Winding Up a Trust Fund

A Trustee approached the Supreme Court of South Australia seeking the Court to wind up a trust and the associated trust fund.

Wicks J in Re IOOF Australia Trustees Limited and The Australian Tourist Property Trust [1999] SASC 541 held that the Court had no power to make such an order.

If the Trust Deed proved for the revocation of the trust and the winding-up of the associated Trust Fund and the trustee was obliged to obey the terms of the trust.

Wicks J stated at 23:

“The Trustee is bound by the terms of the Trust Deed and if the winding up of the Property Trust becomes impossible because the requisite consent on the part of the investors cannot be obtained, s 59C of the Trustee Act 1936 (SA) might be utilised to have an appropriate variation of the Trust made by the Court.”

If the Trust Deed had made no such provision then the Court could assist by making a variation to the trust pursuant to Section 59C of the Trustee Act 1936 (SA).

The Supreme Court of Western Australia in Re Niliant (2004) 204 ALR 674; [2004] WASC 7 ruled that court would not make an order the practical would effect the termination of the trust.