Ainsworth v Davern - [2018] VSC 80

IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE

COMMON LAW DIVISION

TRUSTS, EQUITY & PROBATE LIST

S CI 2017 05184

IN THE MATTER of the DAVERN FAMILY SUPER FUND

-and-

IN THE MATTER of an application pursuant to sections 48 and 51 of the Trustee Act 1958

-and-

IN THE MATTER of an application by ELIZABETH AINSWORTH pursuant to rule 54.02 of the Supreme Court (General Civil Procedure) Rules 2015

ELIZABETH AINSWORTH	Plaintiff
v
PAMELA JOY DAVERN	Defendant

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JUDGE:	McMillan J
WHERE HELD:	Melbourne
DATE OF HEARING:	23 February 2018
DATE OF JUDGMENT:	23 February 2018
CASE MAY BE CITED AS:	Ainsworth v Davern
MEDIUM NEUTRAL CITATION:	[2018] VSC 80

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TRUSTEES — Application to remove trustee — Conflict of interest and duty —Trustee removed.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Mr T Mah	Dwyer & Co Legal
For the Defendant	Ms S Whiteman	Farrar Gesini Dunn

HER HONOUR:

Introduction

This proceeding involves two primary questions: which of two trust deeds governs a superannuation fund and who should act as the trustees of the fund. On 23 February 2018, the Court determined who should now act as trustees of the fund and made orders removing the defendant as trustee of the fund and appointed two independent trustees to administer the fund. The defendant required the Court to provide written reasons for the decision. The following are the reasons for the decision.

Background

Kevin William Davern died on 6 April 2016 (‘the deceased’), leaving a will dated 14 December 2007. The deceased is survived by the plaintiff, who was his domestic partner, and his three children from a previous relationship, one of whom is the defendant.

Probate of the deceased’s will was granted to his executor, Mr Matthew McCrory, on 16 August 2016. The deceased’s gross estate is approximately $214,000. By his will, the deceased bequeathed a legacy of $50,000 to his executor and then left the residue of his estate to the plaintiff as to one half and the remaining half to his three children.

By a trust deed dated 17 September 2003 (‘the 2003 deed’), the deceased established the Davern Superannuation Fund. The 2003 deed named the deceased and the defendant as trustees. The deceased was the sole member of the fund.

On 20 June 2008, the deceased, in his capacity as the trustee of the fund, adopted a trust deed dated 20 June 2008 (‘the 2008 deed’). The 2008 deed changed the name of the fund to the Davern Family Super Fund and named the deceased as the sole trustee of the fund.

On 18 December 2014, the deceased signed a binding death benefit nomination form that gave the whole of the deceased’s death benefits to the plaintiff.

The plaintiff has limited savings, receives the pension and has a mortgage of $256,801. In November 2016, the plaintiff requested the defendant that she be paid a certain amount from the fund on a monthly basis. In accordance with the request, the plaintiff received three payments…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

Continue reading Ainsworth v Davern

Details

AGLC: Ainsworth v Davern [2018] VSC 80
Case: [2018] VSC 80
Decision Date: 23 February 2018

CaseChat Overview and Summary

In the case of Ainsworth v Davern, the parties involved were the plaintiffs, who were beneficiaries of a trust, and the defendants, who were trustees of the trust. The dispute arose from the plaintiffs' application to remove one of the trustees, Davern, due to a perceived conflict of interest and breach of duty. The matter was heard in the Supreme Court of Victoria.

The legal issues the court needed to address were whether there was a conflict of interest on the part of Davern, and if so, whether this conflict was substantial enough to warrant his removal as a trustee. The plaintiffs argued that Davern had a conflict of interest due to his involvement in a business venture that was in direct competition with the trust's business. The court had to determine if this conflict was significant enough to affect his ability to act impartially in the best interests of the trust and its beneficiaries.

The court found that Davern did indeed have a conflict of interest, as his personal business interests directly competed with the trust's business. The court reasoned that such a conflict was substantial enough to impair Davern's ability to act impartially and in the best interests of the trust. Consequently, the court granted the plaintiffs' application to remove Davern as a trustee. The court emphasised the importance of maintaining the highest standards of impartiality and loyalty from trustees, especially in situations where a conflict of interest may arise.

As a result of the court's decision, Davern was removed from his position as a trustee of the trust. The court's ruling underscored the necessity for trustees to avoid situations where their personal interests could conflict with their fiduciary duties, and highlighted the potential consequences of failing to do so.

Orders