Trust me ... Letter to the CJ ... According to Ian Spry QC, Chief Justice French got it wrong in the long-running stoush with the former Mrs Spry over distribution of family trust assets ... Latest in a series of letters contesting the correctness of the majority findings in Kennon v Spry
French CJ: wrong result
28 November 2012
Dear Mr French,
I am writing in regard to recent litigation.
By way of introduction, I note that I am one of two people who have specifically earned Doctorates of Laws at Melbourne University in the last fifty years and I was also appointed a Queen’s Counsel before I attained forty years.
I was chosen to be an associate to Sir Owen Dixon, a position I occupied until Sir Owen’s retirement.
One of my textbooks, Equitable Remedies, has been used by the superior courts in England, Australia, Canada and New Zealand inter alia, and I am told that it is the most successful Australian legal textbook abroad.
I note that at the relevant times I had no beneficial interest at all in the trust assets of the I.C.F. Spry Trust, but was a mere trustee.
In this capacity I was authorised to select objects of the exercise of the trustee’s powers, without any right whatsoever to participate myself in any distribution.
The relevant beneficiaries, who included Mrs Moylan [the former Mrs Spry] until her divorce, had no interest whatsoever except a right to be considered.
I note that I had given $2.53 million to Mrs Moylan and retained for myself only $1.79 million.
The girls’ shares were worth approximately $1.1 million each, as the judge held, and were intended to set them up for the future.
Section 4(2) of the Family Law Act provides:
"A reference in this Act, the standard Rules of Court or the related Federal Magistrates Rules to a party to a marriage includes a reference to a person who was a party to a marriage that has been dissolved or annulled in Australia or elsewhere, or that has been terminated by the death of one party to the marriage."
The section makes no mention of, and does not apply, where the person in question ceased to be a beneficiary of a trust because the provisions of the trust deed excluded him or her from the beneficiaries.
In fact, Mrs Spry ceased to be a beneficiary of the Trust on 17th February 2003, when at her instance her divorce decree became absolute and she accordingly ceased to be married to me pursuant to the trust deed.
Section 4(2) is not ambiguous.
As you know, section 4(2) does not purport to apply to a deed of trust or settlement; it is strictly limited to expressions in the Act or in the relevant regulations.
It has no application whatsoever in regard to other instruments, such as deeds or settlement or trusts. This simple fact (obvious on the face of the provision) accounts for Mrs Moylan and her experienced counsel and the judges of the Family Court not placing any reliance at all upon the sub-section.
They simply regarded it as irrelevant, and they were clearly correct in this. Thus Mrs Moylan irrevocably removed herself as a trust beneficiary in February 2003, when at her instance she removed herself by divorcing me.
In other words, after 16 February 2003 Mrs Moylan was no longer a beneficiary, and no statutory provision detracted from this fact.
Accordingly it is plain and uncontroversial that Mrs Moylan removed herself as a beneficiary, and that section 4(2) was not material.
It is surprising that your relied upon a contrary view, although it is not surprising that Hayne and Gummow relied wrongly on section 4(2) 1.
[snip]
Your reasoning in Kennon v Spry was openly defective. Despite section 4(2), which does not bear upon this question, Mrs Moylan removed herself as a beneficiary of the Trust in 2003, and there is no statutory provision that affects this.
Why then did you treat Mrs Moylan as continuing as a beneficiary, contrary to the facts?
The clear fact was that at the relevant times neither Mrs Moylan (nor I) was a beneficiary of the trust.
Why then did you distort the law as as to assert that she was a beneficiary? (I myself was no more than a trustee, with no rights to the trust fund, and this was entirely clear from the materials before the court.)
The plain fact is that at the material times neither Mrs Moylan nor myself was in any way a beneficiary.
Despite this fact you held the contrary, presumably because you wished Mrs Moylan to be successful (at the expense of the four daughters of the marriage, who you caused to be disinherited.)
As the Chief Justice of the High Court you are required to decide all cases according to the law.
In the appeals being discussed here you elected not to act according to law, but instead accepted the view of section 4(2) that Gummow and Hayne pursued despite the fact that that view was ex facie wrong.
[snip]
Catharine (one of the four children the taking of whose interests by her mother you wrongly approved) killed herself after the High Court judgment had been handed down.
[snip]
Yours sincerely
I C F Spry
1. Footnote: Gummow and Hayne attempted to argue the contrary by arguing that the power to make distributions to Mrs Moylan survived here excluding herself as a beneficiary: see p.409 (238 CLR). This could not be the case, and the fallacy was obvious: Mrs Moylan had ceased to be a beneficiary and there could not be a reinstatement wither under the Act or under the provisions of the trust deed. You were aware of this, but chose to decide the appeal on the false basis that a distribution could be made beneficially to Mrs Moylan despite her having excluded herself as a beneficiary. You must have been aware of this position since no reasonable person could have had a different view.
* * *
Spry claims that both Gummow and Hayne personally disliked him and that is why they found for the former Mrs Spry.
See earlier correspondence:
The Spry epistles
Spry's fresh spray
The Vic Bar sought a please explain from Spry when he applied for readmission:
I Spry
High Court decision December 3, 2008:
Kennon v Spry