Case: Kent v "Maria Luisa" (No 2) [2003] FCAFC 93 ; (2003) 130 FCR 12
Outcome: cited
Clause 8.3 is unfortunately only a heading: "Power to Sell and Vary Investments" without any associated text. However, cl 8.4 empowers the Trustees "to make or vary any of the investments authorised under [the] Deed ...". The Trustees had power to sell the Property, as they did only six days after the Trusts were established. Even if Helen had an interest in the half interest the subject of Helen's Trust as at 28 June 2002, the Trustees' power of sale would have made it a defeasible interest: see Kent v SS "Maria Luisa" (No 2) [2003] FCAFC 93 ; (2003) 130 FCR 12 at [71] . It would cease to be defeasible only when the half interest ceased to be part of Helen's Fund and subject to the Trustees' power of sale. 66 Helen was not entitled to the half interest once it was subjected to the Trust. Her only entitlement was to require the Trustees to pay her money once the conditions of her entitlement were satisfied. 67 Clause 5.4 of the Deed provided relevantly, as follows: Fund Subject to Relevant Requirements This Deed shall be read and construed on the basis that the provisions of the Relevant Requirements are incorporated in the Deed to the extent that they impose covenants or obligations on the Trustee in order for the Fund to qualify for concessional Taxation treatment and this Deed shall be further read and construed on the basis that where there is any inconsistency between a provision in this Deed and a provision under the Relevant Requirements the latter shall prevail... The expression "Relevant Requirements" was defined in cl 4 of the Deed as follows: 'Relevant Requirements' means any requirements under the Occupational Superannuation Standards Act 1987 , the Occupational Superannuation Standards Regulations , the Superannuation Industry (Supervision) Act 1993 and any other Acts or Regulations which the Trustee must comply with in order for the Fund to qualify for concessional Taxation treatment as a Complying Superannuation Fund including the requirements under any other proposed requirements, rulings, announcements or obligations which the Trustee believes will have effect retrospectively. Clause 26 provided: COMPLIANCE WITH THE ACT The requirements contained in the Act with which the Fund must comply shall be deemed to be included in this deed and in the event of any inconsistency or conflict between the requirements of the Act and the provisions of this Deed the trustee shall act or refrain from acting notwithstanding anything to the contrary or otherwise contained in this Deed, in order to comply with the requirements of the Act and the relevant provisions of this Deed shall be deemed to be invalid. The expression "Act" was defined in cl 4 as follows: 'Act' means the Income Tax Act and the Superannuation Industry (Supervision) Act and any legislation amending or replacing those acts, the Regulations and any other law of the Commonwealth or any State or Territory of Australia (including where applicable any relevant determination ruling or guideline made or issued by any Responsible Authority pursuant to any powers vested in it) with which the Fund and / or the Trustees must comply in order to qualify for the maximum concessions in respect of the Taxation of the income of the Fund in order to obtain what the Trustees consider to be any other relevant concession or to avoid what the Trustees consider to be a relevant penalty or imposition; Finally, the expression "Income Tax Act" is defined in cl 4 to mean: 'Income Tax Act" means the Income Tax Assessment Act (1936) and the Income Tax Assessment Act (1997) and any act amending or replacing those acts and the Income Tax Regulations any regulations amending or replacing those acts;