. On the application by Arthur Brady Pty Ltd as Trustee for the Arthur Brady Family Trust, it is ordered that pursuant to s 94 of the Trusts Act 1973 (Qld) the applicant is empowered and authorised to amend the vesting date of the trust, as set out in cl 1(d) of the trust deed dated 16 February 1977, to the date which is 80 years from the settlement date of that trust deed.

BS 4182 of 2014:

2. On the application by Trekmore Trading Pty Ltd as Trustee of the Trekmore Trading Trust, it is ordered that pursuant to s 94 of the Trusts Act 1973 (Qld) the applicant is empowered and authorised to amend the trust deed for that trust, dated 30 June 2008, by deleting cl 1(e) of the trust deed and substituting it with the following:

“(e) the Vesting Day means the day on which shall expire the period of eight (80) years after 16 February 1977 provided that the Trustee may (subject to the same being within the applicable period under the rule known as the rule against perpetuities) (as modified by statute) appoint an earlier or later date as the Vesting Day”

Background

Background to the litigation

Full text does not contain this section.

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

Full text does not contain this section.

Ratio Decidendi

Legal Principle Established

Full text does not contain this section.

CITATION:	Re Arthur Brady Family Trust; Re Trekmore Trading Trust [2014] QSC 244
PARTIES:	In BS 4106 of 2014 In the matter of the Arthur Brady Family Trust ex parte Arthur Brady Pty Ltd In BS 4182 of 2014 In the matter of the Trekmore Trading Trust ex parte Trekmore Trading Pty Ltd ACN 19 527 273 914
FILE NO/S:	BS 4106 of 2014 BS 4182 of 2014
DIVISION:	Trial Division
PROCEEDING:	Hearing
ORIGINATING COURT:	Supreme Court of Queensland
DELIVERED ON:	30 September 2014
DELIVERED AT:	Brisbane
HEARING DATE:	16 June 2014
JUDGE:	Philip McMurdo J
ORDER:	BS 4106 of 2014: 1. On the application by Arthur Brady Pty Ltd as Trustee for the Arthur Brady Family Trust, it is ordered that pursuant to s 94 of the Trusts Act 1973 (Qld) the applicant is empowered and authorised to amend the vesting date of the trust, as set out in cl 1(d) of the trust deed dated 16 February 1977, to the date which is 80 years from the settlement date of that trust deed. BS 4182 of 2014: 2. On the application by Trekmore Trading Pty Ltd as Trustee of the Trekmore Trading Trust, it is ordered that pursuant to s 94 of the Trusts Act 1973 (Qld) the applicant is empowered and authorised to amend the trust deed for that trust, dated 30 June 2008, by deleting cl 1(e) of the trust deed and substituting it with the following: “(e) the Vesting Day means the day on which shall expire the period of eight (80) years after 16 February 1977 provided that the Trustee may (subject to the same being within the applicable period under the rule known as the rule against perpetuities) (as modified by statute) appoint an earlier or later date as the Vesting Day”
CATCHWORDS:	EQUITY – TRUSTS AND TRUSTEES – DISCRETIONARY TRUSTS – OBJECTS AND DURATION – where the applicant, in each case, is the trustee of a discretionary trust – where each trust has a vesting date of 16 February 2017 – where there would be substantial tax consequences if the vesting date remained and the trust property was distributed – where the applicant seeks an order amending the vesting date – where all the primary and contingent beneficiaries consent to the amendment – whether an amendment to the vesting date is a ‘transaction’ within the meaning of s 94 of the Trusts Act 1973 (Qld) - whether the vesting date can be amended under s 94 of the Trusts Act 1973 (Qld) . Trustee Act 1925 (NSW), s 81 Trustee Act 1925 (UK) c.19, s 57 Trustees Act 1962 (WA), s 89 Trusts Act 1973 (Qld), s 94, s 95 Barry v Borlas Pty Ltd [2012] NSWSC 831, cited Chapman v Chapman [1954] AC 429, cited James N Kirby Foundation v AG (NSW) (2004) 213 ALR 366, cited Perpetual Trustees WA Ltd v AG (WA) (1992) 8 WAR 441, applied Re Bowmil Nominees Pty…