Plaintiffs v SANDRA ROTH & Ors

2 This proceeding has a long and protracted history, stemming from an application made by the plaintiffs for executors' commission. For present purposes, it is sufficient to note that on 3 September 2021, Englefield JR made orders giving effect to an unpublished ruling which dismissed the plaintiffs' application for executors' commission and referred four matters relating to the administration of the deceased's estate to a judge of this Court for consideration and, if appropriate, determination.

3 On 21 September 2021 the plaintiffs filed a notice of appeal in relation to the orders dismissing their application for executors' commission.

4 The proceeding was listed for directions before the Court on 22 October 2021, where the plaintiffs contended that the first of the matters that Englefield JR referred to a judge of the Court was anterior to the other issues in the proceeding.

5 The first of the matters referred was a question relating to whether the assets of a trust, the Rudi Roth Family Trust ('the Family Trust'), are properly the assets of another trust provided for in cl 4(5) of the will.

6 In particular, this issue concerned whether a deed of appointment made on 1 February 1996 ('the appointment deed') or a deed of variation dated 23 September 1994 ('the 1994 variation deed') were effective to appoint the plaintiffs, in their capacity as the deceased's executors and/or trustees under a trust created by the will, as the sole beneficiaries of the Family Trust from the vesting day in circumstances where the deed of settlement of the Family Trust made on 9 April 1975 ('the trust deed') did not name the estate or its executors as beneficiaries of the Family Trust.[1]

7 In their administration of the deceased's estate, the plaintiffs have treated themselves, as the executors of the deceased's estate, as entitled to the capital and income of the Family Trust, as and from the vesting day, to be held pursuant to the terms of the trust provided for in cl 4(5) of the will. In this regard the plaintiffs relied upon the intention of the declaration in the 1994 variation deed, the appointment deed and the will. As Englefield JR identified in her ruling, if the executors were wrong in that approach then a substantial liability arises for the estate.

8 Following the directions hearing on 22 October 2021, the Court made orders requiring the plaintiffs to notify interested persons of the issues referred to the Court, providing for those persons to file and serve a notice of address for service if they wished to be heard in respect of those matters, and listing the proceeding for further directions on 26 November 2021.

9 Following the further directions hearing on 26 November 2021, the Court ordered that the plaintiffs file and serve a summons in the proceeding for the determination of questions relating to the first of the issues referred to the Court and adding the first to fifth defendants, who are each grandchildren or step-grandchildren of the deceased and residuary beneficiaries under the will, to the proceeding.

10 By summons dated 7 December 2021 ('the appointment summons'), the plaintiffs sought, pursuant to r 54.02 of the Supreme Court (General Civil Procedure) Rules 2015 (Vic), determination of the following two questions:

(a) In relation to the Family Trust, is the appointment deed effective to appoint the plaintiffs in their capacity as executors of the will of Rudi Roth as the sole beneficiaries of the Family Trust from the date of the vesting day of the Family Trust ('the plaintiffs' first question')?

(b) In relation to the Family Trust, is the 1994 variation deed effective to appoint the plaintiffs in their capacity as executors of the will of Rudi Roth as the sole beneficiaries of the Family Trust from the date of the vesting day of the Family Trust ('the plaintiffs' second question')?

11 On 8 February 2022 orders were made that Samantha Tracy Walker be added as the sixth defendant to the proceeding. The sixth defendant is one of the deceased's two adult daughters, who would be entitled, as tenants in common in equal shares absolutely, to the Family Trust assets if the appointment deed and the 1994 variation deed were not effective to appoint the plaintiffs as the sole beneficiaries of the Family Trust from the vesting day.

12 The appointment summons was heard on 30 March 2022. The plaintiffs, the first to fifth defendants, and the sixth defendant each filed and relied upon written submissions and submissions in reply. Consideration of the three other matters referred to the Court by Englefield JR, and the plaintiffs' notice of appeal, were deferred until after the determination of the questions posed in the summons.

13 The trust deed was made on 9 April 1975 between Bruce Krass as settlor and Bavister Pty Ltd as trustee. Bavister Pty Ltd subsequently changed its name to Rothcorp Holdings Pty Ltd, but otherwise continued as the trustee of the Family Trust until the vesting day.

14 The trust deed originally appointed the deceased and his then wife, Zilla Judith Roth, as joint guardians and appointors during their joint lifetimes and, after the death of one of them, the survivor of them. However, following the deceased and Zilla's divorce, a deed of variation and exclusion dated 22 April 1985 ('the 1985 variation deed') was entered into, which had the effect of excluding Zilla from the class of general beneficiaries and removing her as appointor and guardian.

15 Further amendments were also made to the trust deed by the 1994 variation deed and a deed of variation dated 1 February 1996 ('the 1996 variation deed'). Aside from a question as to the effect of cl 2 of the 1994 variation deed, considered below, there is no dispute that the 1985 variation deed, the 1994 variation deed and the 1996 variation deed were effective in making certain amendments to the trust deed, in accordance with the power of amendment in cl 11 of the trust deed.

16 As a result of these amendments, the trust deed ultimately provided that the deceased and, upon his death, his legal personal representative, were both to be the appointor and guardian of the Family Trust. The 1994 variation deed also amended the definition of 'vesting day' in the trust deed such that cl 1(f) defined it as:

(i) the first to occur of the following dates namely:

A. the days specified in the Schedule as 'the Vesting Day';

1. such date being earlier than the day so specified as the Trustees may in their absolute discretion (subject to Clause 11 hereof) with the consent of the Guardian if there is a Guardian on the date of appointment and if there is no Guardian without any consent appoint; or

C. the death of Rudi Roth...

17 It is not contentious that the vesting day occurred on 22 August 2016, which is the date of the deceased's death. The present issue concerns what, on the proper construction of the trust deed, occurred on that day.

18 What was to occur on the vesting day is dealt with by cl 5 of the trust deed which relevantly provides that:

AS from the Vesting Day the Trustees shall stand possessed of the Trust Fund and the income thereof -

(a) in trust for such of the beneficiaries and for such charitable purposes for such interests and in such proportions and for one to the exclusion of the other or others as the Trustees may (with the consent of the Guardian if any has been appointed hereunder) by instrument in writing revocable or irrevocable before the Vesting Day appoint PROVIDED ALWAYS that -

(i) if a Guardian has been appointed hereunder but none is in office the Trustees shall have no such power of appointment;

(ii) any revocable appointment made with the consent of the Guardian shall be revocable with the consent of the same or any subsequent Guardian but not otherwise;

(iii) any revocable appointment shall be revocable as aforesaid only until the end of the day preceding the Vesting Day when it shall become irrevocable;

(b) in so far as any part of the Trust Fund shall not have been disposed of in accordance with sub-clause (a) of this Clause if one specified Beneficiary is named or described in the Schedule then in trust for such Specified Beneficiary absolutely if such Specified Beneficiary shall be living on the Vesting Day and if more than one Specified Beneficiary are so named or described in trust for such of the Specified Beneficiaries as shall be living on the Vesting Day as tenants in common in equal shares absolutely provided always that the children (if any) living on the Vesting Day of any Specified Beneficiary who dies before the Vesting Day shall take as tenants in common in equal shares the share which such deceased Specified Beneficiary would have received had he or she survived to the Vesting Day and attained a vested interest and the children living on the Vesting Day of any deceased child (who dies before the Vesting Day) of any such Specified Beneficiary shall take as tenants in common in equal shares the share which such deceased child would have received had he or she survived to the Vesting Day and attained a vested interest and in turn the descendants living on the Vesting Day of any of such children of such deceased child who die before the Vesting Day shall take in a manner calculated per stirpes the share which such deceased children would have taken...

19 Clause 5(a) provides the power for the trustee, by an instrument in writing, to appoint one or more beneficiaries or charitable purposes for whose benefit the trustee will stand possessed of the trust fund from the vesting day.

20 The trust deed contains an extensive definition of 'beneficiaries'. Clause 1(c) of the trust deed provides that 'beneficiary' shall mean any of the 'general beneficiaries', which is itself defined in cl 1(b) as follows:

the 'General Beneficiaries' shall mean and include -

(i) the Specified Beneficiary or the Specified Beneficiaries (as the case may be);

(ii) the brothers sisters spouses widows widowers children and grandchildren of the Specified Beneficiary or Specified Beneficiaries and the spouses widows widowers children and grandchildren of such brothers and sisters spouses children and grandchildren;

(iii) any of the following entities whether formed in Australia or elsewhere namely -

1. The Trustees (in their capacity as such) of any Trust or settlement (called 'an eligible trust') under which any General Beneficiary hereinbefore referred to has any interest whether absolute or contingent and whether liable to be defeated by the exercise of any power of appointment or revocation or to be diminished by the increase of the class to which he belongs;

2. any corporation (called 'an eligible corporation') at least one share in which is owned by any General Beneficiary hereinbefore referred to or by the trustees of an eligible trust;

3. any other legal entity at least one share or other interest (whether present or contingent) in which is owned or held by any General Beneficiary hereinbefore referred to or by the trustee of an eligible trust or by an eligible corporation;

(iv) such additional persons corporations and trusts (if any) as are named described or defined in the Schedule as additional members of the class of General Beneficiaries;

PROVIDED HOWEVER, that the following persons namely -

(a) the Settlor or any person claiming under or in right of the Settlor;

(B) the Guardian;

(C) the Trustees;

(D) any corporation in which and the trustees of any trust or settlement in or under which and any other legal entity in which any of the persons referred to in paragraphs (A) (B) and (C) of this proviso have any beneficial interest of whatsoever nature so long as such interest continues -

shall notwithstanding that they may otherwise be or be qualified to be included in the class of General Beneficiaries shall be excluded from the class of General Beneficiaries unless they are Specified Beneficiaries or are otherwise specifically included in the Schedule;

AND PROVIDED FURTHER that the Trustees at any time and from time to time may (in conformity with Clause 11 hereof but not otherwise) declare in writing that any person shall be excluded from the class of General Beneficiaries notwithstanding that but for such exclusion he is or would by reason of one or more of the matters or circumstances hereinbefore referred to have been a General Beneficiary and the class of General Beneficiaries shall as from the date of the making of any such declaration be modified accordingly...

21 Clause 1(a) states that 'Specified Beneficiary' and 'Specified Beneficiaries' shall mean the person or persons named or described as such in the schedule. The schedule identifies the specified beneficiaries as 'the children of Rudi Roth and Zilla Judith Roth'. The schedule also specifically identifies the deceased as a general beneficiary.

22 Relevantly to the definition of 'beneficiaries' under the trust deed, cl 1 of the trust deed also includes:

(l) the expressions 'the Specified Beneficiary' 'the Specified Beneficiaries' and 'the General Beneficiaries' shall include persons corporations and the trustees of Trusts or Settlements and other legal entities who from time to time until the Vesting Day come within the foregoing definitions or within any description in the Schedule notwithstanding that such persons corporations trustees or other legal entities may not be in existence or have come into the defined category at the date of this Deed and in the case of such trustees notwithstanding that the Trusts or Settlements of which they are Trustees have not been formed or come into existence or do not fall within the defined category at the date of this Deed;

(o) references to a contingent interest shall be deemed to include any possibility expectancy or spes.

23 The primary position of the plaintiffs, as well as that of the first to fifth defendants, is that the appointment deed was effective to appoint the plaintiffs as the sole beneficiaries of the Family Trust from the vesting day in accordance with cl 5(a) of the trust deed. The recitals to the appointment deed include '[t]he Trustee with the consent of the Guardian wishes to make an appointment pursuant to clause 5 of the Trust Deed', while the operative clauses provide:

1. Upon the death of Rudi Roth the Trustee shall stand possessed to the Trust Fund for the Trustees of the Trust created by the Will of Rudi Roth to be held pursuant to the Trust created by the said Rudi Roth's Will.
2. Rudi Roth as guardian and appointor consents to this Deed.
3. This Deed is irrevocable without the consent of Rudi Roth.

The sixth defendant contends that the plaintiffs, as described in cl 1 of the appointment deed, were not 'beneficiaries' as defined in the trust deed and therefore a valid appointment under cl 5(a) could not be made in their favour.

24 Alternatively, the plaintiffs submit that cl 2 of the 1994 variation deed validly amended cl 5 of the trust deed, while the first to fifth defendants submit that cl 2 of the 1994 variation deed was itself an appointment under cl 5(a) of the trust deed. Clause 2 of the 1994 variation deed provided:

It is hereby declared that in the event of the death of Rudi Roth the Trustee shall stand possessed of the trust fund and the income thereof in trust for the executor of the estate of Rudi Roth to be held pursuant to the trusts created by the said Rudi Roth's Will PROVIDED HOWEVER that the provision of this paragraph shall only apply where at least one of the residual beneficiaries named in the said Will of Rudi Roth is a general beneficiary as defined in the Trust Deed.

The sixth defendant's position is that cl 2 of the 1994 variation deed did not vary the trust deed but a purported appointment under cl 5(a). However, the sixth defendant submits that, as for the appointment deed, this appointment was not a valid appointment under cl 5(a) as it was not an appointment of a 'beneficiary' as defined in the trust deed.

25 The will makes numerous references to the Family Trust. There is a dispute between the parties as to the extent to which the terms of the will are relevant to the proper construction of the trust deed, the 1994 variation deed and the appointment deed.

(1) The Rudi Roth Family Trust was created by Deed dated 9 April 1975 (the 'Trust Deed') in which Bruce Krass was the Settlor and Bavister Pty Ltd was the trustee. Bavister Pty Ltd has changed its name to Rothcorp Holdings Pty Ltd. The Trust Deed was varied on 22 April 1985 and then on 23 September 1994 and then on 1 February 1996. The effect of the variations to the Trust Deed is that the Guardian and Appointor is Rudi Roth and upon his death his legal personal representatives. Further if not already vested, upon the death of Rudi Roth the Rudi Roth Family Trust vests and the trustee stands possessed of the trust fund for the executor of the estate of Rudi Roth to be held upon the terms of his Will conditional upon at least one of the residual beneficiaries named in the Will being a general beneficiary of The Rudi Roth Family Trust.

(2) AS TO the shares I own in Rothcorp Holdings Pty Ltd (or such other company as is trustee of The Rudi Roth Family Trust) to be transferred to my Trustees in proportions so that my Trustees hold an equal number of shares in the said company and to be held by my Trustees for such time or times as to enable them to administer The Rudi Roth Family Trust and from and after such time to form part of the rest and residue of my estate.

(3) I DIRECT that each of my Trustees shall be appointed a director of and shall be the sole directors of the company which acts as trustee of The Rudi Roth Family Trust.

I GIVE DEVISE AND BEQUEATH the balance of my real and person Estate to my Trustee TO HOLD UPON THE FOLLOWING TRUSTS:-

...

(5) AS TO all of the assets which were formerly owned by The Rudi Roth Family Trust and which vested in my estate on or following my death and including without limitation the properties at 62-66 Church Street, Brighton and the income therefrom to hold the same upon the following trusts:

(b) following the death of [the first defendant] to pay the income from the properties at 62-66 Church Street, Brighton or an amount of money equal to the capital value of the said properties as my Trustees determine in their sole and unfettered discretion to form part of the rest and residue of my estate or to JEWISH CARE.

(d) AS TO the remaining unapplied capital and income which formerly belonged to The Rudi Roth Family Trust to form part of the rest and residue of my estate; ...

(17) AS TO the rest and residue of my estate to be divided into 100 equal parts or shares; and

(a) AS TO 50 parts or shares unto such of my grandchildren as shall survive me and if more than one as tenants in common in equal shares for their sole use and benefit absolutely.

(b) AS TO 50 such parts or shares to such of my wife [the first defendant]'s grandchildren as shall survive me and if more than one as tenants in common in equal shares for their sole use and benefit absolutely.

28 Resolution of the plaintiffs' questions turns on the proper construction of the trust deed, the 1994 variation deed and the appointment deed.

29 The principles relevant to the construction of trust instruments are well settled. For present purposes, the relevant principles were conveniently summarised by the Court of Appeal in Schreuders v Grandiflora Nominees Pty Ltd as follows:[2]

The principles governing the interpretation of contracts apply also to trust instruments.[3] The High Court has 'reaffirmed the objective approach to be adopted in determining the rights and liabilities of parties to a contract.'[4] The meaning of the terms of a contract is to be determined by what a reasonable person would have understood those terms to mean.

In Australian Broadcasting Commission v Australasian Performing Right Association Ltd,[5] Gibbs J stated:

It is trite law that the primary duty of a court in construing a written contract is to endeavour to discover the intention of the parties from the words of the instrument in which the contract is embodied. Of course the whole of the instrument has to be considered, since the meaning of any one part of it may be revealed by other parts, and the words of every clause must if possible be construed so as to render them all harmonious one with another.[6]

[I]f [a] result is produced by the application of the words in which the parties have expressed themselves, it is no part of the function of a court by some process of divination as distinct from construction of the language employed to attribute to parties an intention to do something for which their express words do not provide.[7]

When objectively assessing the meaning of a contractual provision, it is sometimes permissible for the court to have regard to the surrounding circumstances known to the parties at the time the contract was executed.[8] However, if an expression in a contract is unambiguous or susceptible to only one meaning, evidence of surrounding circumstances cannot be adduced to contradict that meaning.[9]

Where an amending agreement amends a principal agreement by discrete amendments rather than by replacing the principal agreement with a new consolidated version which incorporates the amendments, the amending agreement must be read as part of, or in conjunction with, the principal agreement.[10] The two documents must be construed together as this is the only way in which the nature and effect of the changes to the principal agreement made by the amending agreement can be identified.

...

Consistently with the above principles, trust instruments are to be given their natural and ordinary meaning unless they have a special or technical meaning.[11] The terms of an instrument must be construed in the context of the entire document[12] and in such a way that renders them 'all harmonious one with another'.[13]

The parties' intention must be found in the wording of the trust instrument rather than in what was on their minds when they executed the instrument.[14] Evidence of the actual intention of the parties will not be admissible except in an action for rectification and other limited circumstances.[15] In Byrnes v Kendle,[16] Gummow and Hayne JJ stated:

[T]he expressed intention of the parties is to be found in the answer to the question, 'What is the meaning of what the parties have said?', not to the question, 'What did the parties mean to say?'[17]

Was the deceased a beneficiary under the trust deed?

30 Before turning to consider each of the questions raised in the appointment summons it is convenient to consider a preliminary issue between the parties as to whether the deceased himself was excluded as a beneficiary in whose favour the power of appointment could be exercised under the proviso at the end of cl 1(b) of the trust deed.

31 There was no suggestion that the power of appointment had been exercised in the deceased's favour. Nonetheless, the sixth defendant contended that the deceased was excluded as a beneficiary by the proviso and that exclusion ought not be capable of being defeated through an appointment of his executors or trustees of a trust created by his will. The plaintiff contended that the deceased was not excluded by the proviso and the fact that the deceased could be appointed is relevant when construing the trust deed.

PROVIDED HOWEVER that the following persons namely -

...

(B) the Guardian;

...

shall notwithstanding that they may otherwise be or be qualified to be included in the class of General Beneficiaries shall be excluded from the class of General Beneficiaries unless they are Specified Beneficiaries or are otherwise specifically included in the Schedule...

33 On the proper construction of the trust deed, the deceased was not excluded by this proviso. The deceased was 'specifically included in the Schedule', as the schedule named him as a general beneficiary.

34 Contrary to the sixth defendant's submission, such a construction does not result in the trust deed containing a contradiction. The proviso expressly allows for a person it seeks to exclude to nonetheless remain within the class of general beneficiaries if they are expressly identified in the schedule as such. While the deceased held the position of guardian under the trust deed at all material times, the trust deed expressly contemplated the potential for a different guardian to be appointed. The evident purpose of the proviso is to ensure that if a person not named as a specified or general beneficiary in the schedule were to assume the office of guardian, that person would be excluded as a beneficiary notwithstanding that they may otherwise fall within the broad definition of beneficiary.

The plaintiffs' first question: the appointment deed

35 The first question in the appointment summons refers to whether the appointment deed was effective to appoint the plaintiffs in their capacity as executors of the will. However, as the first to fifth defendants submitted, the appointment deed refers to the plaintiffs in their capacities as 'the Trustees of the Trust created by the Will of Rudi Roth'. As such, the Court accepts their submission that the more appropriate formulation of the questions to be determined by the appointment summons is:

was [either the appointment deed or the 1994 variation deed] effective to appoint the plaintiffs in their capacity as executors of the will of the deceased and trustees of the trust created by clause 4(5) of the will, as the sole beneficiaries of the Family Trust, from the date of the vesting day of the Family Trust.

36 In order for a valid appointment to have been made under cl 5(a) of the trust deed, it must be made by the trustee, in writing, prior to the vesting day with the consent of the guardian. It must also be made in favour of 'beneficiaries' as defined in the trust deed or in favour of 'charitable purposes'.

37 The appointment deed was in writing and made by the trustee, with the consent of the deceased as guardian, prior to the vesting day. The key question is therefore whether the plaintiffs, as 'the Trustees of the Trust created by the Will of Rudi Roth', are beneficiaries as defined in the trust deed in whose favour the power of appointment could be exercised.

38 Clause 1(b)(iii)(A) of the trust deed provides that 'General Beneficiaries' means and includes:

The Trustees (in their capacity as such) of any Trust or Settlement (called 'an eligible trust') under which any General Beneficiary hereinbefore referred to has any interest whether absolute or contingent and whether liable to be defeated by the exercise of any power of appointment or revocation or to be diminished by the increase of the class to which he belongs...

39 The plaintiffs and the first to fifth defendants submit that the appointment deed refers to the plaintiffs in their capacity as the trustees of the trust provided for in cl 4(5) of the will. They submit that in such capacity the plaintiffs fall within cl 1(b)(iii)(A), as the deceased's grandchildren, who are themselves general beneficiaries under cl 1(b)(ii) of the trust deed, have an interest in the trust created by cl 4(5) of the will, by virtue of cls 4(5)(d) and 4(17) of the will.

40 The plaintiffs, as well as the first to fifth defendants, contend that the appointment deed's terms and validity fall to be construed on the vesting day and not before that time. They submit that the fact that the plaintiffs did not exist in the capacity as trustees of the trust created by cl 4(5) of the will at the time the appointment deed was entered into is no impediment to the validity of the appointment under cl 5(a) of the trust deed. In this regard, they rely upon cl 1(l) of the trust deed, which provides that:

the expressions 'the Specified Beneficiary' 'the Specified Beneficiaries' and 'the General Beneficiaries' shall include persons corporations and the trustees of Trusts or Settlements and other legal entities who from time to time until the Vesting Day come within the foregoing definitions or within any description in the Schedule notwithstanding that such persons corporations trustees or other legal entities may not be in existence or have come into the defined category at the date of this Deed and in the case of such trustees notwithstanding that the Trusts or Settlements of which they are Trustees have not been formed or come into existence or do not fall within the defined category at the date of this Deed...

41 The plaintiffs and the first to fifth defendants submit that upon the deceased's death the following events occurred:

(a) the plaintiffs, as the deceased's legal personal representatives, became the appointor and guardian of the Family Trust;

(b) the will came into effect and the plaintiffs became executors of the will;

(c) the will came into effect and the plaintiffs became trustees of the trust provided for in cl 4(5) of the will because the property of the trust (being the assets of the Family Trust) was entirely ascertained and not subject to any other parts of the estate being administered; and

(d) the trust vested, as the vesting day as defined in the trust deed was reached.

Accordingly, the plaintiffs (as executors of the will of the deceased and trustees of the trust provided for in cl 4(5) of the will) existed on the vesting day and were therefore beneficiaries capable of receiving trust assets on the vesting of the Family Trust.

42 The first to fifth defendants alternatively submitted that cl 1(l) of the trust deed must otherwise be construed to include trusts or entities that came into existence after the vesting day.

43 On the other hand, the sixth defendant contends that the plaintiffs, as either trustees or executors under the deceased's will, were not beneficiaries as defined in the trust deed as they were not in existence in that capacity on the vesting day. She submits that it is impermissible to conflate distinct, necessarily sequential, events into one singularity, and that the correct sequence of events is:

(a) first, the death of the deceased;

(b) second, the vesting day, triggered by the deceased's death and the termination of the trust period;

(c) third, the vesting of the trust fund on the vesting day to the beneficiaries of the trust under cl 5 of the trust deed; and

(d) fourth, the plaintiffs coming into existence as legal entities either as executors of the will or as trustees of the trust provided for under cl 4(5) of the will.

The sixth defendant submits that cl 1(l) of the trust deed does not expand the definition of beneficiary to include entities or persons that did not exist on the vesting day. Therefore, she contends that it is misconceived to submit that the plaintiffs had existed as legal entities prior to the vesting day and were capable of receiving the trust distribution in their capacity as 'beneficiaries' under the trust deed.

44 As noted above, cl 5(a) of the trust deed provides the trustee with the power to, by written instrument, appoint beneficiaries or such charitable purposes for whom, from the vesting day, the trustees shall stand possessed of the trust fund. It is accepted that, on its proper construction, the trust deed does not require the object of that appointment to be in existence, or to fall within the definition of beneficiary, at the time the written instrument providing for the appointment is executed. The words 'before the Vesting Day' in cl 5(a) are clearly referable to the time at which the instrument of appointment is made.

45 As the plaintiffs submit, cl 1(l) of the trust deed recognises that the persons who fall within the definition of beneficiary may change over time. For example, by virtue of cl 1(b)(iii)(B), a corporation who was not otherwise a beneficiary may fall within that definition at the point in time when a beneficiary purchases shares in that company, and then fall outside that definition if the beneficiary were to sell those shares. Furthermore, persons or entities who fall within the definition may come into existence after the time the Family Trust was created.

46 Clause 1(l) makes clear that persons or entities not in existence or not falling within the definition of 'beneficiary' at the time the Family Trust was created may nonetheless be recognised as beneficiaries at the time that they come within that definition.

47 However, cl 1(l) does provide a temporal restriction on the time at which a person or entity may fall within the definition of beneficiary, stipulating that this may occur 'from time to time until the Vesting Day'. Contrary to the submissions of the first to fifth defendants, this provides an outer limit to the time at which a person or entity must be in existence, and must fall within the definition of beneficiary, in order to be considered a 'beneficiary' of the Family Trust.

48 It is to be noted that cl 1(l) uses the language 'until the Vesting Day' as opposed to 'before the Vesting Day', as is employed in cl 5(a). It has been recognised that the word 'until' is of variable meaning.[18] In Trani v Trani,[19] Daly AsJ considered the use of the language 'until the Vesting Day' in a trust deed, observing that in that case:

The use of 'until' rather than 'before' or 'prior to'... supports a construction which allows the trustee to distribute the income of the trust at any time prior to the nomination or appointment of the Vesting Day by the trustee, notwithstanding that the distribution was made on the same day as the appointed Vesting Day.[20]

49 In the present trust deed, the differing use of language between cl 1(l) and cl 5 suggests that the word 'until' was not intended to be synonymous with 'before', but is rather intended to mean 'up to and including the Vesting Day'. Such a construction is supported by the definition of 'Vesting Day' in cl 1(f)(i) of the trust deed, which makes reference to the vesting day being a particular 'date' rather than a particular point in time. Furthermore, under cl 5, it is 'on the Vesting Day', rather than, for example, upon the time of the event which triggers the vesting day, that the trustee is to stand possessed of the trust fund for certain persons in accordance with cl 5.

50 However, the expansive definition of 'beneficiaries' in the trust deed being such that the persons or entities so described change over time necessitates that an instrument making an appointment under cl 5(a) of the trust deed does not itself fall to be construed until the vesting day. If at that time the object of the purported appointment does not fall within the definition of beneficiary in the trust deed, the trust fund would not vest in accordance with that appointment but would instead vest as otherwise provided in cl 5.

51 Such a temporal limitation is, therefore, consistent with the fact that from the vesting day the trustee is to stand possessed of the trust fund in the manner provided for in the cascading provisions in cl 5 of the trust deed. Accordingly, the trust deed does not allow for a person or entity to fall within the definition of beneficiary, such that from the vesting day the trustee could stand possessed of the trust fund for their benefit, where that person or entity came into existence, or came to fall within the description of beneficiary, after the vesting day.

52 The deceased died on 22 August 2016 and, as such, the vesting day occurred on that date. Accordingly, on the proper construction of the trust deed, by virtue of cl 1(l), any person or entity who fell within the definition of 'beneficiary' between 12.01am and 11.59pm on 22 August 2016 would be capable of being the subject of an appointment made by the trustee under cl 5(a). However, such an appointment must have been made before 12.01am on 22 August 2016.

53 Therefore, in order for the appointment deed to have made a valid appointment of the plaintiffs to the trust fund, 'the Trustees of the Trust created by the Will of Rudi Roth' described in that deed must have come into existence, and within the definition of beneficiary set out in the trust deed, before the end of the vesting day.

54 As the plaintiffs and the first to fifth defendants submitted, the deceased's will operated and took effect from the date of the deceased's death and the plaintiffs, as the executors named in the will, derived their authority from the will from the date of death. The subsequent grant of probate was merely formal proof of the plaintiffs' authority as executors.

55 However, while the plaintiffs were properly considered the executors of the deceased's estate on the vesting day, the appointment deed does not refer to the plaintiffs in this capacity. Instead it refers to the 'the Trustees of the Trust created by the Will of Rudi Roth'. It is accepted that the trust to which this description applies is that referred to in cl 4(5) of the will.

56 If the trust provided for in cl 4(5) of the will came into existence on the vesting day, then the plaintiffs, in their capacity as the trustees of that trust, would fall within the definition of general beneficiaries in cl 1(b)(iii)(A) of the trust deed, as the deceased's grandchildren who are themselves general beneficiaries under the trust deed have an interest in that trust.

57 The plaintiffs and the first to fifth defendants submit that the trust provided for in cl 4(5) of the will came into existence at the time that the will came into effect and the plaintiffs became the executors of the deceased's estate. Thus, they submitted that this trust was in existence on the vesting day.

58 As noted above, the sixth defendant contends that it is not possible to conflate necessarily sequential events into one singularity, and that the trust provided for in cl 4(5) of the will did not come into existence immediately upon the death of the deceased and can only have come into existence after the vesting day. In making her submissions, the sixth defendant does not state the precise manner in which the trust provided for in cl 4(5) of the will could, or would, come into existence and does not point to any particular authority on the timing of the relevant events.

59 Resolution of the question of when the trust provided for in cl 4(5) of the will could have come into existence first requires consideration of the role of the plaintiffs as executors and trustees of the deceased's estate. As stated, the plaintiffs assumed their role as executors of the deceased's estate immediately upon the death of the deceased. While the will identifies them as the trustees and executors of the estate, these are different roles.

60 The executors of an estate have duties to get in the deceased's assets, pay the deceased's debts, distribute the assets and produce accounts. Unlike trustees, executors take both the legal and equitable interest in the estate property. In Official Reviewer in Bankruptcy v Schultz, the High Court explained:[21]

[P]rior to administration of the deceased estate, there is no specific property capable of constituting the subject property of any trust in favour of the beneficiary. It could not be said at that stage what part or parts of the testator's property would need to be realised for the purposes of administration.

61 While in Easterbrook v Young, the High Court noted that:[22]

[S]o soon as the executor by use of his executorial powers has completed his tasks and assented to the benefactions, the testator's will begins to operate and the powers of a trustee are activated in relation to the property then subject to the terms of the will... this is settled law in relation to powers and to the vesting of the interests of the beneficiaries under the will...

62 The process by which executors become trustees of certain estate property under a will was conveniently set out by Dalton J in Re Constantinou as follows:[23]

On death the entire interest in property (legal and beneficial) owned by a deceased person passes to the deceased person's executor for the purpose of administration under the will. While the estate remains in the course of administration, no person entitled under the will has any proprietary interest in any particular asset.

While an estate remains unadministered, persons entitled under the will have a chose in action to require the deceased's estate to be duly administered, and that right is disposable and transmissible. It carries with it the right to receive the fruits of the chose in action when they mature. It is recognised by the law that this is an inchoate interest of a kind in the assets of the estate.[24] But that interest can be defeated by the executor using the assets to pay the liabilities of the estate.[25] No doubt, from the time of demise the executor was subject not only to duties as executor but fiduciary duties in respect of the trusts established by the will.

However, it is not until the executor has completed the administration of the estate and assents that property passes to those entitled under the will. Those taking property at that point in time take under the will, not by reason of the assent,[26] but the dispositions of the will become operative because of the assent.[27]

This estate is still under administration, the executor has not assented. Thus, the executor still holds the entire legal and beneficial interest in all the property and there is no property the subject of the will trusts. There cannot be any extant trusts because, as yet, there is no property held on trust.[28]

63 An executor can become the trustee of estate property at different times so that he may act in different capacities in relation to different property at the same time.[29] However, as explained in Jacobs' Law of Trusts in Australia:[30]

In practice it is not easy to determine exactly when a person ceases to act as executor and commences to hold the property as trustee. The test is clear - have the person's executorial duties in respect of that property ended; but the difficulty in practice is to ascertain precisely whether that is the case.[31]

64 In recognition of the differing role of executors or trustees, counsel for the plaintiffs stated in oral submissions that the nature and extent of the deceased's estate was such that there was never any question that the trust created by cl 4(5) of the will would be circumvented by any other issues relating to the estate administration and, as such, it was a trust that was always going to be formed. It was, therefore, submitted that the trust could be seen as coming into existence immediately upon the deceased's death.

65 The Court does not accept that immediately upon the deceased's death, or at any time on the vesting day, the executors would be in a position to ascertain the extent of the deceased's estate and any debts such that the trust provided for by cl 4(5) of the will could be seen to have come into existence at that time. In Re Orloff, Robson J observed:[32]

For a person to be a trustee, the trust must come into effect and the person named as trustee must accept the appointment. In my view, the trusts have not taken effect and will not take effect until probate is granted, at the earliest.

It may be the case that the trusts will not take effect until the trusts' assets are identified and are able to vest in the trustee. In Principles of the Law of Trusts, the learned authors say:

For the creation of a trust, whether a trust inter vivos or a testamentary trust, it is essential that the trustee's assumption of a personal obligation to act for the benefit of the beneficiaries (or to advance some charitable purpose) be in respect of some subject matter. That requires that some proprietary interest in some specific asset be vested in the trustee.

66 In Porteous v Rinehart,[33] White J held that in relation to particular assets, namely shares in a company left to the executors as trustees on certain trusts, the executors were probably trustees despite it being likely that not all testamentary and administration expenses and debts had been paid. It has also since been acknowledged to be at least arguable that an executor appointed as trustee for donees of specific property can assent to holding the position of trustee in relation to that specific property notwithstanding that administration is not complete.[34] Nonetheless, there is no support for the proposition that the trust could have arisen on the vesting day, let alone immediately upon the deceased's death, and it appears likely that the earliest time the trust could have arisen is upon the grant of probate.

67 However, in any event, there are larger issues with the contention that the trust provided for in cl 4(5) of the will came into existence on the vesting day. As submitted by the sixth defendant, until his death the deceased was no more than an object of the Family Trust and did not have any right to the trust property beyond a mere expectation or hope that the trustee may exercise its discretion in his favour in making a distribution.

68 Thus, while cl 4(5) of the will seeks to provide for the manner in which the deceased wished the plaintiffs to hold 'all of the assets which were formerly owned by The Rudi Roth Family Trust and which vested in my estate on or following my death', the assets of the Family Trust were not the assets of the deceased and, there having been no earlier distribution to him, those assets could not vest in accordance with the appointment deed unless the trust provided for in cl 4(5) of the will had already come into existence. As such, unless this had occurred, the plaintiffs were not in a position to bring in the property subject to the Family Trust in order to transition from their role as executors to trustees under cl 4(5) of the will.

69 As the property of the Family Trust was not the property of the deceased's to devise, cl 4(5) of the will can be seen as no more than a statement of the deceased's wishes directing the plaintiffs as to how he wished the assets of the Family Trust to be dealt with if those assets were to come into their hands by virtue of an appointment under cl 5(a) of the trust deed. In Re O'Callaghan, Gowans J said:[35]

[W]here a testator conveys to his executor a direction to reduce into possession an asset not owned by the testator and the executor is armed by the testator with the power to get it in, he is bound to do so, and to deal with it by way of disposition in the way the testator directs.

However, in the present case the question remains whether the plaintiffs could validly obtain the assets of the Family Trust under the terms of the trust deed.

70 The first to fifth defendants submit that the trust provided for in cl 4(5) of the will did come into existence on the vesting day because the three necessary requirements for the creation of a trust were established: certainty of intention, certainty of beneficiaries and certainty of subject matter.[36] However, this submission overlooks the fact that there can be no trust without property upon which the trust can take effect.[37]

71 While the property which is intended to be held on trust is identified in cl 4(5) of the will, the deceased did not himself have an interest in the property of the Family Trust over which he could create a testamentary trust capable of arising immediately upon his death such that the plaintiffs would assume the status of trustees on the vesting day.

72 Likewise, the plaintiffs could not themselves have an interest in that property which they could hold on trust unless and until the assets of the Family Trust vested to them. As the plaintiffs' acquisition of an interest in the Family Trust property was contingent on them being beneficiaries under the trust deed, by virtue of the trust provided for in cl 4(5) of the will having come into existence, the trust cannot have come into existence on the vesting day.

73 Clause 1(b)(iii)(A) of the trust deed does not extend the definition of beneficiaries to persons who would hold property on trusts for the benefit of other general beneficiaries, instead it is limited to existing trustees of trusts in which a general beneficiary already has an interest.

74 Thus, the ultimate position is that the appointment deed could not have been a valid appointment of the trust fund to the plaintiffs on the vesting day, as it would have been necessary for the plaintiffs to already have obtained an interest in the assets of the Family Trust before the trust provided for in cl 4(5) of the will could have come into existence.

75 Until his death, the deceased himself fell within the definition of beneficiary in the trust deed. As he fell within the definition of beneficiary for part of the vesting day, it is arguable that, notwithstanding the deceased's death being the trigger for the vesting day, a valid appointment under cl 5(a) could have been made in his favour.[38] In that case the result may well have been that the trust fund vested in the deceased's estate such that it would be held by the plaintiffs in accordance with cl 4(5) of the will. However, it was not suggested that the appointment deed, or any other appointment under cl 5(a), could be interpreted as an appointment of the trust fund to the deceased personally. As the sixth defendant submitted, the fact that it may arguably have been possible to appoint the whole of the trust property to the deceased on the vesting day is irrelevant, as it was not done.

76 There were, however, various submissions to the effect that, as the deceased was effectively in control of the Family Trust, being the guardian and appointor of the trust as well as controlling the corporate trustee, the trust deed and the appointment deed should be interpreted in such a manner as to give effect to his intentions, as they were recorded in the terms of the will.

77 In relation to these submissions, there was a dispute between the parties as to the extent to which the terms of the will could assist in the construction of the trust deed and the instruments made under it. For the reasons explained below, cl 2 of the 1994 variation deed did not amend the trust deed such that the trust deed itself contained a reference to the will. Accordingly, the statements in the will cannot properly inform the construction of the trust deed and the extent of the trustees' power to make an appointment under cl 5(a), as they are no more than an expression of the deceased's subjective understanding of how the trust deed operated. The terms of the will are only relevant to the interpretation of the appointment deed for the purpose of ascertaining 'the Trustees of the Trust created by the Will of Rudi Roth'.

78 Thus, ultimately the submissions relying on the intention or understanding of the deceased as expressed in his will are contrary to the requirement that the trust instruments are to be construed objectively. As the sixth defendant submitted, it appears from the will that the deceased had a fundamental misunderstanding of the nature of his relationship to the Family Trust. By the terms of the trust deed, the Family Trust was not created for the deceased's sole benefit. That he intended or understood that it would form part of his estate is irrelevant to the proper construction of the trust deed and the appointment deed. The trustee of the Family Trust held the trust property in accordance with the trust deed and not in accordance with the deceased's subjective intentions or wishes. Although the deceased had practical control over the corporate trustee, he was not himself the trustee under the trust deed and his intentions or wishes cannot override the actions taken, and words employed, by the trustee.

79 While it may be an unfortunate result that what was done did not have the effect intended by the deceased, the Court does not have the power to remake or amend the trust instruments for the purposes of avoiding a result which is considered to be inconvenient or unjust.[39] The question for the Court is ultimately '[w]hat is the meaning of what the parties have said?' and not '[w]hat did the parties mean to say?'.[40]

80 The end result is that the plaintiffs did not exist as the 'Trustees of the Trust created by the Will of Rudi Roth' on the vesting day. The plaintiffs could only exist in such a capacity after the 'assets which were formerly owned by The Rudi Roth Family Trust' vested in the deceased's estate. However, on the proper construction of the trust deed, the trust fund did not vest in the deceased's estate on the vesting day, instead it was to be held by the trustee in accordance with cl 5 of the trust deed. As the 'Trustees of the Trust created by the Will of Rudi Roth' did not exist on the vesting day, they were not beneficiaries as defined in the trust deed and could not be the object of a valid appointment under cl 5(a).

81 For those reasons, on the proper construction of the trust deed and the appointment deed, the appointment deed was not effective to appoint the plaintiffs, in their capacity as executors of the will of the deceased and trustees of the trust created by cl 4(5) of the will, as the sole beneficiaries of the Family Trust, from the date of the vesting day of the Family Trust.

82 Finally, the sixth defendant submitted that, in any event, the plaintiffs were excluded as beneficiaries by the proviso at the end of cl 1(b) of the trust deed upon the deceased's death as, being the deceased's personal representatives, they became the guardians of the Family Trust. However, the Court accepts the submissions of the plaintiffs and the first to fifth defendants that the purpose of the exclusion is to prevent a guardian who is not otherwise specifically included as a beneficiary in the schedule taking a beneficial interest in the trust. Properly construed, the proviso would not operate to exclude a trustee of a trust which comes within cl 1(b)(iii)(A) where that trustee is themselves a guardian of the trust, so long as the guardian has no beneficial interest in that trust.

The plaintiffs' second question: clause 2 of the 1994 variation deed

THIS DEED OF VARIATION OF TRUST made the 23rd day of September 1994.

BY: BAVISTER PTY. LTD. A.C.N. 005 074 402 of Level 1, 102 Toorak Road, South Yarra (hereinafter called "the Trustee").

WHEREAS:

1. By Deed of Trust made the 9th day of April, 1975 (hereinafter called "the Trust Deed") between BRUCE KRASS as settlor of the one part and the Trustee as trustee of the other part, it was constituted as a trust fund for the benefit of the beneficiaries named therein.

2. Pursuant to clause 19 of the Trust Deed:

"19. Subject to clause 11 thereof the Trustees for the time being may at any time and from time to time by deeds revoke to [sic] or vary all or any of the trusts terms and conditions contained in the Trust Deed and subject otherwise to the terms ad [sic] conditions therein contained."

1. The Trustee desires to provide for a distribution of the trust upon the death of Rudi Roth.

2. The Trust Deed was amended by Deed of Variation and Exclusion dated the 22nd day of April, 1985.

NOW IT IS HEREBY DECLARED AS FOLLOWS:

1. Clause 1(f) of the Trust Deed shall be amended by deletion of paragraph (i) thereof and substitution by the following:

"(i) the first to occur of the following dates namely:

A. the days specified in the Schedule as "the Vesting Day";

1. such date being earlier than the day so specified as the Trustees may in their absolute discretion (subject to Clause 11 hereof) with the consent of the Guardian if there is a Guardian on the date of appointment and if there is no Guardian without any consent appoint; or

C. the death of Rudi Roth.

1. It is hereby declared that in the event of the death of Rudi Roth the Trustee shall stand possessed of the trust fund and the income thereof in trust for the executor of the estate of Rudi Roth to be held pursuant to the trusts created by the said Rudi Roth's Will PROVIDED HOWEVER that the provisions of this paragraph shall only apply where at least one of the residual beneficiaries named in the said Will of Rudi Roth is a general beneficiary as defined in the Trust Deed.

2. The Trust Deed shall be amended pursuant to the powers available to the Trustee and conferred on the Trust Deed by clause 19 of the Trust Deed by substituting in the Schedule of the Trust Deed the guardian as follows:

"GUARDIAN:

The said Rudi Roth and upon his death Vanessa Margot Roth."

1. The Trust Deed shall be amended pursuant to the powers available to the Trustee and conferred on the Trust Deed by clause 19 of the Trust Deed by substituting in the Schedule of the Trust Deed the appointor as follows:

"APPOINTOR:

The said Rudi Roth and upon his death Vanessa Margot Roth."

84 The plaintiffs submit that cl 2 of the 1994 variation deed had the effect of amending cl 5 of the trust deed. While the first to fifth defendants generally adopted the submissions of the plaintiffs, they did not press this argument themselves, instead they submit that cl 2 of the 1994 variation deed was intended to take effect as an appointment under cl 5(a) of the trust deed.

Did clause 2 of the 1994 variation deed amend clause 5 of the trust deed?

85 The plaintiffs acknowledge that, on its face, cl 2 of the 1994 variation deed does not expressly purport to vary the trust deed, but submit that, given the width of the power of variation in cl 19 of the trust deed, it would be possible to vary cl 5 of the trust deed to provide expressly that the power of appointment could be exercised in favour of the legal personal representatives of the deceased's estate. They contend that such an express variation would not constitute a destruction of the sub-stratum of the trust, since during his lifetime the deceased was a general beneficiary who could have always been the subject of the power of appointment. They emphasise that the vesting day could always have been specified to be some date earlier than his death and, in that instance, the whole of the trust property could pass to him and would then form part of his estate to be disposed by the provisions in his will.

86 The plaintiffs also submit that given the evident intention of the deceased expressed in the will, as well as the overlap between cl 2 of the 1994 variation deed and the appointment deed in each intending to ensure the Family Trust property would form part of the deceased's estate, the Court should give a purposive construction to cl 2 of the 1994 variation deed such that it is read as implicitly amending the power of appointment in cl 5 of the trust deed.

87 On the other hand, the sixth defendant submits that the words in the 1994 variation deed must be given their ordinary and natural meaning and not given a construction that they do not ordinarily bear in order to achieve what may be thought was the intended purpose of the drafting. The sixth defendant submits that as cl 2 did not expressly vary the trust deed it is not open for the Court to construe the clause as impliedly doing so in circumstances where objectively that was not the intended purpose of the clause.

88 Further, the sixth defendant submits that the power of amendment in cl 19 of the trust deed must be exercised bona fide for the purposes for which it is conferred. The sixth defendant submits that if cl 2 were to be construed as impliedly varying the trust deed, it would have the effect of destroying the sub-stratum of the Family Trust, as the Family Trust was not created for the sole or even primary benefit of the deceased. She submits that even if it had been possible to appoint the whole of the trust property to the deceased on the vesting day, this is irrelevant as it was not done.

89 For their part, the first to fifth defendants submit that the better view of cl 2 of the 1994 variation deed is that the trustee of the Family Trust was exercising the power of appointment in cl 5(a). They submit that the fact that cl 2 takes the form of a 'declaration' rather than using words of appointment or making express reference to the power exercised is of no moment.[41] They contend that the words of cl 2 admit no interpretation other than that this was an exercise of the power of appointment in cl 5(a) of the trust deed. In particular, they emphasise that given the effect of cl 1 of the 1994 variation deed was to include the death of the deceased as an event triggering the vesting of the trust, it is self-evident from the words of cl 2 that it was intended to exercise the power of appointment on the vesting of the trust, being as it was, the event of the deceased's death.

90 The Court accepts the first to fifth defendants' submissions that, properly construed, cl 2 of the 1994 variation deed was intended to operate as an appointment under cl 5(a) of the variation deed and not as a variation of the trust deed under cl 11.

91 As the first to fifth defendants submit, the fact that the 1994 variation deed does not make express reference to the trustee's power to make an appointment under cl 5(a) is no obstacle to such an appointment, as it is sufficient that the instrument reveals an intention to exercise that power.

92 The 1994 variation deed recites that '[t]he Trustee desires to provide for a distribution of the trust upon the death of Rudi Roth'. This statement and the words of cl 2 do not suggest that this desire is intended to be effected through an amendment of cl 5 of the trust deed. Rather, the words of cl 2, read alongside the powers of the trustee under the trust deed, evince an intention to make an appointment under cl 5(a) of the trust deed.

93 While the 1994 variation deed does recite the trustee's power under cl 11 of the trust deed and not the power of appointment in cl 5(a), the language of cl 2 can be contrasted with the language used in the other operative clauses of that deed. Clauses 1, 3 and 4 each expressly state that they are intended to amend the trust deed, identify the clause of the trust deed which is to be amended and clearly identify the words which are to be included within the trust deed. Clause 2, however, merely expresses itself as a declaration of what is to occur 'in the event of the death of [the deceased]'.

94 Furthermore, even if cl 2 were intended to effect an amendment to cl 5 of the trust deed, there are uncertainties as to how it would operate, given that, unlike the other clauses of the 1994 variation deed, it does not specify how the amendment is intended to operate. It is unclear whether the terms of cl 2 were intended to be subordinate to any appointment otherwise made under cl 5(a) of the trust deed or whether they are intended to exhaustively detail what would occur on the vesting day. If the power of amendment were intended to be exercised, the trustee would be expected to identify how that amendment would take effect, as was done for the other amendments effected by the 1994 variation deed.

95 As the sixth defendant submitted, the words of cl 2 of the trust deed cannot be construed such that they impliedly amend cl 5 of the trust deed in circumstances where objectively that was not the intended purpose of the clause.

96 The 1994 variation deed, as with the other trust documents, is to be construed objectively and not based on the subjective intentions or understanding of the deceased. While the deceased's intentions or understanding may be expressed in the will, which is itself referred to in the 1994 variation deed, the will is only relevant to the identification of the 'executor of the estate of Rudi Roth to be held pursuant to the trusts created by the said Rudi Roth's Will' as provided for in cl 2 of the 1994 variation deed, and cannot alter its characterisation as an appointment rather than an amendment to the trust deed. In any event, the intentions or understandings expressed in the deceased's will do not necessarily reflect the intentions of the corporate trustee of the Family Trust, and by their terms do not necessarily support an intention to vary the trust deed rather than to make an appointment under cl 5(a) of the trust deed (even if such an appointment was ultimately ineffective).

97 As, properly construed, cl 2 of the 1994 variation deed was intended to operate as an appointment under cl 5(a) of the trust deed, it is necessary to consider whether that purported appointment was effective to appoint the property of the Family Trust to the 'executor of the estate of Rudi Roth to be held pursuant to the trusts created by the said Rudi Roth's Will' on the vesting day.

Was there a valid appointment under clause 5(a) of the trust deed?

98 The first to fifth defendants submit that because the deceased's grandchildren are general beneficiaries of the Family Trust, and are residual beneficiaries of the will, the 1994 variation deed validly appoints the plaintiffs in their capacity as executors of the will and trustees of the trust provided for in cl 4(5) of the will to receive the trust fund on the vesting day.

99 There was no suggestion from the parties that the clause could be construed as in fact being an appointment in favour of the deceased. Therefore, the key question for the validity of the purported appointment made by cl 2 of the 1994 variation deed is whether the plaintiffs in their capacity as executors of the deceased's estate were beneficiaries as defined in the trust deed, such that a valid appointment under cl 5(a) could be made in their favour.

100 As earlier identified, cl 2 of the 1994 variation deed uses different language to the appointment deed, providing that the trust fund is to be held in trust for 'the executor of the estate of Rudi Roth to be held pursuant to the trusts created by the said Rudi Roth's Will'.

101 As explained above in relation to the appointment deed, the plaintiffs were not trustees of the kind defined in cl 1(b)(iii)(A) of the trust deed on the vesting day. As the executors of the deceased's estate do not otherwise fall within the definition of 'beneficiary' under the trust deed, no appointment of the trust fund could be validly made in their favour.

102 For the forgoing reasons, the answer to each of questions posed by the appointment summons is 'no'. Neither the appointment deed nor the 1994 variation deed were effective to appoint the plaintiffs in their capacity as trustees of the trust provided for in cl 4(5) of the will as the sole beneficiaries of the Family Trust from the vesting day.

103 As a result, the trust property should be returned to the trustee of the Family Trust to be distributed in accordance with the trust deed. In light of this decision, the plaintiffs should provide the Court with updated accounts of the estate and the Family Trust to facilitate the consideration of the remaining questions referred to the Court and the plaintiffs' notice of appeal.

104 The parties are to consult on the appropriate orders arising from this decision and as to costs. Proposed orders by consent or otherwise should be forwarded to the Court no later than 9 September 2022 at 4pm.

GLENN SYDDALL WILLIAMS (in the will called GLENN SYDALL WILLIAMS) (in his capacity as the executor and trustee of the estate of RUDI ROTH, deceased)

SYDNEY ROTH (in the will called SONNY ROTH) (in his capacity as the executor and trustee of the estate of RUDI ROTH, deceased)

HARLEY ROSE (by his litigation guardian PHILLIP ROSE)

ASHER STAR (by his litigation guardian DANIEL STAR QC)

[1] See unpublished ruling of Englefield JR dated 13 August 2021, [25]-[29].

[2] [2016] VSCA 93, [12]-[16], [21]-[22] (Kyrou, Ferguson and McLeish JJA).

[3] Byrnes v Kendle [2011] HCA 26; (2011) 243 CLR 253, 275 [59], 286 [102] ('Byrnes').

[4] Electricity Generation Corporation v Woodside Energy Ltd [2014] HCA 7; (2014) 251 CLR 640, 656 [35] ('Woodside').

[5] [1973] HCA 36; (1973) 129 CLR 99 ('ABC v APRA').

[8] Woodside (n 4), 656-7 [35].

[9] Codelfa Construction Pty Ltd v State Rail Authority (NSW) (1982) 149 CLR 337, 352; Mount Bruce Mining Pty Ltd v Wright Prospecting Pty Ltd [2015] HCA 37; (2015) 256 CLR 104, 116 [48], 117 [52].

[10] Commercial and General Acceptance Ltd v Dunlop [1975] 2 NSWLR 439, 443.

[11] Hill (Viscount) v Hill (Dowager Viscountess) [1897] UKLawRpKQB 33; [1897] 1 QB 483, 486.

[12] Re Altson: Equity Trustees Executors & Agency Co Ltd v Spielvogel [1955] VicLawRp 20; [1955] VLR 281, 284; ABC v APRA (n 5), 109.

[13] ABC v APRA (n 5), 109.

[14] Byrnes (n 3), 273 [53]-[59], 284-90 [98]-[115].

[15] Byrnes (n 3), 285-6 [101], 290 [115].

[16] [2011] HCA 26; (2011) 243 CLR 253.

[17] Byrnes (n 3), 273 [53].

[18] Re Bastard [1932] SAStRp 32; [1932] SASR 155, 160.

[19] [2018] VSC 274.

[21] [1990] HCA 45; (1990) 170 CLR 306, 312 (Mason CJ, Brennan, Deane, Dawson and Gaudron JJ).

[22] [1977] HCA 16; (1977) 136 CLR 308, 320 (Barwick CJ, Mason and Murphy JJ).

[23] [2012] QSC 332; [2013] 2 Qd R 219, 226-7 [33]-[36].

[24] In Re Leigh's Will Trusts [1970] Ch 277, 281-2; Earnshaw v Hartley [2000] Ch 155, 161; Marshall v Kerr [1995] 1 AC 148, 165-6; J R Martyn & N Caddick, Williams, Mortimer and Sunnucks - Executors, Administration and Probate (Thomson Reuters, 19th ed, 2008) [78.04]; C H Sherrin et al (eds), Williams on Wills (LexisNexis, 8th ed, 2002) [25.18].

[25] WJ Williams, The Law Relating to Assents (Butterworth and Co, 1947) 26.

[26] Commissioner of Stamp Duties (Qld) v Livingston [1964] UKPC 2; [1965] AC 694; In Re Leigh's Will Trusts [1970] Ch 277, 281; Re Donkin [1966] Qd R 96, 114-5; Holdway v Arcuri Lawyers [2008] QCA 218; [2009] 2 Qd R 18.

[27] Attenborough v Solomon [1913] AC 76, 83, followed in Holdway v Arcuri Lawyers [2008] QCA 218; [2009] 2 Qd R 18, 47 [72] (Keane JA).

[28] Easterbrook v Young [1977] HCA 16; (1977) 136 CLR 308, 319; Roger Kerridge, The Law of Succession (Sweet & Maxwell, 12th ed, 2008) [24-59].

[29] See, eg, Porteous v Rinehart [1998] WASC 270; (1998) 19 WAR 495, 503 (White J), citing Re Earl of Stamford; Payne v Stamford [1895] UKLawRpCh 182; [1896] 1 Ch 288, 297; Re Timmis; Nixon v Smith [1901] UKLawRpCh 192; [1902] 1 Ch 176, 183_; Re Cockburn's Will Trusts; Cockburn v Lewis_ [1957] 1 Ch 438, 439-50; Attenborough v Solomon [1913] AC 76, 82-3; Wise v Whitburn [1924] 1 Ch 460, 468-9; Re Donkin [1966] Qd R 96, 119.

[30] JD Heydon and MJ Leeming, Jacobs' Law of Trusts in Australia (LexisNexis Butterworths, 8th ed, 2016) [2-44].

[31] Citing Re Claremont [1923] 2 KB 718.

[32] [2010] VSC 48; (2010) 24 VR 603, 607-8 [27]-[28] (citations omitted).

[33] [1998] WASC 270; (1998) 19 WAR 495.

[34] Alexiou v Alexiou [2020] NSWSC 748, [40]-[42] (White J).

[35] [1972] VicRp 24; [1972] VR 248, 256. See also Public Trustee v Smith [2008] NSWSC 397, [142]-[143] (White J).

[36] Citing Re McGowan & Valentini Trusts (2021) 63 VR 449.

[37] See, eg, JD Heydon and MJ Leeming, Jacobs' Law of Trusts in Australia (LexisNexis Butterworths, 8th ed, 2016) [5-24].

[38] See, eg, Chief Commissioner of Land Tax v Macary Manufacturing Pty Ltd [1999] NSWCA 471; (1999) 48 NSWLR 299, 315 [89] (Mason P, with whom Spigelman CJ and Sheller JA agreed).

[39] ABC v APRA (n 5), 109 (Gibbs J).

[40] Byrnes (n 3), 273 [53] (Gummow and Hayne JJ).

[41] Citing G Thomas, Thomas on Powers (Sweet & Maxwell, 1998) 237 [5-178]-[5-179], 238 [5-182]; Re Shuker's Estate, Bromley v Reed (1937) 3 All ER 25.