Insights from Williams + Hughes
Clarifying the ability of trustees to expand their powers: the decision in Re Application of Country Road Services Pty Ltd
Post by Jonathan Haeusler | Posted 4 weeks ago on Wednesday, January 29th, 2020

In this article (published in the December 2019 edition of the Law Society Brief magazine) Jonathan Haeusler, Special Counsel, and Michelle Hankey, Solicitor, discuss the court’s decision in Re Application of Country Road Services Pty Ltd [2019] NSWSC 779 regarding a trustee’s role and their ability to expand their powers as trustee. 

The trust instrument that created a trust is the primary source of the trustee’s duties, obligations and powers.  A trustee’s primary duty is to administer the trust in accordance with the terms of the trust instrument.  If a trustee acts outside the terms of the trust instrument, the trustee’s acts will be "ultra vires" i.e. invalid.  In certain circumstances, a trustee may apply to the court for, among other things, an order conferring additional powers on the trustee where it would be “expedient in the management and administration” of the trust property to do so.

However, a trustee cannot seek additional and new powers so that it might administer the trust in a different way from that contemplated in the trust instrument. The trustee should not seek to question the terms of the trust or seek to improve them.

The court’s decision in Re Application of Country Road Services Pty Ltd serves to remind us of the trustee’s function in making applications to the court for orders conferring additional powers on trustees.  In particular, the court’s observations remind us that the trustee’s role is to administer the trust in accordance with the terms of the trust instrument, not to seek to change the trust instrument.  Further, that the usual role of a trustee should be one of neutrality.  

The key take-aways from the court’s decision are set out in Jonathan’s article, which is available here.  

If you have any queries regarding trust administration, please contact Jonathan Haeusler or Michelle Hankey of our office. 

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