Oesterlin v Sands [1969] HCA 70

Oesterlin v Sands [1969] HCA 70

The will conferred on the trustees a discretionary power to accumulate and apply income for employees generally of Crockett & Co. Pty. Limited without ascertainable principles, specified proportions, prescribed purposes, or defined circumstances. Because the company might indefinitely have employees, the power could be exercised beyond the perpetuity period and was void unless saved by statute. Section 382 of the Companies Act, 1961 N.S.W. did not apply because the provision was not a provident, superannuation, sick, accident, assurance, unemployment, pension, co-operative benefit or other like fund, scheme, arrangement or provision, but only a general discretionary trust for employees....

Jurisdiction
Australia
Procedural Posture
Appeal / High Court Appeal From a Decretal Order of the Supreme Court of New South Wales
Outcome
Appeal allowed.
Legal Topics
['construction of Will' 'rule Against Perpetuities' 'employee Benefit Trusts' 'companies Act, 1961 N.s.w., S. 382']
['trusts and Estates' 'company Law'] ['construction of Will' 'rule Against Perpetuities' 'employee Benefit Trusts' 'companies Act, 1961 N.s.w., S. 382']

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Procedural Posture

Appeal / High Court Appeal From a Decretal Order of the Supreme Court of New South Wales

Legal Issues

  1. 1 ["Whether the provisions in cl. 10 of the testator's will concerning 5,760 shares in Crockett & Co. Pty. Limited created valid trusts after the life interests of the widow and two daughters." 'Whether the discretionary power to apply accumulated income for employees of Crockett & Co. Pty. Limited was void under the rule against perpetuities.' 'Whether s. 382 of the Companies Act, 1961 N.S.W. saved the employee benefit provisions from the rule against perpetuities.']

Ratio Decidendi

The will conferred on the trustees a discretionary power to accumulate and apply income for employees generally of Crockett & Co. Pty. Limited without ascertainable principles, specified proportions, prescribed purposes, or defined circumstances. Because the company might indefinitely have employees, the power could be exercised beyond the perpetuity period and was void unless saved by statute. Section 382 of the Companies Act, 1961 N.S.W. did not apply because the provision was not a provident, superannuation, sick, accident, assurance, unemployment, pension, co-operative benefit or other like fund, scheme, arrangement or provision, but only a general discretionary trust for employees....

Court Disposition

Appeal allowed.

Orders

  • ['Decretal order of the Supreme Court of New South Wales varied by omitting the declaration therein contained and substituting a declaration that upon the true construction of the will of the testator and in the events that have happened the 5,760 shares in Crockett & Co. Pty. Limited mentioned in cl. 10 of the will...