Re The Pickering Family Trusts - [2024] VSC 5

IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE
COMMERCIAL COURT
COMMERCIAL LIST

S CI 2015 02020

IN THE MATTER of an Application pursuant to Rule 54.02 of the Supreme Court (General Civil Procedure) Rules 2015 (Vic)

and

IN THE MATTER of an Application under s 63A of the Trustee Act 1958 (Vic)

W.E. PICKERING NOMINEES PTY LTD (ACN 007 817 825) (AS TRUSTEE FOR THE W.E. PICKERING FAMILY TRUST) & ORS (according to the Schedule)	Plaintiffs
v
JACQUELINE ROBYN PICKERING & ORS (according to the Schedule)	Defendants

- and -

S CI 2018 02379

G.S. & B.W. PICKERING NOMINEES PTY LTD (ACN 007 817 834) (AS TRUSTEE FOR THE GEORGE PICKERING FAMILY TRUST) & ORS (according to the Schedule)	Plaintiffs
v
KAYE HOLT & ORS (according to the Schedule)	Defendants

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JUDGE:	LYONS JA
WHERE HELD:	Melbourne
DATE OF HEARING:	15 February, 17 September 2021 and, 22 February 2023 with further submissions and draft orders including 18 April, 16 August and 24 October 2023
DATE OF JUDGMENT:	24 January 2024
CASE MAY BE CITED AS:	Re The Pickering Family Trusts
MEDIUM NEUTRAL CITATION:	[2024] VSC 5

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TRUSTS – Trustee Act 1958 (Vic), s 63A – Application for Court approval of arrangement to vary trust on behalf of underage and potential unborn beneficiaries – Variation sought to put in place succession plan of those who established trust – Matters which Court may consider in determining if the ‘arrangement’ is ‘for the benefit of’ underage or unborn beneficiaries – Benefit must not be illusory – Observations concerning whether, if arrangement subject to risk, a ‘benefit’ for the purpose of s 63A can be established for underage children or unborn beneficiaries – George v Kollias [2007] VSC 46 and Re CL [1969] 1 Ch 587 considered – Court not satisfied that original arrangement was for benefit as benefit not real and illusory – Opportunity for trustees to put forward revised arrangement ‘for the benefit of’ underage and potential unborn beneficiaries – Court satisfied that revised arrangement both ‘for the benefit’ of underage and potential unborn beneficiaries and reasonable and fair in all the circumstances – Approval given.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiffs in each proceeding	Mr D J Williams QC with Mr B J McCullagh	Partners Legal
For the Defendants in each proceeding	Mr N Jones	Clancy & Triado
For the Contradictor in S CI 2015 02020 (Ms Lyttleton and Mr Pascoe) For the Contradictor in S CI 2018 02379 (Ms Lyttleton)	Mr P Pascoe	Suzanne Lyttleton Lawyers

HIS HONOUR:

Introduction

These two proceedings have a long history. They relate to family trusts established by each of two brothers Edward (Ted) Pickering and George Stewart Pickering in mirror terms (the Ted Pickering Family Trust and the George Pickering Family Trust, and collectively the Family Trusts).

The plaintiff in each proceeding is the trustee of each Family Trust, which I will refer to as the Trustee (or Trustees), unless it is necessary to identify…

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: [2024] VSC 5
Decision Date: 24 January 2024

CaseChat Overview and Summary

This case involved an application for the court's approval of an arrangement to vary the terms of the Pickering Family Trusts on behalf of underage and potential unborn beneficiaries. The application was brought under section 63A of the Trustee Act 1958 (Vic). The dispute centred on whether the proposed variation of the trust arrangement would be for the benefit of the underage and unborn beneficiaries and whether it would be reasonable and fair in all the circumstances.

The primary legal issue before the court was whether the proposed variation of the trust arrangement was for the benefit of the underage and potential unborn beneficiaries. The court had to consider whether the benefit was real and not illusory, and whether the variation was reasonable and fair. The court was required to assess the arrangement against the statutory criteria outlined in section 63A of the Trustee Act 1958 (Vic). The court examined cases such as George v Kollias [2007] VSC 46 and Re CL [1969] 1 Ch 587 to determine whether the benefit to the underage and unborn beneficiaries could be established if the arrangement was subject to risk.

The court found that the original arrangement was not for the benefit of the underage and unborn beneficiaries, as the benefit was illusory. However, the court was satisfied that the revised arrangement was both for the benefit of the underage and potential unborn beneficiaries and reasonable and fair in all the circumstances. The court noted that the revised arrangement provided a clear succession plan for the trust and addressed the concerns of the trustees. The court approved the revised arrangement, allowing the trustees to implement the changes on behalf of the underage and potential unborn beneficiaries. The court's approval ensured that the trust could operate effectively and provide for the future needs of the beneficiaries.

Orders