Bowyer v Wood - [2007] SASC 327

SUPREME COURT OF SOUTH AUSTRALIA
(Full Court)
In the Estate of ANN WILLOUGHBY WOOD
BOWYER v WOOD & ORS
[2007] SASC 327
Judgment of The Full Court
(The Honourable Justice Debelle, The Honourable Justice Nyland and The Honourable Justice Anderson)
7 September 2007
SUCCESSION - FAMILY PROVISION AND MAINTENANCE - FAILURE BY TESTATOR TO MAKE SUFFICIENT PROVISION FOR APPLICANT - WHETHER APPLICANT LEFT WITH INSUFFICIENT PROVISION - CLAIMS BY CHILDREN
Application by adult daughter for provision out of estate of testatrix pursuant to s 7 of Inheritance (Family Provision) Act 1972 – testatrix made bequests of two thirds of her estate to siblings of testatrix and their families and charities – whether plaintiff has been left with adequate provision for her proper maintenance, education and advancement – whether trial judge had correctly assessed the plaintiff’s financial position – whether plaintiff had a moral claim to a greater share of estate or whether testatrix had moral obligation to plaintiff – appeal allowed.
Inheritance (Family Provision) Act 1972 s 7, s 9(8), referred to.
Allardice v Allardice (1910) 29 NZLR 959; Bosch v Perpetual Trustee Co Ltd [1938] AC 463; Goodman v Windeyer (1980) 144 CLR 490; In the Estate of Guthrie (1983) 32 SASR 86; McCosker v McCosker (1957) 97 CLR 566; Morse v Morse (No 2) [2003] TASSC 145; re Allen; Allen v Manchester [1922] NZLR 218; Singer v Berghouse (1994) 181 CLR 201; Singer v Berghouse (1993) 114 ALR 521; Stott v Cook (1960) 33 ALJR 447; Vigolo v Bostin (2005) 221 CLR 191; Welsh v Mulcock [1924] NZLR 673; Worladge v Doddridge (1957) 97 CLR 1, applied.
Coates v National Trustees Executors and Agency Co Ltd (1956) 95 CLR 494; Dobell v Van Damme [1982] VR 425; Fox v Burvill (1955) 92 CLR 334; Golosky v Golosky (unreported, NSW Court of Appeal, 5 October 1999); Krause v Sinclair [1983] 1 VR 73; Lovell v Lovell (1950) 81 CLR 513; Pontifical Society for the Propagation of the Faith v Scales (1962) 107 CLR 9; re Bodman [1972] Qd R 281; re Buckland (No 2) [1967] VR 3; re Chapman [1918] St R Qd 226; re De Feu [1964] VR 420; re Harris [1936] SASR 497; re Kennedy [1920] VLR 513; re Klease [1972] QWN 44; re Maslin [1908] VLR 641; re McCaffrey (1982) 29 SASR 582; re McCreedy [1938] St R Qd 293; re McGoun [1910] VLR 153; re Milanovic [1973] Qd R 205; re Nielsen [1968] Qd R 221; re Sharp [1923] St R Qd 102; re Sitch [2005] VSC 383; re Richardson [1920] SALR 24; re Roberts [1919] VLR 125; re Testator’s Family Maintenance Acts (1916) 12 Tas LR 11, considered.

In the Estate of ANN WILLOUGHBY WOOD
BOWYER v WOOD & ORS
[2007] SASC 327
Full Court: Debelle, Nyland and Anderson JJ

DEBELLE J. The appellant applied for an order under s 7 of the Inheritance (Family Provision) Act 1972 that further provision be made for her out of the estate of her deceased mother for her maintenance, education or advancement. A judge of this court dismissed her application. The appellant has appealed against that decision. I will refer to the appellant as “the plaintiff”.
The defendants are the executors and certain beneficiaries under the will. There are no pleadings. Although the parties had filed affidavits, the defendants required that the action proceed on viva voce evidence. The plaintiff and her husband gave evidence in support of the application. The defendants called Ms Phillipa Fletcher, the unmarried sister of the testatrix, and Mr Michael Hall. The trial judge found that they were all witnesses of truth.
The facts were not in real dispute. The issues on the appeal were essentially whether the trial judge had applied all relevant legal principles and whether he had correctly assessed the financial position of the plaintiff when dismissing the plaintiff’s claim.
The Testatrix and Her Family
The testatrix died on 19 December 2003 aged 71 years. Her will is dated 21 January 1998. She left an estate valued at some $1.2 million.
The testatrix had married twice. She and her first husband, Mr Steele Hall, separated in late 1975 and the marriage was dissolved in 1979. There were four children of that marriage. They were the plaintiff who was born in 1957, Kathleen who was born in 1959, Michael who was born in 1961, and Elinor who was born in 1964. The plaintiff lived with her parents until they separated. The testatrix then moved into a house at Mitcham. The plaintiff continued to live with her father at Henley Beach.
Three of the children of the testatrix have married. They are the plaintiff, Kathleen and Michael. The plaintiff married in 1984. She has one son Alec born in 1994. Kathleen and her husband have three children. Michael has one child. His first marriage has dissolved. Elinor is a single mother and has one child. She has changed her name. She is called Elinor Appletree.
After her divorce from Steele Hall, the testatrix remarried her second husband Alastair Wood. He has four children by a previous marriage.
The testatrix has one brother and two sisters. Her brother Grant and her sister Judith have both married and each has two children. Her sister Phillipa is unmarried.
The Will
The testatrix gave the whole of her estate to her executors and trustees with directions as to how that estate was to be distributed. She first made gifts of her personal estate to her children and stepchildren. She divided the rest of her estate into parts and gave directions as to how those parts were to be distributed. I list each of those bequests in the order in which they were made in the will.
1The testatrix first gave one fifth of her estate to her son Michael absolutely “but with the request, without imposing any trust or binding obligation on him and without conferring any interest upon any other person, to distribute such money” amongst one or more named charities. One fifth of the estate approximated $251,000. Mr Michael Hall gave evidence. He gave an undertaking to the court that he would give the money to the named charities. He said he would do so over a period of two financial years in order to maximise the taxation deductions in respect of his personal income. He added that he would distribute an amount equal to the taxation benefits to the four children of the testatrix, an amount he estimated to be approximately $60,000.
2The testatrix then made gifts of a portion of her estate or $5,000 whichever is the lesser to five named persons who were charity workers or who had been of assistance to her in her lifetime. The total of those gifts will not, therefore, exceed $25,000.
3One tenth of the estate (approximately $146,500) was to be divided equally between the six grandchildren of the testatrix who survived her and attained their majority. That was effectively a gift of some $21,000 to each grandchild.
4Six fifteenths of her estate (approximately $520,000) was to be divided equally between those of the brothers and sisters of the testatrix who survived her, the spouses of her brother and sister who had married, and the children of those marriages provided they survived her. The effect of this gift is that each of her brothers and sisters, their spouses and each of their children will receive about $55,800.
5One thirtieth of her estate (some $42,000) was to be divided between each of the four stepchildren of the testatrix. That is effectively a gift of about $10,500 to each.
6The residue of the estate of the testatrix (approximately $310,000) was to be divided equally between those of her four children who survived her. All four of the children of the testatrix survived her. The effect of this gift is that each of the four children will receive about $77,500. It will have been noticed that, although the testatrix made a gift to the spouses of her siblings, she made no gift to the spouses of her children.
The plaintiff’s case is that additional provision should be made for her and that it should be made out of the bequest to Mr Michael Hall which contained the request to distribute it to the named charities and out of the bequest to the siblings of the testatrix, their spouses and their children. The amount of those bequests totals approximately $770,000. It represents almost 65 per cent of the estate of the testatrix, that is to say, almost two thirds of her estate.
Farming Land Owned by the Bowyers
The plaintiff and her husband are farmers. I will on occasions refer to the plaintiff and her husband as “the Bowyers”. The plaintiff’s husband, Peter Bowyer, is a fourth generation farmer. Initially, Peter Bowyer worked a farming property at Owen in partnership with his father and his younger brother. When the partnership was dissolved in 1999, the plaintiff and her husband purchased 450 acres of the land previously operated by the partnership. They decided to devote their farming activities to crops. They later sold 30 acres of that land reducing the holding to 420 acres.
Before the Bowyers purchased the 450 acres at Owen, they had purchased part of some farming land owned by the testatrix. It comprises about 150 acres. The purchase price was $175,000. The proceeds of the sale of that land to the plaintiff were divided between the testatrix and her four children. The plaintiff’s share was deducted from the purchase price.
Early in 2000, the Bowyers purchased a farming property at Owen owned by Peter Bowyer’s father. Peter Bowyer had share farmed the property with his father. That land has 470 acres of arable land. The purchase price was $400,000. The testatrix lent the plaintiff and her husband $200,000 to enable them to purchase that land. That is the only sum outstanding on that land. Simple interest is payable on the loan at the rate of 5% per annum. The loan is now a debt due to the estate of the testatrix. I will refer later to the circumstances in which that loan was made.
In April 2002, the Bowyers purchased 277 acres of land near Hamley Bridge for $357,000. This farm property is 15 kilometres south-east of Owen. The Bowyers borrowed money from Elders Rural Bank to purchase the land. The loan has not been repaid.
The plaintiff and her husband, therefore, own and farm in partnership a total area of 1317 acres of land.
Loans by Testatrix
The Bowyers have borrowed money from the testatrix on three occasions. They first borrowed $50,000 to assist with the purchase of a header. As already noted, in 2000 they borrowed $200,000 to assist with the purchase of the land from Peter Bowyer’s father. They later borrowed $40,000 to assist with the purchase of a tractor. Interest at the rate of 5 per cent per annum is payable on each of those loans. In 2001 the mother of the testatrix died and left the testatrix a substantial inheritance. Out of that inheritance, the trustee gave $150,000 to each of her four children. The plaintiff applied that sum to reduce the principle debt due by her and her husband to the testatrix. At the date of the death of the testatrix, the plaintiff and her husband owed her $140,000.
The Loan of $200,000
The plaintiff and her husband both gave evidence as the circumstances in which they had borrowed the amount of $200,000 from the testatrix to purchase the land from Peter Bowyer’s father. The plaintiff had informed her mother that she and her husband were considering purchasing the land. Her mother offered to lend them $200,000 free of interest. The plaintiff said to her mother that it was not fair if she and her husband were to receive an interest free loan. Her mother then offered to lend the money with interest. Peter Bowyer asked the testatrix what would occur should she die before the loan was repaid. The testatrix replied that they need not worry because the plaintiff’s inheritance would amount to more than what they borrowed at that stage. At that time the plaintiff and her husband had already borrowed $50,000 from the testatrix. The plaintiff and her husband proceeded to borrow $200,000 with interest at the rate of 5 per cent per annum. The trial judge accepted that evidence. He acknowledged that it was appropriate to take the assertion of the testatrix into account. The trial judge dealt with the issue in these terms but erred in doing so.
However, it must be considered along with the fact that the testatrix subsequently forgave $150,000 of the $200,000 which she lent to the plaintiff and her husband for the purchase of the property.
That finding does not accord with the evidence. The testatrix did not forgive a portion of the loan. The true position is that the mother of the testatrix had died and the testatrix received a substantial inheritance. Out of that inheritance, the testatrix gave $150,000 to each of her four children. In short, the testatrix did not forgive the loan. Instead, the plaintiff repaid $150,000. In one sense, there is little consequence in this error. The plain fact is that, by whatever means, the loan was reduced by $150,000. However, it is necessary to note that the plaintiff did not receive any financial benefit which was not also received by her brother and two sisters.
Assets and Liabilities of the Bowyers
The trial judge found that at 22 January 2006 the plaintiff and her husband had assets totalling $3,152,672.00. They comprised:
Land  $2,635,000.00
Agricultural plant and equipment              $297,170.00
Motor Home  $12,500.00
Shares  $38,343.00
Trading options  $117,763.00
Cash at different financial institutions       $51,896.00
TOTAL  $3,152,672.00
Their liabilities totalled $662,207. The major part of those liabilities comprised a liability on a loan by Elders Rural Bank of $442,875 and the loan by the testatrix of $140,000. A further $69,476 consisted of debts in respect of the purchase and repair of farm, plant and equipment. The balance of the liabilities were on credit cards.
A Meagre Income
The income derived by the Bowyers from their farming operations is not high. The average income of the plaintiff and her husband over the financial years ending 30 June 1993 to 30 June 2005 was $26,010 and $22,210 respectively. That is an income substantially below the average national wage. Their income has improved in the past five years. Their combined average income for the financial years ending 30 June 2000 to 30 June 2005 is $78,208. Thus, each earns no more than approximately the average national wage. It is apparent, therefore, the plaintiff and her husband are each earning but a relatively meagre income. It must be noted that in the year ending 30 June 2002 the plaintiff and her husband had an income substantially in excess of their income in all of the years since 1993. Each earned about $30,000 more than they had earned before or since. That only serves to underline the fact that the plaintiff and her husband are earning but a meagre income.
The plaintiff and her husband have investments with a total value of $156,000. It is reasonable to expect a return from those investments in future years. The income from those investments is included in the average income of each the plaintiff and her husband noted in the previous paragraph.
The Bowyer’s Debt Position
In one sense, it might be said that the plaintiff and her husband are asset rich but income poor. However, that would be to misstate the true position because of their significant liabilities in respect of the land they own. Those liabilities total $582,878. Assuming that the plaintiff will apply the whole of the gift of $77,464 under the will of the testatrix to the repayment of the loan of $140,000 due to the estate, the total liability in respect of the land will still be substantial, namely, $505,414. The meagre income of the plaintiff and her husband does not provide a surplus sufficient to enable them to repay the principal. There is no direct evidence of the interest payable to Elders Rural Bank. The interest payable on the loan of $140,000 to the testatrix is 5 per cent per annum. Assuming conservatively that the rate of interest payable to Elders Rural Bank is 7 per cent per annum, the amount of the interest on the sum of $505,414 is of the order of $35,000 per annum, leaving the plaintiff and her husband about $43,000 with which to live and meet their other obligations which include repaying the sum of $69,476 due on plant and equipment. The reality is that given their present earnings and their liabilities, the plaintiff and her husband have no present ability to repay the principal sum borrowed from Elders for the purchase of the land. The trial judge commented that, “It was not suggested that this part of the debt could not be refinanced. There is ample security for the existing borrowing”. With respect, that is an unrealistic assessment. While there is no doubt ample security for the existing borrowings, any new loan must be repaid if the plaintiffs are to retain their land. In any event, the refinancing of the debt will result in additional costs. I say nothing of the possibility of an increase in the rate of interest.
A Desire to Improve Plant and Equipment
The Bowyers purchased a second-hand header for harvesting their crops. It has been their practice to purchase second-hand equipment. The header is now 15 years old and the cost of repairs and maintenance is making it uneconomic to operate. It was repaired for use for the 2005-2006 harvest season. The cost of repairs was between $7,000-$8,000. One disadvantage of the header is that it has a small capacity which means that it takes a long time to harvest crops. When harvesting barley, there is some loss of barley. In 2005, the Bowyers did not get the whole of the lentil crops in before a heavy downpour of rain because of the small capacity of the header. They wish to purchase a new header to reduce the cost of repairs and improve their harvesting capacity. The cost of a new header after deducting a trade-in allowance for the old header is $102,300.
The Bowyers also seek to purchase two new sheds for farming purposes, one to house their farm machinery and the other, a smaller shed, to house sprays. The smaller shed must comply with prescribed standards. The estimated cost of the sheds and installation is $40,000 and $5,000 respectively. It is apparent that the present financial position of the plaintiff and her husband provides little scope for funding to purchase the header and the two sheds.
The Appletree Trust
The trial judge properly had regard to the income the plaintiff was likely to receive from the Appletree Trust, a trust created in 1995 by the testatrix. It is a discretionary trust. The trustees were the plaintiff’s siblings, Michael Hall and Kathleen Smart. The present trustees are Kathleen Smart and the plaintiff’s stepsister, Kirsten Wood. The testatrix established the Appletree Trust for the purpose, among others, of providing an income for Elinor, the fourth daughter of the testatrix. The trust deed names as specified beneficiaries the trustee and each of her four children. Eligible beneficiaries are the spouses, children and grandchildren of the specified beneficiaries. The trust has assets with a total value of $1.348 million.
On 16 June 2003, a meeting was held between the testatrix and her four children concerning the administration of the Appletree Trust. The meeting agreed that the corpus would not be available for distribution. At that meeting or a little later, they also agreed the terms of a document that contains guidelines for the administration of the trust.
The guidelines permit Elinor Appletree to apply to the trustees for assistance for unusual expenses. The guidelines also provide for distribution of the income. It is to be applied first in the payment of the living expenses of Elinor Appletree with the balance being equally divided between the other three children of the testatrix. If the balance of the income is more than three times the amount paid to Elinor in any one year, the income is to be equally divided between all four children of the testatrix.

The plaintiff received her first distribution in 2003. In the years ending 30 June 2004 and 2005 the plaintiff received distributions of $8,197 and $10,624 respectively. To November 2005, she had received a further distribution of $4,057. It is reasonable to expect that the plaintiff will continue to receive distributions of income as in past years. However, as the trial judge noted, the trust is discretionary in nature so that there is no guarantee that distributions in the future will follow this pattern. The income from the Appletree Trust has been included in the calculation of the average income of the plaintiff.
The Trial Judge’s Summary
The trial judge made a summary of the financial position of the plaintiff in these terms:
48In summary, I find that at the time of the death of the testatrix, the plaintiff was established with her husband on properties with a combined value of $1.6m and that the value of the land has now increased to $2.6m. I accept that the value of the land is dictated more by its saleability than the income which is presently derived from it. The plaintiff and her husband have the capacity to supplement their farming income with investments from a portfolio valued at approximately $156,000. It appears that the plaintiff will continue to receive distributions from the Appletree Trust in the order of $8,000 to $10,000 per year. It appears that the plaintiff and her husband are able to service their present borrowings.
49I have not lost sight of the fact that the plaintiff is entitled to no more than a one-half share of the partnership assets. However, the assessment as to whether adequate provision has been made for the plaintiff’s proper maintenance, education and advancement in life cannot ignore the reality of the business partnership and the sharing of assets, income and liability.
With respect, that summary is only partly correct. It ignores a number of important considerations. It entirely overlooks the difficulty, if not the inability, of the plaintiff and her husband to repay the principal debt on their land. It ignores the debt in respect of plant and equipment for the farm. Putting to one side the amount of $140,000 which must be repaid to the estate of the testatrix, the liability for farm debt for land, plant and equipment totals approximately $512,350. Even if the plaintiff and her husband sold their investments in order to reduce that debt, there is still a substantial debt remaining. The likelihood is that the return on their investments substantially exceeds the return on their investment in the farm property. It also appears that the judge has treated the income from the Appletree Trust, if not also the investment income, as additional to the plaintiff’s average income noted earlier. That is an error. The returns of income tax which were tendered show that the average income of both the plaintiff and her husband included their investment income and the income of the plaintiff included her income from the Appletree Trust.
Future School Fees
When determining what is required for the maintenance of the plaintiff, a relevant consideration is the fact that she has a child who is dependent on her and whom the plaintiff has to support and educate: Goodman v Windeyer (1980) 144 CLR 490 at 498. The judge found that it was likely that the plaintiff’s son Alec would attend a boarding school in Adelaide. However, he does not appear to have made any allowance for the substantial cost of boarding school fees.
Financial Assistance from Testatrix
It is relevant also to consider financial assistance provided to the plaintiff by the testatrix during her lifetime: In the Estate of Guthrie (1983) 32 SASR 86 at 96. On five occasions over about the past 15 years, the testatrix has made substantial gifts of money to each of her four children. Those gifts were made when the testatrix sold real estate and on the occasion on the death of her mother when she received a substantial inheritance. On each of those occasions, the testatrix made an equal payment to each her children out of the money she received. On occasions, she kept some of the money for her own purposes. As the trial judge found, the plaintiff has received payments totalling $237,000 from the testatrix. However, each of the plaintiff’s siblings also received a like amount.
The trial judge also referred to the fact that the plaintiff has had the benefit of loans at lower than commercial rates of interest. The rate on the loans made by the testatrix was 5 per cent per annum. While that is a rate below ordinary commercial rates, it is not a rate significantly below rates available for borrowing in respect of rural property. It does not represent a large benefit to the plaintiff. The plaintiff was not the only one of her children to whom the testatrix lent money. She had also lent about $129,000 to the plaintiff’s sister Kathleen.
The judge also had regard to the fact that the plaintiff and her husband had given shares to the value of $20,000 to their son. He also had regard to a gift of $50,000 from the plaintiff’s father and to the likelihood of another gift from him.
The Relationship between the Plaintiff and the Testatrix
The trial judge found that there was nothing in the relationship between the plaintiff and her mother that required or justified any aspect of the will. The evidence entirely supported that finding.
Little Contrary Evidence
Little evidence was led in opposition to the plaintiff’s claim. Her brother, Michael Hall, explained how he intended to distribute the sum of $251,000 to charities. His proposed distribution of the tax savings to his siblings would, he said, be varied if the plaintiff succeeded in her claim. He also gave evidence as to the agreement between his mother, himself and his siblings as to the terms of the management guidelines for the Appletree Trust. He referred to the fact that at one meeting a suggestion had been made that the sum of $140,000 be paid to the plaintiff out of the Appletree Trust if she did not proceed with this action. Mr Hall said that no formal offer was made to the plaintiff. The issue had been raised and the plaintiff did not wish to proceed with it. The trial judge properly had no regard to it.
The only other witness called by the defendants was Ms Phillipa Fletcher, who is one of the sisters of the testatrix and the plaintiff’s aunt. Her evidence was that she had made an offer to the plaintiff to pay the loan of $140,000 for her but the plaintiff had rejected the offer. The evidence has little utility. The terms of the offer were vague. The trial judge did not refer to that evidence and appears to have disregarded it. He was correct to do so.
Little Evidence of Means of Siblings
There was no evidence as to the means of each of the siblings of the testatrix other than Ms Fletcher. She was cross-examined as to her means. She was aged 63 years at the trial. She is unmarried. She did not state her annual income but she has income from two sources. The first is from the sales of an educational board game which she had produced and the second is the income from a share portfolio valued at about $1.2 million. In my view, her portfolio would be likely to produce an income of approximately $60,000 per annum. She used to earn some additional income from painting but she has not painted in recent years. She owns a house property in Stanley Street, North Adelaide. It is not subject to any mortgage. This evidence indicates that Ms Fletcher is reasonably well off. It does not suggest that she had any moral claim on the testatrix and she did not make such a claim. It will have been noticed that the value of her share portfolio is about the same as the value of the estate of the testatrix.
There was no evidence of any kind as to the financial circumstances of the other two siblings of the testatrix or whether they had any claim on the testatrix. Her brother Grant was aged 70 years at the death of the testatrix and her sister Judith was 67 years old. The financial circumstances of the siblings and their families was relevant: Vigolo v Bostin (2005) 221 CLR 191 at [126]. If they were pensioners, the testatrix may have had every reason to assist them. If they were well off, they had little claim on her bounty. There was nothing which suggested that they or any member of the family of each had any moral claim on her estate. There was no evidence whether they had, like the testatrix, received a substantial inheritance on the death of their mother. It is reasonable to infer that, like the testatrix, they would have received such an inheritance. If parties fail to adduce evidence, the court has no alternative but to act on that which is proved: Stott v Cook (1960) 33 ALJR 447 at 448 per Dixon CJ and at 450 per Kitto J.
The Judge’s Conclusion
The trial judge found that the plaintiff is able to maintain and advance herself from her own resources. He expressed his findings in these terms:
The plaintiff said in evidence that it was unfair that the charities and the siblings of the testatrix and their families should benefit to the extent provided for in the will. I accept that an increased provision for the plaintiff would be well spent on the properties farmed by the plaintiff and her husband. However, I am of the view that the plaintiff is able to meet the cost of properly maintaining and advancing herself in life from her own resources. After taking into account the plaintiff’s financial position, the provision made for her in the estate and the financial assistance given to her by the testatrix during her lifetime, I am not satisfied that the plaintiff has been left without adequate provision for her proper maintenance, education and advancement in life.
For those reasons, he dismissed the plaintiff’s claim.
Some Relevant Factors Not Considered
When considering the issues under s 7 of the Act the trial judge applied the approach of Mason CJ, Deane and McHugh JJ in Singer v Berghouse (1994) 181 CLR 201 at 208:
It is clear that, under these provisions, the court is required to carry out a two-stage process. The first stage calls for a determination of whether the applicant has been left without adequate provision for his or her proper maintenance, education and advancement in life. The second stage, which only arises if that determination be made in favour of the applicant, requires the court to decide what provision ought to be made out of the deceased’s estate for the applicant. The first stage has been described as the “jurisdictional question”. That description means no more than that the court’s power to make an order in favour of an applicant under s 7 is conditioned upon the court being satisfied of the state of affairs predicated in s 9(2)(a). (Citations omitted).
As is apparent from the reasons for his conclusion on the jurisdictional question, the trial judge determined the application by considering only the plaintiff’s financial position, albeit taking into account the provision made for the plaintiff in the will and the financial assistance given to the plaintiff by the testatrix during her lifetime. He considered the question whether the testatrix had made adequate provision for the plaintiff by examining only the financial position of the plaintiff and her needs. It is not sufficient merely to consider the needs of the plaintiff. Those needs must be assessed against the background of any moral claim that the plaintiff might have on the estate of the testatrix and be considered in the light of all relevant factors including the size of the estate. The trial judge has failed to consider all relevant factors and in particular failed to consider the size of the estate and failed entirely to consider the question whether the testatrix had any moral duty towards her children including the plaintiff. These are serious flaws in his reasons. In addition, the trial judge has failed correctly to assess the plaintiff’s financial position. In short, he has not correctly considered the question whether the testatrix has failed to make adequate provision for the proper maintenance, education and advancement (which I shall simply call “maintenance”) of the plaintiff. I set the reasons for these conclusions.
Determining an Adequate Provision
When determining whether the testatrix has failed to make adequate provision out of her estate for the proper maintenance of the plaintiff, it is necessary to consider what is meant by the words “adequate” and “proper”. This meaning has been considered on many occasions. The words “adequate” and “proper” are always relative: Goodman v Windeyer at 502 per Gibbs J applying Dixon CJ in Pontifical Society for the Propagation of the Faith v Scales (1962) 107 CLR 9 at 19. They must be applied in a relative sense to all the circumstances of the case: re McCaffrey (1982) 29 SASR 582 at 585. There are no fixed standards and the court is left to form opinions upon the basis of its own general knowledge and experience of current social conditions and standards: Goodman v Windeyer (supra).
The word “proper” connotes something different from the word “adequate”: Goodman v Windeyer at 497. The word “proper” connotes an ethical position as to what allowance should be made: re Harris [1936] SASR 497 at 500 applying Allardice v Allardice (1910) 29 NZLR 959. Adequate provision for the proper maintenance of a child is not limited to providing what is sufficient for a basic subsistence or satisfying the mere needs of that child. As Salmond J said in Welsh v Mulcock [1924] NZLR 673 at 685:
[T]he testamentary duty of a man towards his family is not limited to a merely eleemosynary provision sufficient to provide the necessities of existence. This may be the measure of the legal obligation of a husband or a father in his lifetime under the Destitute Persons Act, but it is not the measure of that moral obligation – that officium pietatis, as the Roman lawyers called it – which he owes to his family in respect of the testamentary disposition of his estate, and which is recognized and enforced by the Family Protection Act.
The Privy Council commented on the distinction between the words “adequate” and “proper” in Bosch v Perpetual Trustee Co Ltd [1938] AC 463 at 476 in these terms:
The use of the word “proper” in this connection is of considerable importance. It connotes something different from the word “adequate”. A small sum may be sufficient for the “adequate” maintenance of a child, for instance, but, having regard to the child’s station in life and the fortune of his father, it may be wholly insufficient for his “proper” maintenance. So, too, a sum may be quite insufficient for the “adequate” maintenance of a child and yet may be sufficient for his maintenance on a scale that is “proper” in all the circumstances. A father with a large family and a small fortune can often only afford to leave each of his children a sum insufficient for his “adequate” maintenance. Nevertheless, such sum cannot be described as not providing for his “proper” maintenance, taking into consideration “all the circumstances of the case” as the sub-section requires shall be done.
Those passages highlight how what might be considered to be an adequate provision for proper maintenance of a child will vary according to all relevant circumstances. The needs of the plaintiff are not considered in a vacuum. The size of the estate is relevant when considering what is an adequate provision for the proper maintenance of a child.
It is well established that the word “proper” is not intended to give the court power to re-write the will in accordance with its own ideas of justice and fairness. Instead, the use of the word “proper” is intended to require the adequacy of the provision which has been made to be determined by reference to all relevant circumstances including the size of the estate: Worladge v Doddridge (1957) 97 CLR 1 at 16 to 17 per Kitto J who added, relying on Bosch v Perpetual Trustee Co Ltd:
In Bosch’s Case the Privy Council corrected this misconception by insisting that proper maintenance is not to be translated as adequate maintenance, and that a judgment as to the maintenance which is “proper” for a particular applicant in the circumstances of his case is necessarily a judgement as to what maintenance the applicant ought to have in those circumstances, and not what he or she needs. It is only in that sense that it is correct to say that Bosch’s Case adopted an “ethical” rather than an “economic’ view. The hypothesis of a just but not loving testator is resorted to, not for the purpose of determining what would have been the ideally fair manner of disposing of the testator’s estate, but only for the purpose of determining what was sufficient for the maintenance and support which the circumstances make it right that the applicant should have, as distinguished from what was sufficient for the maintenance and support which the applicant may be considered to need. (Citations omitted).
In McCosker v McCosker (1957) 97 CLR 566 at 571 to 572 Dixon CJ and Williams J identified the relevant considerations in these terms:
The question is whether, in all the circumstances of the case, it can be said that the respondent has been left by the testator without adequate provision for his proper maintenance, education and advancement in life. As the Privy Council said in Bosch v Perpetual Trustee Co (Ltd) the word “proper” in this collocation of words is of considerable importance. It means “proper” in all the circumstances of the case, so that the question whether a widow or child of a testator has been left without adequate provision for his or her proper maintenance, education or advancement in life must be considered in the light of all the competing claims upon the bounty of the testator and their relative urgency, the standard of living his family enjoyed in his lifetime, in the case of a child his or her need of education or of assistance in some chosen occupation and the testator’s ability to meet such claims having regard to the size of his fortune. If the court considers that there has been a breach by a testator of his duty as a wise and just husband or father to make adequate provision for the proper maintenance education or advancement in life of the applicant, having regard to all these circumstances, the court has jurisdiction to remedy the breach and for that purpose to modify the testator’s testamentary dispositions to the necessary extent. (Citations omitted).
As will have been noticed, there is continued reference to the size of the estate as a relevant factor. In the case of large estates, provision can be made for the well-to-do but that consideration is subordinated to the dominant purpose of determining what provision would be made by a just testator making proper provision for the maintenance, education and advancement of his family: Lieberman v Morris (1944) 69 CLR 69 at 91 to 92 per Williams J.
In Singer v Berghouse, Mason CJ, Deane and McHugh JJ re-iterated the above principles in these terms at 209:
The first question is, was the provision (if any) made for the applicant “inadequate for [his or her] proper maintenance, education and advancement in life”? The difference between “adequate” and “proper” and the interrelationship which exists between “adequate provision” and “proper maintenance” etc. were explained in Bosch v Perpetual Trustee Co. Ltd. The determination of the first stage in the two-stage process calls for an assessment of whether the provision (if any) made was inadequate for what, in all the circumstances, was the proper level of maintenance etc. appropriate for the applicant having regard, amongst other things, to the applicant’s financial position, the size and nature of the deceased’s estate, the totality of the relationship between the applicant and the deceased, and the relationship between the deceased and other persons who have legitimate claims upon his or her bounty.
Considerations relevant to the determination of an adequate provision were explained by Callinan and Heydon JJ in Vigolo v Bostin at [122]:
Adequacy of the provision that has been made is not to be decided in a vacuum, or by looking simply to the question whether the applicant has enough upon which to survive or live comfortably. Adequacy or otherwise will depend upon all of the relevant circumstances, which include any promise which the testator made to the applicant, the circumstances in which it was made, and, as here, changes in the arrangements between the parties after it was made. These matters however will never be conclusive. The age, capacities, means and competing claims, of all of the potential beneficiaries must be taken into account and weighed with all of the other relevant factors.
With respect, that passage is entirely consistent with the relevant considerations identified in earlier decisions.
No Reference to Moral Claim

The trial judge did not at any stage refer to the reasoning of the majority of the High Court in Vigolo v Bostin nor consider the question whether the plaintiff had a moral claim to a greater share of the estate of the testatrix or whether the testatrix had any moral obligation to the plaintiff. He did not refer to the reasoning in Vigolo v Bostin in any respect notwithstanding that in argument counsel had referred to that decision. The plaintiff’s appeal is in part grounded on that omission.
In Vigolo v Bostin a majority of the High Court held that it was helpful, when making the value judgment required on the jurisdictional question whether adequate provision had been made to a plaintiff, to have regard to considerations of moral claim and moral duty. It is a consideration which connects the general but value-laden language of the statute to the community standards which give it practical meaning: Vigolo v Bostin at [25] per Gleeson CJ and see generally Gleeson CJ at [11] to [25]. Moral duty and moral obligation may, according to circumstances, be relevant and within the contemplation of the Act but a moral claim cannot be a claim founded upon considerations not contemplated by the Act: Vigolo v Bostin at [113] to [121] per Callinan and Heydon JJ. However, considerations of moral duty and moral claim cannot be a substitute for the text of the Act: Vigolo v Bostin at [25] per Gleeson CJ. The failure of the judge to consider whether the plaintiff had a moral claim was a serious omission especially given the substantial provision made by the testatrix for charities and her siblings. For the reasons which follow, the judge erred in failing to give consideration to the moral claim of the plaintiff upon the bounty of her mother.
The basic principle underlying the Act was explained by Salmond J in re Allen; Allen v Manchester [1922] NZLR 218 at 220 to 221 in these terms:
The provision which the Court may properly make in default of testamentary provision is that which a just and wise father would have thought it his moral duty to make in the interests of his widow and children had he been fully aware of all the relevant circumstances.
That approach was adopted by the Privy Council in Bosch v Perpetual Trustee Co Ltd at 479, which as Gleeson CJ noted in Vigolo v Bostin at [16] has been followed and applied many times in the High Court. In Singer v Berghouse at 209 Mason CJ, Deane and McHugh JJ said that in Australia it had been accepted as the correct approach. The observations of Salmond J apply with no less force today and apply also where the testatrix is a mother. A wise and just mother will have regard to what Dixon CJ in Coates v National Trustees Executors and Agency Co Ltd (1956) 95 CLR 494 at 510 called “the natural claim upon her testamentary bounty”. The principles applicable to a claim by an adult son or an adult daughter are the same as apply to other claimants: McCosker v McCosker at 576; Pontifical Society for the Propagation of the Faith v Scales at 19; re Buckland(No 2) [1967] VR 3.
The failure of the judge to refer to the moral duty of the testatrix to her children has led the judge into error. This was an instance of a testatrix preferring the interests of others over her own children in circumstances where there was no reason for her to do so. The evidence indicates that the testatrix had a good relationship with her children. She was fond of her siblings but that does not provide a reason why the testatrix should have favoured the interests of her siblings and their families over the interests of her children and their families. There was a complete absence of any evidence as to the financial position of the siblings of the testatrix and their families other than her sister Phillipa, who is unmarried. There is no evidence that the siblings had any claim, moral or otherwise, on the bounty of the testatrix. Indeed, the evidence of the testatrix’s sister Phillipa suggests that she had no need of any provision by the testatrix. She was aged 63 years and lived in her own home. She had a portfolio of investments valued at about $1.2 million, an amount almost equal to the value of the estate of the testatrix. The other two siblings of the testatrix were her brother Grant aged 70 years and a sister Judith aged 67 years. As they were both well advanced in years, there would not appear to be any reason why the testatrix should provide for them other than perhaps a nominal amount. There was no evidence to suggest that they or any member of their respective families had any claim on the testatrix. There was no evidence as to the financial position of each or of their families. It is reasonable to infer that, like the testatrix, her siblings had received an inheritance on the death of their mother. Given the lack of evidence, it is reasonable to infer that the siblings of the testatrix and their families did not have any claim on the bounty of the testatrix.
The absence of any such claim serves to emphasise the striking contrast between the amount of the bequest to each of the siblings, the spouses of the siblings and the children of the siblings on the one hand and the children of the testatrix on the other. The amount of the bequests to each of the siblings, the spouses of the siblings and the children of the siblings is approximately $55,800. Thus, her brother Grant, his wife and their two children each received $55,800. That represents a bequest of $223,200 to Grant’s family. Similarly, her sister Judith, her husband and two children each received $55,800 representing a gift of $223,200 to the family. In the case of the remaining sister Phillipa, who is unmarried, the bequest is $55,800. By contrast, each of the four children of the testatrix will be entitled to receive some $77,400. Each of the grandchildren of the testatrix is entitled to a bequest of almost $21,000. That is more than $30,000 less than the gift of $58,500 to each of the nephews and nieces of the testatrix. In the result, the family of each of her children receives a substantially lesser benefit under the will than the families of each of her two married siblings. The provision made by the testatrix for the plaintiff and the plaintiff’s son Alec totalled $98,392, which is to be contrasted with the gift of $223,200 to the families of Grant and Judith.
In addition, while the testatrix made a bequest to the spouse of each of her two married siblings, she made no bequest to the spouse of her three married children. Whilst that might perhaps be explicable in the case of Michael whose marriage had dissolved, there is no reason why the testatrix could not have made a gift to the spouse of each of her married daughters. I do not suggest that there was any obligation on the testatrix to make a gift to the spouse of any of her children. My only purpose is to contrast the manner in which the testatrix disposed of her estate between the families of her children and the families of her siblings.
Similarly, I do not mean to suggest the testatrix should not have made a bequest to her siblings and their families. As the plaintiff herself said, the testatrix was close to her siblings and in other circumstances it might be proper for her to make a bequest to them. What is remarkable is the disparity between those bequests and the bequest to her children and grandchildren. It bespeaks an absence of any proper consideration by the testatrix of any moral duty to her children and their families.
In my view, the trial judge erred in failing to have regard to the moral claim of the plaintiff upon her mother. There was no evidence to suggest there was any reason why the testatrix, as a just and wise mother, should not have made a more generous provision out of her estate for her four children.
I do not think that his conclusion is affected by the fact that the testatrix had made substantial gifts to her children during her lifetime. The evidence indicates that she was equally generous to each of her children. It is not at all uncommon for a wise and just parent who has the means to do so to make substantial gifts to children during that parent’s lifetime and, in addition, make generous provision for them in a will. In this case, the testatrix was reasonably well off. The gifts she made to her children during her lifetime were equal distributions out of capital sums she had received at different times during her life. She died with a relatively large estate which permitted her to make adequate provision for the proper maintenance and advancement of her children. The trial judge relied on the fact that the testatrix had lent money to the plaintiff and her husband at lower than commercial rates of interests. The rate of interest was not, as earlier noted, significantly lower than the rate which the plaintiff and her husband would have been able to borrow money. In short, the testatrix did not in any real sense prefer the interests of the plaintiff over any of her other children.
The trial judge also erred in that he failed to give proper weight to all of the relevant circumstances when determining whether the testatrix had made adequate provision for the proper maintenance and advancement of the plaintiff. In my view, he has considered the financial position of the plaintiff only by reference to gifts made to the plaintiff by the testatrix during her lifetime and the plaintiff’s financial position. He did not correctly assess the plaintiff’s needs and failed to consider those needs against the size of the estate of the testatrix and the completing claims. His reasons contained but a brief reference to the competing claims and he does not indicate the weight, if any, to be given to them. He does not weigh the moral claims of the plaintiff against those claims.
The judge acknowledged that it was appropriate to have regard to the bequest to the charities as well as to what he called the “sizeable bequest” to the siblings of the testatrix, their spouses and children. They were, he said, to be taken into account along with the size and nature of the estate of the testatrix. However, he did not indicate in any way what weight should be given to those factors or how they might affect the outcome. They are bequests to persons who had no claim on the bounty of the testatrix. There is every reason why the moral claim of the plaintiff, especially when considered with the statement by her mother that the plaintiff would receive an inheritance more than the borrowings, leads to the conclusion that the testatrix made inadequate provision for the maintenance of the plaintiff.
When considering the gifts to the charities, the trial judge relied on the fact that this was not a case where gifts had been made to charities for the purpose of preventing the children of the testatrix from receiving a large inheritance: cf Coates v National Trustees Executors and Agency Co Ltd at 510. He noted that the testatrix had donated almost $200,000 to charities in the two years before her death and that there was no suggestion that her purpose of making the gift was other than philanthropic. However, the fact remains that there is nothing to suggest the testatrix has any special interest in any of the charities she named. By her will she has given more than she did in any one of the previous two years. In addition to those considerations, the amount given to these charities represents a little more than one fifth of her estate.
In addition, the judge failed correctly to assess the plaintiff’s financial position. He had regard to the fact that the value of the land held by the plaintiff and her husband had increased since the date of the death of the testatrix. While the testatrix might have reasonably anticipated that fact, she could not have known by how much its value would increase. The more important fact is that the plaintiff and her husband are not earning sufficient to repay the large loans outstanding and charged on that land. They do not have the means to purchase necessary plant and equipment for their farming operation. He failed to have regard to the meagre income earned by the plaintiff and her husband. He has incorrectly stated that the plaintiff’s income will be supplemented by the income from the Appletree Trust. In truth, that income had been included in the calculations of the plaintiff’s claim. Although he referred to the expense the plaintiff was likely to incur in paying fees at a boarding school for her son, he has had no regard to how the plaintiff and her husband will pay those fees.
I have had regard to the fact that the plaintiff’s brother and two sisters have not joined her in this action. In my view, that does not alter the fact that the testatrix did not have proper regard to the moral claims of her children. Nor does it adversely affect the validity of the plaintiff’s claim. While the fact that they did not join the plaintiff might cause the plaintiff’s claim to be scrutinised with great care, it does not disqualify her claim.
The testatrix left a relatively large estate. It was quite large enough to enable a gift to cover the borrowings of the plaintiff and her husband. Instead of having regard to the moral claims of her children, the testatrix has left more than one half of her estate to charities and other beneficiaries who have no claim on her bounty.
The principles which regulate the circumstances in which an appellate court may review a decision on the jurisdiction on whether a court has made adequate provision for the plaintiff are the same as those which govern appellate review of discretionary decision: Singer v Berghouse at 212 where the majority approved the remarks of Kirby P (as he then was) in Golosky v Golosky (unreported, NSW Court of Appeal, 5 October 1999 at pp 13-14):
Unless appellate courts show restraint in disturbing the evaluative determinations of primary decision-makers they will inevitably invite appeals to a different evaluation which, objectively speaking, may be no better than the first. Second opinions in such cases would be brought at the cost of diminishing the finality of litigation in a troublesome area and, sometimes at least, with a burden of costs upon the estate which should not be encouraged.
The appellant must show that the decision below was an entirely erroneous estimate: ibid, or clearly wrong: Lovell v Lovell (1950) 81 CLR 513 at 526.
For the reasons already expressed, the trial judge has plainly erred in failing to have regard to all relevant factors when considering whether the testatrix had made adequate provision for the proper maintenance of the plaintiff. He has also made quite significant errors in assessing the plaintiff’s financial position. I acknowledge the force of the remarks of Kirby P in Golosky v Golosky. However, this is a case where clear errors require correction by an appellate court. The first question should therefore be answered in favour of the plaintiff.
The Provision for the Plaintiff
As the trial judge did not determine what provision should have been made for the plaintiff, it is necessary for this court to determine that question.
The question as to what provision should be made for the plaintiff is difficult to resolve. A wise and just testatrix would have made equal provision for each of her children. As this testatrix had, during her lifetime, given to her children equal amounts of cash from time to time and had, by her will equally divided the residue of her estate between them, the calculation of any future distribution to the plaintiff should proceed on the footing that the testatrix would have given a like amount to her other three children. Although none of the other children of the testatrix has joined in the plaintiff’s application, it is nevertheless necessary to assume that there would have been an equal distribution to each of the four children of the testatrix. In addition, a wise and just testatrix would have made a substantially greater provision for her children than for her siblings, their spouses and their children.
A starting point for the assessment of what provision should be made for the plaintiff is the conversation that the testatrix had with the plaintiff and her husband on the occasion when the testatrix said that she would lend the plaintiff and her husband $200,000. In answer to the question from Peter Bowyer as to what should occur if the testatrix died before the loan had been repaid, the testatrix said that the plaintiff’s share of the inheritance would be more than what the plaintiff and her husband had then borrowed. At that stage the plaintiff and her husband had already borrowed $50,000. The effect of the remarks of the testatrix is that she would make a bequest of at least $250,000 to the plaintiff if not more. Shortly after the Bowyers had borrowed another $40,000 to purchase a tractor. At a later stage the testatrix made a distribution of $150,000 to each of her children. Regard must be had to that distribution.
In those circumstances, a wise and just testatrix would have divided her estate so that there was a gift of at least $200,000 to each of her children. That sum coupled with the distribution of $150,000 represents a gift totalling $350,000 to each child. It represents a sum more than the amount then borrowed by the plaintiff and her husband. Similarly, if regard is had to the facts as at the date of the death of the testatrix, a bequest of $200,000 is more than the sum of $140,000 then due and owing by the plaintiff and her husband to the testatrix. The burden of the order should be borne rateably by the gifts to the charities and to the siblings of the testatrix, their spouses and their children.
The Appeal as to Costs
The trial judge ordered that the plaintiff pay the costs of her failed application. The plaintiff has appealed against that decision. Given the conclusion that the plaintiff’s appeal should be allowed, it is, strictly speaking, unnecessary to consider that question. However, I do so for completeness.
Section 9(8) of the Act invests the court with power to make such order as to costs as it considers just. The court, therefore, has a discretion as to costs. The general rule is that the court will make no order as to costs where an application is unsuccessful, that is to say, the unsuccessful applicant is not liable to pay the costs of other parties. The personal representatives of the testator will usually be entitled to an order for costs out of the estate: re McGoun [1910] VLR 153; re Sharp [1923] St R Qd 102; re Nielsen [1968] Qd R 221; Krause v Sinclair [1983] 1 VR 73.
The reported decisions contain little discussion of the principles to be applied. In most instances the report simply notes the order as to costs. There is a substantial number of decisions in which no costs order was made in the case of an unsuccessful application: re Maslin [1908] VLR 641; re Chapman [1918] St R Qd 226; re Roberts [1919] VLR 125; re Kennedy [1920] VLR 513; re Richardson [1920] SALR 24; re McCreedy [1938] St R Qd 293; re Milanovic [1973] Qd R 205; Dobell v Van Damme [1982] VR 425. In Fox v Burvill (1955) 92 CLR 334 at 341, the High Court ordered that, in the particular circumstances of that case, the costs of the unsuccessful applicant who was also the appellant (she was the divorced widow of the testator) be paid out of the estate. In Krause v Sinclair at 78, Tadgell J ordered that an unsuccessful applicant should not have the benefit of an order for costs but at the same time she would not be ordered to pay costs. The executor’s costs were paid out of the estate. In Singer v Berghouse at 214, the majority noted that there is nothing in the Act which precludes an order for costs against an unsuccessful applicant. While that is unquestionably correct, their Honours were not discussing the ordinary rule nor did they question that in some circumstances an unsuccessful applicant might recover costs out of the estate. In exercising its discretion not to order costs against an unsuccessful applicant, the court will also consider the effect of an order for costs upon the applicant’s financial position: re De Feu (deceased) [1964] VR 420 at 428.

In some instances the question whether an unsuccessful applicant will be liable for costs will depend on the reasonableness of the application. In re Testator’s Family Maintenance Acts (1916) 12 Tas LR 11 at 13 Ewing J held that in view of the fact that the applicant was “within his rights in coming to the Court there should not be an order for costs” except as to the costs of two parties which were paid out of the estate. The decision was affirmed on appeal. In the case of a reasonable application based on a moral claim or obligation, the unsuccessful applicant may even obtain an order for costs in his favour out of the estate. Re Bodman [1972] Qd R 281 is an instance. In that case, a number of applicants succeeded but one failed. Hoare J ordered that both the successful applicants and the unsuccessful applicant be paid their costs out of the residuary estate of the deceased. He said:
As to costs I order that the costs of each applicant, including reserved costs, be taxed as between solicitor and client and be paid out of the residuary estate of the testator. So far as concerns the applicant George Albert Bodman, although his application failed, in the particular circumstances of this case especially having regard to the strong moral obligation of the deceased towards him, I order that his costs, including reserved costs, be taxed as between solicitor and client and paid out of the residuary estate of the deceased.
In re Klease (1972) QWN 44 Hoare J ordered that unsuccessful applicants should have paid their costs out of the estate because “there was this moral obligation in their favour and the applicants could not be said to be unreasonable”.
In Singer v Berghouse (1993) 114 ALR 521 Gaudron J decided an application for security of costs before the appeal was heard by the High Court. In the course of her reasons, she summarised the principles as to orders for costs in family provision cases in these terms (at 522):
Family provision cases stand apart from cases in which costs follow the event. Leaving aside cases under the Act which, in s 33, makes special provision in that regard, costs in family provision cases generally depend on the overall justice of the case. It is not uncommon, in the case of unsuccessful applications, for no order to be made as to costs, particularly if it would have a detrimental effect on the applicant’s financial position. And there may even be circumstances in which it is appropriate for an unsuccessful party to have his or her costs paid out of the estate.
In Morse v Morse (No 2) [2003] TASSC 145 Slicer J expressed a like view at [4]. He said:
The discretion afforded by statue is wide, by not unfettered (Singer v Berghouse (1994) 181 CLR 201; Fox v Burvill (1955) 92 CLR 334; Dehnert v Perpetual Trustees (1954) 91 CLR 177). Relevant matters governing the exercise of discretion include merits and reasonableness of claim (Re Bodman [1972] Qd R 281, conduct in the proceedings (Vasiljev v Public Trustee [1974] 2 NSWLR 497) and the size of the estate (Re Klease [1972] QWN 44). In some circumstances a court might decline to award costs against an unsuccessful applicant if such an order will have a detrimental effect on his or her financial position (Re De Feu [1964] VR 420). In many cases an unsuccessful applicant is denied an order for costs to be paid by the estate, but not required to pay the costs incurred by other parties (In re Testators Family Maintenance Acts (1916) 12 Tas LR 11; Dobell v Van Damme [1982] VR 425; Re Lago [1984] VR 706; Ingamells v WA Trustees Western Australian Supreme Court, unreported 5 March 1993).
These propositions were reiterated by Gillard J in re Sitch [2005] VSC 383. He said:
In the past the general practice was that if an application failed the plaintiff was not ordered to pay the costs. See, for example, in re Kennedy. I can recall appearing in cases in the 1960s-1970s where an order was made in favour of an unsuccessful plaintiff, for costs out of the estate. The costs orders made in the past were made pursuant to s 97(6) of the Act which provided:
(6) The Court may make such order as to the costs of any proceeding under this part as it deems just.
The amendments effected in 1997 added a sub-s.(7) to s 97. Sub-s.(6) was made subject to sub-s (7). It provides –
(7) If the Court is satisfied that an application for an order under s 91 has been made frivolously, vexatiously or with no reasonable prospect of success, the Court may order the costs of the application to be made against the applicant.
In my opinion, the legislature has made it clear that in appropriate cases a costs order can be made against an applicant, and some of the old cases must now be approached with care. The old rule which, as I say, was a common practice not to award costs against the plaintiff who failed, can no longer be accepted as a general proposition. However, it is unnecessary for me to say anything more about the effect of s 97(7) because the plaintiff has been successful.
There is, therefore, a substantial body of consistent opinion as to the rules which ordinarily operate in relation to an unsuccessful application. The principles are that, generally speaking, there will be no order as to costs of an unsuccessful application. The court may in its discretion make an order in favour of an unsuccessful applicant who makes a reasonable application founded on a moral claim or obligation. While it is unnecessary to decide the issue in this case, the cases also suggest that the court may in its discretion order an unsuccessful applicant to pay costs where the claim was frivolous or vexatious or made with no reasonable prospects of success or where the applicant has been guilty of some improper conduct in the course of the proceedings.
The trial judge made the following orders as to costs:
1The plaintiff pay the costs of the action of the first to fifth defendants in their capacity as executors as between solicitor and client.
2There will be no order as to the plaintiff’s costs of the action.
3The plaintiff pay the costs of the third defendant (in his capacity as beneficiary pursuant to clause 8.3 of the will) and of the sixth to fourteenth defendants on a party and party basis.
He expressed his reasons for those orders in these terms:
In my view, the executors, in their capacity as executors, are entitled to costs as between solicitor and client. Not all the beneficiaries were joined as defendants. It would be inappropriate to make a costs order against the residuary beneficiaries who are not joined as defendants. I do not think their share of the estate shall be reduced in any way, including by an order for costs. Nor do I think it appropriate that the costs of the executors should be borne by beneficiaries who were joined as defendants and against whom the plaintiff was unsuccessful.
The judge has failed to have regard to the relevant principles or, if he has, he has not expressed any reason for departing from them. This error of law justifies this court in setting aside the order and exercising the discretion afresh. For the reasons already expressed, this was an instance of what was on any view a reasonable claim founded on the moral obligation of the testatrix to her daughter, the plaintiff. Even if the claim had failed, it remained a reasonable claim. The plaintiff was, therefore, entitled to her costs out of the estate. Had it been necessary to do, I would have allowed the appeal as to costs, set aside the order made by the trial judge and in lieu thereof made the following orders:
1That the costs of the first to fifth defendants in their capacity as executors be taxed and paid out of the estate on a solicitor and client basis.
2That the costs of the third defendant (in his capacity as beneficiary) and of the sixth to fourteenth defendants and of the plaintiff be taxed and paid out of the estate on a party and party basis.
Conclusion
For these reasons, the appeal will be allowed. The order of the trial judge will be set aside and in lieu thereof there will be an order that provision for the maintenance of the plaintiff be paid out of the estate of the testatrix in the sum of $200,000. There will be a further order that the burden of the legacy of $200,000 be borne rateably by the gifts to the charities and to the siblings of the testatrix, their spouses and their children. It will be necessary to hear the parties on the question as to the costs of this appeal, the costs before the trial judge, and where the burden for those costs should fall.
NYLAND J: I would allow the appeal for the reasons expressed by Debelle J and I agree with the orders proposed by him.
ANDERSON J. In this matter I have had the advantage of reading in draft the reasons of Debelle J. I agree that the appeal should be allowed for the reasons expressed by Debelle J. I agree also with His Honour’s conclusions and reasons on the question of costs.