Bank of Australasia v Balbirnie Vans

Supreme Court of NSW|2004-09-24|Before: Barrett J

CITATION : McCready & Anor; Estate of Lindsay Leslie McCready [2004] NSWSC 887 revised - 28/09/2004 HEARING DATE(S) : 19/08/04 Written submissions: 15/09/04 JUDGMENT DATE : 24 September 2004 JURISDICTION: Equity Division JUDGMENT OF : Barrett J DECISION : Claim for order under s.72 Trustee Act 1925 dismissed

CATCHWORDS : TRUSTS AND TRUSTEES - land held by trustees upon trust for testator's son for life with remainder to son's children - son childless and likely to remain so - trustees seek order under s.72 Trustee Act vesting land in son freed from contingent rights of unborn children - nature of s.72 order as "vesting order" - requirement for separately existing equitable entitlement in need of perfecting by vesting order - s.72 does not permit variation of trusts independently of such requirement LEGISLATION CITED : Trustee Act 1925, ss.72, 78 Bank of Australasia v Balbirnie Vans (1861) 1 W&W Eq 120 Chang v Registrar of Titles (1976) 137 CLR 177 Hargreaves v Wright (1853) 10 Hare App II lvi; 68 ER 1147 Re Blocksidge [1997] QdR 234 CASES CITED : Re Eggleston; The Equity Trustees Executors and Agency Company Ltd v Eggleston [1940] VLR 474 Re Moore's Will; Moore v Willis (1901) 1 SR(NSW) Eq 148 Salkeld v Salkeld [2000] SASC 296 Union Bank of Australia v Harrison Jones and Devlin Ltd (1910) 11 CLR 492 Wentworth v Humphrey (1886) LR 11 App Cas 619 Wood v Beetlestone (1854) 1 K&J 213; 60 ER 434 PARTIES : Glen Leslie McCready and Judith Catherine Fuller - Plaintiffs FILE NUMBER(S) : SC 5276/03 COUNSEL : Mr C Stomo SOLICITORS : Gunn Hamilton & Blay

IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION

5276/03 - APPLICATION OF GLEN LESLIE McCREADY AND JUDITH CATHERINE FULLER; ESTATE OF LINDSAY LESLIE McCREADY

1 Lindsay Leslie McCready died on 27 August 1976. Probate of his will dated 5 April 1973 was in due course granted to the executors therein named, being his widow (now Mrs Fuller) and a trustee company. By means which it is unnecessary to relate, the trustee company was later replaced. The present trustees of the estate (which, they say, is fully administered) are Mrs Fuller and the deceased's son, Glen Lindsay McCready (whom I shall call "G L McCready"). 2 By his will, the deceased, after appointing executors: · gave certain specific legacies (clause 3); · gave "all my real estate to which I shall be seised possessed or entitled at the date of my death" to his trustees upon trust to pay the income to his widow during her life and, after her death, to hold one half for the deceased's daughter (Mrs Oakley) absolutely and to hold the other half, first, to pay the income to G L McCready during his life and, second, to hold that half after the death of G L McCready for such of his children as attained the age of 21 years, in equal shares if more than one (clause 4); and · gave the remainder of his property to his trustees upon trust to pay debts, funeral and testamentary expenses and to hold the residue, as to one half, for Mrs Oakley absolutely and, as to the other half, for G L McCready absolutely should he be living at the deceased's death (as he was) (clause 5). 3 At his death, the deceased owned a property at Artarmon. There was no other real estate. The Artarmon property was sold by the trustees about three years after the deceased's death and half the proceeds were paid to Mrs Oakley. The remainder of the proceeds were applied in purchasing a property at Point Clare in which G L McCready and his wife lived. G L McCready's wife later died and, in 1981, the trustees sold the Point Clare property and applied the proceeds in purchasing a property at Auburn which became the home of G L McCready and in which he continues to live. G L McCready has no children and has not remarried. He says in his affidavit that he is not in a de facto relationship and that he has no intention of having children. He is aged in his early 60s and in poor health. He is no longer able to work. 4 By their amended summons, the plaintiffs, Mrs Fuller and G L McCready, being the trustees of the estate, claim: "An order pursuant to Section 72 of the Trustee Act vesting the property situate at and known as 3/53 Northumberland Road, Auburn ('the property') in the plaintiff, Glen Lindsay McCready, absolutely."

Mrs Oakley has sworn an affidavit in which she expresses her consent to the making of this order. 5 The application was argued on the footing that the Auburn property is properly to be regarded as held upon trust pursuant to that part of clause 4 of the will (being clause 4(b)) which refers to G L McCready and his children. Clause 4(b) reads in full as follows: "(b) As to the remaining one-half thereof UPON TRUST to pay the income to my said son GLEN LINDSAY McCREADY during his life and on his death for such of his children as attain 21 years and if more than one equally." 6 Because clause 4 is expressed to apply to "all my real estate to which I shall be seised possessed or entitled at the date of my death", it is not clear to me that the Auburn property acquired by the trustees in 1981 is within and governed by the clause. Nor, I might say, is it clear to me that, when the trustees sold the Artarmon property (being the only real estate owned by the deceased at his death), paid half the proceeds to Mrs Oakley and applied the balance in purchasing the Point Clare property, they acted in conformity with the will or in due exercise of their powers. The same comments apply to the later sale of the Point Clare property and the purchase of the Auburn property. But, in view of the conclusion I have reached with respect to the ambit of s.72 of the Trustee Act 1925 upon which the plaintiffs' rely in advancing the claim in the amended summons, it is not necessary for me to pursue those questions which, in any event, were not the subject of argument before me. I proceed, at this point, on the assumption (and I emphasise that it is no more) that the Auburn property is held upon the trusts specified in clause 4(b) of the will. 7 Implicit in the claim the trustees press under s.72 of the Trustee Act is the proposition (made explicit in written submissions made by Mr Stomo of counsel on behalf of the trustees) that, in any case in which property is directed to be held upon trust for A (who has no children) for life with remainder to the children of A, s.72 empowers the court to make an order that causes the property to be vested in A free from any contingent interest in remainder of the children of A. I am not persuaded that s.72 is the source of a power to make such an order. 8 Section 72 of the Trustee Act is in the following terms: " Contingent rights of unborn persons Where any property is subject to a contingent right in an unborn person or class of unborn persons, who, on coming into existence, would in respect thereof become entitled to or possessed of the property on any trust, the Court may make a vesting order releasing the property from the contingent right, or vesting in any person the estate or interest to or of which the unborn person or class of unborn persons would, on coming into existence, be entitled or possessed in the property." 9 Section 72 is one of nine sections appearing in the portion of Division 1 of Part 3 of the Trustee Act that is headed "Vesting orders". That Division 1 is headed "New trustees and vesting orders". Part 3 as a whole has the heading "Powers of court". It is appropriate to set out certain of the other sections found under the "Vesting orders" heading. Section 71 is as follows: " Vesting orders (1) The Court may make an order in this Act called a vesting order, which shall have effect as provided in section 78.

(2) A vesting order may be made in any of the following cases, namely: (a) where the Court appoints or has appointed a new trustee, (b) where a new trustee has been appointed out of court under any statutory or express power, (c) where a trustee retires or has retired, (d) where a trustee is a minor, (e) where a trustee is an insane or an incapable person or person of unsound mind, (f) where a trustee is out of the jurisdiction of the Court, (g) where a trustee cannot be found, (h) where a trustee being a corporation is dissolved, (i) where a trustee neglects or refuses to convey any property, or to receive the dividends or income of any property, or to sue for or recover any property according to the direction of the person absolutely entitled to the same for twenty-eight days next after a request in writing has been made to the trustee by the person so entitled, (j) where it is uncertain who was the survivor of two or more trustees jointly entitled to or possessed of any property, (k) where, as to the last trustee known to have been entitled to or possessed of any property, it is uncertain whether he or she is living or dead, (l) where there is no legal representative of a trustee who was entitled to or possessed of any property or where it is uncertain who is the legal representative of a trustee who was entitled to or possessed of any property, (m) where any person neglects or refuses to convey any property, or to receive the dividends or income of any property, or to sue for or recover any property in accordance with the terms of an order of the Court, (n) where the Court might have made a vesting order if this Act had not been passed, (o) where property is vested in a trustee, whether by way of mortgage or otherwise, either solely or jointly with any other person, and it appears to the Court to be expedient to make a vesting order.

(3) The provisions of paragraphs (d), (e), (f), (g), (h), and (i) of subsection (2) extend to a trustee entitled to or possessed of any property either solely or jointly with any other person.

(4) Where the order is consequential on the appointment of a new trustee, the property shall be vested in the persons who, on the appointment are the trustees.

(5) Where the vesting order is consequential on the retirement of one or more of a number of trustees, the property may be vested in the continuing trustees alone.

(6) Subject to the provisions of subsection (4), the vesting order may vest the property in any such person in any such manner and for any such estate or interest as the Court may direct, or may release or dispose of any contingent right to such person as the Court may direct.

(7) The fact that the order is founded or purports to be founded on an allegation of the existence of any of the matters mentioned or referred to in subsection (2), shall be conclusive evidence of the matter so alleged in any Court upon any question as to the validity of the order.

(8) This section shall not prevent the Court from directing a reconveyance or the payment of costs occasioned by any such order if improperly obtained, or from making a further vesting order.

(9) Where by reason of the dissolution of a corporation either before or after the commencement of this Act a legal estate in any property has determined, the Court may by order create a corresponding estate and vest the same in the person who would have been entitled to the estate which determined, had it remained subsisting estate." 10 Section 74 reads: " Minor or insane mortgagee Where any person entitled to or possessed of property by way of mortgage is a minor, or is an insane or an incapable person or person of unsound mind, the Court may make a vesting order vesting or releasing or disposing of the property, with the right to transfer or call for a transfer of property, or to receive the dividends or income thereof, or to sue for or recover property or any interest in respect thereof, in like manner as in the case of a trustee being a minor, or insane or incapable person, or person of unsound mind." 11 Section 75(1) is as follows: "Where a mortgagee of land has died, the Court may make a vesting order vesting the land in such person or persons in such manner and for such estate as the Court may direct:

Provided that where the land is subject to the provisions of the Real Property Act 1900 the order may discharge the mortgage." 12 Section 76(1) is in these terms: "Where an order is made by the Court directing the sale or mortgage of any land, the Court may, if it thinks expedient, make an order vesting the land or any part thereof for such estate as the Court thinks fit in the purchaser or mortgagee or in any other person." 13 Section 77(1) reads: "The Court may make a vesting order where an order is made by the Court for the specific performance of a contract concerning any land, or for the partition or sale in lieu of partition of any land, or for the exchange of any land, or for the conveyance of any land, either in cases arising out of the doctrine of election or otherwise." 14 The effect of a vesting order is then stated in s.78: " Effect of vesting order (1) In the case of a vesting order consequential on the appointment of a new trustee, or the retirement of a trustee, the vesting order shall have the same effect as if the persons who before the appointment or retirement were the trustees, if any, had duly executed all proper conveyances of the property for such estate or interest as the Court directs, or if there is no such person, or no such person of full capacity, then as if such person had existed and been of full capacity, and had duly executed all proper conveyances of the property for such estate or interest as the Court directs.

(2) In every other case the vesting order shall have the same effect as if the trustee or other person or description or class of persons to whose rights, or supposed rights, the provisions of this Part respectively relate, had been an ascertained and existing person of full capacity, and had executed a conveyance or release to the effect intended by the order.

(3) In the case of land subject to the provisions of the Real Property Act 1900 , the land shall not vest until the appropriate entries are made in accordance with the provisions of that Act, and in the case of any other land, the land shall not vest before the order is registered in the office of the Registrar-General as prescribed by regulation under the Conveyancing Act 1919 .

(4) In the case of property subject to the provisions of the Closer Settlement Acts, the Crown Lands Act 1989 , the Mining Act 1992 or the Offshore Minerals Act 1999 , or any other Act relating to Crown lands, the proper officer is hereby authorised, upon the vesting order being registered as provided in subsection (3), to make all such entries as may be necessary to give effect thereto.

(5) In the following cases the vesting order shall vest in the person named in the order the right to transfer or call for a transfer of the property or security, that is to say, in the case of: (a) any property that does not come within subsections (3) or (4), but a transfer of which is required to be registered by or under any Act, whether of this State or otherwise, (b) any security that is only transferable in books kept by a corporation company or other body, or in manner directed by or under any Act, whether of this State or otherwise.

(6) In the case of any security or chose in action the vesting order shall vest in the person named in the order the right to receive the dividends or income thereof, and to sue for or recover the chose in action.

(7) The person in whom the right to transfer or call for the transfer of any property or security is so vested may transfer the property or security to himself or herself or any other person according to the order, and all corporations companies associations and persons shall obey the order.

(8) After notice in writing of the vesting order it shall not be lawful for any company association or person to transfer any property or security to which the order relates, or to pay any dividends thereon except in accordance with the order." 15 It will be noticed that the order s.72 empowers the court to make is a "vesting order". Section 71(1) confers upon the court a general power to make "an order in this Act called a vesting order" which is to "have effect as provided in s.78". The general specification in s.71(1) is not, in my view, limited to the cases dealt with in later parts of s.71 itself. The jurisdiction extends to every case in which the Act allows an order identified as a "vesting order" to be made, including not only a case referred to in s.71(2) or s.72 but also cases under ss.74, 75(1), 76(1) and 77(1). A particular "vesting order", once made under one or other of these provisions, has the effect provided for in s.78. 16 The effect of a vesting order made under s.72 is stated in s.78(2). The order is declared by that section to have the same effect as if the unborn persons whose contingent rights are in question were in existence and had executed a release of the rights "to the effect intended by the order". 17 A vesting order is, of its nature, an order founded upon and giving effect to some established equitable right or otherwise calculated to assist full effectuation of some result of the exercise of equitable jurisdiction. The limitations of equity which eventually came to be regarded as the source of a need for statutory powers to make vesting orders were described by Sir Frederick Jordan in "Chapters on Equity in New South Wales" (1921) at pp.92-93 as follows (with footnotes omitted): "Apart from statute a Court of Equity had no power by its decree directly to affect the common law title to property; although it could order the person in whom the common law title was vested to convey the property, and could enforce its order by process of contempt in personam . Much inconvenience was, however, often occasioned when persons in whom land was vested as trustees or mortgagees were unable through personal incapacity to make a necessary conveyance, and, later, when trustees of stocks and annuities transferable at the Bank of England were unable through incapacity or absence, or refused, to make proper transfers. To remedy this inconvenience various statutes were passed which have now been replaced in England by the Trustee Act, 1893, and the Lunacy Act, 1890, and in New South Wales by the Trustee Act, 1898. By this and certain other statutes the Supreme Court of New South Wales in its equitable jurisdiction is now empowered in certain prescribed cases to cause certain forms of property to be divested from one person and vested in another, by means either of a vesting order or of a conveyance made by a person nominated by the Court to convey." 18 In England, the statutory reforms to which Sir Frederick Jordan referred centred upon the Trustee Act 1850 as supplemented by, in particular, the Trustee Extension Act 1852. The provisions in Division 1 of Part 3 of the present New South Wales Act are direct descendants of the English provisions of 1850 which were widely adopted throughout the then British Empire. The New South Wales Act tends to suggest that there may have been some aspect of non-statutory equitable jurisdiction allowing a vesting order to be made. Section 71(2), in describing cases in which a vesting order may be made, refers in paragraph (n) to the case "where the Court might have made a vesting order if this Act had not been passed". The English legislation has never contained an equivalent provision. There are indications in some cases that a court of equity may, as part of its inherent jurisdiction, make an order vesting trust property in continuing trustees where one trustee is allowed to retire. In Re Moore's Will; Moore v Willis (1901) 1 SR(NSW) Eq 148, A H Simpson CJ in Eq appeared to acquiesce in that proposition by making such an order by consent. The order was said in argument by counsel (later Sir John Harvey, Chief Judge in Equity) to reflect the inherent jurisdiction of the court, unaffected by provisions of the Trustee Act. Lowe J later adopted the same approach in Re Eggleston; The Equity Trustees Executors and Agency Company Ltd v Eggleston [1940] VLR 474. Because the present case concerns an application for an order under s.72 of the Trustee Act 1925 which confers statutory jurisdiction to make a "vesting order", the question about the inherent jurisdiction need not be pursued. 19 A commonly encountered situation in which a vesting order is sought and made is where a vendor of land to whom the purchase money has been paid fails or refuses to convey the land to the purchaser. As Mason J related in Chang v Registrar of Titles (1976) 137 CLR 177 at pp.184-185, there was a time when an application for a vesting order in such circumstances would not be entertained until a constructive trust had been declared in a suit. This was because that particular aspect of the vesting order jurisdiction was available only where there was a "trustee". Mason J also pointed out that, in more recent times, that strict approach has not yet been insisted upon and there has been an elision of the determination of the existence of the relevant equitable right and the adjudication of the dependent claim to a vesting order. 20 There is little in textbooks and decided cases about the particular form of vesting order provided for in s.72 and its counterparts in other jurisdictions. "Chapters on Equity in New South Wales" (above, at p.94), "Jacobs' Law of Trusts in Australia" (6th edition, 1997, by R P Meagher and W M C Gummow, at paragraph 2508) and "Underhill and Hayton - Law Relating to Trusts and Trustees" (15th edition, 1995, by D J Hayton, at p.757) merely refer to the existence of the provision and state or paraphrase its terms. "Lewin on Trusts" (17th edition, 2000, by W J Mowbray, L Tucker, N Le Poivedin and E Simpson, at paragraph 18-06) sets out the terms of the English section and refers, in a footnote, to Hargreaves v Wright (1853) 10 Hare App II lvi; 68 ER 1147. The seventh (and last) edition of "Seton's Judgments and Orders", 1912, at pp. 1208-1209, recites the English section and notes the decision in Wood v Beetlestone (1854) 1 K&J 213; 60 ER 434. Brief commentary on the section does, however, appear in "Principles of the Law of Trust" by H A J Ford and W A Lee (3rd edition, 1996), at paragraph 8520, as follows: "Power is given to the court to make a vesting order releasing property from any contingent right therein of any unborn person or class of persons, or vesting the contingent right in a person. This enables such property to be sold freed of the contingent right, which attaches to the proceeds of sale: Hargreaves v Wright (1853) 10 Hare App II, lvi; 68 ER 1147 ; Wood v Beetlestone (1854) 1 K & J 213; 69 ER 434 ; Bank of Australasia v Balbirnie Vans (1861) 1 W & W Eq 120 . The Northern Territory and South Australian provisions are limited to land. The phrase "contingent right" is defined in (NSW) s 5; (NT) s 82; (Qld) s 5; (SA) s 4; (Tas) s 4; (Vic) s 3; (WA) s 6; (NZ) s 5." 21 The second sentence of this extract, as well as the three cases mentioned, indicate the purpose and scope of s.72. Hargreaves v Wright (above) was a case in which the court was asked to decree specific performance of certain contracts for the sale of entailed lands by the life tenant and the holder of a life interest in remainder where the latter had died between contract and completion. The plaintiffs also sought, if it was necessary, an order under what was then s.29 of the Trustee Act 1850 (Eng) (the equivalent of s.72 of the present New South Wales Act) discharging the lands from the interests of those unborn persons who, if living, would be entitled to interests under the limitations of the settlement. The Vice Chancellor, Sir William Page Wood, made the decree "substantially in the form in which it was prayed in the bill", but the report says nothing of his reasons for doing so. 22 Wood v Beetlestone (above) concerned copyholds devised to an infant son for life with remainder to his sons in tail which were decreed to be sold to pay the debts of the testator. An order was made that the guardian of the infant tenant for life should surrender the copyholds. The Vice Chancellor considered that order alone to be insufficient. He took the view that "it is far too doubtful to compel the purchaser to be content with the proposed surrender". There were contingent rights, subsequent to the infant's life estate, that the surrender of the infant's estate would not defeat. The Vice Chancellor said that: "… as the title is capable of being made clear in this case, by discharging the contingent rights of other parties under sect. 29, I think that this is the proper course to take, and I cannot force the purchaser to take a conveyance on any other terms." 23 In Bank of Australasia v Balbirnie Vans (1861) 1 W&W Eq 120, a testator gave to his wife his real estate for her life and directed that one property should, at her death, pass to his children and to their children afterwards. Upon the application of a creditor, a decree was made for the sale of lands including the property subject to the gift over to the testator's children and grandchildren. After reciting these facts, the report continues: "Mr. Carter, on behalf of Mr. Degraves, the purchaser, under the Decree, of the Flinders-lane property, moved, under the 16th, 20th and 29th sections of the ' Trustee Act 1856', for a declaration by the Court that the lots purchased by Mr. Degraves might be discharged from any contingent rights of any unborn persons therein, under the will; and that the infant Defendants were trustees for the purchaser within the meaning of that Act: and that J.M. Seward, Chief Clerk in the Master's office, might be appointed to convey the estate and interest of such infant Defendants respectively to the purchaser; and cited Wood v. Beetlestone ."

The motion was not opposed and was granted without any reasons being given or, at least, recorded in the report. 24 At the time these cases were decided, real estate devolved directly upon a devisee or, if not disposed of by the will, passed directly to the heir under an intestacy. As a result, there were difficulties for a deceased's creditors in obtaining satisfaction out of the deceased's real estate, even with the assistance of provisions first introduced in England in 1830 through the Act 1 Wm 4 c.47 ("An Act for consolidating and amending the Laws for facilitating Payment of Debts out of Real Estate"). Those problems are exemplified by the cases mentioned. In New South Wales, the Real Estate of Intestates Act 1862 ("Lang's Act"), dealing with cases of intestacy, caused real property that would otherwise have passed to the heir to devolve upon the legal representative. The reasons for this were said by the Privy Council in Wentworth v Humphrey (1886) LR 11 App Cas 619 to be well known and not to need recapitulation: "One of them clearly appears on the face of the statute to be the payment of the intestate's debts …"

The Probate Act 1890 (NSW) went further in the same direction by making devised land pass to the legal personal representative and subjecting it to a power of sale for purposes of administration. As Higgins J observed in Union Bank of Australia v Harrison Jones and Devlin Ltd (1910) 11 CLR 492 at 526: "This meant a further assimilation of the law as to realty to the law as to personality." 25 Corresponding reforms were made later in England and elsewhere so that both devised land and land as to which there was an intestacy devolved upon the legal personal representative and were unquestionably and readily available to meet the deceased's debts. 26 This revised approach to devolution of real estate on death meant that the problems addressed in the three cases referred to at paragraph 8520 of Ford and Lee were avoided. The Law Reform Commission of British Columbia, in its report of March 1987 on "Obsolete Remedies Against Estate Property: Estate Administration Act, Part 9" (LRC 91), referred to the British Columbia equivalent of s.72 of the New South Wales Act (s.58 of the Trustees and Executors Act, RSBC 1897) as one of several statutory provisions enacted to resolve procedural problems attending decrees for the sale of a deceased's land to meet creditors' claims where the land had devolved upon the devisee or heir. The adoption by statute of the system under which realty devolves upon the legal personal representative was seen as having removed those difficulties (Part II F of the report). It may therefore be the case that s.72 is now of very limited - perhaps even academic - utility. 27 What I have just said assumes that s.72 cannot be regarded as a species of independent variation of trusts provision; in other words, that it does not allow the rights of unborn persons to be extinguished except as may be necessary or desirable to carry into effect some separately existing requirement of equity. The plaintiffs, of course, seek to ascribe to the section the character of a variation of trusts provision not subject to any such constraint. Mr Stomo submitted on their behalf that s.72 authorises an order vesting the Auburn property in Mr G L McCready freed from the contingent rights of his unborn children and in such a way as to subvert the intention of the testator as expressed in the will. (This assumes, as I have said, that the property is held upon the trusts specified in clause 4(b) of the will.) It was not submitted that G L McCready has any separately existing equitable right or interest in respect of the property which needs to be perfected by a vesting order as such. The proposition is simply that the court should find that it is, in some general sense, fair and reasonable that G L McCready, situated as he is, should have the Auburn property absolutely and that the court should therefore somehow obliterate not only the contingent rights of his unborn children but also, of course, those of persons entitled as upon an intestacy if there be no children of G L McCready living at his death. 28 In advancing these submissions, Mr Stomo referred to Re Blocksidge [1997] QdR 234 and Salkeld v Salkeld [2000] SASC 296. He conceded that neither could be regarded as governing the present situation. Re Blocksidge was a case involving jurisdiction under explicit variation of trusts legislation, being s.95 of the Trusts Act 1973 (Qld), a provision modelled on the Variation of Trusts Act 1958 (Eng). The scope of provisions of this kind in force in Victoria, Queensland, Western Australia and South Australia is discussed at paragraph 1707 of "Jacobs' Law of Trusts in Australia" (above). There is no counterpart in New South Wales. The Salkeld case involved a proposed consensual arrangement among all living persons having interests under certain settlement trusts in a situation where there were also rights of persons as yet unborn. The arrangement made provision for actuarially calculated sums to be set aside for the unborn class. The court considered it unnecessary to resort to explicit variation of trusts legislation. It did two things. First, it made an order under a South Australia rule of court appointing a person to represent the interests of the unborn class. Second, it exercised inherent jurisdiction to approve a compromise and, in so doing, had regard to the opinion of an actuary as to the desirability of the compromise from the viewpoint of the unborn class. There was no attempt to extinguish the interests of the class. Neither case is of assistance in the present context where the plaintiffs seek to invoke and base their case on s.72 of the Trustee Act. 29 I am aware of one occasion on which it has been suggested that a provision corresponding with s.72 might be regarded as a variation of trusts provision, albeit one much less comprehensive than those of the kind involved in Re Blocksidge (above) and derived from the Variation of Trust Act 1958 (Eng). In 2000, The Law Reform Commission, Ireland, published its "Report on the Variation of Trusts" (LRC 63-2000). That report contains the following passage: "In other jurisdictions, the legislature has intervened to broaden the narrow sphere within which equity traditionally allowed a trust to be varied. Two categories of statute may be identified, the first giving general powers and the other granting powers which can be used in narrow, specific situations. Of the second category there are some Irish examples, for instance section 27 of the Trustee Act , 1893 which states: 'Where any land is subject to a contingent right in an unborn person or class of unborn persons who, on coming into existence would, in respect thereof, become entitled to or possessed of the land on any trust, the High Court may make an order releasing the land from the contingent right, or make an order vesting in any person the estate to or of which the unborn person or class of unborn persons would, on coming into existence, be entitled or possessed in the land.'"

This characterisation of the Irish equivalent of s.72 as a provision allowing a trust to be varied and capable of being used to that end in the narrow and specific situations to which it refers seems to me, with respect, to overlook the nature of the order as a vesting order. 30 The plaintiffs do not say that G L McCready has some existing equitable right the perfecting of which at law requires an order extinguishing the rights of his unborn children or that full attainment of the objectives of some existing equitable relief makes such an order necessary or desirable. That being so, I see no basis for the making of a vesting order in respect of the Auburn property under s.72 of the Trustee Act, even assuming that the property is held upon the trusts in clause 4(b) of the will. Deserving of sympathy as G L McCready's circumstances may be, they represent no foundation for the exercise of the power conferred on the court by s.72. The section does not create a jurisdiction in any way analogous with that arising under variation of trust provisions such as those of the Variation of Trust Act 1958 (Eng). 31 The plaintiffs' claim for the order pursuant to s.72 of the Trustee Act 1925 sought in the amended summons is dismissed. **********

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Probate Act 1890(NSW)

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