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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Their application may serve a wide range of purposes. That is to say, for the purpose of its inquiry into the settlement, the Court could have regard to a state of affairs which existed before the order was pronounced and vary it. His Honour set aside the Instrument.

Kennon v Spry; Spry v Kennon [2008] HCA 56

But, although alluded to once later, this was no more than a courteous acknowledgment of, or a forensically tactful gesture to, the idea advanced by members of the Court. Cases dealing with the English provisions have made it spr that the settlor must have in mind the marriage in question for the settlement to qualify as ante-nuptial.

Ancillary orders were also made.

With me in the studio to discuss it is Melbourne barrister, Gerry Holmes. From the husband ceased even to be an object of the power. The interests of no other third parties were involved in setting those kennoh aside.

Terms and beneficiaries of the trust settled. Except in the case of shams, and companies that are mere puppets of a party to the marriage, the Family Court must take the property of a party to the marriage as it finds it. The crucial step was the transfer of assets to those trusts. It followed upon the receipt of submissions, including submissions from the Family Court. In the case of a residuary legatee the right to due administration is connected to a real expectancy of an interest in the property.

Each trust related to one of his four daughters. It would be necessary to examine what was written and said when the transfers took place. Subsequently she applied to dissolve the marriage. The position of the husband and the kenhon after the Instrument.


There did not mennon to be. So characterised for the purposes of the Family Law Act it had an attribute in common with the legal estate he had in the assets as trustee. It thereby acquired the nuptial element. For example, in the Trust under consideration in these appeals the husband had no right after to beneficial enjoyment in the sense of being able to take for himself any of the assets.

The Instrument was not set aside by the courts below. It was made 10 years before the husband married. In this case the Chief Justice was not concerned about this argument and distinguished it kennnon saying the husband as trustee owned the legal title and the wife had an equitable right to due consideration and administration. Accordingly, some further reference to legislative history is of assistance here. The matter of costs is for this Court and is not controlled by provisions respecting costs in the Act.

The definition of “property” in s. It is sufficient for the purposes of the section that the association of which it speaks “made in relation to” be present when the Court comes to determine the application of the property settled under s.

In arriving 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. The proper construction kennno the section, in order to explain its intended operation, is a matter of general importance.

Reference to those contributions serves both to identify the property in question and to provide one means of assessment for the purpose of decision. It limits the alienation and transferability of the property.

None of these characteristics are shared by the object of a bare power of appointment. Under the Trust, the wife was the object of a bare fiduciary power of appointment. 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 decree. If the Trust were terminated before kkennon date of distribution pursuant to cl 5, she had no entitlement: The matrimonial relationship and the course of the proceedings.

The end result was disastrous for the husband given the extra interest payments and costs he will have to pay and that he was ordered to pay a sum certain in a falling market of real estate and investments generally. In December the wife filed her divorce application in the Federal Magistrates Court of Australia. The case concerned a future entitlement to benefits from a superannuation fund.


Family Law and Family Trusts

The instrument and dispositions were made with the intention of defeating an anticipated order and should not be allowed to stand.

The trustee had an absolute discretion to apply the capital and income of the Trust fund. Justices Gummow and Hayne delivered their usual joint judgment. That is unfortunate to say the least given that in reality the children have had the ability as much as the husband has had to prevent this dispute not only from occurring at all but certainly from reaching the heights that it has ….

It is convenient to examine these arguments in turn. The nuptial element can readily be seen by the contribution made by the parties to the marriage to the Trust and the holding kennnon that property for their benefit.

High Court handed down its decision dismissing the appeals. In the present case the primary judge had undertaken that exercise, not only with respect to what might properly be called the property of the parties to the marriage, but also with respect to the Trust property.

It was there held that the Family Court had no power to order directors of a company to register shares, where the Memorandum and Articles of Association of the company enabled them to decline to do so, mennon least where the company was not controlled by the husband. But can the Trust be said to be ante-nuptial? The process of construction should begin with examining the context of the provision in question. No object in the Trust had any fixed or vested entitlement.

A later cancellation by the parties to the Deed could not alter the effectiveness of the release.

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