Deemhire Pty Limited as trustee of the Vartuli Family Trust v No Defendant

HIS HONOUR: ‘Plans’ [1] are schemes of action or proposals by person(s) for doing or achieving something now that will impact events or things in the short or long term future. ‘Succession planning’ [2] particularly focuses upon a future event when some key person will no longer be available to carry out or assist a plan or to do certain things by dint of that person passing away, retiring, becoming incapable, or in the realm of business, leaving the business.

Frequently, such plans are designed and/or purposefully underpinned by some rationality. However, some plans or schemes in life are said to be ‘harebrained’ being irrational [3] . Some plans may be entirely transparent and borne out of exquisitely beautiful and pure motives. Other plans may be borne out of tragic experiences embittering a person, clothed as one thing but having a manipulative or Machiavellian purpose. In Charles Dickens’ Great Expectations, Miss Havisham’s plans affecting Pip [4] and ultimately self-destructive to herself were forged from such an event.

The success of such plans may depend on minimal or conversely many factors of varying importance. The mettle of plans may be tested by putting the plan theory into practice. Particularly in the sporting arena, game plans may be readily tested by the nature of the contest and found wanting. Mike Tyson famously said “Everybody has plans until they get hit for the first time” [5] .

Naturally people are interested to understand others plans and people may be unwilling to support or ‘buy into’ plans unless they both understand the plan and agree with its purposes. Such reluctance will often depend upon the trust reposed in the planner. Frequently, people of faith as they see life unfold are unable to know distinct purposes or understand why particular events affecting them or others occur. Nonetheless, they are or may be confident, patient, persevering and hopeful in the face of perplexing events or adversity because they trust the character of the deity. For example, this is described of Christians [6] . Similarly people might not question plans of others including family members because they trust the planner. As will be seen, likely that occurred in this case.

Giuseppe Vartuli (Giuseppe/settlor) was born in April 1923 and died on 20 July 2011 aged 88. He was a greengrocer. Consistent with his role as a market vendor of fresh produce, he was fruitful in life and business. He was blessed with a wife, children, grandchildren and great-grandchildren. He planned, provided for his family and prospered, in particular through means of a family trust, the Vartuli Family Trust (Trust). He achieved this by means of being both the Settlor and Appointor of the Trust. He was selfless in the sense that the terms of the Trust precluded benefiting himself in those capacities or otherwise as a beneficiary.

My strong impression is that Giuseppe’s intentions for his family were the best of intentions (unlike those of Miss Havisham). However, despite his undoubted benevolence, his actions in respect of the Trust in a few respects were remiss though not in any obvious untoward way.

First, the Trust Deed has a few glitches in it. Secondly, whilst Giuseppe’s family grew generationally, the range of beneficial objects to whom income could be appointed was not merely ‘frozen in time’ by reference to a critical event namely his death as Appointor, but it in fact was reduced. Thirdly, he failed to provide a mechanism for a successor Appointor prior to his demise which also impacted the power of variation of the Trust. Fourthly, he failed to inform his family or accounting/legal professionals who assisted him with the trust of the ‘game plan’ or reasons for curtailing post-mortem the above Trust aspects.

The above matters have become the centrepiece (or in fruitful expression ‘epergne’ [7] ) for an application by the plaintiff, the trustee of Trust (Deemhire/Trustee), supported by family members to seek to address the above issues.

Failure by Giuseppe to record or impart his reasoning and the purposes to be achieved for his plans to prosper the family through the Trust have given rise to some but not insurmountable difficulties in this application.

The proceedings were commenced by a summons filed on 3 February 2025, which summons was amended on 31 July 2025 with orders sought (as specified below) pursuant to ss 81(2) and 86A Trustee Act 1925 (NSW) (Trustee Act). For convenience, I will refer to ss 86A, 86B and 86C Trustee Act and cognate or equivalent legislation elsewhere as ‘variation approval’ legislation.

Ultimately, I have decided that a limited part of the relief sought ought to be granted by the variation approval means and another part through the Court’s inherent jurisdiction to secure the due execution of trusts. It may well be that the relief I have foreshadowed is sufficient to enable the plaintiff to progress matters and the operation of the Trust. My proposal is that the plaintiff and family members have some time to reflect upon these reasons, provide short minutes of order to give effect to them and reserve to them the opportunity to seek further relief from the Court should the occasion arise.

The specific amendments to the Trust Deed sought are as follows:

The proposed amendments fall into essentially three categories:

Principally, the submissions in the matter addressed only the third aspect of the relief sought. The Trustee made it clear that it wishes to continue to pay income at its discretion to all grandchildren and great-grandchildren as the Trustee would have been entitled to do pursuant to cl 3(a) prior to the death of Giuseppe as the Appointor.

Giuseppe was married to Rosina who was born in 1925 and died on 14 March 2024. They had four children, namely: Bruno (born in April 1953, aged 72); Francisco (variously referred to as Francisco, Frank and Frank Peter - I will use ‘Frank’); Maria; and Salvatore Domenico (known and referred to as Domenico).

Bruno is married to Nancy and they have 3 children, Rosanne (born August 1982), Robert (born February 1985) and Frank (born May 1987). Bruno has 7 grandchildren (Sophia, Gabrielle, Oscar, Elizabeth, Alesandro, Xavier and Spencer).

Francisco is married to Maria and they have 2 children, Joseph (born November 1977) and Anthony (born January 1982). Francisco has 2 grandchildren (Francisco and Stephanie).

Maria is married to Larry Gerace and has no children.

Salvatore was married but is now divorced. He has 2 children, a daughter Jessica (born January 1987) and a son Jordan (born July 1992). Salvatore has one grandchild, Elija.

Frank was the (or one of) the executors of Giuseppe’s estate.

In life, in law, and particularly in the realm of trust law, various labels and terminology are used to designate roles that persons (natural or corporate) undertake and the powers, obligations, duties, rights and entitlements of such persons. Dictionary definitions provide a general, standard or literal indication of the meaning of a word, and give an indication of a general rule about how a particular word should be used, and is, or might be said to be normative in that respect.

Other than ‘trustees’, it is not uncommon to find other roles such as ‘appointor’ and ‘guardian’ in Trust Deeds.

Specifically, within the realm of trusts, at times certain roles are created and powers distributed to provide checks and balances against risks that might potentially arise. Thus, certain powers of a trustee may only be exercisable with the consent of other persons or notice to other persons including for example appointors, guardians or protectors.

The term ‘discretionary trust’ is not normative, but rather descriptive of the particular features of such trusts [8] . Ultimately, it is necessary to resort to context and the particular sources that constitute a trust (principally the trust deed supplemented by any relevant statutory provisions, general law principles and court orders) and the terms of each trust to understand what a trust provides and what is permitted [9] . That is especially true of representative words such as ‘trustee’, ‘appointor’ (and other trust roles such as ‘guardian’).

The term ‘appointor’ is used in law to cover a number of roles varying according to context [10] . One role is simply that of being the donee of a power [11] . A power is an authority to take a step which affects rights and obligations [12] . A ‘legal power’ is said to be “generated by legal rules allowing a powerholder to change hers and/or another’s legal status by manifesting her intention to effect that change” [13] . There are various sorts of powers. These include administrative powers and dispositive powers. Another sense in which the term ‘appointor’ is used is a person who nominates another for an office [14] .

Frequently, in trust law the term ‘appointor’ is used to designate a donee empowered to appoint a trustee for a trust. The types of things that an ‘appointor’ may do will depend upon the source of the power creating the role.

New trustees may be appointed in accordance with the provisions made in the trust instrument or statutory enactment conferring a power to appoint [15] .

In most jurisdictions, the trust instrument is of primary importance, with statutory powers relevant only if the instrument is silent or if the provisions of the trust instrument do not apply [16] .

The adequacy of statutory powers of appointment of trustees and removal of trustees tend to count against the need for inclusion in trust deeds of express powers for appointment or removal of trustees. Nonetheless, the appetite of those in different jurisdictions to draft trust deeds to include appointor roles and powers of appointment and removal varies according to jurisdiction and other factors including the purposes attendant upon the creation of the trust.

In the UK it is said that the usual drafting practice for English family settlements is to provide to the application of the statutory power of appointment with or without modification [17] . In NSW, the main statutory power recognises that the instrument creating the trust may provide for such an appointor [18] . However, if there is no such person, or no such person able and willing to act, then the power to appoint may be exercised by the surviving or continuing trustees or trustee for the time being, or by the legal representative of the last surviving or continuing trustee [19] .

The appointor may be separate to the trustee. The power may be given to a beneficiary [20] including sometimes a principal beneficiary. Different persons may be nominated to appoint according to the specified sets of circumstances [21] .

The extent of the role of the appointor varies according to circumstances. It may be general or specify precise circumstances in which the power is to be exercised. The appointor may be empowered not only to appoint a trustee but also to appoint an additional trustee, to remove a trustee and to appoint an additional or replacement appointor and to consent or not consent to any amendments of the trust deed proposed by the trustee [22] . The trust terms may address the form of the appointment [23] .

The extent to which the appointor role and powers are fiduciary and whether the appointor is precluded from appointing themselves depends upon the circumstances of each case. The wording of the trust instrument might or might not preclude self-appointment [24] . Statutory powers vary on the issue. In NSW, self-appointment is specifically permitted [25] .

The character of the office or role of appointor and powers of appointment is case specific and discussed in detail in Lewin [26] . That said, generally speaking, the following may be noted.

The power of appointment of new trustees per se is not conferred for the personal benefit of the donee but is an administrative power the purpose of which is to enable a person to be appointed to the fiduciary office of trustee for the benefit of the beneficiaries as a whole [27] .

The appointor role per se and powers of appointment and removal are not necessarily fiduciary [28] . That this is so, is evident from some examples.

In El Sayed, the original appointor (who was also the settlor) was empowered relevantly to appoint a new trustee and new appointor. The appointor executed two inconsistent deeds - the first by which he resigned and appointed ‘A’ as new appointor and the second by which he resigned and appointed ‘B’ as new trustee and ‘C’ as new appointor. Litigation ensured over the effectiveness of the appointments. ‘A’ was a solicitor and also an eligible beneficiary under the trust. At first instance it was held that ‘A’s’ appointment was invalid by reason of ‘A’s’ breach of fiduciary duty (or the potential for such breach). The Court of Appeal held that there was no breach of fiduciary obligation in ‘A’ becoming the appointor of the trust. Rather, in El Sayed (or indeed in any case), the basis for a fiduciary obligation arising and the nature and scope of the obligations must be considered before any breach is inferred. Conflict as between interest and duty must be assessed realistically rather than theoretically [29] . On the facts, it was plain that the trustee could act self-interestedly, and there was no suggestion that the appointor’s power had been exercised, or had even been considered to be exercised [30] .

Lewin references a passage from Underhill and Hayton, stating that where a power of removal coupled with a power of appointment of trustees is vested in a principal beneficiary, the obvious inference is that the power has been conferred on the beneficiary to look after his own interests and not those of the beneficiaries as a whole, though without intimating that such a power is free from constraints of the “fraud in the power” doctrine [31] (or what is in more recent years is referred to as “proper purpose rule” [32] ).

This case, including the ex parte nature of it, does not give rise to particular occasion to consider the proper purpose rule regarding a donee’s intentional adherence to the terms according to which a power is held or conferred [33] . The operation of the rule varies according to the specific relational or institutional context, and the type of power involved [34] .

It suffices to note that irrespective of whether in any given situation an appointor has fiduciary duties, there is a legitimate question as to the application of the proper purpose rule to the exercise by an appointor of a power of appointment.

Some different views have been expressed regarding the extent to which the proper purpose rule applies to the exercise by an appointor of a power of appointment.

For example, in Re Jasmine Trustees Ltd and the Piedmont Trust [2015] JRC 196, the Royal Court considered that a power of appointment was attended by certain duties including duties to act in good faith and in the interests of the beneficiaries as a whole, to reach a decision open to a reasonable appointor, to take into account relevant matters and only those matters and not to act for an ulterior purpose [35] .

On the other hand, Lewin and Lewin Supplement [36] reference, with caution, the decision of Briss J in JSC Mezhdunarodniy Promyshlenniy Bank v Pugachev [2017] EWHC 2426 as an example in which a power of appointment of new trustees was held to be a beneficial power exercisable solely for the benefit of the appointor, free even from the constraints of the fraud on the power doctrine.

The Trust was established on 11 April 1986 pursuant to terms of a Trust Deed of that date. It was varied by deed of variation dated 3 May 2010 (variation deed) and purportedly amended after Guiseppe’s death by deed of amendment dated 26 November 2012 (amendment deed).

The variation deed added powers to appoint an attorney and power to borrow, raise and secure in cl 9 of the Trust Deed.

The amendment deed, amongst other things, made provision for inserting various new definitions, including definitions of ‘Distributed Income’, ‘Financial Year’, ‘Taxable Income’ and ‘Trust Income’. It also included a new cl 3A dealing with trust income and rules for distribution of income. There is, as Mr Ellison SC recognised, a very real issue as to whether the amendment deed is valid. However, on the application, he placed no reliance upon it submitting that it was irrelevant to the proceedings. The application before the Court does not seek to include terms provided for in the amendment deed. In the above circumstances I will proceed without particular reference to it.

It is convenient to refer to the Trust Deed as amended by the variation deed and (purportedly by) the amendment deed as simply the "Trust Deed".

Giuseppe was the ‘Settlor’ and ‘Appointor’ of the Trust. Deemhire from its inception has been the Trustee of the Trust. Bruno is one of the directors of the Trustee and at least as at 2012 Bruno was also the company secretary and Frank another director of the Trustee.

The principles that apply to the construction of a Trust Deed are the same as those that apply to construction of contracts [37] .

The deed is construed objectively based on the understanding of a reasonable person in the position of the parties to it by reference to the deed as a whole, its text, context and purposes, or objects [38] .

Sometimes Trust Deeds contain provisions which provide for a representative (such as an executor or some other person) to exercise a power in the event that the donee of the power is either deceased or unable to exercise the power. However, there is no such provision in the deed.

One of the anomalies of the Trust Deed is that despite the reference in clauses 3(a), 3(b) and 4 to "specified proportions" there is no such definition within the Trust Deed of "specified proportions". Further, there are references to 5 schedules in the Trust Deed but as will be seen below 2 schedule headings have been omitted from the form of the Trust Deed.

The Trust Deed created a form of what was described as a discretionary trust. Relevant provisions of the Trust Deed include the following.

Clauses 1, 3, 4, 21 and 23:

The Trust Deed refers to and contains 5 schedules:

The First, Third and Fourth Schedules have specific headings, there is no schedule for what is self-evidently the Second and Fifth Schedules.

The First Schedule contains the name of the settlement and the ‘Name’ and ‘Address’ details for each of the Settlor, Trustee and Appointor. Giuseppe is identified as being the Settlor and Appointor and in addition, for those two roles there is a ‘Description’ specifying Giuseppe as ‘INVESTOR’. Deemhire is designated as the Trustee.

The Second to Fifth Schedules are as follows. For clarity, I have inserted in italics the introduction to what is self-evidently the Second and Fifth Schedules even though the names of those Schedules do not appear in the Trust Deed:

In this Trust in order to understand the significance and the role of the ‘Appointor’ it is necessary to refer to the terms of the Trust Deed.

In the Trust Deed, the term ‘Appointor’ is defined in cl 1(i) and the name of that person (Giuseppe) is specified in the First Schedule. Further reference to the ‘Appointor’ is set out in a number of clauses of the Trust Deed. Essentially there are tasks which the Appointor may carry out and there are various matters which may be affected by reference to the life of the Appointor in the sense of matters which can be done prior to the death of the Appointor but may not be effected after the death of the Appointor.

Thus:

Generally the noun ‘relative’ means someone who is connected with another or others by blood or marriage [39] . However, the Trust Deed defines ‘relative’ in a more restrictive way such that (as I will detail below) it is limited.

Essentially, under cl 3(a) of the Trust Deed, the Trustee had power to distribute to beneficial objects being ‘the Beneficiaries’ including Giuseppe’s wife, children, grandchildren and ‘any relative’ defined in limited terms but relevantly to also include Giuseppe’s parents, siblings, piblings [40] , niblings [41] and immediate in-laws [42] . The power to distribute to beneficial objects became more confined from the date of Giuseppe’s death in his capacity as ‘Appointor’ to only ‘the Eligible Beneficiaries’ being Giuseppe’s wife, children and the 4 grandchildren (Joseph, Anthony, Roseanne and Jospeh Robert) who were alive at the time of the establishment of the Trust.

There is no other child of Giuseppe. Thus, as at the date of the Trust Deed the ‘Eligible Beneficiaries’ were simply the 9 listed persons in the Third Schedule. Today there is one less by dint of Rosina’s death.

At the time of Giuseppe's death there was no other spouse of the Appointor other than Rosina.

Thus, as at the time of the deed ‘the Beneficiaries’ included the 5 nominated persons, the grandchildren of Giuseppe (noting that after the date of the deed, three grandchildren were born namely Jessica, Jordan and Frank), Giuseppe’s parents, siblings, piblings, niblings and immediate in-laws.

No other grandchildren were born to Giuseppe by the time of his death. Indeed, there are no other grandchildren. However, he has great grandchildren.

In cl 21, the power to vary the Trust is given to the Trustee but on notice to the Appointor.

I have considered the possibility as to whether the variation power in cl 21 of the Trust Deed is able to be exercised after the death of Giuseppe as Appointor. The terminology in the opening two lines "at any time during the life of the Appointor and prior to the termination of the trusts hereinafter declared" might allow other possibility that the power could be exercised after the death of the Appointor but prior to the termination of the trusts.

However, such a construction is counted against by the fact that the clause goes on to provide for notice to be given to the Appointor. I consider the better construction is that variation is not permitted unless there is an Appointor.

It is not clear who drafted the Trust Deed.

Bruno had nothing to do with the creation of the Trust, and only learnt about its existence sometime after 1986. Bruno is unaware of why the Trust Deed contained two different categories of beneficiaries or why a distinction was made regarding distribution to different categories of beneficial objects before and after the death of Giuseppe. Nor does he know why the Trust Deed makes no provision for any appointor after Giuseppe's death.

Frank Galluzzo (Mr Galluzzo) was the accountant for the Trust from 1975 to 2004. He retired in 2016 and no longer has access to the records of the Trust. He was asked to comment regarding the history of the creation of the Trust, the drafting of the Trust Deed and why it provided that it could not be amended following the Appointor's death and why there were different classes of beneficiaries. Candidly, he says he does not recall the creation of the Trust or the reasons for its creation, or any specific provisions in the Trust Deed having regard to the time that has passed since its creation. Nonetheless, he believes that the form of the Trust Deed was a "standard precedent" used at the time.

Nick Ussia (accountant) was employed by Galluzzo Brothers Accounts in 1986 and assisted Mr Galluzzo at the time in respect of accounting work for the family and in respect to the Trust Deed. Indeed, he witnessed the signature of Giuseppe as Appointor. He frankly states that he cannot recall the history of the Trust or why certain provisions were made and is unaware as to why the Trust Deed contained provisions prohibiting amendment after the death of the Appointor or why there were different classes of beneficiaries.

The Trust Deed records that the sum of $100 was settled on the Trust. It appears that in 1986 (within the balance of the year after the trust was created), the Trustee purchased land at John Street, Cabramatta (John Street property).

The John Street property land continues to operate as commercial premises with shops. Bruno indicates that other real estate was acquired over time. The principal assets of the Trust remain commercial property being or including a number of properties in John Street, Cabramatta and Elizabeth Drive, Liverpool. There are also some publicly listed shares.

Bruno indicates that, for all intents and purposes, Giuseppe made all the decisions with regard to the Trust and the Trust Deed. Bruno was not involved with the running of the Trust until after Giuseppe died in July 2011.

Bruno and (he believes) his siblings and Giuseppe’s grandchildren have no particular recollection of receiving dividends from the Trust prior to Giuseppe's death.

During Mr Galluzzo’s involvement with the Trust, he has no recollection of discussing the different classes of beneficiaries with Giuseppe nor any of the circumstances by which the whole of the available profits were distributed other than to “the named beneficiaries”. He has no recollection of discussing distribution proportions with Giuseppe.

Frank La Delfa began to handle all aspects of the management and tax issues regarding the Trust in 2008. For his part, he is unaware of the history of the Trust prior to the commencement of his employment with Mr Galluzzo’s firm in September 1998. He asserts (to the best of his recollection) that there has been no distribution whether it be in “specified proportions” or in the “absolute discretion” of the Trustee "because of the trustee not exercising its discretion in any accounting period". He further asserts that the question of ‘specified proportions’ or the exercise of some ‘absolute discretion’ as referred to in cl 3 (a), (b) and 4 of the Trust Deed had never been given any attention by the trustee. His recollection is that Bruno and Frank signed the Trust tax returns.

Following Giuseppe's death in 2011, Bruno with some assistance from Frank took over the running of the Trust. The real estate is mortgaged with Cross Mortgages and according to Bruno, the Trust has run at a profit since at least the time that he took over. Seemingly each year after 2011, all the net income has been paid out by way of distribution. The determinations in that regard were made by Rosina up until her death in 2024, in consultation with the trust accountant Frank Ladelfa. Bruno openly admits that Rosina's decision was accepted as the decision that the trustee would implement. He states that there has been no distribution whether it be in "specified proportions" or in the "absolute discretion" of the trustee.

From accounts for the trust for the 14 financial years between 30 June 2011 and 30 June 2024, without descending to exact detail, it is evident that across that period there have been distributions to beneficiaries or persons or entities other than ‘the Eligible Beneficiaries’. This includes distributions to spouses of Giuseppe's four children, grandchildren, great-grandchildren and corporate entities.

On 17 October 2023 the Trustee sought a private ruling from the Chief Commissioner of State Revenue (CSR) in respect of the proposed amendments that are the application before the Court.

The CSR on 24 June 2024, responded confirming that the then proposed amendments would not result in a dutiable transaction under the Duties Act 1997 (NSW).

On 13 November 2023, the Trustee also sought a private ruling from the Deputy Commissioner of Taxation on the consequences of the proposed amendment on the basis that the Supreme Court of Victoria [43] would approve the proposed amendment. The Deputy Commissioner of Taxation declined to make a private ruling notifying that on 16 April 2024.

The ‘inherent jurisdiction’ of courts of Equity exists to supervise, and in appropriate circumstances intervene in, the administration of trusts [44] . Under the general law, and subject to exceptional circumstances, the foundational equitable principle is that Equity preserves trusts, rather than destroying them [45] and acts to perform or execute trusts not to alter them [46] .

To that end the Court may remove a trustee, or appoint a new trustee, or (albeit only in rare cases) administer the trust [47] . Thus, generally, if trustees are unable to execute powers, receivers are appointed to execute the trust or trust powers rather than to wind up a trust [48] .

Leaving the statutory jurisdiction to one side, in NSW, there is no inherent power to vary a trust so as to permit its revocation [49] .

There is no general inherent power to alter trusts simply because that may advantage beneficiaries. Leeming JA in summarising the position has stated [50]

There are cases which bear upon the question of the Court’s inherent jurisdiction to replace or appoint an appointor.

In Kennedy v Kennedy [51] , a discretionary family trust had been set up involving relevantly a son and his parents. The son had been appointed as trustee and appointor and his parents were named as the principal beneficiaries of the trust with various other discretionary objects. The son disappeared and extensive searches to locate him proved futile. The son’s disappearance gave rise to the consequence that there was no person to make the appointment to replace the trustee. The parents applied for orders. Slattery J in circumstances of the son having disappeared for almost 3 years in which nothing had been done to administer the trust in that period determined that the Court should intervene to remove the son as trustee. His Honour also considered that someone would need to be appointed as the appointor of the trust [52] .

His Honour, accepting that there were special circumstances, appointed the parents as trustees. However he declined to appoint them as appointors to the trust. He considered that they would need to find someone else to take that role. He granted liberty to the plaintiffs to advance in due course the name of another person to become appointor of the trust. His Honour considered that it would be preferable that that person was not a beneficiary but (could be) perhaps a professional adviser to the plaintiffs [53] . His Honour in appointing the parents as trustees referenced “the exercise of the Court's supervisory jurisdiction over this trust to appoint new trustees under Trustee Act 1925, s 70” [54] . It is not evident from the reasons for judgment (and this is no criticism as it is an ex tempore judgment) precisely what jurisdictional basis there was for the contemplated appointment of a new appointor.

In Blenkinsop, the Western Australian Court of Appeal appeared to accept that the Court had power to remove a guardian of a trust if it was necessary to secure, but not alter, the due execution of the trusts and that the proper characterisation of the guardian’s trustees powers affected discretion rather than jurisdiction [55] . On the facts there were joint guardians and issues arose by dint of the dysfunctional relationship between them. Neither Allanson J at first instance nor the Court of Appeal acted to remove and replace the guardian. The Court of Appeal on the facts did not accept that the primary judge had erred in failing to find that the powers of the guardians were fiduciary powers [56] .

In Dryandra, Master Russell addressed the question of whether the Court had inherent jurisdiction to appoint a replacement guardian and appointor. In reliance upon the Western Australian Court of Appeal's decision in Blenkinsop, her Honour found that the Court had power under its inherent supervisory jurisdiction to remove and, relevantly, replace both a guardian of a trust and an appointor if the circumstances were such as to warrant the exercise of the power. Her Honour considered that there was no fixed rule and each case must be considered on its own facts and circumstances including the terms of the relevant trust instrument [57] . Her Honour considered that it was appropriate to exercise the power in circumstances where the guardian and appointor did not have capacity to perform that role and the trust was unable to operate as intended [58] .

In Panizza v Clathington Pty Ltd as former trustee for the P. and D. Panizza Family [2025] WASC 246 (Panizza) there was litigation over a family trust. The litigation principally involving the two children (a son and daughter) of Mr and Mrs Panizza, commenced in 2015 and spanned a decade. In 2019, orders were made removing an existing trustee and appointing another trustee. In 2021 an account was ordered to be taken by the Registrar of the Court. Relevantly at that time Kenneth Martin J had indicated that the account should be finalised before determination of the question of who ought to be the guardian and appointor of the trust. In January 2025 the Registrar provided an account and a preliminary question required determination as to whether the Court should remove the daughter as the guardian and appointor of the trust and appoint the son.

Whitby J determined that the daughter should be removed as the guardian and appointor of the trust and the son appointed to those roles [59] . Her Honour was satisfied that the roles were fiduciary in nature. Unlike in Blenkinsop the powers of the guardian were not confined to merely consenting to decisions of the trustees but there were active powers. Specifically, her Honour considered that a power to act within a certain time of notice to the guardian to change the nature of the trust and significantly restrict and reduce the role and powers of the trustee were protective of the beneficiaries of the trust and the guardian role was fiduciary rather than personal in nature [60] . Whilst the trustee was silent on matters that the guardian or appointor must consider, her Honour was of the view that the nature of the powers conferred meant that the guardian and appointor must consider the best interest of the beneficiaries to the exclusion of their own interests [61] .

Her Honour considered that the principles applicable to the removal of a guardian and appointor holding a fiduciary role were akin to those applicable to removing a trustee and the guiding principle was the welfare of the beneficiaries and due administration of a trust in their favour [62] .

Beneficiaries in some circumstances have powers to bring trusts to an end. Thus, in Anglo-Australian law (contrary to the position in the United States), capable adult beneficiaries who enjoy an absolute vested and indefeasible interest in trust property, may act to call upon the trustee to transfer the trust property to them. The divergent approach in different jurisdictions reflects policy choices regarding how far a settlor should be permitted to control not only the disposition but also the enjoyment of property [63] .

The recognition of such a power predates 1841 but is often referred to as the so-called ‘rule’ in Saunders v Vautier [64] .

The exercise of the power does not involve the performance by a trustee of any part of its office as active trustee, rather it brings the office to an end. In doing so it effects a change in legal relationships [65] . The power, if available and acted upon prevails over or overrides restrictions imposed by testators and settlors in the trust instrument having the effect of bearing and defeating the intention of a testator or settlor to subject property to the continuing trusts, powers and limitations of a will or trust instrument [66] .

The power is not unqualified. Thus, even when beneficiaries are unanimous and absolutely and indefeasibly entitled, the exercise of the power may be subject to qualifications including a trustee's right to reimbursement or exoneration for the discharge of liabilities incurred in the administration of the trust [67] .

Section 81 of the Trustee Act is as follows:

Statutory powers need not (and often do not) reflect the general law position. Nonetheless, s 81 addresses the provision of power(s) to facilitate the management or administration of the trust assets. Powers might in some cases be conferred which have the effect of altering or impinging upon trusts but that is a consequential effect. There is no principal purpose in s 81 to authorise alteration of the trusts on which trust property is held which would have been beneficial to the interests of the beneficiaries, or to the fulfilment of the trust purpose, but which are not concerned with the management or administration of the trust assets [68] .

This aspect was emphasised by Barrett JA in in Re Dion Investments Pty Ltd & Anor (2014) 87 NSWLR 753; [2014] NSWCA 367 (Re Dion) as follows [69] :

Statutory construction depends upon the purpose, text, context, coherence and legislative history of the relevant provision [70] .

Expressions from one statutory context cannot be readily equated or appropriated to another even if broadly speaking, the general topic from each statutory context is similar [71] .

Often the history of a rule, as to its genesis and purpose, and the circumstances that are addressed in the authorities that have applied the rule, may provide useful guidance in considering how the power conferred by the rule should be exercised in a particular case, or at least give some insight as to its exercise [72] .

Nonetheless, it is inappropriate to read provisions conferring jurisdiction or granting powers to a court by making implications or imposing limitations which are not found in the express words [73] .

Generally with New South Wales (NSW) legislation, headings to provisions of an Act or instrument, being headings to Parts, Divisions or Subdivisions into which the Act or instrument is divided, are taken to be part of the Act [74] . However, marginal notes, footnotes or endnotes are generally not taken to be part of the Act [75] .

The trust variation approval amendments to the Trustee Act (through the insertion of Division 3A being ss 86A, 86B and 86C) were affected by the Stronger Communities Legislation Amendment (Courts and Civil) Act 2020 (NSW) with the provisions commencing on the date of assent, namely 28 September 2020.

Various miscellaneous amendment bills are typically introduced into Parliament each session as part of the government's regular legislative review and monitoring program. In that year, owing to the disruption caused by the COVID-19 pandemic, a miscellaneous amendment bill was not able to be introduced in the budget session of the Parliament, and instead four separate miscellaneous bills were introduced during the session in September [76] .

The legislative history of the provision was addressed by Lindsay J in Re PDC [77] . The explanatory note to the Bill relevantly indicated that the object of the Bill was

The Bill was introduced into the Legislative Assembly on 16 September 2020. The Attorney General (Mark Speakman SC) explained in the Second Reading Speech that it introduced a number of miscellaneous amendments to address developments in case law, support procedural improvements and close gaps in the law that had become apparent relating to courts and civil procedure [79] .

So far as the Trustee Act was concerned, the Bill addressed the provisions of the Trustee Act which deal with maintenance for beneficiaries, including introducing a provision dealing with maintenance for adult beneficiaries. The other provision addressed by the Bill related to the variation of trust.

The Second Reading Speech addressing the variation of trusts was, relevantly, as follows [80]

Interestingly, the explanatory note which appears after Schedule 1.14 of the Act is in slightly different terms to the explanatory note in the Bill [81] .

Section 86A,86B and 86C of the Trustee Act is as follows:

Broadly speaking, the structure of s 86A is that subsection 1 addresses the power of the Court to approve an arrangement, subsection 2 addresses standing, subsection 3 addresses the extent of the reach or application of the section, and subsection 4 contains a number of definitions.

Consistent with the Attorney General's indication that the amendments would bring NSW law into line with the law and the United Kingdom (UK) and in other Australian states, as observed by Lindsay J as part of the context in construing the legislation, the Court is invited to look for guidance in the experience of other courts with similar legislation [82] . Further, as observed by Lindsay J, "that said, the remedial nature of the legislation invites a liberal application of its text and militates against judicial gloss. The text needs to remain open to application to a broad range of trust".

The genesis of variation approval legislation is the UK legislation in 1958.

Relevantly the Variation of Trusts Act 1958 (UK) s 1 is in the following terms

The enactment of the Variation of Trusts Act 1958 (UK) was consequent upon recommendations of a law reform committee to "meet the mischief identified in Chapman v Chapman" and overcame the limitations identified by it to the effect that the court had no power to approve a beneficial alteration to the terms of a trust on behalf of beneficiaries who are incapable of giving such approval, whether by reason of their being minors or unborn or unascertained [83] .

In the UK it been said that the decision in Chapman v Chapman [84] did not affect the so-called Saunders v Vautier power of beneficiaries, if they were all sui juris and together absolutely entitled, to determine a trust or resettle trust property on altered trusts, nor affect the jurisdiction of the Court to sanction a compromise of rights under a trust which were the subject of doubt, or dispute. However, the Court had no jurisdiction to sanction such change in reference to rights which were not in dispute [85] .

The UK legislation has thus been viewed by the courts as type of a statutory extension of the consent principle embodied in the rule in Saunders v Vautier. However, agreement as to the ambit of that analogy is not uniform [86] .

NSW was the last of the various Australian States to enact variation approval legislation. The relevant provisions being: Trustee Act 1958 (Vic), s63A; Trustees Act 1962 (WA), s90; Trusts Act 1973 (Qld), s95; (d) Trustee Act 1936 (SA), s59C; and Variation of Trusts Act 1994 (Tas), Part 3, ss 12-15.

In Cisera 2023 [87] Parker J, noted that with the possible exception of South Australia, the cognate variation approval legislation in NSW and the other States appears to have been influenced by the UK legislation observing that some align more closely with the UK legislation than others. His Honour summarised the material differences [88] .

In the UK for almost 40 years after the enactment of the legislation, the variation provisions were "invoked thousands of times" yet with remarkably few reported cases on its construction, until the decision of the Court of Appeal in Goulding v James [89] - the notable exception being the decision of the House of Lords in Inland Revenue Commissioners v Holmden [1968] AC 685 (Holmden).

It is evident that there are slight differences in wording in the various provisions in the UK and other Australian states. Discussion of the UK legislation and that of other Australian states and judicial application of the legislation is addressed both in texts and case law.

For the position up to 2016, a helpful background is given by the learned authors of Jacob's Law of Trusts in Australia, 8th edition at [17–07].

In NSW the first decision dealing with the variation provisions is that of Justice Lindsay in 2021 in PDC.

Since PDC there have been relatively few decisions in NSW. Chronologically the decisions are: in 2022 - Slattery J in Campbell v Campbell [90] ; in 2023 decisions of Kunc J in In the Application of Nyasa No. 19 Pty Ltd [91] and Parker J in Cisera 2023; in 2024 - Williams J in Reinhard v Denkel [92] ; in 2025 - Hmelnitsky J in WFT Capital Pty Ltd v Windt [93] and Kunc J in The Application of Dhuramein Nominees Pty Ltd [94] and in 2026 - Hammerschlag CJ in Eq Michelakis v Kalumic Pty Ltd as trustee of the Michelakis Family Trust [95] . There is no Court of Appeal decision in NSW addressing section 86A.

The leading appellate decision dealing with an Australian equivalent of the trust variation legislation is that of the Victorian Court of Appeal in 2014 in Perpetual Trustee's Victoria Limited v Barns [96] .

It is evident that the Victorian Court of Appeal in dealing with the Victorian provisions and judges in New South Wales dealing with s 86A have consistently referenced the remedial nature of the legislation indicating that its provisions should be construed beneficially [97] .

In Cisera 2023, Parker J similarly recognised the remedial nature of the legislation, though referenced at least one limitation. His Honour stated [98]

His Honour went on to discuss that limitation at length.

The Trust in this case was created prior to the commencement of s 86A, and subject to the question of standing, its provisions are not otherwise excluded by the reach of the section outlined in s 86A(3).

Standing in respect of an application under s 86A is addressed by reference to persons who in general terms have no immediate present entitlement in respect of the trust, but rather have an interest or may have an interest, but are unable to engage in respect of the variation or revocation proposal because they are either incapable of assenting, or their possible entitlement is contingent upon some future date or event that has not occurred at the time of the application or there is a protective trust involved or the person is unborn. In those cases that I have generally described (more precisely defined in s 86A(2)), the application may be made "on behalf of" such a person. It is unnecessary to dwell deeply on the wording "on behalf of". Clearly the words permit action by a representative of a person who is unable to readily make an application. The trustee of a trust readily fits that description.

The standing gateway to applications under s 86A so expressed by the section have natural application in relation to "discretionary trusts". Thus, nature of discretionary trusts where there are objects of power to appoint allows ready satisfaction of the standing criteria. This includes, for example, so-called "default beneficiaries" where persons are specified as taking in default of appointment.

The terminology of "any arrangement" is both textually and contextually to be understood consistently with the remedial nature of the legislation. This terminology is deliberately used in the widest possible sense to cover any proposal which a person with standing may put forward for varying or revoking the trusts [99] .

The breadth of statutory reach to impact objects or intentions of settlors or testators may be seen by reference to the law of charitable trusts. Thus, Leeming JA has observed that conceptually there is no obstacle in a statute amending the charitable purpose of a trust. His Honour made the following observations in rejecting the notion that it is "fundamental" that the terms of a charitable trust are fixed at its inception: see Catholic Metropolitan Cemeteries Trust v Attorney General of New South Wales [100]

Significantly, in the UK in respect of variation approval applications, it has been observed that the Court does not attach any overbearing or special significance to the wishes of a settlor. That is, notwithstanding the fact that rules of court require any living settlor to be joined as a party to the proceedings [101] . In Goulding Mummery LJ observed that even the most determined settlor testator cannot exclude the jurisdiction of the Court under the legislation. Indeed, his Lordship expressed it in stark terms as follows [102] :

The fact that there could be legislation of such a character in Australia and even in the UK in 1958 is unsurprising. Family provision legislation applied properly can have an effect which may permit departure from purposes or terms which a testator has expressly laid down. Thus indeed, by general analogy to family provision jurisdiction, the statutory provisions may be seen as a legislative response to issues or limitations that arose in a context and permits discretionary curatorial intervention, which may impact the entitlement of beneficiaries in any given situation coming properly within the terms of the provisions. However, in the same way that family provision legislation does not extend to authorising general redistribution of estates, by reference to notions of general "fairness" or otherwise [103] , the variation approval legislation does not broadly permit resettlement of trusts, other than by proper application of the provisions to any given case.

The ultimate form of the explanatory note on the passing of the NSW provisions revealed a difference from that in the Bill as I have noted above. In the Act, the expression of object or purpose in allowing the Court to approve an arrangement varying or revoking a trust is expressed with the disjunctive "or" rather than the conjunctive "and". Thus, it was envisaged that in that expression of the objects the enlivening basis of the Court's intervention could occur in circumstances where the proposed arrangement is either beneficial to the interests of the beneficiaries or to the fulfilment of the trust purpose rather than both.

Lindsay J has recognised that whilst importance may attach to identification of continuity of purpose in comparison with a state of affairs before the making of an order and after, the Court is not necessarily anchored to the settlor’s or testator’s purposes upon the proper exercise of the jurisdiction [104] .

It has been observed that though the distinction between a variation and a revocation might be important in a particular case, the substance of what is sought must be kept in view [105] .

The variation provisions have been understood as beneficiary initiated rather than settlor or trustee initiated. Further, the role of the Court has been perceived as not itself, amending or varying the trusts, but acting on behalf of or is representing beneficiaries who are not in a position to give their own consent and approval [106] .

The Court in so acting has been described as being almost in the position of a "statutory attorney" behalf of the members of the class cannot act for themselves [107] .

The proposed arrangement must be consented to by everyone that is or will be affected by its imposition, whether that consent is provided by the individuals who are able to consent or in the case of those who are unable to consent by the Court on their behalf [108] .

In Barns, the Victorian Court of Appeal indicated that the Court must first be satisfied that the arrangement was and is both for incapacitated persons benefit and a fair and proper one overall, must take into account the purposes of the trusts and the intention of the of the testator and should engage in a "businesslike consideration of the arrangement, including the total amounts of the advantages which the various parties obtain, and their bargaining strength” [109] .

Approval applications have involved various proposals including claims to extend vesting dates, widen classes of beneficiaries and introduce powers of amendment. Invariably, it is helpful to understand concerns regarding jurisdictional limits by reference to facts of particular cases.

In Re Em McPherson Settlement [110] Harris J permitted a proposed variation to broaden a class of beneficiaries but not as wide as had been sought. Her Honour considered that the definition of beneficiaries ought to require a closer relationship between the family member beneficiaries and the corporate beneficiaries. Thus, a widening was permitted but on the basis that the variation was reworded to refer to private companies in which the beneficiary had a controlling interest [111] . Her Honour was concerned in permitting such an amendment to consider whether any significant broadening of the definition of "beneficiaries" would constitute such a change as to destroy the substratum of the trust or amount to a resettlement rather than the variation. Her Honour in allowing the variation was satisfied that the proposed amendment would not alter the basic purpose or substratum of the trust [112] .

In NSW the tension between what permissibly may be authorised under s 86A, and concerns regarding its limits have been helpfully discussed in WFT Capital by Hmelnitsky J.

His Honour addressed jurisdictional limits by reference to discussion of the ill-fated Cisera litigation. His Honour explained in detail why the applications were unsuccessful and the concerns addressed by Parker J. In the first decision of Parker J in 2017 (referenced by Hmelnitsky J as "Cisera I") Hmelnitsky J observed that orders in the form proposed would have not only extended the vesting date but altered the composition of the beneficial class by adding additional generations of the family contrary to what appeared to be a design limitation in the original trust [113] .

Cisera 2023 [114] involved an application under s 86A (in distinction from the earlier application under s 81). There were issues relating to both the life of the trust and expansion of beneficial class. Hmelnitsky J observed that Parker J had approached the resolution of issues through the prism of a ‘substratum’ test in terms of addressing whether changes made to the terms of the trust cross the boundary between variation and settlement [115] .

Hmelnitsky J observed that, at least in Australia, the question of whether a variation of trust amounts were resettlement is not answered by reference to whether the variations are essential or inessential, fundamental or immaterial, but rather by reference to whether there is continuity across indicia being the regime of trust obligations, the trust property and membership of the trust. His Honour stated [116] :

His Honour did not find it necessary to reach any conclusion as to the relevance of the substratum test in the context of s 86A in a context in which he was comfortably satisfied that the proposed variation to the vesting date involved a variation of the trust within the meaning of s 86A.

Differing approaches in different jurisdictions have been taken to the question of whether the variation approval legislation permits the appointment of appointors.

In both the UK and NSW there are instances of the variation approval legislation being used to facilitate appointment of appointors. However, in Victoria and Western Australia there are decisions that go the other way. It is convenient to deal with them chronologically.

In Bathurst v Bathurst [2016] EWHC 3033 (Bathurst) an application under the Variation of Trusts Act 1958 proposed a change to the provision for the appointment of new trustees. There were competing proposals regarding who should have the power to appoint new trustees. All of the adult beneficiaries of the settlement and 3 of the 4 current trustees proposed that the principal beneficiary should have that power with the written consent of the trustees for the time being. On the other hand, the fourth trustee proposed that the trustees be the appointor, though with the consent of the principal beneficiary.

Essentially the issue was refined as to which of either the trustees or the principal beneficiary would have the appointor power subject to the veto of the other [117] . In the result, Master Matthews determined that the principal beneficiary ought to be the appointor. The reason being that he, knowing the situation of all the beneficiaries (members of his extended family) and having enjoyed a long relationship with the land part of the trust assets held in his family for many generations, was in at least as good a position as anyone and better than most to decide what qualities were needed in a new trustee [118] . There was no suggestion that the Court lacked jurisdiction to appoint an appointor under the legislation.

In W E Pickering Nominees Pty Ltd v Pickering [2016] VSC 71 [119] the plaintiffs conceded that there was no power in the deed to amend the deed for the appointment of an appointor to the trust [120] . Their submissions essentially rested on the propositions that such a variation was consistent with the deceased wishes as set out in his Will and they referenced a clause of the deed which provided for the trustee to exercise powers under the South Australian Trustee Act [121] . McMillan J was unconvinced that Victorian variation approval power conferred on the Court the ability to grant a general power to amend or a power to appoint an appointor [122] . Specifically, in regard to the power to appoint an appointor, her Honour considered that the provisions of the South Australian Act had sufficient breadth to address any issues that might arise concerning the appointment and removal of the trustee to the trust [123] .

There was an appeal to the Court of Appeal [124] on the basis that there had been a denial of procedural fairness. The parties had requested that her Honour deal with the matter on the papers. McMillan J had taken into account the position of potential unborn beneficiaries in deciding whether to grant relief. They complained that her Honour did not inform them that that would be an issue with the consequence that they did not address the position and had no opportunity to make submissions or file the evidence directed at the issue. An appeal was allowed. However, the Court of Appeal had no occasion to address the question of whether variation approval power conferred on the Court the ability to grant a general power to amend or power to appoint an appointor.

Master Russell in Dryandra in which equivalent Western Australian variation approval power (s 90 Trustees Act 1962) was proposed to affect variations to a Trust Deed to ameliorate the adverse consequences of the loss of mental capacity of the appointor and guardian of a discretionary family trust [125] . The appointor (Mrs Hardie) became appointor and guardian of the trust upon the death of her husband. However, by reason of suffering from dementia caused by Alzheimer's disease she did not have and had not had since her appointment capacity to act as appointor or guardian [126] . Further, there was no provision in the trust deed for the appointment of a replacement guardian after Mrs Hardie’s death or in circumstances where she did not have capacity. There was no relevant provision under the trust deed which addressed the consequences of lack of capacity. Her Honour determined that a lack of mental capacity did not of itself affect the validity of the appointment as appointor/guardian [127] . Rather, the consequences of the lack of capacity is that it prevented the valid exercise by the donee of the power or powers conferred.

There were two proposed variations to the trust deed. The first involved augmenting the definition of ‘guardian’ to include in default of an appointment, a legal personal representative. The second proposed an attorney of the appointor or guardian exercising the powers of the appointor guardian in the event of lack of capacity.

Her Honour considered use of the variation approval power. Neither her Honour nor counsel had identified any authority in support the proposition that the power might be used to approve a variation to a trust where the consent of the guardian is required to vary the trust or trust instrument and it is the guardian who is incapable of assenting [128] . Her Honour was not satisfied that power extended to approve a variation that required the consent of a guardian who lacked capacity to provide such consent [129] .

Her Honour was of the view that the statutory power was principally directed to the situation of a person whose interests under the trust would or may be affected by the arrangement. Conceptually, whilst a guardian may also be a beneficiary her Honour noted that the guardian as such did not have an interest in the trust property acting in its capacity as such. Rather, the guardian’s role is limited to exercising the powers of that office. Ultimately, her Honour was not persuaded that the variation approval power could be used to appoint a replacement appointor or guardian at least in circumstances where the existing appointor and guardian could not validly exercise powers [130] .

In Michelakis, Hammerschlag CJ in Eq acted under s 86A Trustee Act to approve an arrangement to appoint an appointor of a discretionary family trust in circumstances where the trust deed made provision for the appointment of an appointor including place for the appointor’s name to be stated with no name having been inserted. His Honour appointed the plaintiff, who was one of a number of primary beneficiaries as appointor, subject to notice being given to a nominated secondary beneficiary. Under the trust deed, once appointed, an appointor had power to exercise powers to remove a trustee, appoint a new trustee and vary or amend the provisions of the deed other than the name of the trust or the vesting date.

In Victoria a number of judges under the variation approval power (s 63A) have declined to accede to applications the effect of which would be to permit a variation trusts generally.

In Re the Alan Synman Family Trust [2013] VSC 364 (Re Synman) Ginnane J declined to approve an arrangement to vary a trust to give a trustee a general power of variation. His Honour intimated that the Court is better placed to assess specific proposals. Proposals of general variation may well make it difficult for the Court to properly assess whether it is in the best interests of the beneficiaries. His Honour stated [131]

McMillan J in Pickering was unconvinced that the Court had the jurisdiction to grant a general power to amend or a power to appoint an appointor [132] .

In McPherson, Harris J, whilst permitting a variation having the effect of widening a class of beneficiaries, declined to permit a variation to introduce a general power of amendment. Her Honour considered that was not possible to be satisfied that the introduction in carrying out of a general power of amendment would benefit current and future minor beneficiaries [133] .

The Court has a discretion as to whether or not to approve the proposed arrangement. That discretion under the UK legislation has been said to be exercised with regard to all relevant factors property considered in the statutory context [134] . In Goulding, the issue before the Court was described in terms of whether "a mandatory benefit, bargained on behalf of a specified class, is outweighed by some other countervailing discretionary factor, such as the purpose of the trust or the intention of the testatrix in making it" [135] .

Whilst the application in this case was amended to include reference to the statutory power under s 81(2) Trustee Act, no particular submissions were addressed to that provision. It is not evident that s 81(2) Trustee Act authorises what is proposed in the amended summons.

In relation to the s 86A Trustee Act relief, I accept that the Trustee has standing.

Mr Ellison SC submitted

Each of the 8 surviving ‘Eligible Beneficiaries’ consents to the application before the Court (either by express form of consent or affidavit).

Despite Mr Ellison’s submission regarding differences between the Variation of Trusts Act UK s 1(b) and s 86A(2)(b) Trustee Act it is not evident to me that for the purposes of this application it is necessary to analyse and form particular views regarding the differences in the wording of those provisions. That is because on any view of the matter it seems to me that the provisions of s 86A(2) in terms of standing are engaged.

Mr Ellison SC referred to the decision of Master Russell in Dryandra Investments, in a context in which he recognised that her Honour found that the variation approved the legislation could not be used to appoint an appointor but found that the Court had an inherent power to appoint an appointor. However no particular other submissions were addressed to this relief.

Bruno (whether correctly or otherwise) has proceeded on the basis that cl 21 of the Trust Deed permitted variation of the trustee during the life of the Appointor. As indicated above I think that is the correct construction.

The role the Appointor has what might well be regarded as a protective role in relation to the power to vary the Trust. Thus, certainly on one view of clauses 20 and 21 if the Trustee proposes a variation of the Trust on notice to the Appointor in a form which is disagreeable to the Appointor, the Appointor may remove the Trustee before such variation is effected. However, there is no need for me to form any concluded view regarding whether that is the proper construction or whether the Appointor’s powers in this respect are fiduciary or otherwise. On any view of the matter, whilst the Trust can operate without the Appointor per se, it can be said that the Appointor’s role at the very least under cl 20 in appointing or removing trustees was (and would be if operative) facilitative to the due and proper execution of the Trust.

Having regard to the above authorities, there is some doubt as to whether the variation approval power may be exercised to appoint an appointor. In the absence of particular submissions on the issue I am not inclined at least at the moment to exercise the s86A power to that effect.

However, I am persuaded that there is an inherent power to secure, but not alter, the due execution of the Trust. Provisionally, I am prepared to use the inherent power of the Court to appoint an “Appointor” for the Trust. The proposal is that Bruno and Frank be appointed. Subject to one matter, I am prepared to appoint them as “Appointors”. The one matter is that under cl 19 of the Trust Deed the there is a very clear indication that no benefits may be conferred upon the Appointor notwithstanding that such a person is otherwise within the description of Beneficiaries or Eligible Beneficiaries.

I propose to give Bruno and Frank some time to consider whether they are prepared to be appointed on those terms.

There is a real question regarding whether the proposed order for removal and substitution of appointors can be said to be within the interests of beneficiaries. No specific submissions were addressed to this point. It is unclear what is meant by the wording a “majority decision of the named beneficiaries and in the event of a named beneficiary being deceased, then by all the eligible beneficiaries". Provisionally I infer that ‘named beneficiaries’ is a substitute for the ‘the Eligible Beneficiaries’. In any event, in circumstances in which I propose to appoint under the inherent power an appointor, I do not consider it necessary at this stage to exercise any power under the variation approval power in relation to future removal and substitution of ‘Appointors’.

It is one thing to approve arrangements in respect of the Trust for certain purposes which may be in the interests of beneficiaries. It is another to enlarge a power of variation of the trusts.

There are no Australian cases in which that has seemingly occurred. There is a real question regarding whether the proposal to vary the cl 21 variation power can be said to be within the interests of beneficiaries. No specific submissions were addressed to this point.

Nonetheless, it seems to me that once an Appointor is appointed there is arguably mechanism under the Trust Deed for the variation power to be operative. In those circumstances, I do not consider that at this point of time it is appropriate to make any order pursuant to s 86A to grant the relief in relation to clause 21. However, my decision in that regard is not to be construed as foreclosing any further potential application.

The gist of the application to address the beneficiary class in cl 3(b) is based on what might be broadly described as family harmony. Bruno described it in the following terms:

Mr Ellison SC addressed the beneficial class relief as follows:

Mr Ellison SC submitted that the present application (in relation to the relief in 1(f)) does not amount to a resettlement. He submitted that:

On balance I am prepared to accede to the application to approve the proposed amendment to cl 3(b) of the Trust Deed.

The notion of family harmony is in the context of a family discretionary trust perhaps generally, but more specifically, in this case a reasonable consideration in favour of the proposed arrangement. In Perenna, McMillan J observed that benefit could include familial benefits [136] . Further, I note that under the Tasmanian variation approval legislation there are various matters specified that the Court must have regard to including any non-financial benefit to and the welfare of the family of the (relevant) person [137] .

The proposal does not create any broader class of beneficiaries entitled to distributions than was permissible during Giuseppe's lifetime.

The proposal does not affect the persons who would ultimately be entitled to a distribution of the Trust on its termination and distribution under cl 4. Clause 4 of the Trust Deed contains specific reference to ‘the Eligible Beneficiaries’ and the proposal does not seek to widen that class.

The effect of the proposed amendment to cl 3(b) of the Trust Deed would permit the Trustee to distribute income as indicated to ‘the Beneficiaries’ as defined which relevantly would include the grandchildren of Giuseppe other than the 4 grandchildren who are specified as being ‘Eligible Beneficiaries’ and also ‘any relative’ of Giuseppe.

Each of the 8 ‘Eligible Beneficiaries’ who might be affected by the arrangement have in substance consented to the arrangement, expressly conscious of the fact that although they are only objects of appointment of income and have no necessary right to the appointment of income to the extent that there is a more limited class of persons to whom income may be distributed, they are content for the Court to approve a proposal which might dilute their interests.

Ultimately, it seems to me that it can be said that the proposed alteration to cl 3(b) is in the interests of beneficiaries both those who are unable to consent and the beneficiaries as a whole. I propose to make that order.

The application sought a raft of relief principally pursuant to s 86A Trustee Act. Ultimately, I am persuaded that only a limited part of that relief should be given, at least at this stage in relation to the beneficial class provisions.

The further issues which arise in relation to use of s 86A Trustee Act in respect of variations regarding nomination of the Appointor, permitting a majority decision of the “named beneficiaries” to remove or substitute another Appointor, and amendments (including timing and recipient of notice) to the variation power were not the subject of specific submissions and I consider can await reflection by the plaintiff and family members on these reasons for judgment.

Consistent with what I have indicated above I am prepared to act upon the inherent power of the Court to appoint appropriate ‘Appointors’ whether they be Bruno and Frank or some other suitable person.

The costs of the application to date may be paid out of the Trust on the indemnity basis. I direct the plaintiff to bring in short minutes of order to give effect to the reasons for judgment.