As
highlighted in previous posts, it is critical to 'read the deed' when providing
advice that involves a trust.
Following
last week's post (and again with thanks to Tara Lucke) about
Montevento Holdings, this post reinforces the importance of reading a
trust deed before taking any step.
In Montevento
Holdings, a disgruntled beneficiary sought to rely on a technical
interpretation of the way the appointor could exercise their power under the
trust deed to change the trustee to support the argument that the change was
ineffective.
The
relevant clause precluded individual appointors from personally being
appointed as trustee. As mentioned last week, the individual appointor
appointed a company as trustee of which he was personally the sole director and
shareholder.
The
High Court held that the ordinary and natural meaning of the clause was that an
individual person holding the office of appointor could not personally appoint
themselves as trustee. However, because the trust deed consistently
distinguished between individuals and companies, it did not prohibit the
appointment of a corporate trustee, even if that trustee was controlled by the
individual appointor.
Until
next week.
