Background
Barratt Nominees Pty Limited, trustee of the Barratt Property Trust, sought judicial advice concerning a 2020 deed poll that amended the trust deed. The discretionary family trust was established in 1977 and was to end on the earliest of: 50 years from its creation; 21 years after the death of the last surviving specified descendant of King George VI; or an earlier date selected by the trustee.
The 2020 amendment changed the fixed 50-year period to 80 years, moving that date from 2 May 2027 to 2 May 2057. The amendment power prohibited an amendment “extending the Distribution Date beyond the latest date provided by” the deed. Parker J had initially decided the application in July 2026, but withdrew that judgment and set aside its orders after the trustee submitted that the conclusion did not follow from the reasoning.
The Court’s Holding
Parker J held that the 2020 amendment was valid and advised that the trustee would be justified in administering the trust on that footing. The relevant “latest date provided by” the deed was assessed when the amendment power was exercised, rather than only at the trust’s creation.
In November 2020, living descendants of King George VI who had been alive when the trust was made ensured that the royal-lives period would run at least until November 2041. That period was therefore the deed’s operative maximum duration for the purpose of the amendment restriction. Although the amended fixed period ran to 2057, the trust still had to vest on the earlier of that date and the royal-lives period. The amendment consequently did not extend the distribution date beyond the permissible maximum and remained consistent with the old rule against perpetuities.
Key Takeaways
- A trust-deed amendment power may be construed in light of circumstances existing when it is exercised.
- Extending a fixed vesting period may be valid where a royal-lives backstop still requires vesting within the permissible perpetuity period.
- The Court granted judicial advice only; alternative claims for rectification or amendment under s 86A of the Trustee Act 1925 (NSW) did not need to be determined.
Why It Matters
The decision provides guidance for older discretionary trusts with approaching fixed vesting dates and royal-lives clauses. It confirms that an amendment extending the fixed date is not necessarily invalid merely because the new fixed date is later, provided the deed continues to require vesting by the earlier perpetuity-compliant backstop.
It also illustrates the value of judicial advice where trustees face uncertainty about the validity of a prior amendment before continuing to administer a trust.