11/09/2026
The High Court on 10 September 2026 refused 2 special leave applications regarding the case of Caldwell which dealt with an intergenerational family trust. This means the Full Court decision stands.
What does this mean and why is it important?
TL;DR: If a party has the present capacity to effectively control a discretionary trust and cause benefits to be distributed to themselves, the trust assets may be property for the purposes of s 79, even where that control has never actually been exercised.
By majority, Christie and Brasch JJ overturned the first-instance decision and held that the three intergenerational family trusts were property of the husband.
The key findings were:
• Effective control is what matters. The husband had voting and appointor powers that enabled him to obtain control of the trustees and ultimately cause distributions to himself. He did not need to have actually exercised those powers.
• Property identification and contributions are separate questions. The fact that the wealth had been accumulated by the husband's family over generations did not determine whether it was property. That history was relevant later when assessing contributions and the appropriate adjustment.
• The need to take steps to exercise control did not change the result. If the husband presently had the legal ability to take those steps and nothing prevented him doing so, that was sufficient.
• Being property does not mean it will necessarily be divided. The classification of the trusts as property is only the first step. The source of the wealth, contributions and the justice of any ultimate adjustment remain to be determined.
The practical takeaway from Caldwell is that when considering a discretionary trust, it is not enough to ask who has historically received distributions or exercised control. You need to examine the trust deed and corporate structure and ask: what can this person actually cause to happen now?
