Duncan v Cathels [1956] HCA 56

Duncan v Cathels [1956] HCA 56

The settlement made an initial absolute gift of equal shares to the settlor's children, including Bisset Fenwick, subject only to the later provisions and powers that became operative. Bisset did not marry, become bankrupt, alienate, or encumber his share, and the only operative trust was the trust to pay him income during life; the other limitations failed. The proviso for payment of income to surviving children was only a substituted income provision for periods when the preceding income trusts could operate and never became operative in the events that happened. Accordingly Bisset Fenwick's share was vested in the executors of his will, not in the settlor's estate or Charlotte Dunkley.

Jurisdiction
Australia
Procedural Posture
Appeal and Cross Appeal in an Originating Summons to Construe Trusts of an Indenture of Settlement / High Court Appeal From Part of a Decretal Order of the Supreme Court of New South Wales in Equity Made by Myers J.
Outcome
Appeal allowed. Cross-appeal dismissed.
Legal Topics
['construction of Trusts' 'vesting of Trust Interests' 'rule in Lassence V. Tierney' 'resulting Trust' 'gift of Income and Corpus']
['equity' 'trusts' 'succession'] ['construction of Trusts' 'vesting of Trust Interests' 'rule in Lassence V. Tierney' 'resulting Trust' 'gift of Income and Corpus']

Case Brief

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Procedural Posture

Appeal and Cross Appeal in an Originating Summons to Construe Trusts of an Indenture of Settlement / High Court Appeal From Part of a Decretal Order of the Supreme Court of New South Wales in Equity Made by Myers J.

Legal Issues

  1. 1 ['Whether, on the true construction of the indenture of settlement and in the events that happened, the share or interest of Bisset Fenwick deceased was vested in the executors of his will.' "Whether the estate of the settlor was entitled to Bisset Fenwick's share by resulting trust." "Whether Charlotte Dunkley was entitled to the corpus of Bisset Fenwick's share under the proviso concerning payment of income to surviving children."]

Ratio Decidendi

The settlement made an initial absolute gift of equal shares to the settlor's children, including Bisset Fenwick, subject only to the later provisions and powers that became operative. Bisset did not marry, become bankrupt, alienate, or encumber his share, and the only operative trust was the trust to pay him income during life; the other limitations failed. The proviso for payment of income to surviving children was only a substituted income provision for periods when the preceding income trusts could operate and never became operative in the events that happened. Accordingly Bisset Fenwick's share was vested in the executors of his will, not in the settlor's estate or Charlotte Dunkley.

Court Disposition

Appeal allowed. Cross-appeal dismissed.

Orders

  • ['Delete declarations in decretal order.' 'In lieu thereof insert a declaration that upon the true construction of the trusts declared in the indenture of settlement made by John Fenwick deceased on 22nd June 1900 and in the events which have happened the share or interest of Bisset Fenwick deceased is now vested in...