Australian Conservation Services v Liladel Holdings

[2017] ACTSC 162

Supreme Court of the ACT21 April 2017

Built by Barristers,
For Australian Law.

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Interrogate

Catchwords

1. Equity
2. › Trusts
3. › Powers of appointment
4. › Power to nominate new appointor
5. › Whether power disabled during appointor's bankruptcy
6. › Construction of trust deed
7. › Whether cl 8(g) disability extends to cl 11 nomination power
1. Equity
2. › Trusts
3. › Powers of appointment
4. › Fraud on a power
5. › Appointment of company controlled by appointor as trustee
6. › Whether broad ratio of Re Skeats' Settlement applies in Australia
7. › Whether appointment made in good faith and for benefit of beneficiaries

Quick Take

The broad ratio of Re Skeats' Settlement — that an appointor can never appoint themselves or an entity they control as trustee — does not represent the law in Australia. The correct approach is to ask whether the exercise of the power of appointment involved a fraud on the power, assessed by reference to good faith, consistency with the objects of the trust, and the benefit of the beneficiaries. An appointor may appoint a company they control as trustee where the circumstances justify it.