Malcolm John McLennan v Ruskin Dudley McLennan

2026/00029323

EQUITY – the appellant, Malcolm John McLennan (John), and his late wife, Mrs Susan Karen Jeannine McLennan (Karen), established two discretionary trusts (the Conulon Trust and Lakshimi Trust) as vehicles for holding commercial property for investments for the benefit of the McLennan family – the trustees of the Conulon Trust and Lakshimi Trust are two companies incorporated under the instructions of, and originally controlled by, John and Karen, being Convulon Pty Limited (Convulon) and the second respondent (Lakshimi), respectively – John and Karen established a third trust, being a self-managed superfund with the trustee being McLennan Holdings Pty Ltd (MHPL) – in 2010, John and Karen’s son, the first respondent (Ruskin), was appointed by his parents as an additional director of Lakshmi, Convulon, and MHPL and in about 2013 was given authority to operate John and Karen’s personal bank accounts – in 2014, John and Karen transferred their shares in Convulon and Lakshmi to Ruskin outright and resigned as directors of the two companies – the original Lakshimi Trust deed provided for an appointer, being John, who had the power to remove and replace the trustee of the Lakshimi Trust – in 2020, Karen and John executed a deed amending the terms of the Lakshimi Trust deed so as to provide for the appointer from time to time to be able to nominate someone else as appointer – a second deed was simultaneously executed providing for John, as appointer, to nominate Ruskin as the new appointer of the Lakshimi Trust (the Deed of Appointment) – also in 2020, a property jointly owned by John and Karen (the Bombi Road Property) was transferred to Ruskin as an outright gift – in return, Ruskin entered into what was described as a “life tenancy” with his parents whereby they were to be entitled to live in the property, rent-free, for the rest of their lives – John commenced proceedings (which, during the trial, were carried out by his tutor, Mr Martyn Kennedy) seeking to set aside the Deed of Appointment and the transfer of the Bombi Road Property in equity as unconscionable transactions, and, alternatively, that Karen’s half share of the Bombi Road Property be awarded to him by way of a family provision order as an asset forming part of Karen’s notional estate – the primary judge held that the neither the Deed of Appointment nor the transfer of the Bombi Road Property was an unconscionable transaction and that the family provision claim had not been made out – whether the primary judge erred in failing to find that the Deed of Appointment was an unconscionable transaction – whether the primary judge erred in failing to find that the transfer of the Bombi Road Property was an unconscionable transaction.

McLennan v McLennan [2025] NSWSC 1603