Manuel feels the burden of trusteeship weighing heavily upon him and has applied to the court for advice. You are Judge Sapiens, and it is time to write your judgment.

Assignment: 1500 words.

Overview

This assessment requires an advanced form of legal writing where you are to write a reasoned judicial decision, as a judge would in an authentic case. Please read Supreme Court Rule 54.02 and S 63 of the Trustee Act 1958 (Vic) to understand the context of an application to the Court by a trustee, in the context of the judgment you are required to write for this assessment. Think about the tone and decisiveness of good judicial writing by reflecting on the best cases you have read and why they persuaded you. Try to emulate that.

For an example of the required format re an application under SCR 54.02, see Re Dove Family Trust [2022] VSC 625 (see separate attachment.

Reference Policy for this Assignment (see also below for general advice)

The only references that are permitted are those that are in the textbooks:

• (Equity and Trusts in Australia (TEXTBOOK)Book: Bryan, Michael, Third edition, Cambridge, Cambridge University Press, 2022-10-31).
• A Sourcebook on Equity and Trusts in Australia (SOURCEBOOK) Book: Bryan, Michael, author; Degeling, Simone, author. Donald, M. S. (M. Scott), author. Vann, V. J., author. Third edition, Port Melbourne, VIC, Australia, Cambridge University Press, 2022

Assignment Question

The settlor, Mrs Alice Richards, established a trust, the Torquay Family Trust (‘the TFC’). She appointed The Torquay Trustee Company (‘the TTC’) and Manuel Merida as trustees. Basil and Sybil are directors of the TTC, which is a proprietary limited shelf company with no assets. All the trust property has been vested in the TTC. She left a sealed letter to Manuel.

The TTC liquidated the index fund and placed the money into Sybil’s personal account at the Cheatem Bank. Basil and Sybil sometimes use the money to meet running costs of their hotel, Salty Towers. ‘It’s what Auntie Alice would have wanted’, Sybil often says. Manuel is slightly afraid of Basil and usually does what Basil tells him to, and also because Basil lets him stay at the Portsea holiday house. It is Manuel’s job to communicate to the Schedule 1 beneficiaries, and the TFC pays him three hours a week at the minimum wage to accomplish this task.

The debt of $100 000 has never been collected and remains outstanding to date. ‘Sunset at Torquay’ has been hanging at Salty Towers and was recently defaced by a guest. It will cost $50 000 to repair the damage as it was not insured.

Keith Richards has been studying law since 2020.

The TTC contracted with The Leafy Garden Company (‘Leafy’) to maintain the gardens at the holiday house. Leafy are seeking payment, but TTC is ignoring their calls and emails.

In 2020 and 2021, the TTC distributed the dividends from the Commonwealth Bank shares equally amongst the named Schedule 1 beneficiaries. In 2022, the dividends were distributed to all named Schedule 1 beneficiaries except Danny. In 2023, the sum total of the bank dividends was distributed to Daisy.

Manuel has been getting angry emails and phone calls from Schedule 1 beneficiaries who missed out on payments. Danny is demanding to see all the trust documents, including the deed, financial records and details of which disbursements were made and why.

Required: Manuel feels the burden of trusteeship weighing heavily upon him and has applied to the court for advice. You are Judge Sapiens, and it is time to write your judgment.

Torquay Family Trust Deed.

 I, Mrs Alice Richards, establish the Torquay Family Trust (‘the TFC’) as follows.

1. The property in Schedule 1 is vested in the trustees.
2. The trustees are not liable to the beneficiaries in respect of any loss unless it arises from actual fraud or breach of trust on the part of the trustees.
3. The beneficiaries of the trust are the persons named in Schedule 2 and the persons who are members of any of the classes of eligible beneficiaries specified in the Schedule. A named beneficiary has no interest in any part of the trust fund or its income, nor as a group does the class of eligible beneficiaries.
4. Until the vesting day, the trustees have absolute discretion to decide to distribute any part of the income of the trust fund for a financial year, in any proportions the trustees decide, to any one or more persons who are named in Schedule 2 as beneficiaries, or a member of a class named in Schedule 2. The trustees have absolute discretion to exclude any Schedule 2 beneficiary.
5. The trustees may not distribute any income to a person contemplated in Schedule 2 who undertakes the study of law.
6. If there are no named beneficiaries alive on 30 June of that financial year, the next of kin of the named beneficiaries in the share that the relevant named beneficiary would have received had all the named beneficiaries been alive on 30 June of that financial year.
7. The trustees may decide to accumulate any income of the trust fund for any period that is allowed by the law governing this deed. When that decision is made, the relevant income becomes capital of the trust fund.
8. Before the vesting day, the trustees have absolute discretion to decide to distribute the trust fund and any unapplied and undistributed income from it, in any proportions the trustees decide, to any one or more persons contemplated in Schedule 2 as beneficiaries.
9. The trust terminates 20 years after the date of this deed. The remaining capital is to be distributed to Daisy Richards.

Schedule 1

1. 5000 shares in Commonwealth Bank,
2. 1 Beach Road, Portsea (‘the holiday house’),
3. The painting by Brett Whitley ‘Sunset at Torquay’ hanging at the holiday house,
4. The debt of $100 000 that is owed to me by my nephew Basil,
5. My investment in the index fund that is held at Macquarie Bank (account 123456), approximate balance $900 000.

Schedule 2

Daisy Richards, Lucy Richards, Amy Richards, Keith Richards, Danny Brown, Liam Brown.

Any future grandchildren I may have, as yet unborn.

Signed Alice

As Settlor on 1 February 2019.

Letter to Manuel

1/2/19

Dear Manuel,

I am asking you to be co-trustee of the Torquay Family Trust because I want you to keep an eye on Basil and make sure he does the right thing. We have been friends a long time and I trust you implicitly.

I know you have absolute discretion, but I would like to let you know my thinking. I am very proud of my grandchildren except for Danny – he is like his useless father and will never amount to anything in life, so don’t give him any money. Daisy has always been my favourite grandchild, so make sure she has everything she needs as well as the wedding of her dreams when the time comes.

Your dear friend,

Alice Richards