Jones v Krawczyk [2011] NSWSC 139 | Case summary

Supreme Court of NSW|2010-11-25|Before: White J

Judgment 1HIS HONOUR: The issue in these proceedings is whether a clause rendering the plaintiff ineligible to act as trustee of certain testamentary trusts is void as being contrary to public policy. 2The proceedings concern the estate of Zofia Krawczyk who died on 20 August 2009. She left a modest estate valued for probate purposes at $732,859.35. The principal assets of the estate consisted of three parcels of land, one at 35 Arnott Road, Marayong, another at 4 Nairana Drive, Marayong and the third at Lot 17, 18 Bellbird Avenue, Kurrajong. 33Despite the modest nature of the estate, the deceased's will is an extraordinarily elaborate document of 24 pages. 4The deceased had two children, namely her daughter, Zofia Maria Jones who is the plaintiff, and her son John, who is the defendant. By clause 3.1 the defendant was appointed as executor of the will. 5Clauses 11.1 and 12 provide as follows: "11.1 If they survive me by thirty (30) days and (unless otherwise specified) attain the qualifying age, I give the following gifts to the following persons, so that: (a)each person named in the first column of Table A below shall be the primary beneficiary of a beneficiary testamentary trust established in accordance with Part C of this Will in respect of (b)all my right title and interest in the property specified (and subject to any conditions specified) in the adjacent row of the second column of Table A. Name of Person: Details of property the subject of the gift:

Division and Distribution of Balance of My Estate to My Children via Trusts 12.1 My executors shall divide the balance of my estate into one or more equal parts, sections or portions, and shall hold on trust in accordance with Part C of this Will, and dispose of such parts, sections or portions as follows. 12.2 This clause is subject both to the adjustment provisions and to the discretion given to my executors in Part B of this Will. 12.3 Each of my children who survive me by thirty (30) days and attain the qualifying age shall be the primary beneficiary of a trust for one such equal part." 6Thus the will created some seven separate testamentary trusts. The defendant is to hold the residue on trust for himself and the plaintiff. 7Clauses 3.4 and 3.5 provide: " Appointment of Trustees 3.4 Subject to the Appointment and Removal of Trustees sub-clause in Part C, where a primary beneficiary has been nominated and determined in respect of a trust, the primary beneficiary or the person nominated by the primary beneficiary shall be the trustee of the trust; 3.5 Otherwise, my executors shall be the trustees of each trust under this Will unless or until another trustee is appointed pursuant to this Will." 8Hence, subject to clause 23 referred to below, the trustee of each of the six testamentary trusts established in respect of the property described in Table A is the person nominated as primary beneficiary. 9The beneficiaries of each of those trusts encompass a very wide range of individuals or entities. Clause 23 and 23.1 provides: " 23. Terms of Beneficiary Testamentary Trusts In respect of each of the trusts established under this Will that nominate a person to be the primary beneficiary (the 'beneficiary testamentary trust'), I declare that the following terms shall apply: Beneficiaries 23.1 The beneficiaries of the beneficiary testamentary trust shall be: (a)the primary beneficiary; (b)the children and remoter descendants of the primary beneficiary; (c)any person who is a descendant of a grandparent of either the primary beneficiary of the trust or a spouse of the primary beneficiary; (d)the spouse and children of any of the persons specified in the preceding paragraph; (e)the entities (including companies and trusts) in which any of the above beneficiaries are a director, or directly or indirectly have an absolute, contingent or expectant interest; (f)charitable or religious funds or institutions; provided that the trustee may: (g)elect to temporarily or permanently exclude a beneficiary from all or any part of the trust fund; (h)elect to temporarily or permanently refrain from distributing or providing income, capital or other benefits in respect to all or any part of the trust fund, to or for the benefit of a beneficiary; or (i)need to take note of any family trust or other election that may be made." 10Clause 23.3 gives the trustee of each of the trusts a discretionary power to apply income and capital. Clause 23.3(a) provides: "23.3 The trustee shall allocate or accumulate the net income or such of the capital that is not set aside pursuant to the sub-clause entitled 'General Power to Hold on Separate Trust' (the 'unreserved capital') of the beneficiary testamentary trust as follows: (a)the net income or unreserved capital (or any category of the net income or unreserved capital) of the trust in each year may be: (i)paid or allocated to or applied for the benefit of such of the beneficiaries that the trustee in its absolute discretion selects from time to time; or (ii)(in the case of the net income) may be accumulated as an addition to the unreserved capital of the trust." 11Subclause 23.9 empowered a trustee with the prior consent of the primary beneficiary to separate any part of a trust fund and hold it on a separate trust. No such step was taken. All of the capital of each of the three trusts of which the plaintiff is the primary beneficiary is unreserved capital. 12Clause 23.4 provides as follows: "Appointment and Removal of Trustee 23.4 The trustee of the beneficiary testamentary trust may be appointed or removed as follows: (a)subject to paragraph c) of this sub-clause, the primary beneficiary or the specified beneficiaries, or a person (including a company) nominated by the primary beneficiary or the specified beneficiaries, shall be the initial trustee or trustees; (b)the primary beneficiary or the specified beneficiaries (other than an ineligible person) may exercise the power to appoint such other person as he, she or they choose to be an additional or replacement trustee and may subsequently remove the person as a, or the, trustee; (c)an ineligible person shall not be appointed as trustee or shall be deemed to have resigned as trustee (as the case may be), and in no case shall the consent of the ineligible person be required under clause 11.2 unless or until he or she ceases to be an ineligible person and: (i)my executors (other than the ineligible person), or (ii)where the person is or was my sole executor, the persons (other than the ineligible person) named in this Will to be substitute executors; shall be the trustee, or one of the trustees (as the case may be), in the ineligible person's place and shall hold or share the power to appoint the trustee in place of the ineligible person; (d)a majority of my executors, excluding any trustee who suffers a family breakdown as defined in this clause ('the separated trustee'), shall be entitled to deem the separated trustee to be an ineligible person, by: (i)notice in writing to the separated trustee, for such initial period as the notice may stipulate; (ii)further notice or notice in writing, for such amended or extended period as the notice may stipulate; (e)in this clause, in relation to a primary beneficiary or a specified beneficiary: ' bankruptcy ' includes an act of bankruptcy, and being or becoming an undischarged bankrupt; ' bankrupt ' includes a person who has committed an act of bankruptcy; ' disability ' includes being: (i)or becoming the subject of a declaration by any board constituted under an Act of Parliament governing the appointment of Guardians and Administrators made on the grounds of disability, infirmity or lack of legal capacity; or (ii)unable to understand the nature or effect of their own decisions or unable to communicate decisions in some way or form; or (iii)in the reasonable opinion of my executor, addicted to or habitually under the influence of illegal drugs and/or alcohol; (iv)in the reasonable opinion of my executor, addicted to gambling or is an habitual gambler; (v)a party to a family breakdown. 'family breakdown' means the period: (i)the relevant primary beneficiary or specified beneficiary ceases to live with their spouse (as defined in this clause) on a bona fide domestic basis commencing on the date of separation; and (ii)ends when the date for appeal from a property or financial settlement or final orders made by a court of competent jurisdiction affecting or between the relevant primary beneficiary or specified beneficiary and their spouse has been concluded within the meaning of the Family Law Act 1975 or any other applicable legislation as the case may be and the law may require, expires; ..." 13An "ineligible person" is defined as follows: "' ineligible person ' means a person who is: (i)also a primary beneficiary or specified beneficiary or a company wholly or partly owned by a primary beneficiary or a specified beneficiary; and (ii)under a disability, is bankrupt, has been placed in liquidation, receivership or administration or is unable to act or to continue to act as trustee; and the person remains an ineligible person until such time as subparagraph ii) of this definition no longer applies. (iii)In the case of my daughter Zofia Maria Jones she shall be an ineligible person for the purposes of this clause for so long as she shall be married to GRANT JONES or remain living with him in a bona fide domestic relationship." 14The plaintiff married Mr Grant Jones on 15 April 2000 having lived with him in a de facto relationship since 1985. She remains married to him. Because she is so married, the effect of para (iii) of the definition of "ineligible person", if valid, is that the plaintiff is not the trustee of the three trusts established by Table A of clause 11.1 of which she is the primary beneficiary. Instead, the defendant is the trustee of those trusts, and, subject to clause 23.3(b) referred to below, has the discretion to apply income and capital in accordance with clause 23.3(a). Clause 23.3(b) provides: "b) at any time when the trustee has been appointed by virtue of paragraph c. of the sub-clause headed 'Appointment and Removal of Trustee' below, the trustee shall either: (i)accumulate all or any part of the trust net income; or (ii)pay allocate or apply all or any part of the net income to or for the benefit of such beneficiaries as the trustee considers is in the best interests of the primary beneficiary or all of the specified beneficiaries." 15Clause 23.3(b) qualifies the discretion the defendant would otherwise have in respect of the application of income under clause 23.3. If income is not accumulated, it must be paid or applied in what the defendant considers to be in the best interests of the plaintiff. There are no "specified beneficiaries". "Specified beneficiaries" is defined in clause 23.7 as being, relevantly, beneficiaries appointed by the primary beneficiary by deed as specified beneficiaries in respect of all or any part of the fund. 16Whilst clause 23.3(b) qualifies the defendant's powers under clause 23.3(a) to deal with income, it does not qualify his discretionary power to appoint capital to any of the beneficiaries. Were the plaintiff not ineligible to be a trustee by reason of being married to Mr Jones, she would have the power to appoint income and capital, including the power to appoint it to herself. In the exercise of that power the plaintiff would be required to consider the claims of other discretionary objects. However, she would be entitled to appoint capital and income to herself or to terminate the trust and apply trust property to herself (or other beneficiaries). As the plaintiff is not an eligible trustee, it is the defendant who has the power to appoint capital. He has the power to appoint the capital to any of the beneficiaries. He has the power to decide whether to accumulate income, but if income is to be paid he must pay it to such of the beneficiaries as he considers it would be in the best interests of the plaintiff that income be paid. There is no absolute restraint on the plaintiff being paid the capital whilst she remains married to Mr Jones. It is in the defendant's discretion whether or not so to appoint capital. The defendant could also, with the plaintiff's consent, terminate the trusts and vest the trust property in such of the beneficiaries as he determines. 17If Mr Jones were to die, or were he and the plaintiff to divorce and separate, the plaintiff would cease to be an "ineligible person". She would then have the power under clause 23.4(b) to appoint another person as a "replacement trustee". She could remove the defendant as trustee and assume control of the trust property. 18The plaintiff contends that the provision making her ineligible to be the trustee of the trusts of which she is primary beneficiary for so long as she remains married to Mr Jones, or lives with him as his wife, is void as being contrary to public policy. 19Halsbury's Laws of Australia (at 430-405) states: "Trusts detracting from the sanctity of marriage Historically a trust was treated as void, for being contrary to public policy, if it exposed the parties to a marriage to a real temptation to terminate the marriage and was likely to produce that result, or if it interfered with the consortium of marriage by introducing a source of fundamental friction." That is an accurate statement of the law ( Ramsay v Trustees Executors and Agency Co Ltd [1948] HCA 44; (1948) 77 CLR 321; Trustees of Church Property of the Diocese of Newcastle v Ebbeck [1960] HCA 38; (1960) 104 CLR 394). 20In Ramsay the testator left the residue of his estate on trust to pay the income to his son for so long as his son remained married to his present wife and thereafter to the son absolutely. The will provided that if the testator's son predeceased the son's wife during the period they were married, the estate would go to the testator's nephew and sister. If the son's marriage came to an end through death or divorce, the son would be entitled to the corpus. So long as he remained married he was entitled only to income. The High Court held (Dixon and Williams JJ dissenting) that these provisions did not offend public policy because it was not enough that the will provided a motive for the testator's son to divorce his wife, but it would have to be likely to produce that result. The question of whether the will would be likely to produce that result was to be determined without regard to the particular circumstances and characteristics of the persons concerned, but having regard to what the court considered to be the general tendency of the provision (at 326, 334). 21Dixon J said that it was the policy of the law to preserve and maintain marriage (at 332, 333). His Honour held that the will offended against this policy because the provisions of the will were framed to encourage the dissolution of the marriage contract between the testator's son and his wife. It was not a question of how far a gift in such a form was or was not likely to contribute actually to bringing about a dissolution of the marriage (at 332). 22Williams J also dissented. His Honour held that the gift was void on the grounds of public policy because it had a harmful tendency to induce the son who benefited under the will to give his spouse grounds for divorce in the hope that she would take advantage of them or that the will might prevent his condoning some ground for a divorce afforded by his wife. His Honour also concluded that the gift might lead to a collusive divorce with a view to a subsequent remarriage. It was this tendency of the provision that made it void. His Honour did not conclude that that would be the likely effect. His Honour also held that the gift might interrupt the " true consortium of married life by making the spouse who did not benefit suspicious of a motive for some conduct of the spouse who did " (at 338). 23However, these were dissenting views. The other members of the court did not deny that it is the policy of the law to preserve and maintain marriage. However, the majority held that the will would only offend that policy if it were likely to produce the result that the beneficiary of the will would seek a divorce in order to obtain the full inheritance (per Latham CJ at 327, per Starke J at 330-331, per McTiernan J at 334). 24Mr Harris SC for the plaintiff submitted that it remains the policy of the law to preserve and maintain marriage. He submitted that the reasons that the majority of the High Court decided in Ramsay that the gift in that case would not have the likely effect of interfering with the marriage bond no longer apply. When Ramsay was decided, divorce was not available on the grounds that the parties had separated and had ceased to live together. It was only obtainable at the suit of an innocent party whose spouse had committed a matrimonial offence such as desertion, habitual drunkenness with cruelty or neglect, adultery, grievous or repeated assault or other egregious conduct such as having committed rape, sodomy or bestiality or being imprisoned for lengthy periods (Marriage Act 1928 (Vic) ss 75-78). In Ramsay, Latham CJ found no reason to presume that the beneficiary under the will would be likely to use "wrongful methods" to obtain a divorce so as to get money (at 328). His Honour referred to the deterrence against persons doing "unlawful or corrupt acts" in order to obtain a divorce so as to get money (at 329). Starke J (at 330-331) rejected the contention that the "moral standards and conduct of decent and ordinary members of the community" would be "insufficient to withstand the temptation of the pecuniary advantage arising under the terms of the will". His Honour said: "It should be observed that the termination of the marriage by means of divorce could not be achieved without the active participation of the wife in the proceedings. And if the husband and wife acted in concert to procure a divorce they might easily defeat their ends and lay themselves open to a charge of conspiracy. The contention that the provisions of the will have a tendency to induce departure from the standards of ordinary moral and decent persons for a pecuniary advantage is, I think, unreal and fanciful." 25Similarly McTiernan J (at 334) said: "I should think that it would be the rule that a disposition of property like that made by the testator in the present case would not expose a husband to the temptation to contrive by unlawful or wicked means, or otherwise, to end his marriage." 26Mr Harris SC for the plaintiff submitted that today divorce is much easier to obtain and the opprobrium that formerly attached to a person who gave his or her spouse grounds for divorce no longer arose. The sole ground for divorce is that the marriage has broken down irretrievably and that fact is established if the parties have lived separately and apart for a continuous period of only 12 months, unless the court is satisfied that there is a reasonable likelihood of cohabitation being resumed (Family Law Act 1975 (Cth), s 48). Hence a will which has a tendency to encourage divorce is more likely to be effective in bringing about that result than when Ramsay was decided. 27Mr Harris SC also submitted that it was difficult to reconcile the decision in Ramsay with the later decision of the High Court in Ebbeck. In Ebbeck a testator left the residue of his estate in remainder for his three sons. Their gift was subject to a life estate for the testator's wife. The will included a condition that if at the date of the death of the testator's wife the trustees were not satisfied that any son, or that son's wife, professed the Protestant faith, then the son would forfeit his share. Two sons had married Roman Catholics and the third was about to do so. The High Court, by majority, (Dixon CJ and Windeyer J, Kitto J dissenting) held that the condition was void on the grounds of public policy. As Dixon CJ said, the effect of the condition in the will was that the testator was saying to the donee " your marriage must be dissolved or your wife must change her religion: otherwise your patrimony will be forfeited. You have until your mother's death to resolve this dilemma ." (at 402). 28A condition requiring a donee to change his or her religious faith as a condition of receiving a gift under a will is not contrary to public policy (at 403, 407, 414). Dixon CJ adhered to the views he had expressed in Ramsay that: "... once it is seen that a condition subsequent is framed in opposition to that policy the law does not proceed to examine or weigh the probabilities of the inducement established by the limitation proving or not proving effective either in the given case or by considering the presumed responses of the average reasonable man." (at 403) 29Dixon CJ held that the condition of the gift was invalid because it provided an inducement to each son to obtain a divorce if the wife refused to renounce her own faith which was in opposition to the policy of the law to preserve and maintain marriage (at 404). His Honour also said that the condition was liable to create discord within the marriage (at 404). 30Kitto J, who dissented, held (at 409): "The general principle that the institution of marriage is sacrosanct, and in particular that neither husband nor wife should be given an inducement to divorce or separation, no court, I imagine, would hesitate to maintain. But there is not, I think, any principle of law which is offended by the creation of a potential cause of dissension between spouses, unless the dissension would be likely to result in divorce or separation." His Honour held that the condition was not likely to lead to one of the spouses seeking to end their marriage or their cohabitation (at 410, 411). 31Windeyer J decided the case not on the basis that the condition would be likely to lead to one of the spouses seeking to end the marriage, nor on the ground that the condition had the tendency to encourage such a step. His Honour held that the condition was void because of its tendency to create serious matrimonial discord. His Honour said (at 417): "The vice of the situation that this condition creates does not, I think, arise from the possibility of cupidity on the part of the husband overmastering affection and considerate loyalty. It arises rather from the conflict of emotions, loyalties and duties that it creates for the wife. She must decide before a given date whether to adhere to her faith and thus cause her husband to lose his patrimony, or in the interests of her husband and their children to renounce her faith. It is not, I think, fanciful to regard such a situation as containing the seeds of unhappy differences and not the less so if the spouses be good and conscientious people." 32Hence Windeyer J distinguished Ramsay. He did not depart from it. 33Ebbeck is not contrary to the decision in Ramsay that a condition in a will is not void as being against public policy because it has the tendency to encourage a donee to terminate his or her marriage so as to take the gift under the will unless the condition is likely to be effective in that respect. The ratio of Ebbeck was that the gift was void because it created a source of serious friction or discord within matrimony. 34The first question is whether it is still the law that a condition in a will that has the tendency and is likely to have the effect of causing one party to a marriage to divorce his or her spouse in order to obtain a gift under the will is void as being in contrary to public policy. In Ellaway v Lawson [2006] QSC 170 Douglas J raised, but did not decide, the question as to whether changing attitudes to divorce and the easier facility for obtaining divorce suggest that such a provision may no longer be contrary to public policy (at [16]). Mr Harris SC submitted that it is still the policy of the law to encourage the preservation, protection and maintenance of marriage where possible and this policy is not contradicted by the fact that Parliament has provided a greater facility to terminate the marriage bond where the marriage has broken down. This policy is reflected in s 43(1) of the Family Law Act which provides: "43 Principles to be applied by courts (1)The Family Court shall, in the exercise of its jurisdiction under this Act, and any other court exercising jurisdiction under this Act shall, in the exercise of that jurisdiction, have regard to: (a)the need to preserve and protect the institution of marriage as the union of a man and a woman to the exclusion of all others voluntarily entered into for life; (b)the need to give the widest possible protection and assistance to the family as the natural and fundamental group unit of society, particularly while it is responsible for the care and education of dependent children; (c)the need to protect the rights of children and to promote their welfare; (ca) the need to ensure safety from family violence; and (d)the means available for assisting parties to a marriage to consider reconciliation or the improvement of their relationship to each other and to their children." 35Other sections of the Family Law Act dealing with the provision of counselling services to help with possible reconciliation (ss 12A, 13A and 13B) reflect a policy that the marriage bond should be preserved and maintained if that is possible. 36In Seidler v Schallhofer [1982] 2 NSWLR 80; (1982) 8 Fam LR 598 the question was whether an agreement for the continuation of a de facto relationship for a specified period of cohabitation and thereafter for the parties to marry or separate was void as being contrary to public policy. Unsurprisingly, given the statutory recognition of de facto relationships, the Court of Appeal held that the agreement was not void as being contrary to public policy. Hutley JA held that earlier authorities which had held that agreements to cohabit were void as contrary to public policy were no longer authoritative because the public policy there recognised was a policy to support the institution of marriage by discountenancing relationships which undermined the institution of marriage. His Honour said (at 100; 614): "The marriage which the law now provides is of an entirely different kind. It is an arrangement terminable by either party on one year's separation, really one year's notice, as the separation may be fictitious. Though, the Family Law Act 1975 provides:-
The Family Court shall, in the exercise of its jurisdiction under this Act or any other Act, and any other court exercising jurisdiction under this Act shall, in the exercise of that jurisdiction, have regard to - (a)the need to preserve and protect the institution of marriage as the union of a man and a woman to the exclusion of all others voluntarily entered into for life; (b)the need to give the widest possible protection and assistance to the family as the natural and fundamental group unit of society, particularly while it is responsible for the care and education of dependent children. this can only be regarded as propaganda contradicted by the substantial provisions of the Act which, except for the creation of counselling facilities, are directed to the speedy termination of the married state." 37Neither Hope JA nor Reynolds JA agreed with this statement. 38It does not logically follow that because the Family Law Act provides ready means for dissolving marriages that have broken down that there has been a change in public policy that marriages should be preserved and protected. In my view Parliament's recognition in s 43(1)(a) of the need to preserve and protect the institution of marriage cannot be dismissed as mere propaganda. It is a deliberate statement by the Commonwealth Parliament of public policy. I agree with Mr Harris SC's submission that this is still the policy of the law. 39I also accept Mr Harris SC's submission that statutory changes leading to the readier facility of divorce and changes to society's attitudes to divorce and divorced persons mean that today it could be more readily found that a condition in a will which has the tendency to encourage a putative donee to divorce his or her spouse would be likely to be effective to that end, than would have been the case in earlier times when divorce was harder to obtain, involved typically the commission of a matrimonial offence, and attracted greater opprobrium. The decision in Ramsay does not conclude the question as to whether the provisions in the will in the present case would be likely to have the effect of inducing the plaintiff to terminate her marriage. 40In Ramsay , Latham CJ said (at 326) that: "... where it is evident that the object &c of the parties or the testator is to bring about an illegal or otherwise reprehensible act, it would be difficult to deny that the provision had that tendency." 41I do not find that it was the deceased's object that the plaintiff should divorce her husband. The condition in clause 23 is explicable on the basis that the deceased considered that it would not be in her daughter's best interests to have the management of the property of the trusts of which she was named as principal beneficiary, or the power to dispose of that property, while she remained married to or living with her husband. I infer the deceased considered that the plaintiff might be inclined or persuaded to deal with the property in a way which was not in her best interests. In other words, the deceased's intentions are likely to have been protective of the plaintiff. I do not conclude that the condition was included in the will because the deceased wished the plaintiff to divorce and separate from her husband. 42It is common ground that the question whether the impugned provisions would be likely to have the effect of inducing the plaintiff to terminate her marriage is to be answered without regard to the character or habits of the individual parties. 43In traditional wedding vows each spouse agrees to take the other " for better for worse, for richer for poorer ". Even where traditional vows are not taken, it is implicit in the marriage bond as a union for life that each spouse promises to take the other for better for worse, for richer for poorer. Whilst courts should and do recognise that spouses may yield to the temptation to break a wedding vow for the sake of pecuniary advantage, it should not lightly be assumed that they will do so. 44The likely effect of the condition as an inducement to divorce and separation should be assessed having regard to the provisions of chapter 3 of the Succession Act 2006 (NSW) (substantially re-enacting the Family Provision Act 1982). If the effect of the impugned provisions is that the plaintiff has not been left with adequate provision for her proper maintenance, education and advancement in life, the plaintiff, as a child of the deceased, would be entitled to apply for an order for provision out of the estate so as to make such adequate provision ( Succession Act , s 59). If the plaintiff receives adequate provision out of the estate for her proper maintenance, education and advancement in life, even if that provision is less than that which she would have received had she exercised a power of appointment of income or capital to herself as beneficiary, it is not likely that she would divorce and separate herself from her husband in order to obtain that power of appointment. 45In this case the plaintiff is not debarred from receiving the corpus of her share of the estate while she remains married to or in cohabitation with her husband. She remains a discretionary object of each of the seven testamentary trusts established by the will. In respect of those trusts of which she is principal beneficiary she has a prima facie right to the income that may be distributed. The defendant is under a duty to consider whether income should be accumulated or paid. He is under a duty also to consider whether to appoint capital and will be obliged to consider the financial position and needs of all of the discretionary objects in making that decision, just as the plaintiff were she trustee, would be required to consider the financial position and needs of all of the discretionary objects in deciding whether, and if so, how, to appoint capital. 46Having regard to these matters, I do not think that the likely effect of the impugned provisions would be to lead to divorce and separation. 47Nor do I consider that the impugned provisions would be likely to lead to significant discord or friction in the marriage separate from their possible tendency to induce the plaintiff to terminate the marriage and separate. This is not a case in which either party will be called on to surrender firmly held views or beliefs or to act in any particular way towards the other party. 48In my view the impugned provisions are not contrary to public policy. 49By her summons the plaintiff also sought a determination of questions as to whether she was entitled to terminate the trusts and to call for a transfer of the trust property to her. That claim was not pressed. 50The summons sought the following relief: (1)" A determination as to whether, upon the true construction of the last will of Zofia Krawczyk ('the deceased'), late of 35 Arnott Road, Marayong, and in the events which have occurred: (i)Clause 23.4(e)(iii) - ('ineligible person') of the will is contrary to public policy and invalid; or (ii)Clause 23.4(e)(iii) - ('ineligible person') of the will is otherwise void; (iii)The plaintiff is entitled to terminate the 'beneficiary testamentary trust' established in clause 11.1(a) and Table A lines 1, 4 and 6 of the will, and call for the transfer to her of the legal interest in the assets of that trust. (iv)Additionally or alternatively, the plaintiff is, pursuant to clause 23.4(a) of the will the trustee of the trust referred to in (iii) above. (v)Additionally or alternatively, the plaintiff is entitled, pursuant to clause 23.4(b) of the will, to appoint herself and/or some other person to replace the defendant as trustee of the trust referred to in (iii) above. (2)A determination as to whether, upon the true construction of the last will of the deceased, and in the events which have occurred, the plaintiff will, on completion by the defendant of his executorial duties, be entitled to terminate the residuary trust established in her favour in clause 12 of the will and call for the transfer to her of the legal interest in the assets in that trust." 51The questions raised in paragraphs 1 and 2 of the summons should be answered as follows. Clause 23.4(e)(iii) of the will of Zofia Krawczyk is not contrary to public policy and is not invalid or void. The plaintiff is not entitled to terminate the trusts established in clause 11.1(a) and Table A, lines 1, 4 and 6 of the will, nor to call for the transfer to her of the legal interest in the assets of those trusts. The plaintiff is not the trustee of those trusts. The plaintiff is not presently entitled to appoint herself or some other person to replace the defendant as trustee of those trusts. On completion by the defendant of his executorial duties, the plaintiff is not entitled to terminate the residuary trust established by clause 12 of the will and call for the transfer to her of the legal interests in the assets of that trust. 52I make declarations accordingly. Prima facie the plaintiff should pay the defendant's costs of the proceedings. I will hear the parties on costs. DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 11 March 2011

Marriage Act 1928(Vic)

(Marriage Act 1928(Vic)ss 75-78).

(Family Law Act 1975(Cth)

Jones v Krawczyk

At a glance

Court

Decision date

Before

Catchwords

Source

Catchwords

Judgment (2 paragraphs)

Parties

Legislation Cited (5)

Cases Cited (6)

Cited By (1)