CASE NOTE: Robert Thomas Grant as trustee of the Grant Family Testamentary Trust

This case involved an application by Mr Robert Grant, who was acting as the trustee of a testamentary trust created under his late father’s Will. Mr Grant asked the Court for permission to vary the terms of the trust so that he could manage it more effectively.

He wanted powers that weren’t included in the original Will, such as the ability to borrow money, offer trust assets as security (like a mortgage), and amend the trust deed in the future without needing to apply to the Court again.

Key Issues

• Could the Court authorise changes to the terms of a testamentary trust after the death of the person who created it?
• Would the proposed changes go against the testator’s original intentions?
• Would the beneficiaries be disadvantaged or unfairly affected by the changes?

Decision

The Court approved the application and allowed the changes to the trust deed. Justice Lindsay found that the additional powers were reasonable and consistent with the proper administration of the trust. The changes were considered to be in the best interests of the beneficiaries and aligned with the likely intentions of the deceased.

Reasoning

• The Court accepted that modern trust management often requires flexibility, especially when it comes to financial matters like borrowing or providing security.
• The original Will did not provide adequate powers to the trustee to effectively manage the trust in the current legal and financial environment.
• The amendments did not alter the fundamental nature of the trust or undermine the testator’s intent.
• No beneficiaries would be disadvantaged as a result of the changes. 
• Mr Grant was acting responsibly and in good faith in seeking the Court’s guidance.

Appeal

There was no appeal. The decision remains a helpful authority on the Court’s ability to vary the terms of testamentary trusts in appropriate circumstances.

Key Principles

• The Supreme Court of NSW can approve amendments to the terms of a testamentary trust if it is satisfied that the changes are necessary and do not conflict with the deceased’s intentions.
• Trustees must continue to act in the best interests of the beneficiaries and may seek the Court’s assistance when their powers under a Will are unclear or too limited.
• Trusts created by a Will should be practical and capable of being administered effectively, particularly in a modern financial context.

Relevance

This case confirms that testamentary trusts are not entirely fixed and can be updated by the Court where needed. For trustees who feel restricted by the terms of a Will, this decision shows that it is possible to seek appropriate legal remedies that allow them to better carry out their duties.

Any information on this website is general in nature and should not be taken as personal legal advice. We recommend that you speak to a lawyer about your personal circumstances.