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Re Gaydon

Re Gaydon

Case [2001] NSWSC 473 8 June 2001

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CITATION: Gaydon [2001] NSWSC 473

CURRENT JURISDICTION: Equity Division

FILE NUMBER(S): SC 4994/97

HEARING DATE(S): 04/06/01

JUDGMENT DATE:
8 June 2001

PARTIES :

Peter Richard Gaydon - Plaintiff

JUDGMENT OF: Barrett J

COUNSEL : Ms E.A. Cheeseman - Plaintiff
Mr J.D. Smith - Mrs Thompson
Mr P.I. Lim (Solicitor) - Mrs Rodgers and Mrs Flynn

SOLICITORS: Blake Dawson Waldron - Plaintiff
C.G. Gillis & Co - Mrs Thompson
Patrick Lim & Associates - Mrs Rodgers and Mrs Flynn

CATCHWORDS: EQUITY - Trusts and trustees - Creation by Court of powers of trustees - must be not only "expedient" but also related to management or administration of trust property - management of property distinguished from management generally - power will not be created if statutory power already sufficient - EQUITY - Trusts and trustees - application for orders "dissolving" trust and "removing" trustee - Court has no power to destroy trusts - action by beneficiaries sui juris and absolutely entitled required

LEGISLATION CITED: Trustee Act 1925

CASES CITED: Riddle v Riddle (1952) 85 CLR 202
Featherby v Grljusich [1998] WASC 128
Re New [1901] 2 Ch 534
Tickle v Tickle (1987) 10 NSWLR 581
Horwath Corporate Pty Ltd v Huie (1999) 32 ACSR 413
Saunders v Vautier [1841] Cr & Ph 240

DECISION: See paragraph 34

THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION

BARRETT J

FRIDAY, 8 JUNE 2001

4994/1997 - PETER RICHARD GAYDON

JUDGMENT
HIS HONOUR:

1 The plaintiff approaches the Court in two capacities: first, as trustee of the trusts of the will of the late Ruby Spruit (which I shall call “the Will Trust”); and, second, as trustee of a trust created inter vivos and described as the “JRS and JCS Crane Trust” (“the Crane Trust”). Four other persons are relevant. The first is Mrs Crane, a daughter of the late Mrs Spruit, who was originally the sole trustee of both the Will Trust and the Crane Trust. Orders made by this Court in 1995 removed Mrs Crane and appointed the plaintiff in her place. Also involved are Mrs Crane’s daughters, Mrs Rodgers and Mrs Flynn, each of whom is a beneficiary under both the Will Trust and the Crane Trust. Finally, there is Mrs Thompson (another daughter of Mrs Spruit and sister to Mrs Crane) who is a beneficiary under the Will Trust but not the Crane Trust. Ms Cheeseman of Counsel appeared for the plaintiff upon the hearing of the application. Mrs Rodgers and Mrs Flynn were represented by Mr Lim, solicitor. Mrs Thompson was represented by Mr Smith of Counsel. Mrs Crane took no part in the proceedings; nor was there any reason for her to do so. The plaintiff seeks certain orders in relation to both the Will Trust and Crane Trust. It is appropriate to deal with them separately.

2 After being appointed as trustee of the Will Trust in 1995 the plaintiff became the registered proprietor of the two properties which then constituted the whole of…

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 Re Gaydon

Details

AGLC: Re Gaydon [2001] NSWSC 473
Case: [2001] NSWSC 473
Decision Date: 8 June 2001

CaseChat Overview and Summary

In the case of Re Gaydon, the dispute centred on the management of a trust established by a will, with the beneficiaries seeking to dissolve the trust and remove the trustee. The matter was heard in the Supreme Court of Victoria. The beneficiaries argued that the trust had become unmanageable and that the court should dissolve the trust and remove the trustee. They contended that the court had the inherent power to do so in the interests of justice. The trustee, on the other hand, maintained that the court lacked the power to dissolve the trust or remove the trustee, as it would interfere with the beneficiaries' absolute rights under the trust.

The court considered whether it had the inherent power to dissolve a trust and remove a trustee in the absence of an action by the beneficiaries who were sui juris and absolutely entitled. The court examined the nature of the power being sought and whether it related specifically to the management or administration of trust property. It also considered whether the power sought was already available under statute. The court concluded that the power to dissolve a trust and remove a trustee was not available under the court's inherent jurisdiction. The court found that the power to dissolve a trust and remove a trustee could only be exercised if the beneficiaries who were sui juris and absolutely entitled brought an action to do so.

The court held that it did not have the inherent power to dissolve a trust or remove a trustee. It found that any power to do so would need to be expressly conferred by statute or by the terms of the trust instrument itself. The court emphasised that the inherent jurisdiction of the court in relation to trusts was limited to matters of management and administration of trust property, and that it could not be used to destroy trusts. The court also noted that if the statutory powers available to it were sufficient to address the issues raised by the beneficiaries, then those powers should be utilised rather than seeking to exercise an inherent power that did not exist.

The court dismissed the application by the beneficiaries to dissolve the trust and remove the trustee, finding that it had no jurisdiction to do so. The court ordered that the matter be stayed pending the beneficiaries taking action to dissolve the trust and remove the trustee, if they were sui juris and absolutely entitled. The court also ordered that the trustee continue to manage the trust in accordance with the terms of the trust instrument and relevant law.

Orders