Michael Hallinan

A court has upheld an informal removal and appointment of SMSF trustees. The background is about the control of a death benefit of a father.

The legal issue was whether the daughter had been validly removed as a trustee and whether his de facto had been validly appointed as trustee.

The Court held that the daughter had been validly removed and that the de facto had been validly appointed.

The trust deed required that any removal/appointment must be in writing and must be immediately advised to the continuing trustees. This requirement was satisfied by a minute of trustees meeting stating that “decided to remove trustee” and “decided to appoint trustee”.

The “minute” satisfied the trust deed as it was signed by all relevant parties – so was a “in writing” and by signing the “minute” the continuing trustee had notice of the removal/appointment.

This is an interesting case – “decided to remove/appoint” is equated with “removed/appointed”. Also, it treats a trustee minute as being “writing” as all relevant parties signed the minute.

There may be much discussion as to the reasoning and whether third parties will be satisfied with such informality of trustee changes.
Case reference: Perry v Nicholson [2017] QSC 163

By Michael Hallinan, Special Counsel Superannuation

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