Re Dion Investments Pty Limited [2020] NSWSC 1661

Re Dion Investments Pty Limited [2020] NSWSC 1661

The Trustee has no power to surrender or release its powers to appoint income or capital to a beneficiary who is a foreign person, as those powers are coupled with a duty and cannot be disclaimed under s 28 of the Conveyancing Act. However, the court may, and did, confer power upon the Trustee under s 81 of the Trustee Act to the extent necessary to prevent 'foreign persons' from being beneficiaries whilst they meet that definition, as the release or surrender is expedient for the administration of the trust and to avoid a significant annual surcharge under the Land Tax Act. The power in clause 15 of the Trust Deed was personal to the named individuals and lapsed upon death of the last...

Parties
Plaintiff: Dion Investments Pty Limited
Jurisdiction
Australia
Judgment Date
27 October 2020
Procedural Posture
Equity Application for Judicial Advice and Orders Regarding Trusts Under the Trustee Act 1925 (nsw) / Final Orders and Reasons for Judgment
Outcome
Orders made as sought in short minutes; judicial advice given; power conferred under s 81 Trustee Act to allow the Trustee to prevent 'foreign persons' from being beneficiaries while they meet that definition.
Legal Topics
Judicial Advice to Trustee, Powers of Trustees, Foreign Beneficiaries and Land Tax
Equity Trusts and Trustees Judicial Advice to Trustee Powers of Trustees Foreign Beneficiaries and Land Tax

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Parties

Dion Investments Pty Limited

Plaintiff

Procedural Posture

Equity Application for Judicial Advice and Orders Regarding Trusts Under the Trustee Act 1925 (nsw) / Final Orders and Reasons for Judgment

Legal Issues

  1. 1 Whether the Trustee is justified in disclaiming and/or surrendering its powers to appoint income and/or capital to any beneficiary of the Trust Estate while the beneficiary is a 'foreign person' as defined in the Land Tax Act and Duties Act
  2. 2 Whether the Trustee is justified in not exercising its powers to appoint/distribute to any beneficiary who is a 'foreign person' and who has disclaimed their interest
  3. 3 Whether the power in clause 15 of the Trust Deed was relinquished upon death of the last named survivor and, if not, whether it devolves to the legal personal representative

Ratio Decidendi

The Trustee has no power to surrender or release its powers to appoint income or capital to a beneficiary who is a foreign person, as those powers are coupled with a duty and cannot be disclaimed under s 28 of the Conveyancing Act. However, the court may, and did, confer power upon the Trustee under s 81 of the Trustee Act to the extent necessary to prevent 'foreign persons' from being beneficiaries whilst they meet that definition, as the release or surrender is expedient for the administration of the trust and to avoid a significant annual surcharge under the Land Tax Act. The power in clause 15 of the Trust Deed was personal to the named individuals and lapsed upon death of the last...

Court Disposition

Orders made as sought in short minutes; judicial advice given; power conferred under s 81 Trustee Act to allow the Trustee to prevent 'foreign persons' from being beneficiaries while they meet that definition.

Orders

  • Order pursuant to s 81 of the Trustee Act conferring on the Trustee power to surrender/release such trusts or powers, such that any 'foreign person' is not a beneficiary whilst they meet that definition.
  • Other orders as per short minutes of order provided by plaintiff.