SUPREME COURT OF QUEENSLAND

Transcription

1 SUPREME COURT OF QUEENSLAND CITATION: PARTIES: FILE NO/S: SC No 3223 of 2015 DIVISION: PROCEEDING: ORIGINATING COURT: Re Sobey & Anor as T ees of the Will of Norman Lance Cummins (deceased) [2015] QSC 104 MICHAEL ANTHONY SOBEY and JULIAN ROPER MCNAMARA as trustees of the Will of NORMAN LANCE CUMMINS (DECEASED) Trial Division Application Supreme Court at Brisbane DELIVERED ON: 29 April 2015 DELIVERED AT: Brisbane HEARING DATE: 22 April 2015 JUDGE: Philip McMurdo J ORDER: 1. It is directed that in respect of the trust under cl 5 of the will the office of appointor is held by the trustees of the will for the time being and cl 12.2 has no application. 2. It is directed that at the vesting day of the trust under cl 5, the capital is to be applied according to cl 5.3 and not cl 12.4 of the will. CATCHWORDS: EQUITY TRUSTS AND TRUSTEES APPLICATIONS TO COURT FOR ADVICE AND AUTHORITY PETITION OR SUMMONS FOR ADVICE where the applicant trustees applied for directions under s 96 of the Trusts Act 1973 (Qld) respecting the exercise of a power or discretion of power vested in the trustee where the applicant trustees sought directions regarding the identification of the person or persons entitled to exercise the appointor s power to affect the vesting date of the trust under a will where the trustees sought directions regarding the application of certain clauses of the will in relation to the required disposition of trust property, knowledge of which was relevant in deciding whether to exercise their power to affect the vesting date SUCCESSION CONSTRUCTION AND EFFECT OF TESTAMENTARY DISPOSITIONS CONSTRUCTION GENERALLY where the applicant trustees sought directions in relation to the definition of the term appointor within a will whether the definition of appointor contained in a

2 2 COUNSEL: SOLICITORS: certain clause of the will applied to all, or only certain trusts contained in the will whether for certain trusts the office of appointor was held by the trustees of the will for the time being as defined by one clause of the will or whether a separate clause in the will defining the appointor applied where it was directed that in respect of certain trusts contained in the will, the office of appointor was held by the trustees of the will for the time being, and another clause defining appointor had no application for the purpose of those trusts Trusts Act 1973 (Qld), s 96 R D Williams for the applicants Sykes Pearson Miller Lawyers for the applicants [1] This is an application by trustees for directions under s 96 of the Trusts Act 1973 (Qld). It provides that a trustee may apply to the court for directions concerning any property subject to a trust, or respecting the management or administration of that property, or respecting the exercise of any power or discretion vested in the trustee. [2] The applicants are trustees under a trust from the will of the late Norman Cummins who died in By cl 1 of the will, the partners resident in Queensland of the law firm Sykes Pearson & Miller were appointed the executors although the testator expressed the wish that only two of them should prove his will. The testator further appointed the persons who proved his will to be the trustees of this will. Probate was granted to the applicant Mr Sobey and another member of the firm, Mr Miller. Subsequently Mr Miller resigned as a trustee and was replaced by the other applicant, Mr Roper. [3] There were several specific gifts before cl 4 provided that the residuary estate would be held upon trust for my trustees to be held by them upon the trusts of clause 5 of this will. [4] Clause 5 provided that my trustees shall hold the share of my residuary estate in clause 4 ( the trust fund ) upon the following trusts. There then followed cl 5.1 through cl 5.6 which prescribed the terms of that trust. Relevantly those terms were as follows: 5.1 DEFINITION AND INTERPRETATION The following terms (unless the context does not permit) shall have the following meanings and interpretations - (a) the primary beneficiaries means - (i) my son GREGORY NORMAN CUMMINS - (ii) my grandchildren - (iii) my great grandchildren - (b) the secondary beneficiaries means -

3 3 (c) (d) (i) (ii) any natural and/or lawfully adopted child of the persons in (ii) above - any spouse of any of the persons in 5.1(a)(i), (ii) or clause 5.1(b)(i); (iii) any other trust and corporation in which any of the primary beneficiaries may have an entitlement or an interest - the beneficiaries - any one or more of the primary beneficiaries and secondary beneficiaries - the vesting day - the day following the date which is the 80th anniversary of the date of my death, or such earlier date as my trustees ( the appointor ) may at any time determine to be the vesting day - (e) accounting period - as set out in clause 12 - (f) the appointor - will be the trustees of this my will for the time being INCOME DISTRIBUTION As set out in clause CAPITAL DISTRIBUTION On the vesting day my trustees shall hold the capital of the trust fund (subject to any prior application allowed by this trust and at law) UPON TRUST for the same beneficiaries and upon the same trusts as those contained in clause 7 of this will FURTHER POWERS AND OBLIGATIONS My trustees shall hold the trust fund upon the obligations and with the powers contained in clauses 12, 13 and 14 of this will and with all other powers available to them at law - [5] There are four grandchildren of the testator. Two are children of the testator s son, Gregory Cummins, and two are children of the testator s daughter who predeceased him. [6] According to cl 5.1(d), the vesting day of this trust is the 80th anniversary of the date of the testator s death, or such earlier date as my trustees ( the appointor ) may at any time determine to be the vesting day. Thus far the trustees have not made such a determination. [7] By cl 5.2 the income is to be distributed according to cl 12 which relevantly provides as follows: 12.3 INCOME DISTRIBUTION

4 4 Until the vesting day the trustees shall hold the income of the trust fund (subject to any prior application allowed under this trust and at law and subject to powers available to the trustees in respect of accumulation and other dealings with income) UPON TRUST absolutely for the beneficiaries or any one or more of them exclusive of the other or others in such shares as my trustees shall in their absolute discretion determine on or prior to the end of the account period - There have been some distributions of income in favour of the children of the testator s daughter but for the most part the income has been distributed to the testator s son. [8] By cl 5.3, upon the vesting day, the trustees are to hold the capital of the trust fund upon the same trusts as those contained in clause 7 of this will. That clause relevantly provides as follows: 7 I GIVE my residuary estate as defined in clause 4 upon the following trusts namely Subject to any election made by the Appointor under clause 8.5, as to a one quarter share to my grandchild BENJAMIN WILKINSON to be held by him upon the trusts contained in clause Subject to any election made by the Appointor under clause 9.5, as to a one quarter share to my grandchild SAMUEL WILKINSON to be held by him upon the trusts contained in clause Subject to any election made by the Appointor under clause 10.5, as to a one quarter share to my grandchild ELISA CUMMINS to be held by her upon the trusts contained in clause Subject to any election made by the Appointor under clause 11.5, as to the remaining one quarter share to my grandchild JOELLE CUMMINS to be held by her upon the trusts contained in clause 11 - I shall refer to the four trusts which would be thereby constituted as the clause 7 trusts. I shall refer to the present trust as the clause 5 trust. [9] Each of the clause 7 trusts is in relevantly the same terms as the others. The primary beneficiaries under each of the clause 7 trusts is the particular grandchild and his or her spouse. The secondary beneficiaries are any children of that grandchild and the tertiary beneficiaries are the other persons related or associated in certain ways with that grandchild. Each of clauses 8, 9, 10 and 11 provides that the vesting day of the clause 7 trusts is to be the 80th anniversary at the date of my death or such earlier date as my [grandson/granddaughter] ( the appointor ), may at any time determine to be the vesting day. [10] Each of those clauses 8 through 11 provides that the distribution of income and capital will be as set out in clause 12. Clause 12.2 provides as follows: 12.2 THE APPOINTOR If the appointor (a) dies or (b) loses lawful capacity through age, accident or illness, prior to the vesting day, in the case of (a) the

5 5 appointor shall be the executors of the appointor s estate. In the case of (b), the appointor shall be his/her attorney pursuant to an enduring power of attorney or, if there are none, then the appointor shall be the trustees of this will -. [11] Clause 12.4 provides as follows: 12.4 CAPITAL DISTRIBUTION On the vesting day my trustees shall hold the capital of the trust fund (subject to any prior application allowed by this trust and at law) UPON TRUST for the secondary beneficiaries if more than one then equally as tenants in common absolutely with clause 2.4 applying - [12] The first of the questions raised by this application is whether, for the clause 5 trust, the office of appointor is held by the trustees of the will for the time being and cl 12.2 has no application. Mr Sobey is concerned that it is not fully clear that cl 12.2 is inapplicable. His wife holds an appointment as his attorney under an enduring power of attorney and is named as his executor. He is concerned that she could become required to take his place as an appointor of the clause 5 trust. He says that the identity of the persons holding the office of appointor has a practical importance in the administration of the trust because of the appointor s power, under cl 5.1(d), to affect the vesting date. [13] Arguably this is a direction respecting the exercise of any power or discretion vested in the trustee, because it involves the identification of the person or persons entitled to exercise the power under cl 5.1(d). I accept that the direction would have utility in resolving a concern of Mr Sobey which otherwise might affect whether he remains as a trustee. [14] In my opinion, cl 12.2 does not apply to the clause 5 trust. Clause 5.1 defines the appointor for the clause 5 trust. It does not define the appointor by reference to cl 12, as it does by the definition of accounting period. Clause 5.6 provides that the trustees are to hold the trust fund upon the obligations and with the powers contained in clauses 12, 13 and 14. But cl 12.2 does not confer a power or impose an obligation. Each of the clauses which provides for the clause 7 trusts provides for the trustee to be the relevant grandchild with a power (for example in cl 8.1(e)) in that grandchild to affect the vesting day of the clause 7 trust as the appointor. In turn, for example, cl 8.1(g) further defines the appointor by reference to cl 12. [15] Therefore, once the vesting date of the clause 5 trust is reached, and the property comes to be held under the clause 7 trusts, there are different appointors under those trusts. Until then, the appointor is as defined in cl 5.1. [16] I therefore direct that in respect of the trust under cl 5 of the will the office of appointor is held by the trustees of the will for the time being and cl 12.2 has no application. [17] The second question raised by the application is whether the trustees are, at the vesting day, to hold the capital of the trust fund on trust on the terms stated in clause 5.3 and clause 12.4 has no application in respect of the trusts of clause 5. [18] Clause 5.3 appears to provide for the property of the clause 5 trust to vest in the four grandchildren as trustees of the clause 7 trusts. Clause 12.4 provides that on the vesting

6 6 day my trustees shall hold the capital of the trust fund upon trust for the secondary beneficiaries if more than one then equally as tenants in common. If cl 12.4 would apply on the vesting day of the clause 5 trust, there would be an obvious tension between that provision and cl 5.3. Mr Sobey s affidavit says that this question is of concern to the trustees in the sense that it is a matter which needs to be clarified, so that the administration can proceed smoothly in the future. Arguably the direction is one which respects the exercise of a power or discretion vested in the trustees, namely the power to affect the vesting date of the clause 5 trust. In other words, it is relevant for the trustees to know of the required disposition of the trust property in that event, in deciding whether to exercise the power. [19] The clear tension between clauses 5.3 and 12.4 must be resolved and in my opinion the latter does not apply on the vesting day of the clause 5 trust. Clause 12.5 does use the expression my trustees, which if read alone, might refer to the trustees appointed by the will. But that expression is consistently used within clauses 8 through 11 in respect of the clause 7 trusts where plainly the trustee is not a trustee of the will but is a grandchild. And each of those clauses (for example by cl 8.3) provides for the distribution of capital of a clause 7 trust to be as set out in clause 12. Therefore, cl 12.4 applies to the clause 7 trusts but not the clause 5 trust. [20] The trustees will be directed that at the vesting day of the trust under cl 5, the capital is to be applied according to cl 5.3 and not cl 12.4 of the will.