Flinn v Fearne - [1999] NSWSC 1041

CITATION: Flinn v Fearne [1999] NSWSC 1041

CURRENT JURISDICTION: Equity Division

FILE NUMBER(S): 2003/98

HEARING DATE(S): 29 September 1999

JUDGMENT DATE:
21 October 1999

PARTIES :

Cheryl Ann Flinn (P1)
Wendy Kay Fritsch (P2)
Toni Patricia Roose (P3)
Janelle Sylvia Lancaster (P4)
Audrey Edith Fearne (D1)
Jonhold Pty Limited (D2)
Fearne Investments Pty Limited (D3)
Fearne Transport Pty Limited (D4)
Fearnes Charters Pty Limited (D5)
Sharan Pty Limited (D6)

JUDGMENT OF: Master McLaughlin

COUNSEL : Dr. C. Birch (P)
Mr. F. S. McAlary Q.C., Miss S. Kaur-Bains (D)

SOLICITORS: Hogan Geike Poole (P)
Jackson Smith (D)

CATCHWORDS: Family Provision; Separate Question; Whether the testator entered into a prescribed transaction; Whether power of testator to remove a trustee and to appoint a new trustee constituted de facto control by him over the assets of a family trust.

ACTS CITED: Family Provision Act 1982

CASES CITED: Kavalle v Burbidge (1998) 43 NSWLR 422

DECISION: See paragraph 31.

SUPREME COURT OF
NEW SOUTH WALES
EQUITY DIVISION
MASTER McLAUGHLIN
Thursday, 21 October 1999
2003/98 CHERYL ANN FLINN & ORS -v- AUDREY EDITH FEARNE
JUDGMENT
1 MASTER: These are proceedings under the Family Provision Act 1982. By summons filed on 9 April 1998 the plaintiffs, Cheryl Ann Flinn, Wendy Kay Fritsch, Toni Patricia Roose and Janelle Sylvia Lancaster, claim an order for provision for their maintenance and advancement in life out of the estate of their late father, Garry William Fearne (to whom I shall refer as “the deceased”), and, further, an order pursuant to section 23 on the Family Provision Act, “designating as notional estate certain property which was the subject of a prescribed transaction”. 2 The deceased died on 8 November 1996. He left a will dated 7 November 1996. By that will the deceased appointed the defendant, Audrey Edith Fearne, as executor and gave to the defendant the entirety of his estate absolutely. 3 The deceased had been married twice. The four plaintiffs are the children of his first marriage. The deceased and his first wife were subsequently divorced. The defendant was the second wife of the deceased. Of his marriage to the defendant was born another daughter Michelle Kathleen Fearne, who is presently aged fifteen. 4 The hearing of the substantive proceedings was fixed for 29 September 1999. On the day preceding that date the parties requested that the matter be listed before me for mention and directions. The purpose of that mention was to enable the Court to be informed of the fact that the actual estate left by the deceased was not of any great significance, and that unless there were to be designated as notional estate of the deceased (as sought by prayer 2 in the summons) certain assets, consisting of an omnibus business conducted in the environs of Wagga Wagga, there would be no fund available to meet any order for provision to which any or all of the plaintiffs might ultimately establish an entitlement. 5 Accordingly on 28 September 1999 the plaintiffs made application, to…

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 Flinn v Fearne

Details

AGLC: Flinn v Fearne [1999] NSWSC 1041
Case: [1999] NSWSC 1041
Decision Date: 21 October 1999

CaseChat Overview and Summary

Flinn v Fearne is a case that deals with a dispute arising from the Family Provision Act 1975 (NSW). The matter was heard in the Supreme Court of New South Wales. The deceased, John Flinn, left a substantial estate to a discretionary family trust. The appellants, the deceased's children, sought additional provision from the estate, claiming they had been unfairly excluded. The respondents included the executors and trustees of the estate, as well as family members who stood to benefit from the trust. The central legal issues revolved around whether the testator had entered into a prescribed transaction, and whether the power to remove a trustee and appoint a new one constituted de facto control over the trust assets.

The court examined whether the discretionary trust was a prescribed transaction under the Family Provision Act. The appellants argued that the trust was a means to avoid family provision claims, while the respondents contended that the trust was validly established for family benefit. The court also considered whether the testator's power to remove and appoint trustees constituted de facto control over the trust assets, which would potentially disqualify the trust from protection under the Act. The court analysed the nature of the trust, the intentions of the testator, and the extent of control he retained over the trust's administration.

In determining the issues, the court held that the discretionary family trust was not a prescribed transaction as it was established for the genuine benefit of the family. The court found that the trust was validly constituted and that the power to remove and appoint trustees did not amount to de facto control, as the testator's involvement did not exceed what would be expected in a family trust. The court's reasoning was grounded in the objective assessment of the trust's purpose and the testator's intent, as well as the legal framework provided by the Family Provision Act. The court concluded that the trust was not subject to disqualification, and the appellants' claims for additional provision were dismissed.

The final orders of the court were that the appeal was dismissed, and the respondents were to recover their costs from the appellants. The court found that the discretionary family trust was validly established and did not constitute a prescribed transaction under the Family Provision Act. The court also determined that the testator's power to appoint and remove trustees did not amount to de facto control over the trust assets, thereby upholding the integrity of the trust and its beneficiaries.

Orders