McAtamney v Allen (2020) 5 NZTR 30-008

Trustees were appointed by deed. The trouble was that, of the two parties purporting to complete the deed, only one was authorised to exercise the power of appointment of trustees in the trust instrument. The trustees sought a declaration that the additional trustees who had been appointed by deed were, in fact, validly appointed and that declaration was granted.

The power of appointment of trustees was vested during his lifetime in Mr McAtamney and then in his executors. The initial trustees of the trust were Mr McAtamney and his wife. The solicitor who prepared the deeds of appointment, did so on the basis that the power was being exercised by Mr and Mrs McAtamney as the continuing trustees.

Mr McAtamney affirmed that when he executed the deeds he intended to exercise the power of appointment vested in him under the trust deed. Mrs McAtamney’s purported exercise of the power was ineffective because she had no such power. However the Court held that this had no effect on the exercise of the power of appointment by Mr McAtamney. Accordingly, his appointments of the additional trustees were valid.

The case seems to turn on the fact that Mr McAtamney was aware that he held the power of appointment, notwithstanding that he and his wife were presented with a deed in which they purported to make appointments together. Mr McAtamney's act of completing that deed was in fact his application of the power of appointment, despite the purported inclusion of his wife in that act.  

© G D Clews, 2020