Reschke v Reschke - [2017] SASC 192

SUPREME COURT OF SOUTH AUSTRALIA
(Civil)
RESCHKE v RESCHKE
[2017] SASC 192
Judgment of The Honourable Justice Blue
22 December 2017
EQUITY - POWERS OF APPOINTMENT - CREATION AND CONSTRUCTION - OTHER MATTERS
EQUITY - POWERS OF APPOINTMENT - EXERCISE GENERALLY - DEVISE OR BEQUEST IN GENERAL TERMS
SUCCESSION - CONSTRUCTION AND EFFECT OF TESTAMENTARY DISPOSITIONS - TESTAMENTARY DISPOSITIONS GENERALLY - WHAT PROPERTY TRANSFERABLE BY WILL
SUCCESSION - CONSTRUCTION AND EFFECT OF TESTAMENTARY DISPOSITIONS - CONSTRUCTION GENERALLY - PRINCIPLES OR RULES OF CONSTRUCTION - GENERALLY
Determination of preliminary issues relating to construction of a trust deed and will.
The Rocky Castle Trust was established by a trust deed. The fourth defendant Fabriano Pty Ltd was appointed trustee of the trust. Trevor Reschke and the first defendant his wife Vivian were the shareholders and directors of Fabriano. Clause 28 provided that during his lifetime Trevor was to have power to remove and replace any trustee and upon his death the power was to vest in his legal personal representative.
On 1 August 2007, Trevor made his last will and testament. Clause 8 provided that Trevor gave his power of appointment in the trust and his shares in Fabriano to Vivian, Mr Scott and Mr Westley to hold and to act as trustees of the trust and in that capacity to vest the farming land owned by the trust in favour of his sons Dru and the first plaintiff Burke in such shares as would create equality in their landholdings. Trevor died in 2008.
It is common ground that the power of appointment conferred by clause 28 of the trust deed was limited so that it could only be exercised by Trevor during his lifetime and hence could not be left as a testamentary disposition.
Burke contends that by clause 8 of the will Trevor exercised his power of appointment inter vivos on 1 August 2007, merely postponing the date of effect of the change to the time of death. Fabriano and Vivian contend that by clause 8 Trevor purported to transfer his power of appointment by testamentary disposition.
Held:
1. The power of appointment granted to Trevor by clause 28 of the trust deed endured only during his lifetime and was incapable of being transferred by will as a testamentary disposition (at [26]).
2. By clause 8 of his will, Trevor purported to transfer the power of appointment by way of testamentary disposition and did not exercise the power of appointment inter vivos on 1 August 2007 (at [42]).
3. The purported transfer of the power of appointment by clause 8 of the will was invalid (at ([43]).
4. The transfer of Trevor’s share in Fabriano effected by clause 8 by way of testamentary disposition was valid (at [46]).
5. Fabriano is not obliged to vest the farming land in favour of Dru and Burke as purportedly directed by clause 8 of the will (at [53]-[56]). However, Fabriano is obliged to give consideration to Trevor’s wishes in this respect in the exercise of its discretion whether to make capital distributions and to whom (at [53], [56]).
Administration and Probate Act 1936 (SA) s 69; Supreme Court Civil Rules 2006 (SA) R 206; Trustee Act 1936 (SA) s 91, referred to.
Baird v Baird [1990] 2 AC 548; In the Matter of Richstar Enterprises Pty Ltd v Carey (No 6) [2006] FCA 814; Wolfe v Wolfe [1902] 2 Ir R 246, discussed.

RESCHKE v RESCHKE
[2017] SASC 192
Civil:
BLUE J:

This is the determination of three preliminary issues arising in an action and cross action relating to the construction of the trust deed of the Rocky Castle Trust and the will of the late Trevor Reschke.
Background
Trevor Reschke (Trevor) was married to the first defendant Vivian Reschke. They have three children being the first plaintiff Burke Reschke, Dru Reschke and Joanne Edwards. Trevor had four sisters.
On 20 June 1989 Trevor and Vivian incorporated the fourth defendant Fabriano Pty Ltd (Fabriano). At all material times up to 21 June 2008 Trevor and Vivian each held one share in and each was a director of Fabriano.
On 21 June 1989 by a trust deed between a settlor and Fabriano (the Trust Deed) the Rocky Castle Trust (the Trust) was created. Fabriano was appointed the trustee of the Trust. The Trust was a discretionary trust. Eligible beneficiaries for distributions of income (the income beneficiaries) included Trevor, Vivian, their children and remoter issue (the personal beneficiaries); any company of which a share was beneficially owned by a personal beneficiary; any trust of which a personal beneficiary was a beneficiary; and any charity. Eligible beneficiaries for the distribution of capital were income beneficiaries together with the spouses and remoter issue of Trevor and Vivian’s children and remoter issue.
Clause 28 of the Trust Deed (reproduced below) provided that Trevor during his lifetime was to have power from time to time to remove and replace any trustee of the Trust. It provided that upon his death the power of removal and replacement was to vest in Trevor’s legal personal representatives. I refer to the powers conferred by clause 28 as the power of appointment.
In July 1989 Fabriano as trustee of the Trust acquired land comprising sections 239, 377 and 379 in the Hundred of Comaum in the Coonawarra.
At some point Trevor incorporated or acquired Trevor Reschke Nominees Pty Ltd (TR Nominees), which became the trustee of the Reg Reschke Family Trust. At some point land at Coonawarra was acquired by TR Nominees as trustee of the Reg Reschke Family Trust.
At some point or points Trevor acquired:
· the land comprising sections 226 to 231 (sections 226 to 231); and
· the land comprising section 438 (section 438);
in the Hundred of Comaum in the Coonawarra.
At some point Trevor and Vivian established a superannuation fund and the fund acquired land comprising sections 440, 441, 442 and 444 (sections 440 to 444) in the Hundred of Conaum in the Coonawarra.
At some point Burke incorporated or acquired the second plaintiff Reschke Vineyards Pty Ltd (Reschke Vineyards), which became the trustee of the Koonara Property Trust.
At some point the Altruism Trust was established by Dru with Altruism Pty Ltd as trustee.
The second defendant Brenton Scott acted as accountant and the third defendant Peter Westley acted as solicitor for Trevor and Vivian. Trevor gave instructions to Mr Westley to draft his will and he was one of the witnesses to its execution.
On 1 August 2007 Trevor made his last will and testament (the Will). By the Will Trevor appointed Vivian as the executrix and trustee of the Will. By the Will Trevor gave:
·    sections 226 to 231 to the trustee of the Koonara Property Trust (clauses 4 and 5);
·    section 438 to the trustee of the Altruism Trust (clause 6);
·    his licences to take underground water to the trustees of the Koonara Property Trust and the Altruism Trust to be divided equally between them (clause 12);
·    certain other specific bequests; and
·    his superannuation entitlements, life insurance policies, public company shares and the residue of his estate to Vivian.
Clause 7 of the Will (reproduced below) addressed the Reg Reschke Family Trust. Clause 8 (reproduced below) addressed the Trust.
The Will provided that, if Vivian should pre-decease him, Trevor gave his house property (which I assume was owned jointly by Trevor and Vivian), life insurance policies and public company shares to Joanne. It is possible that Vivian made a corresponding will at about the same time leaving these assets to Joanne, but this is only speculation in the absence of evidence.
On 21 June 2008 Trevor died. Probate has been granted in respect of the Will.
On 1 July 2013 Trevor’s mother Emiline Reschke made a will (Emiline’s will). Emiline owned farmland at Coonawarra. Emeline’s will provided that Burke and Dru might within three months after probate was granted elect to purchase the farmland, which if both so elected was to be divided by her trustees into two lots of approximately equal value, and the purchase price was to be calculated by reference to a prescribed method of valuation. Emeline’s will left 20 per cent of the residue of her estate to each of her four daughters, ten per cent to Burke, eight per cent to Dru and two per cent to Joanne.
On 19 April 2014 Emeline died. She had appointed one of her daughters and her son-in-law as executors but ultimately an administrator was appointed to her estate.
The action and cross action
On 9 August 2017 Burke instituted the action against Vivian, Mr Scott and Mr Westley seeking replacement of the executrix of the Will by an administrator of the estate and replacement of the trustees of the Trust. Fabriano was later joined as the fourth defendant. Reschke Vineyards was later added as the second plaintiff and a claim for relief in relation to a water licence was added.
On 26 October 2017 a cross action was instituted by Vivian and Fabriano against Burke seeking the determination of three questions relating to the construction of clause 28 of the Trust Deed and clause 8 of the Will pursuant to rule 206 of the Supreme Court Civil Rules 2006 (SA), section 69 of the Administration and Probate Act 1936 (SA) and/or section 91 of the Trustee Act 1936 (SA).
On 23 November 2017 an order was made for the determination of the preliminary issues. The preliminary issues are:
1       Whether on the proper construction of the Trust Deed, and in the events that have happened, the power of appointment granted to Trevor Stanley Reschke in clause 28 of the Trust Deed endured only during his lifetime and Vivian Fay Reschke in her capacity as executor of the estate of Trevor Stanley Reschke holds the power of appointment contained in that clause.
2       Whether on the proper construction of clause 8 of the Will, the clause:
2.1fails as the power of appointment granted to Trevor Stanley Reschke in clause 28 of the Trust Deed endured only during his lifetime;
2.1Aotherwise effects an appointment by him pursuant to the power of appointment under clause 28 of the Trust Deed of Vivian Reschke, Brenton Scott and Peter Westley as trustees of Rocky Castle Trust, with such appointment to take effect upon his death;
2.2     in any event, is otherwise void for uncertainty.
3.Whether on the proper construction of clause 8 of the Will, and in the events that have happened:
3.1the trustee of Rocky Castle Trust (whether it be Fabriano Pty Ltd or Vivian Reschke, Brenton Scott and Peter Westley jointly) is obliged to comply with that part of the clause that states “… vest the farming land owned by that Trust in favour of my said sons DRU and BURKE in such shares as will create equality in the land holdings of my said sons or their entities taken pursuant to this my Will and after taking into account the inheritance of land either son (or his related entity) may have received from the estate of their grandmother EMILINE MAY RESCHKE”; and
3.2if so, in what manner.
Construction of clause 28 of Trust Deed
The first question for determination is whether on the proper construction of the Trust Deed:
·the power of appointment granted to Trevor in clause 28 of the Trust Deed endured only during his lifetime;
·Vivian in her capacity as executrix holds the power of appointment contained in clause 28.
Clause 28 provides:
The said TREVOR STANLEY RESCHKE shall during his lifetime have the following powers vested in him viz.
(i)to remove any trustee hereof at any time and from time to time, and
(ii) to appoint a new trustee or trustees provided that the removal of a trustee shall not be effected otherwise than simultaneously with the appointment of a new trustee or new trustees in his place.
Upon the death of the said TREVOR STANLEY RESCHKE the powers of removal and appointment by this Clause conferred shall vest in the legal personal representatives of the said TREVOR STANLEY RESCHKE.
The parties agree that the answer to all parts of the first question is yes. However, given the nature of the cross action as seeking determination of an issue of construction of the Will, I determine the question independently of the parties’ agreement.
The power of appointment vested by clause 28 in Trevor is expressly limited to “during his lifetime”. Upon his death the power of appointment vests by force of clause 28 itself in Trevor’s legal personal representative regardless of whether Trevor has exercised the power of appointment during his lifetime.
It follows that the power of appointment granted to Trevor endured only during his lifetime and was incapable of being transferred by Will as a testamentary disposition.
It follows that the power of appointment vested upon Trevor’s death in Vivian in her capacity as executrix.
Construction of clause 8 of the Will: power of appointment
The second question for determination is whether on the proper construction of clause 8 of the Will:
a     clause 8 fails because the power of appointment granted to Trevor in clause 28 of the Trust Deed endured only during his lifetime;
b     clause 8 otherwise effects an appointment by Trevor pursuant to the power of appointment under clause 28 of Vivian, Mr Scott and Mr Westley as trustees of the Trust, with such appointment to take effect upon his death;
c     clause 8 is void for uncertainty.
Clause 8 of the Will provides:
I GIVE my power of appointment in the “Rocky Castle Trust” and my shares in FABRIANO PTY LTD which is trustee of the “Rocky Castle Trust” UNTO my said wife VIVIAN, BRENTON SCOTT of Adelaide, Accountant and PETER ROBERT WESTLEY of Naracoorte, Solicitor, to hold and to act as trustees of the said Rocky Castle Trust and in that capacity to vest the farming land owned by that Trust in favour of my said sons DRU and BURKE in such shares as will create equality in the land holdings of my said sons or of their entities taken pursuant to this my Will and after taking into account the inheritance of land either son (or his related entity) may have received from the estate of their grandmother EMILINE MAY RESCHKE. I FURTHER DECLARE that the assets of the said Trust shall remain subject to the lease of those assets UNTO my said wife VIVIAN without consideration for the term of her natural life or until she shall advise my said trustees that she wishes to surrender her lease. I FURTHER DECLARE that the land may remain subject to any existing mortgage or security registered over that land for the term of the lease unto my said wife.
Clause 7 of the Will provides:
I GIVE my shares in “Trevor Reschke Nominees Pty Ltd” being the trustee of the “Reg Reschke Family Trust” together with any other interest I may have in the “Reg Reschke Family Trust” to the trustee or trustees from time to time of the said “Altruism Trust” and I GIVE any power of appointment under the “Reschke Family Trust” to the trustee of trustees from time to time of the “Altruism Trust”.
It is common ground that clause 8 is to be construed by reference to its text, context and evident purpose. The court can take into account relevant circumstances surrounding the making of the Will and known to the testator by metaphorically placing itself in the testator’s armchair at the time of making the will.[1] The court attempts to discern the testator’s true intentions.[2] Neither party sought to adduce evidence of Trevor’s purely subjective intentions or contended that they should be taken into account in construing clause 8.
[1] Allgood v Blake (1873) LR 8 Exch 160 at 163 per Blackburn J; Perrin v Morgan [1943] AC 399 at 414 per Viscount Simon LC and 420 per Lord Russel of Killowen; Re Alleyn (deceased) [1965] SASR 22 at 27 per Hogarth J.
[2] Fell v Fell (1922) 31 CLR 268 at 275 per Isaacs J.
Disposition or exercise of power of appointment?
Vivian and Fabriano contend that by the words “I give my power of appointment in the “Rocky Castle Trust” … unto [Vivian, Mr Scott and Mr Westley]”, Trevor purported to transfer his power of appointment by way of testamentary disposition under the Will. This was ineffective because he had no power to do so given the terms of clause 28 of the Trust Deed addressed above.
Burke contends that, by the relevant words, Trevor exercised his power of appointment inter vivos on 1 August 2007, merely postponing the date of effect of the change to the time of his death.
In Baird v Baird[3] the rules of a pension scheme provided that benefits on a member’s death would be paid to such person(s) as the member nominated in writing or in default to his widow or estate. Milton Baird nominated Dixon Baird. Milton Baird’s widow contended that the nomination was void because it did not comply with the requirements for execution of a valid will. The Privy Council held that the nomination had effect other than as a testamentary disposition. Lord Oliver of Aylmerton (delivering the judgment of the Privy Council comprising Lord Bridge of Harwich, Lord Roskill, Lord Brandon of Oakbrook, Lord Oliver of Aylmerton and Sir Roger Ormerod) said:
The argument advanced on behalf of the widow founds upon three propositions, that is to say, first, that the nomination of a beneficiary to receive the “death-in-employment” benefit is a disposition of the member’s property; secondly, that it is a disposition which is limited to take effect only upon the death of the disponer; and, thirdly, that it is a disposition which is ambulatory in the sense of being capable of revocation at any time. It is, therefore, the argument proceeds, a testamentary disposition…
…
It is not, however, the case that every revocable instrument which creates interests taking effect on the death of the person executing the instrument is necessarily a will. The most obvious example of such a revocable but non-testamentary instrument is the exercise of a revocable power of appointment under a settlement inter vivos. Essentially, a pension scheme of the type with which this appeal is concerned is no different from any other inter vivos declaration of trust or settlement containing provisions for the destination of the trust fund after the death of the principal beneficiary.[4]
[3] [1990] 2 AC 548.
[4] At 556.
In Wolfe v Wolfe[5] William Wolfe Senior and his son James signed a document dated 13 March 1899 by which William bequeathed his farm to his grandson William Junior and at the same time gave up the management of the farm from 13 March 1899 in return for James agreeing to pay to William Senior and his wife £20 per annum. Andrews J held that the document was effective as a will insofar as it bequeathed the farm to William Junior notwithstanding that the document also contained an agreement between William Senior and James. Although not an issue, the fact that the document comprised in part a will would not have rendered it invalid as in part a contract.
[5] [1902] 2 Ir R 246.
On the one hand Vivian and Fabriano accept that it is legally and conceptually possible for a person having a power of appointment during his or her lifetime to exercise it during his or her lifetime but suspend its effect until his or her death and consequentially that, if Trevor in fact exercised his power of appointment on 1 August 2007, it would have been effective pursuant to clause 28 of the Trust Deed. On the other hand, Burke accepts that, if Trevor purported to transfer his power of appointment by testamentary disposition under his will, it would have been ineffective. The only issue to be determined is therefore an issue of construction of clause 8.
The text of clause 8 strongly suggests that it contains a (purported) testamentary disposition of Trevor’s power of appointment rather than the exercise inter vivos of the power of appointment with its effect merely suspended until Trevor’s death. First it is expressed as a gift of the power of appointment rather than as an exercise thereof. Secondly the same sentence contains a gift of Trevor’s share in Fabriano which is manifestly a testamentary disposition: it is an unlikely construction that in the same sentence and by the same language Trevor intended to make a testamentary disposition of the shares but not of the power of appointment.

The context of clause 8 within the Will as a whole strongly suggests that clause 8 (purportedly) effects a testamentary disposition of Trevor’s power of appointment. Each clause from clause 3 to clause 15 relevantly begins with the words “I GIVE” and each such clause is manifestly a testamentary disposition. It is an unlikely construction that Trevor used identical language for clause 8 and intended something other than a testamentary disposition. In addition clause 8 is part of, and indeed a numbered clause of, what is expressed to be and plainly is Trevor’s last will and testament.
Burke points to the fact that, by reason of the provisions of clause 28 of the Trust Deed, it was not legally possible for Trevor to transfer his power of appointment by testamentary disposition and it should be inferred that he was aware of this and intended instead to exercise his power of appointment to appoint Vivian, Mr Scott and Mr Westley as trustees in lieu of Fabriano.
However, there is no basis on which to find that Trevor was aware that it was not legally possible to transfer his power of appointment by testamentary disposition. Clause 8 itself evidences apparent misunderstandings by Trevor as to what was and was not legally possible. Clause 8 goes on to provide in absolute terms for the vesting of the farming land owned by the Trust in favour of Dru and Burke. Burke acknowledges that, even though he contends that this had the legal effect of requiring the Trustee to give utmost consideration to complying with Trevor’s wishes in this respect, clause 8 did not itself effect or legally require such a vesting. Similarly clause 8 goes on to declare in absolute terms that the assets of the Trust shall remain subject to a lease in favour of Vivian without consideration and Trevor lacked power to effect this. Clause 7 purports to give any power of appointment that Trevor may have under the Reg Reschke Family Trust to the trustee of the Altruism Trust, which suggests that Trevor had a general belief that it was possible to transfer powers of appointment by testamentary disposition.
The evident purpose of clause 8 is to effect a testamentary disposition of both Trevor’s power of appointment in the Trust and his shares in Fabriano.
The text, context and evident purpose of clause 8 all indicate that Trevor mistakenly believed that he could make a testamentary disposition of his power of appointment and purported to do so. There is no basis on which to construe clause 8 as effecting an inter vivos exercise of the power of appointment to substitute the three named persons for Fabriano as trustee with the effect merely being suspended until the date of Trevor’s death.
Effect on clause 8
As clause 8 purports to be a testamentary disposition of Trevor’s power of appointment, it is ineffective at least to that extent.
The question arises whether this voids the whole clause or whether that part of clause 8 should be severed from the balance.
It follows from the ineffectiveness of clause 8 to convey Trevor’s power of appointment to Vivian, Mr Scott and Mr Westley that the part of the clause that provides for them to hold and to act as trustees of the Trust is ineffective and that Fabriano remains the trustee. That part of the clause that provides for the vesting of the farming land owned by the Trust in favour of Dru and Burke would, for the reasons given above, be ineffective in any event. Those parts of the clause declaring that the assets of the Trust shall remain subject to a lease in favour of Vivian and that the land may remain subject to existing securities are also consequentially ineffective.
On the other hand, Trevor had the ability to make a testamentary disposition of his share in Fabriano and the mere fact that he did not have the ability to make a testamentary disposition of his power of appointment does not affect the former. There is no reason why the metaphorical blue pencil could not be drawn through the gift of the power of appointment leaving the gift of the share intact. The testamentary disposition of the share in Fabriano in favour of Vivian, Mr Scott and Mr Westley was effective.
Construction of clause 8 of Will: benefit to Dru and Burke
The third question for determination is whether on the proper construction of clause 8 of the Will, and in the events that have happened:
athe Trustee is obliged to comply with that part of the clause that states “… vest the farming land owned by that Trust in favour of my said sons Dru and Burke in such shares as will create equality in the land holdings of my said sons or their entities taken pursuant to this my Will and after taking into account the inheritance of land either son (or his related entity) may have received from the estate of their grandmother Emiline”; and
bif so, in what manner.
Burke does not contend that in an absolute sense the Trustee (which I have determined is Fabriano) is obliged to vest the farming land owned by the Trust in Dru and Burke. Burke acknowledges that Trevor lacked power to revoke or alter the disposition of the property vested in the Trust.
Burke’s contention is first that a trustee of a discretionary trust invested with powers and discretions has a duty to consider whether to exercise those powers and discretions;[6] secondly the farming land of the Trust had been contributed by Trevor; thirdly clause 8 evinced a misguided intention by Trevor that the farming land should be distributed to Dru and Burke so as to achieve equality; fourthly it follows that the Trustee is required to give the utmost consideration to this expression of wishes by the donor of the farming land to the Trust in exercising its discretion whether to make capital distributions of the land to Dru and Burke as eligible beneficiaries; fifthly Trevor could have appointed himself trustee and made distributions himself of the farming land to Dru and Burke; sixthly Trevor had before his death something approaching a general power and ownership of the trust property;[7] and finally that in the circumstances the Trustee would need to have a very good reason not to implement Trevor’s wishes.
[6] Citing Re Gestetner Settlement [1953] Ch 672 at 688 per Harman J; McPhail v Doulton [1971] AC 424 at 449 and 456 per Lord Wilberforce.
[7] Citing Australian Securities and Investments Commission v Carey and Others (No 6) [2006] FCA 814, (2006) 153 FCR 509 at [36]-[37] per French J.
Burke’s first contention may be accepted. Dru and Burke are both eligible beneficiaries of the Trust and would have standing to compel the Trustee to consider whether it should exercise a discretion if it wrongly refused to do so. I note that no evidence has been adduced on the hearing of the preliminary issue as to Fabriano being called upon to exercise its discretion in a particular way.
Burke’s second contention cannot be accepted on the present state of the evidence or given the nature of the preliminary issues to be determined. No evidence was adduced as to the source of the land vested in the Trust other than that sections 239, 377 and 379 were acquired by the Trust in July 1989 soon after the Trust was established.
Burke’s third contention may be accepted. Although reasonable minds may well differ about how equality might be achieved, there is no doubt concerning the overall spirit of Trevor’s intention evinced in clause 8 of the Will.
Burke’s fourth contention must be rejected. It may be accepted that Trevor was a de facto co-founder of the Trust with Vivian and was controller with Vivian of the Trust (by their ownership of the shares in and directorship of the trustee company Fabriano) for almost two decades and that the Trust is and was a vehicle primarily for the devolution of Reschke family assets from Trevor and Vivian’s generation to the next generation(s). It may be accepted that in these circumstances Fabriano as the Trustee is required to give consideration to Trevor’s wishes as to such devolution in the exercise of its discretion whether to make capital distributions and to whom. However, that level of consideration is the same as the consideration that would be required to be given by the Trustee to Dru and Burke (and indeed Vivian, Joanne and the next generation) as objects of the discretionary trust in terms of capital distributions. There are well-defined limits to the level of consideration required to be given and to the ability to judicially review the exercise or non-exercise of the discretion. There is no basis to elevate this level of consideration to “utmost” consideration.
Burke’s fifth contention may be accepted. Trevor could, if had chosen, have exercised his power of appointment during his lifetime to appoint himself trustee and as trustee could (within recognised limits) have make capital distributions of the farming land of the Trust to eligible beneficiaries, including if he saw fit (subject to recognised limits) to Dru and Burke in a manner in which he considered that overall equality was achieved. However, he did not so act and the mere possibility that he might have done so does not entail that the position is to be semi-equated with that which would have existed had he done so.
Burke’s sixth contention may be partially accepted. In Australian Securities and Investments Commission; In the Matter of Richstar Enterprises Pty Ltd v Carey (No 6)[8] French J said:
As discussed earlier, the beneficiary who effectively controls the trustee’s power of selection because he or she is the trustee or one of them and/or has the power to appoint a new trustee has something approaching a general power and the ownership of the trust property. There are cases in the Family Law jurisdiction which have dealt with like circumstance. In Ascot Investments Pty Ltd v Harper, Gibbs J said:
... if a company is completely controlled by one party to a marriage, so that in reality an order against the company is an order against the party, the fact that in form the order appears to affect the rights of the company may not necessarily invalidate it.
Stephen, Aickin and Wilson JJ agreed.[9]
[8] (2006) 153 FCR 509.
[9] At [37]. (Citations omitted).
However, the question under consideration is not what powers Trevor might have exercised during his lifetime or whether or to what extent they might be equated with ownership of the trust property, but rather what consideration the current trustee in current circumstances is required to give to Trevor’s wishes. For the reasons given above, that level of consideration does not rise to the level of utmost consideration, let alone that the Trustee would need to have a very good reason not to implement Trevor’s wishes. Consideration would not require the trustee to give a specific weight to Trevor’s wishes. This would be a matter for the trustee provided that consideration was given to Trevor’s wishes.
Vivian and Fabriano contend that, if the relevant part of the clause comprised a direction, it would be void for uncertainty. However, given that it only operates as an expression of Trevor’s wishes, no issue of voidness for uncertainty arises.
Conclusion
I will hear the parties as to the precise form of the orders to be made answering the questions for determination in accordance with my reasons for judgment.