Icepine Pty Ltd: In the matter of the Bellamy Street Unit Trust [2017] NSWSC 1701

Icepine Pty Ltd: In the matter of the Bellamy Street Unit Trust [2017] NSWSC 1701

Clause 5.2 of the Trust Deed provides that, when a unitholder dies, the legal personal representative is the only person recognised by the trustees as having title to the units. The legal personal representative may apply to be registered but, pursuant to the deed, the trustee retains an absolute discretion to refuse registration as if the unitholder had made such application prior to death. This discretion, however, must be exercised honestly and in good faith, with genuine consideration and for a proper purpose; it is not merely administrative but dispositive, and judicial advice confirms these circumstances and the proper construction of the deed.

Parties
Plaintiff: Icepine Pty Ltd (A.C.N. 080 028 324)
Jurisdiction
Australia
Judgment Date
16 November 2017
Procedural Posture
Application for Judicial Advice / Judgment/orders Made on Application
Outcome
Judicial advice granted; orders made in accordance with proposed minutes.
Legal Topics
Judicial Advice to Trustee, Interpretation of Trust Deed, Trustee Discretion, Transmission of Units on Death
Equity Trusts Judicial Advice to Trustee Interpretation of Trust Deed Trustee Discretion Transmission of Units on Death

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Parties

Icepine Pty Ltd (A.C.N. 080 028 324)

Plaintiff

Procedural Posture

Application for Judicial Advice / Judgment/orders Made on Application

Legal Issues

  1. 1 What is the proper construction of clause 5.2 of the Trust Deed regarding the rights of a legal personal representative upon the death of a unitholder?
  2. 2 Does the Trustee have an absolute discretion to refuse registration of a legal personal representative as a unitholder under the Deed?
  3. 3 What, if any, limitations or qualifications attach to the Trustee’s discretion to decline registration?

Ratio Decidendi

Clause 5.2 of the Trust Deed provides that, when a unitholder dies, the legal personal representative is the only person recognised by the trustees as having title to the units. The legal personal representative may apply to be registered but, pursuant to the deed, the trustee retains an absolute discretion to refuse registration as if the unitholder had made such application prior to death. This discretion, however, must be exercised honestly and in good faith, with genuine consideration and for a proper purpose; it is not merely administrative but dispositive, and judicial advice confirms these circumstances and the proper construction of the deed.

Court Disposition

Judicial advice granted; orders made in accordance with proposed minutes.

Orders

  • Answers given to questions raised in the application in accordance with opinions of counsel and proposed minutes (see [39]-[46]).