What it does
The Perpetuities Act 1984 (NSW) is a reforming statute that replaces the common-law rule against perpetuities with a statutory regime built around a fixed 80-year perpetuity period. Under s 7(1), the perpetuity period applicable to an interest created by a settlement is 80 years from the date the settlement takes effect. Where a special power of appointment is involved, s 7(2) reckons the period from the date the instrument creating the power took effect. This replaces the former "lives in being plus 21 years" formula that generated considerable uncertainty.
The Act introduces a "wait-and-see" mechanism in s 8. Where a provision would otherwise infringe the rule, the interest is treated as valid until it becomes certain that it must vest (if at all) after the end of the perpetuity period (s 8(1)). Similar treatment is given to general powers of appointment (s 8(2)) and to other powers or rights (s 8(3)), with the latter being valid to the extent they are exercised within the period. Section 8 expressly does not affect the operation of s 15, which removes certain options from the rule altogether.
Remedial provisions in s 9 allow a court or decision-maker to reduce a specified age that triggers vesting (s 9(1)) or to exclude a class member or potential member whose inclusion would cause infringement (s 9(4)). These adjustments are to be made only to the minimum extent necessary to save the disposition. Where different ages are specified for different persons, each age is reduced as required (s 9(3)). An ulterior interest is protected from being defeated by the operation of these reductions (s 9(2)). Section 10 imposes a strict order of application: first the wait-and-see rule in s 8, then age reduction under s 9(1), and finally class exclusion under s 9(4). This sequencing is critical because earlier steps may render later ones unnecessary.