Public Trustee v Smith

[2008] NSWSC 397

Supreme Court of NSW

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Interrogate

Catchwords

1. Trusts
2. › Discretionary trusts
3. › Rectification of trust deed
4. › Whether clear evidence of sufficiently precise intention
5. › Omission of intended beneficiary by typographical error
1. Trusts
2. › Discretionary trusts
3. › Beneficial ownership
4. › Whether object of discretionary trust who controls corporate trustee is beneficial owner of trust property
5. › Control of trustee with power of appointment coupled with membership of class of objects
6. › Trust not a sham
1. Equity
2. › Estoppel
3. › Estoppel by convention
4. › Whether both parties conducted relationship on basis of mutual assumption
5. › Whether act or omission of trustee led to action or inaction by plaintiff
6. › Testatrix the controlling mind of trustee
7. › Same assumption in both capacities but no causal link
1. Equity
2. › Constructive trust
3. › Common intention constructive trust
4. › Whether plaintiff acted to detriment referable to common intention
5. › No agreement between parties founding constructive trust

Quick Take

Control of a corporate trustee by a discretionary object, even when combined with the power to appoint and remove trustees and membership of the class of beneficiaries, does not amount to beneficial ownership of trust property where the trust is not a sham. Family Court authorities treating trust assets as 'de facto property' of a controlling party are confined to the statutory context of s 79 of the Family Law Act 1975 (Cth) and do not establish a general law principle of beneficial ownership. Estoppel by convention cannot be established where the same person is the controlling mind of both the party alleged to be estopped and the party claiming the estoppel, unless some act or omission of the estopped party caused the claimant to adopt or persist in the relevant assumption.