- Fisher v Nemeske  HCA 11
- Zaburoni v The Queen  HCA 12
- IMM v The Queen  HCA 14
- Coverdale v West Coast Council  HCA 15
Construction of trusts – trustees’ powers
In Fisher v Nemeske  HCA 11 (6 April 2016) the High Court was asked to construe a clause in a trust deed that conferred on the trustees power to ‘advance or raise any part or parts of the whole of the capital or income of the Trust Funds and to pay or to apply the same as the Trustee shall think fit …’ (at ).
The trust assets were comprised of shares in another company. In 1994, the trustee resolved to distribute an amount equal to the value of the shares to the two beneficiaries of the trust. The distribution was recorded in the trust accounts, along with a record of the same amount returned to the trust funds as beneficiary loans. A further deed was created in 1995 purporting to charge the shares in the favour of the beneficiaries, with an obligation on the trustee to repay the principal on the demand of the beneficiaries.
The key question for the Court was whether the distribution was a valid exercise of the trustee’s power under the deed.
The majority held that the creation of a debt to be satisfied out of the property of the trust fell within the powers to ‘advance’ and ‘apply’ the capital or income of the trust fund. A creditor/debtor relationship had been created between the trustee and the beneficiaries. The actions of the trustee were valid and a debt was owed to the beneficiaries. French CJ and Bell J jointly, Gageler J concurring; Kiefel and Gordon JJ dissenting separately.
Appeal from the Court of Appeal (NSW) dismissed.