Changing the appointor of a family trust – Staley v Hill Family Holdings Pty Ltd

How to change an appointor of a trust

The appointor (sometimes known as a principal) has a powerful role in a trust. The appointor usually has the power under the trust deed to appoint and remove the trustee of the trust.

The trust deed will usually provide a mechanism for an appointor to be appointed and removed. An appointor will usually be removed upon death, incapacity or bankruptcy. The appointor can usually also voluntarily resign and nominate a successor to act in their place.

Typically, trust deeds do not allow a trustee to change the appointor. This can cause issues where the “wrong person” becomes the appointor of the trust, as there is usually no person who can remove them. However, a recent decision of the Supreme Court of Appeal has found that there may be an avenue for the trustee to remove an appointor.

Staley v Hill Family Holdings Pty Ltd

The Queensland Supreme Court of Appeal recently handed down their decision on Staley v Hill Family Holdings Pty Ltd [2025] QCA 95 where they upheld the decision of the Queensland Supreme Court (Staley v Hill Family Holdings Pty Ltd [2024] QSC 176).

Background

The case considers a Deed of Variation where the trustee (Hill Family Holdings Pty Ltd) varied the trust deed for the Hill Family Trust (Trust) to include a new special power for the trustee to remove the existing appointor (Mrs Staley) and nominate a new appointor in her place.

In this instance, the variation power did not require the appointor to consent to the variation. As a result, Mrs Staley was not notified that she had been removed by the trustee as an appointor of the Trust until she attempted to exercise her power as an appointor of the Trust to appoint and remove the trustee. At that time, she was informed that she had been removed as an appointor of the Trust. 

Supreme Court and Appeal Decisions

The Queensland Supreme Court held that the variation power of the Trust was broad enough to allow the trustee to include the new clause including the special power and that any exercise of that power was effective to change the appointor. The Queensland Supreme Court also held that the exercise of this power was not a fraud on the trustee’s powers.

Mrs Staley appealed the decision, arguing broadly that the trustee’s power to vary the trust deed did not extend to altering the appointor role, as the appointor role:

1. confers supremacy over the trustee
2. there is an implied limitation for the trustee to change the appointor. 

The Queensland Court of Appeal upheld the original decision, confirming that:

• the Deed of Variation was valid and enforceable
• the power of variation under the trust deed was broadly constructed, giving the trustee wide powers to vary the trust deed
• the provisions in the trust deed dealing with the appointment and removal of appointor did not impliedly limit the variation power of the trustee.

Conclusion

This case confirms that it may be possible for a trustee to remove an appointor of a trust if the variation power is broad enough to allow this.

It is necessary to consider the terms of the specific variation power of each trust to determine whether this is an available option.

Hot tip: if an appointor is worried about the trustee removing them or changing their powers – consider whether the variation power in the trust deed requires the appointor to consent to any variation, particularly to variations in relation to the appointor’s role and powers. If the trust deed requires the appointor to consent, then the mechanism in the Staley v Hill Family Holdings Pty Ltd case may not be available to the trustee.