Power of Amendment

A Power of Amendment my be held by the Employer or the Trustee. The Power of Amendment may be conditional requiring the consent of the Trustees or the Employer and/or the members of the fund either under the terms of the trust or pursuant to statutory provisions.

A trustee exercising a Power of Amendment contained in the trust instrument must form an opinion based on the correct understanding and construction of the matters to be considered {Wilson v Metro-Goldwyn-Mayer (1980) 25 NSWLR 730 at 745-6; Lock v Westpac Banking Corp (1991) 25 NSWLR 593 at 609-10; Re Cavill Hotels Pty Ltd [1998] 1 Qd R 396 at 398}.

The holder of the Power of Amendment must exercise that power honestly and in good faith and for the benefit of the beneficiaries as a whole {Gra-Ham Australia Pty Ltd v Perpetual Trustees WA Ltd (1989) 1 WAR 65 at 84; Lock v Westpac Banking Corp (1991) 25 NSWLR 593 at 609; Imperial Group Pension Trust Ltd v Imperial Tobacco Ltd [1991] 2 All ER 597 at 607;[1991] 1 WRL 589 per Browne-Wilkenson VC; Bathgate v National Hockey League Pension Society (1994) 110 DLR (4th) 609 at 624-5, CA (Ontario).

A Power of Amendment may not be used to manifestly alter or defeat the main purpose(s) (sometimes termed the “substratum“) of the trust {Re Courage Group’s Pension Schemes; Ryan V Imperial Brewing and Leisure Ltd [1987] 1 All ER 528 at 541-2; [1987] 1 WLR 496 per Millet J; Re UEB Industries Ltd Pensions Plan [1992] 1 NZLR 294 at 302}.

In determining the nature and scope of a power authorising the variation or amendment of a trust instrument, the trust instrument must be construed as a while, with close regard to its particular provisions and the terms of the amendment under consideration, to ascertain whether the amendment is within the amending power {Lock v Westpac Banking Corp (1991) 25 NSWLR 593 at 602-10; Global Custodian Ltd v Mesh [2002] NSWSC 47}.

 

 

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