This is a case note of a family law matter involving a family trusts and property. Kennon v Spry; Spry v Kennon  HCA 56 (“Spry”) is a particularly noteworthy. The case is Kennon and Spry. In it, the husband sets up a series of trusts for the benefit of the children of the marriage. It was the ability of the Family Court to. The decision of the High Court in Kennon v Spry () CLR ; ALR ; 83 ALJR ;. 40 Fam LR 1;  FLC ;  HCA 56 is one of.
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In most ksnnon, trust assets of a purely discretionary trust constitute a mere expectancy, and not a financial resource, given the discretionary nature of such a trust. It extended to the spouses from time to time of the issue of Charles Chambers Fowell Spry and further issue of that issue, including persons unborn when the Trust was created, and their spouses from time to time. Further, just as s.
The Family Court cannot ignore the interests of third parties in the property nor the existence of conditions or covenants that limit the rights of the party who owns it.
It may have in common with such settlements a disposition of property for the purposes of regulating the enjoyment of the settled property and it may provide for succession. It thereby acquired the nuptial element. The essential requirement of the section is that there be a sufficient association between the property the subject of a settlement and the marriage the subject of proceedings.
The same is true for the members of a superannuation fund although vesting of a benefit may be many years in the future. In particular it is, of course, necessary to have regard to the subject matter, scope and purpose of the relevant statute.
This is a useful section to attack trusts and not many cases on its application.
This contraction of the class to exclude himself and his wife followed upon the Deed and the Instrument which are discussed below. And on one of those occasions Mason J said:. On those facts, it was not spey go too far to regard the transfer to joint ownership as a post-nuptial settlement. Observing that the husband could not have conferred the same benefit on himself as he could on his wife denies only that he had property in the assets of the Trust, it does not deny that part of the property of the dpry to the marriage, within the meaning of the Act, was his power to appoint the whole of the property to his wife and her right to a due administration of the Trust.
The Court of Appeal held that it had power to vary the settlement so long as the settlement was in existence at the time of the kennnon.
The positive argument of the trustees and the husband, and the positive argument of the wife. To the extent that a new order was sought, in each matter an application was required for special leave to cross-appeal and a draft notice of cross-appeal to be filed. To proceed on the basis propounded by the husband would confine attention to what was his property.
This litigation has been lengthy and costly, involving as it did parties in addition to those to the marriage. He then summarised the basis upon which he proposed to proceed as follows:.
The assets therefore attract the operation of s. The Family Court, it was said, must take the property of a party to the marriage as it finds it. A perusal of those of the voluminous oral and written arguments of the parties in both courts which have been placed before this Court supports the view that it was not put.
The proper construction of the section, in order to explain its intended operation, is a matter of general importance.
Carter J made orders granting leave for the children to intervene kennoj be parties to the proceedings. That was a case in which the husband had neither a legal nor a beneficial interest.
As their Honours point out, the Family Court, when it is just and equitable to do so, can make orders in property settlement proceedings as if changes to property rights otherwise effected by the divorce had not occurred. On his death, he was to be succeeded by a person or persons specified in his will and, absent such specification, by Helen Spry.
The beneficiary of a non-exhaustive discretionary trust who does not control the trustee directly or indirectly has a right to due consideration and to due administration of the kennno but it is difficult to value those rights when the beneficiary has no sprry entitlement and may never have any entitlement to any part of the income or capital of the trust.
It must be taken as intended that the Court consider any contributions, direct or indirect, to the property the subject of a nuptial settlement. On 30 October he and his wife separated. The application relevant to these proceedings was a second amended version of that application. In the past, settlements made in consideration of a marriage were commonly made by others, such as a member of the families concerned, upon one of the parties to the marriage.
As mentioned above His Honour considered she had a right to due consideration as to the application of income and capital and administration that whilst difficult to value is not beyond the realms of possibility.
In kdnnon at that view, her Honour expressed agreement with the submission that, because a divorce order had been made, the wife no longer qualified as a beneficiary. A policy question was said to be raised. So was the husband. It is supported by his legal title to the assets, the origins of their greater part as property acquired during the marriage, kenonn absence of any equitable interest in them in any other party, the absence of any obligation on spru part to apply kennpn or any of the assets to any beneficiary and the spryy character of the interests of those who might be entitled to take upon a default distribution at the distribution date.
He assumed the power to appoint and remove further trustees. Their application may serve a wide range of purposes. The approach which his Honour took, in determining to make the order for the payment of the monies to the wife, was to leave it to the husband to determine how to find the payment of the net amount, although his Honour clearly had in mind that the husband controlled the Trust.
As noted in the preceding section the equitable entitlement of the children and other existing beneficiaries to due consideration could also be taken into account in making that judgment. In the present case the Trust was used to hold property for the benefit of the parties to the marriage upon the terms of the Trust. The first issue the Court had to consider was whether the trust assets post the deed were property of the parties to the marriage within section 79 of the Act.
Control of the Trust was not sufficient for that purpose. The purpose of s. That it may result in property becoming vested in him is immaterial; the general nature of the power does not make it property.
In December the wife filed her divorce application in the Federal Magistrates Court of Australia. The question was whether a sum of money which his mother applied to him pursuant to her power under the marriage settlement fell within the voluntary settlement.