Nisus Pty Ltd

1. [1]

   By way of Summons filed 23 December 2021 the trustee seeks judicial advice pursuant to s 63 of the Trustee Act 1925 (NSW).

2. [2]

   The Summons contains five prayers for relief which relate to the power to amend as contained in clause 2(a) of the Trust Deed.

3. [3]

   In particular, the questions posed by these proceedings include whether the power to vary as contained in clause 2(a) of the Trust Deed can be exercised such that (and according to the prayers contained in the Summons):

4. [4]

   I heard this matter on 22 February 2022 having received detailed written submissions dated 17 February. I made orders at the conclusion of argument. I indicated I would provide reasons at a later date. These are they.

5. [5]

   In the hearing before me the following evidence was relied upon:

6. [6]

   Peta and Heidi are the only children of Robin John Heming. They are the “first line” of the takers-in-default of the appointment of capital. They have an interest in the capital which is vested in interest (but not possession) contingent on them surviving the vesting date.

7. [7]

   Both are aware of the proceedings and consent to the extension of the vesting date.

8. [8]

   It may be noted that clause 1(i) of the Trust Deed contains the trusts of income. However the term “income” is not defined. Clause 1(ii) contains the trusts for income and capital upon the “Vesting Day” arriving. It is accepted that any extension of the vesting date would obviously affect the children of Robin John Heming but they have consented to the extension.

The definition of the term “vesting date”

1. [9]

   The term “vesting date” is critical in determining the entitlements to income and capital of the Trust Estate.

2. [10]

   The term “vesting date” is defined in the introductory section of the Trust Deed, as follows:

3. [11]

   As the Trust Deed was executed on 1 March 1972, the fifty (50) year period is to arrive on 1 March 2022.

4. [12]

   Clause 2(a) of the Trust Deed is in the following terms:

5. [13]

   There is no doubt that powers such as those contained in clause 2(a) should be construed widely and beneficially, Kearns v Hill (1990) 21 NSWLR 107 (a decision of the Court of Appeal).

6. [14]

   As to prayer 1, I agree with counsel that the powers contained in clause 2(a) are wide enough to enable the proposed various amendments to be made. In particular in my view the Trustee is justified in varying the definition of the term “vesting date” using the power in clause 2(i) of the Trust Deed in the manner proposed by the relevant deletions.

7. [15]

   The effect of the variation would be to have the Trust Estate’s “vesting day” occur pursuant to the Royal lineage provision or if the Trustee otherwise determines prior to that time. It will not however be 1 March 2022.

8. [16]

   It would appear to be somewhat of a mystery why the 50 year period was chosen but that is not relevant given the width of the power in clause 2(i). In any event as the Trust Deed was executed on 1 March 1972 prior to the application of the Perpetuities Act 1984 (NSW) which applied from 31 October 1984. As a result the 80 year perpetuity period does not apply to the Trust Estate.

9. [17]

   So far as prayer 2 is concerned in my view the Variation Power can be exercised to extend the objects of the power to appoint income to include Robin John Heming and his lineal descendants.

10. [18]

    So far as prayer 3 is concerned again in my view the Variation Power can be exercised to extend the objects of the power to appoint capital to include Robin John Heming and his lineal descendants.

11. [19]

    So far as prayer 4 is concerned it seeks to irrevocably exclude “successor trustees” from being able to benefit (by being beneficiaries) under the Trust Estate. The effect of the amendment is if there is a change of Trustee then nominal duty only would be payable pursuant to s 54(3) of the Duties Act as opposed to ad valorem which would otherwise be payable.

12. [20]

    Given the term “income” is not defined in the Trust Deed the income dealt with in clause 1(i) is ordinary income and would not include for example capital gains. The proposed variation described in prayer 5 if made is in my view one which is one that relates to the trusts of income and capital as well as to appoint income and capital. It is within the scope of clause 2(a) of the Trust Deed.

13. [21]

    It follows that I have answered each of the questions posed in the affirmative and would advise accordingly.