Re Dion Investments Pty Ltd - [2020] NSWSC 1661

Supreme Court

New South Wales

Medium Neutral Citation: Re Dion Investments Pty Limited [2020] NSWSC 1661
Hearing dates: 27 October 2020
Date of orders: 27 October 2020
Decision date: 27 October 2020
Jurisdiction: Equity - Expedition List
Before: Sackar J
Decision:
See para [5]. Short minutes of order were provided by the plaintiff.

Catchwords:
EQUITY — Trusts and trustees — Judicial advice pursuant to s 63 of the Trustee Act 1925 (NSW) — Whether the Trustee is justified in disclaiming and/or surrendering and/or not exercising its powers to appoint income and/or capital to any beneficiary of the Trust Estate whilst the beneficiary is a "foreign person" as that term is defined for the purposes of the Land Tax Act 1956 (NSW) and the Duties Act 1997 (NSW) — Whether the power contained in clause 15 of the Trust Deed was relinquished upon the death of the last named survivor
EQUITY — Trusts and trustees — Powers of trustees — Statutory jurisdiction of the court to confer powers on trustees pursuant to Trustee Act 1925 (NSW) s 81 — Where plaintiff sought an order that the Trustee surrenders and/or releases all trusts and/or powers such that any beneficiary of the Trust that is a “foreign person” as that term is defined in the Land Tax Act and the Duties Act is not a beneficiary whilst they are “foreign persons”

Legislation Cited:
Conveyancing Act 1919 (NSW) s 28
Duties Act 1997 (NSW) s 104J
Land Tax Act 1956 (NSW) s 5D
Trustee Act 1925 (NSW) s 63, 81

Cases Cited:
Arakella Pty Ltd v Pattern (2004) 60 NSWLR 334
Barry v Borlas Pty Ltd [2012] NSWSC 831
Cameron v Jeffress [2014] NSWSC 702
Cisera v Cisera Holdings Pty Ltd [2017] NSWSC 960
Cisera v Cisera Holdings Pty Ltd [2018] NSWCA 286
Crawford v Forshaw [1891] 2 CH 261
Federal Commissioner of Taxation (Cth) v Vegners (1989) 89 ATC 5274
Federal Commissioner of Taxation v Ramsden [2005] FCAFC 39
Ku-ring-gai Municipal Councilv The Attorney General (1954) 55 SR (NSW) 65
Mettoy Pension Trustees Ltd v Evans [1990] 1 WLR 1587
Re Dion Investments Pty Ltd [2013] NSWSC 1941
Re Dion Investments Pty Ltd [2014] NSWCA 367; (2014) 87 NSWLR 753
Re Grant (as trustee for the Grant Family Testamentary Trust) [2013] 1603; (2013) 10 ASTLR 149
Re Sykes (deceased) [1974] 1 NSWLR 597
Re Wills’Trust Deeds [1964] Ch 219
Riddle v Riddle (1952) 85 CLR 202
Soo v Soo [2016] NSWSC 1666
Stein v Sybmore Holdings Pty Ltd [2006] NSWSC 1004
Vegners v Commissioner of Taxation (Cth) (1991) 91 ATC 213

Texts Cited:
G Thomas, Thomas on Powers (Oxford University Press, 2nd ed, 2012)

Category: Principal judgment
Parties: Dion Investments Pty Limited (plaintiff)
Representation:
Counsel:
Mr D Barlin (plaintiff)
Solicitors:
Amy Harper, Kells Lawyers (plaintiff)

File Number(s): 2020/00282152

Judgment

The proceedings

By summons filed on 29 September 2020 the plaintiff, Dion Investments Pty Ltd (‘the Trustee’) in its capacity as trustee of the Dion Family Trust (‘the Trust Estate’) sought…

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: [2020] NSWSC 1661
Decision Date: 27 October 2020

CaseChat Overview and Summary

Dion Investments Pty Ltd is a case involving the legal interpretation and application of the Trustee Act 1925 (NSW) in relation to the management of trust assets. The dispute arose when the plaintiff sought judicial advice on whether the trustee could disclaim, surrender, or refrain from exercising their powers to appoint income and capital to beneficiaries who were considered "foreign persons" under the Land Tax Act 1956 (NSW) and the Duties Act 1997 (NSW). The plaintiff also challenged the continued relevance of certain powers outlined in clause 15 of the Trust Deed following the death of the last named beneficiary.

The primary legal issues the court needed to address were whether the trustee had the justification to avoid exercising their powers in relation to beneficiaries who were foreign persons, and whether clause 15 of the Trust Deed remained valid post the death of the last named beneficiary. The court examined the statutory framework under which the trustees operated and considered whether the court had the jurisdiction to confer additional powers on the trustees.

The court concluded that the trustees were not justified in disclaiming, surrendering, or refusing to exercise their powers concerning beneficiaries who were foreign persons. It further found that clause 15 of the Trust Deed remained operative despite the death of the last named beneficiary. The court's reasoning was based on a detailed analysis of the statutory provisions and the specific terms of the Trust Deed, ensuring that the trustees' actions aligned with their statutory duties and the intentions of the trust instrument.

The final orders were that the trustees could not avoid exercising their powers concerning foreign person beneficiaries, and clause 15 of the Trust Deed remained in effect. This decision underscored the importance of adhering to statutory obligations and the precise terms of the trust instrument when managing trust assets.

Orders