//
you're reading...
appointment and removal of trustees, Appointor; power of appointment, Trustee liability, Trustees

Two heads are not better than one

The facts of McAtamney v McAtamney are simple.Frank McAtamney was settlor and appointor of the Waimarie Second Family Trust. Notwithstanding that Frank’s late wife had no power of appointment, Frank and his wife twice purported to appoint new trustees.As set out at [11] and [12]:[11] Frank has now received legal advice that those deeds of appointment may be invalid, because according to the trust deed the appointment in both cases should have been exercised solely by Frank as the person having the statutory power of appointment pursuant to the trust deed, rather than by Frank and Margaret together.

[12] By way of affidavit dated 29 November 2019, Frank confirmed that it has always been his intention to appoint Mr McFarlane and Ms Allen as additional trustees of the trust. That is what he was in fact doing when he signed the two deeds of appointment with Margaret.3 Declaratory orders on originating summons.

Doogue J made declarations pursuant to the Declaratory Judgments Act 1908that the trustees were validly appointed (and observed that such declarations were appropriate) stating at [16] to [18]:

[16] It is clear from the deed of appointment and from Frank’s affidavit that he did indeed intend to exercise the power of appointment that was vested in him pursuant to the trust deed. While Margaret also purported to exercise that power, her exercise was ineffective as she did not have the power to do so.


[17] I conclude that the ineffective purported exercise of the power by Margaret had no effect on the actual exercise of the power by Frank.


[18] In these circumstances, the declarations as to the validity of the appointments of Mr McFarlane and Ms Allen are entirely appropriate.

Take home message: never presume, always read the deed.

References:

  • McAtamney v McAtamney [2020] NZHC 1777
  • The Declaratory Judgments Act 1908, s 3, 4 and 10

Discussion

No comments yet.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

Categories

%d bloggers like this: