Staley v Hill Family Holdings Pty Ltd

Staley v Hill Family Holdings Pty Ltd concerned the validity of a Deed of Variation executed by the Trustee of a discretionary trust to remove and substitute the Appointor under the Trust Deed. The dispute arose when the Appointor, Mrs Staley, sought a declaration that the Deed of Variation was invalid. This case required the Federal Court to determine whether the power to vary the terms of the Trust Deed included a power to change the identity of the Appointor or amend the terms of the Trust Deed to allow that to happen.

The court examined the Trust Deed, particularly clause 14.01, which granted the Trustee the power to vary all or any of the trusts, powers, or provisions declared or included in the Trust Deed. The court noted that clause 14 did not require the Trustee to obtain prior consent from the Appointor before exercising these powers. The court found that the Deed of Variation was effective as it was consistent with the Trustee's power under clause 14.01 to vary the terms of the Trust Deed. The court concluded that the Trustee had the authority to insert a new clause, including one that allowed for the removal and substitution of the Appointor, provided a replacement Appointor was nominated.

The court refused the declarations sought by Mrs Staley, holding that the Deed of Variation was valid. The court will hear the parties regarding the form of orders, including costs, and any agreed declarations flowing from the findings.

ORDERS:
1. The declarations sought by the applicant are refused.
2. I will hear the parties as to the form of orders (including as to costs) and any declarations (if they are agreed) that follow from my findings.