I think I have fixed the problem using an on error local statement call to :-
Code:
deffn_setupError
if err=196 then
rem file exists error
= false
else
if fn_FAULT_M(" I am sorry the following error occured during setup: "+LF$+LF$+report$+LF$+LF$+" Do you want to quit?") then
= true
else
=false
endif
endif