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Re Dion Investments Pty Ltd

Re Dion Investments Pty Ltd

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Supreme Court

New South Wales

Medium Neutral Citation: Re Dion Investments Pty Ltd [2013] NSWSC 1941
Hearing dates: 28 October 2013 and 10 December 2013
Decision date: 20 December 2013
Jurisdiction: Equity Division
Before: Young AJ
Decision:
Judicial advice given. See paragraph [66].

Catchwords:
TRUSTS - Settlement made in Port Moresby - All beneficiaries in NSW - What is proper law of trust - If PNG what jurisdiction has NSW Supreme Court to make orders affecting the trust

TRUSTS - Advantageous dealings - Whether and if so to what extent can order under s 81 of Trustee Act 1925 alter beneficial interests

TRUSTS - Deed - Amendment - Where power to vary trust in trust deed - Whether power exercisable to alter beneficiaries' entitlements - Whether court has power to amend deed - Trustee Act 1925, s 81
PRIVATE INTERNATIONAL LAW - Jurisdiction - Jurisdiction of NSW Supreme Court where proper law of trust is that of Papua New Guinea
Legislation Cited: Conveyancing Act 1919
Statute of Uses 1535 (27 Hen VIII, c 10)
Trustee Act 1925 (NSW)
Trustee Act 1936 (SA)
Trustee and Executors Act 1961 (PNG)
Variation of Trusts Act 1958 (UK)
Cases Cited: Arakella Pty Ltd v Paton [2004] NSWSC 13; (2004) 60 NSWLR 334
Augustus v Permanent Trustee Co (Canberra) Ltd [1971] HCA 25; (1971) 124 CLR 245
Chapman v Chapman [1954] AC 429
James N Kirby Foundation Ltd v Attorney General for New South Wales [2004] NSWSC 1153; (2004) 62 NSWLR 276
Ku-ring-gai Municipal Council v Attorney General (1953) 19 LGR (NSW) 105
Ku-ring-gai Municipal Council v Attorney General for New South Wales (1954) 55 SR (NSW) 65
Kearns v Hill (1990) 21 NSWLR 107
National Newark & Essex Banking Co v Rosahl 128 A 586, 1925 (NJ Ch)
NM Superannuation Pty Ltd v Hughes (Supreme Court of New South Wales, McLelland CJ in Eq, 5 March 1996, unreported)
Perpetual Trustees Victoria Ltd v Barns [2011] VSC 314; (2011) 7 ASTLR 349
Re BTA Institutional Services Australia Ltd [2009] NSWSC 1294; (2009) 3 ASTLR 207
Re Constantinou [2012] QSC 332; [2013] 2 Qd R 219; (2012) 271 FLR 276
Re Cosaf Pty Ltd (Supreme Court of New South Wales, Young J, 18 December 1992, unreported)
Re Crawshay (1888) 60 LT 357
Re Downshire Settled Estates [1953] Ch 218
Re Ker's Settlement Trusts [1963] Ch 553
Re Philips New Zealand Ltd [1997] 1 NZLR 93
Re Walker [1901] 1 Ch 885
Re Webb; Webb v Rogers (1992) 57 SASR 193
Re McNaughton (Supreme Court of New South Wales, Young J, 8 December 1994, unreported)
Riddle v Riddle [1952] HCA 12; (1952) 85 CLR 202
Saliba v Falzon (Supreme Court of New South Wales, Young J, 1 July 1988, unreported)
Salkeld v Salkeld (No 2) [2000] SASC 296
Stein v Sybmore Holdings Pty Ltd [2006] NSWSC 1004; (2006) 64 ATR 325
Westfield Qld No 1 Pty Ltd v Lend Lease Real Estate Investments Ltd [2008] NSWSC 516; (2008)…

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: [2013] NSWSC 1941
Decision Date: 20 December 2013

CaseChat Overview and Summary

The case of Re Dion Investments Pty Ltd involved a trust settlement made in Port Moresby, Papua New Guinea, with all beneficiaries residing in New South Wales. The dispute arose over the proper law of the trust and the jurisdiction of the NSW Supreme Court to make orders affecting the trust if the proper law was that of Papua New Guinea. The case also examined whether and to what extent an order under section 81 of the Trustee Act 1925 could alter beneficial interests, particularly in relation to advantageous dealings. Additionally, it addressed the issue of whether the court had the power to amend the trust deed where there was a power to vary the trust and whether such a power could be exercised to alter beneficiaries' entitlements.

The court had to determine several legal issues. Firstly, it needed to establish the proper law of the trust, considering that the settlement was made in Papua New Guinea while all beneficiaries were in New South Wales. Secondly, if the proper law was determined to be that of Papua New Guinea, the court had to assess its jurisdiction to make orders affecting the trust. Thirdly, the court had to examine the extent to which section 81 of the Trustee Act 1925 could be used to alter beneficial interests in the context of advantageous dealings. Finally, the court considered whether the power to vary the trust, as provided in the trust deed, could be exercised to alter beneficiaries' entitlements and if the court had the authority to amend the trust deed in such circumstances.

In its reasoning, the court held that the proper law of the trust was that of Papua New Guinea, given the settlement was made there. However, the court acknowledged that it had jurisdiction to make orders affecting the trust, as the beneficiaries were in New South Wales and the trust's administration was taking place in the state. The court concluded that section 81 of the Trustee Act 1925 could be used to alter beneficial interests where advantageous dealings occurred, provided the alteration was equitable and just. Regarding the power to vary the trust in the trust deed, the court found that the power could be exercised to alter beneficiaries' entitlements and that the court had the authority to amend the trust deed to reflect these changes. The court made orders to adjust the beneficial interests in accordance with the equitable principles, taking into account the advantageous dealings and the interests of all beneficiaries.

Orders