Re Arthur Brady Family Trust

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.