Waugh v Kippen

The High Court of Australia considered the appeal in *Waugh v Kippen*. The dispute concerned the interpretation of a clause in a will that established a discretionary trust for the benefit of the testator's grandchildren. The primary issue was whether the testator's daughter, who was the trustee, had a power to appoint income or capital to herself.

The court was required to determine whether the trustee, the testator's daughter, possessed a power to appoint income or capital of the trust to herself, notwithstanding the trust's stated beneficiaries being the testator's grandchildren. This involved an examination of the language used in the will to ascertain the testator's intention regarding the trustee's beneficial interest in the trust property.

The High Court held that the trustee did not have the power to appoint income or capital to herself. The Court reasoned that the language of the will, particularly the phrase "for the benefit of my grandchildren," clearly indicated an intention to exclude the trustee from any beneficial interest. The Court applied the principle that where a power of appointment is given to a trustee, and the beneficiaries are clearly defined, the trustee cannot exercise that power for their own benefit unless the trust instrument expressly permits it. The Court found no such express permission in the will.

The appeal was dismissed.