IN THE MATTER of an application pursuant to r 54.02 of the Supreme Court (General Civil Procedure) Rules 2015 (Vic) for the determination of questions arising in the execution of the trusts and as to the composition of any class of persons having a beneficial interest in the property subject to the trusts

I.N. & G. NOMINEES PTY LTD (ACN 005 480 419) as trustee for the Peter Valentini Trust and as trustee for the Anna McGowan Trust

First Plaintiff

and

ANNA MCGOWAN AND PETER VALENTINI in their capacity as executors of the will of the late IRIS NORMA FLETCHER

Second and Third Plaintiffs

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JUDGE:	MACAULAY J
WHERE HELD:	Melbourne
DATE OF HEARING:	12 May 2020 and 24 August 2020
DATE OF JUDGMENT:	31 March 2021; revised 19 November 2021
CASE MAY BE CITED AS:	Re McGowan & Valentini Trusts
MEDIUM NEUTRAL CITATION:	[2021] VSC 154

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EQUITY — Trusts — Determination of questions arising in the execution of trusts — Rule 54.02 Supreme Court (General Civil Procedure) Rules2015 (Vic) — Questions arising in the administration of two private family trusts established by deeds.

EQUITY — Where the company appointed as trustee of trusts was not incorporated at the time of execution of the trust deeds — Where deed executed by persons who became director and secretary of the nominated corporate trustee upon its subsequent incorporation —Whether trusts failed due to the non-existence of the intended corporate trustee at the establishment of the trusts —Whether the intended corporate trustee became the trustee of the trusts upon its subsequent incorporation — Raftland Pty Ltd v Commissioner of Taxation (2006) 227 ALR 598.

EQUITY — Whether strangers to the trust, without appointment, became actual trustees of an express trust by taking custody and administration of real property for the benefit of the beneficiaries — Soar v Ashwell [1893] 2 QB 390, Clay & Ors v Clay & Ors (1999) 20 WAR 427, Perpetual Trustee Co Limited v Thomas (1903) 3 SR (NSW) 277 considered — Whether trustee had declared trusts in respect of real property it held — Whether requirements of s 53 Property Law Act 1958 (Vic) were complied with — Whether written manifestation and proof of declaration of trusts could be found in combination of documents including affidavits sworn for the purpose of the proceeding — Secretary, Department of Social Security v James (1990) 95 ALR 615.

EQUITY — Where property held on express trusts had vested absolutely in the beneficiaries — Where trust fund was not transferred to beneficiaries upon vesting but with their consent remained subject to amended trusts — Whether subsequent to vesting…

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 McGowan & Valentini Trusts

Details

AGLC: Re McGowan and Valentini Trusts [2021] VSC 154
Case: [2021] VSC 154
Decision Date: 31 March 2021; revised 19 November 2021

CaseChat Overview and Summary

The case of Re McGowan & Valentini Trusts involves the interpretation and administration of two private family trusts. The dispute was heard in the Supreme Court of Victoria and pertains to the trusts' validity, the appointment of the trustee, and the administration of the trusts' property. The parties involved in the dispute include the settlors, the trustee company, and the beneficiaries of the trusts. The primary issue before the court was whether the trusts were validly constituted given that the corporate trustee was not incorporated at the time the trust deeds were executed. Additionally, the court needed to determine whether the company, which was later incorporated and whose directors and secretary had executed the deeds, became the trustee upon its incorporation. Another issue was whether the trustees had the authority to amend the trusts to enlarge the beneficiary class and extend the vesting date after the trusts had vested in the beneficiaries.

The court examined whether the trusts failed due to the non-existence of the intended corporate trustee at the establishment of the trusts and if the company could be considered the trustee upon its incorporation. The court considered the case of Raftland Pty Ltd v Commissioner of Taxation (2006) 227 ALR 598, which provides guidance on the appointment of trustees where the intended trustee was not in existence at the time the trust deed was executed. The court also considered whether the trustees had declared trusts in respect of the real property they held and whether the requirements of s 53 of the Property Law Act 1958 (Vic) were met. In reaching its decision, the court examined various documents, including affidavits sworn for the purpose of the proceeding, to determine if a written manifestation and proof of the declaration of trusts could be found.

The court found that the intended corporate trustee became the trustee of the trusts upon its subsequent incorporation. The court also found that the trustees had the authority to amend the trusts to enlarge the beneficiary class and extend the vesting date after the trusts had vested in the beneficiaries. The court determined that the amended trusts were the continued original trusts. The court further found that the trustees had declared trusts in respect of the real property they held and that the requirements of s 53 of the Property Law Act 1958 (Vic) were met. The court held that the combination of documents, including affidavits sworn for the purpose of the proceeding, could be used to establish the written manifestation and proof of the declaration of trusts. The court's decision provides guidance on the interpretation and administration of private family trusts and the powers of trustees to amend trusts.

Orders