Goodman v Windeyer

[1980] HCA 31

HIGH COURT OF AUSTRALIA

Gibbs, Stephen, Mason, Murphy and Aickin JJ.

GOODMAN v. WINDEYER

(1980) 144 CLR 490

2 September 1980

Testator's Family Maintenance

Testator's Family Maintenance—Widow—Adequate provision for proper maintenance—Good conduct of widow—Nursing services provided by widow—Relevence of conduct to claim—Effect of inflation—Widow with dependent child of former marriage—Testator's Family Maintenance and Guardianship of Infants Act, 1916 (N.S.W.), s. 3.

Decisions

1980, September 2.
The following written judgments were delivered: -
GIBBS J. This appeal is brought by Marie Dempster Lascelles Goodman, the widow of Noel Collingwood Goodman ("the testator"), from a judgment of the Court of Appeal setting aside an order made by Waddell J. in favour of the appellant under s. 3 of the Testator's Family Maintenance and Guardianship of Infants Act, 1916 (N.S.W.), as amended. The respondents to the appeal are the executors and trustees of the will of the testator. (at p492)

2. The testator died on 1st January 1976 aged seventy-seven. He was survived by one son and two daughters, children of previous marriages; all of these children were adult, all had received benefits from the testator during his lifetime and all were in comfortable circumstances financially. The appellant also had children by a previous marriage; they were aged twenty three, twenty and sixteen respectively. By his will, made on 24th March 1975, the testator gave to the appellant until her death or remarriage an annuity of $2,080 per annum as from the date of his death, payable half-yearly and charged upon a debt due to the testator from a family company, Collingwood Investments Pty. Ltd., of which the testator had been governing director. He gave legacies of $1,000 each to his ten grandchildren, and gave all his furniture and his household and personal effects to his two daughters in equal shares. He gave four insurance policies on the life of the appellant to such of the appellant's children as should survive him and attain the age of twenty-one years; this was in effect a legacy of $2,352.80 each. He forgave debts totalling $65,275 due to him by his three children. The residue of his estate was to be held on trust to be divided as to one half for his son and as to one quarter for each of his daughters, provided that each daughter should attain the age of thirty years. There were substitutionary gifts in the event that a daughter should not attain the age of thirty, but it is unnecessary to mention their details. (at p493)

3. The testator left an estate whose net value for probate purposes was $572,062. This included the amount of gifts made within three years of the death of the testator, viz., $6,285 to the appellant and $3,650 to one of the appellant's sons. Duties paid amounted to $267,906. The amount available for the beneficiaries was therefore about $294,000 but from this legal and administration expenses (whose amount was not stated) would have to be deducted. (at p493)

4. The appellant married the testator on 22nd October 1965. She was then almost forty-five and according to the age shown on the death certificate he was about sixty-eight. After the marriage they lived with their respective children at the testator's house at Wahroonga. The testator appears to have been in fairly affluent circumstances and his house, which was a large one, was set in about an acre of ground. There is no evidence as to the nature of the relationship between the spouses during the early years of the marriage but it does appear that during the period of about four years which ended in 1969 the testator took the appellant for four holidays abroad and gave her some quite substantial presents. However, difficulties seem to have arisen between them during 1970, and in 1971 the appellant and her children left the home at Wahroonga. In October of that year she brought proceedings for maintenance against the testator and in May 1972 obtained an order that the testator pay her $40 per week as maintenance for herself and $10 a week as maintenance for her son Michael (her youngest child). The testator thereafter paid her this amount until he died. (at p493)

5. In January 1973, at the testator's request, the appellant returned to his home at Wahroonga. Michael accompanied her. By that time the testator was suffering from a disease which caused an obstruction to his airways and from the middle of 1973 until he died the appellant nursed him in his illness. She was a qualified nurse. From about the middle of 1974 the testator was bedridden. As his condition deteriorated her duties increased. For the last eighteen months of his life she acted as his nurse at night as well as during the day. For the last six months the testator required full time nursing. The appellant had to wash, shave and otherwise attend to him besides performing ordinary household duties such as washing and ironing his clothes and cooking his meals. In addition she had to care for the garden. She rarely left the house except to do her shopping. She had no nursing assistance except for a very short period and little domestic assistance. The testator refused either to go to hospital or to have anyone other than the appellant look after him. During this period the testator paid the appellant $50 per week for housekeeping and other expenses - it seems probable, although it is not clear, that this was the same payment as that made under the maintenance order, and not an additional payment. (at p494)

6. At the date of the testator's death the appellant was aged fifty-five. She then owned a home unit at Hornsby, in which she now lives, and which was then valued at $35,000. Her other property comprised money in the bank amounting to $2,478, shares and securities having a market value of some $114,000, a 1972/73 Toyota Corona motor car valued at about $2,750, the contents of the home unit valued at approximately $6,000 and jewellery, clothing and other personal effects valued at approximately $8,000. In addition she was entitled to certain interest bearing deposits and investment accounts totallying $24,000, the income from which (amounting to about $2,000 per annum) was paid either directly to her children or into a trust account to be used for the benefit of her grandchildren. It appears, however, that the appellant rather than the children or grandchildren was legally entitled to these moneys. Her income at the date of the testator's death from the shares and securities (other than the interest bearing deposits and investment accounts) was slightly over $6,000 per annum. The income tax on her separate income amounted to about $1,700 annually. Although she was still registered as a nurse, she had not been employed in that capacity for some years before the testator's death and is in fact now unable to work because she suffers from spondylitis for which she has been receiving treatment since 1966 and which she said in evidence causes her constant pain. At the date of the testator's death the appellant's son Michael was still dependent upon her, but he was no longer dependent at the date of the hearing of her application. There was no evidence that the other children of the appellant were dependent upon her. According to the appellant's own affidavit, her expenses, excluding items of a capital nature such as the purchase of furniture and the price of new issues of shares, came to about $5,000 per annum. (at p495)

7. Before the learned primary judge, counsel for the appellant submitted that the estate of the testator was of such a size that he should have provided for the appellant a lump sum to enable her to have a comfortable overseas holiday, to replace her car when it became necessary, to deal with unexpected contingencies and to assist her with her responsibilities to her children without making inroads into her own assets. It appears from one passage in the judgment of the learned trial judge that he may have accepted this submission. He said that the testator had a moral duty "to provide his widow with a moderately substantial lump sum for purposes of the kind put forward by her counsel and with an annuity somewhat higher than that provided by the will". He ordered that provision be made for the appellant by giving her a lump sum of $50,000 and by increasing her annuity to $3,000. He went on to say that he was conscious of the decisions of the courts which indicate the unwisdom of giving a lump sum to an applicant of advanced years, but said that it seemed to him that the provision of a lump sum was the only practical means of protecting the appellant's income against the inroads of inflation. He said that the sum would provide her with capital assets which she could invest in a variety of ways and would also leave her with some money free for contingencies and for a holiday overseas of the kind which a widow who enjoyed the kind of life which she did before the testator's illness could reasonably expect to be able to have. He added that the alternative to providing a lump sum of this size would be to increase further the sum which should be provided for the appellant by way of annuity so as to allow her to invest her own moneys in a way which would take care of capital gain rather than seek to maximize income. (at p495)

8. The Court of Appeal was unanimous in allowing the appeal and in ordering that the appellant's application be dismissed. However, on one important question of principle there was a difference of opinion between the members of the Court. Hutley J.A. (with whom Reynolds J.A. agreed) considered that it was irrelevant that the appellant had for a number of years devoted herself to nursing and caring for the testator during his illness. He said:
"Further, it is established that the jurisdiction given to the courts is not to reward the virtuous. Though in some case, particularly in relation to adult sons, the fact that a son has laboured to build up or maintain the father's fortune may give rise to a moral obligation where none existed before, it is not the responsibility of the courts to adjudicate on the respective merits of wives unless the issue raised is one of disentitlement. The trial judge referred to savings which her efforts effected. Of the amount of the savings there is no evidence. If this factor affected the decision as to whether he had jurisdiction, his Honour erred in law." (at p496)

9. The other member of the Court, Mahoney J.A., did not agree that the conduct of an applicant is relevant only in determining whether he or she is disentitled to the benefit of an order; he said that the appellant's claim in the present case "must be approached upon the basis that, deserving well of the deceased, the level of proper maintenance for her is to be assessed accordingly". Nevertheless, he agreed that the testator did not leave the appellant without appropriate provision. (at p496)

10. Two other questions of principle were discussed by the majority of the Court - first the question whether the moral duty of a testator is increased by the fact that his wife has children of her own to support and, secondly, whether a testator fails in discharging his moral duty if he does not make proper provision for the effect of inflation upon the annuity for which his will provides. As to the former matter Hutley J.A. said that his Honour, in considering whether the testator left the appellant without proper maintenance, made an error of law in so far as he had regard to the appellant's children and to the apparent wish of the appellant to keep her estate intact to benefit them. As to the second matter he assumed (but not without doubt) that a testator can be said to fail in his moral duty if he does not make provision for inflation, but concluded that the present was not a case in which it could be said that the testator failed to make proper provision for the maintenance of the appellant by leaving her unshielded from the effects of inflation which he should have foreseen. (at p496)

11. In my opinion Mahoney J.A. was correct in rejecting the view that the conduct of a claimant for relief is irrelevant except on the issue whether that conduct is such as to disentitle him or her to the benefit of an order under s. 3 of the Testator's Family Maintenance and Guardianship of Infants Act, 1916. The principles upon which the court must approach an application under legislation of this kind were settled in Bosch v. Perpetual Trustee Co. (1938) AC 463 . Their Lordships there pointed out that the powers given to the court by s. 3 (1) of the Act only arise when any of the persons mentioned is left without adequate provision for his or her proper maintenance, and that in that expression the word "proper" connotes something different from the word "adequate" (1938) AC, at p 476 . It is clear from their Lordships' reasons that the court, in considering what constitutes proper maintenance, both for the purpose of deciding whether the condition precedent to the exercise of the powers given by s. 3 (1) has been fulfilled, and for the purpose of deciding what provision should be made by order for such maintenance, must consider not merely the need for maintenance, but all the circumstances of the case (1938) AC, at pp 476-479 . Their Lordships cited (1938) AC, at p 479 with approval a passage from the judgment of Salmond J. in In re Allen, deceased; Allen v. Manchester (1922) NZLR 218, at pp 220-221 which has since very frequently been repeated:

"The Act is . . . designed to enforce the moral obligation of a testator to use his testamentary powers for the purpose of making proper and adequate provision after his death for the support of his wife and children, having regard to his means, to the means and deserts of the several claimants, and to the relative urgency of the various moral claims upon his bounty. 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."

One of the circumstances that must be considered in deciding upon the deserts of a claimant to a testator's estate, and in determining whether proper maintenance has been provided, is the manner in which that claimant has conducted himself or herself in relation to the testator. If the claimant has contributed to building up the testator's estate, or has helped him in other ways, that may give the claimant a special claim on the testator's bounty. This was recognized by Dixon C.J. in Coates v. National Trustees Executors &Agency Co. Ltd. (1956) 95 CLR 494, at p 510 when he said that the natural claims of a son upon his mother's testamentary bounty were "much strengthened by his cooperation and support in the conduct of her business and of her affairs". Perhaps the most recent example in this Court of a case in which a son's claims have been strengthened for this reason is Hughes v. National Trustees Executors &Agency Co. (Australasia) Ltd. (1979) 143 CLR 134 . There is, however, no reason in principle why a son should stand in a special position in this regard, and the authorities here consistently treated the fact that a claimant has rendered services to the testator as relevant in cases of this kind - whether the claimant be a daughter (Blore v. Lang (1960) 104 CLR 124, at p 129 ), a widow (E. v. E. (1915) 34 NZLR 785 , discussed in In re Worms; Worms v. Campbell (1953) NZLR 924, at p 935 ) or a widower (In re McElroy (1940) VLR 445, at p 447 ). The claimant's conduct does not cease to be relevant if it has not been of financial benefit to the testator - if, for example, the labour has been in vain. If the claimant has made sacrifices on the testator's behalf, that is a circumstance to be considered even if no monetary saving or benefit for the testator resulted. Indeed, the very fact that a claimant has been a dutiful and devoted spouse or child is one of the relevant circumstances of the case to be considered together with all the other circumstances in deciding whether proper maintenance has been provided. (at p498)

12. In the course of his judgment Hutley J.A. referred to a passage from the dissenting judgment of Fullagar and Menzies JJ. in Blore v. Lang where their Honours said (1960) 104 CLR, at p 134 :

"Bad conduct or character may disentitle a member of the family to needed assistance, but good conduct and honest worth are not to be rewarded by a generous but second-hand legacy at the hands of the court."

In the same case Windeyer J., who agreed with the decision of the majority, said (1960) 104 CLR, at p 137 : "The jurisdiction under the Testator's Family Maintenance Act is to provide for deserving persons according to their requirements, not to reward past services." It is of course perfectly true to say that the power of the court under this legislation is to order that proper provision be made for the maintenance of the claimant, and not simply to reward the claimant for past services, but those dicta cannot mean that, in determining what is proper provision in all the circumstances of a particular case, the fact that a claimant has been a loving, helpful or dutiful spouse or child can or should be ignored. (at p498)

13. It was in my opinion a relevant circumstance that the appellant had a child of her own who was dependent upon her. Although the child of a claimant is not himself entitled to relief under the Act, the fact that a claimant has to support and educate a child is one of the circumstances that have a bearing on the question of what is necessary for the claimant's proper maintenance: see Cooper v. Dungan (1976) 50 ALJR 539, at p 540 ; In re Worms; Worms v. Campbell (1953) NZLR, at p 941-942 . The question is not one of very great importance in the present case since Michael had ceased to be dependent upon the appellant by the time the application was heard. It was established in Coates v. National Trustees Executors &Agency Co. Ltd. (1956) 95 CLR 494 that the question whether the provision made in a will is inadequate for the proper maintenance of the claimant is not to be determined at the date of the application, but at the date of death of the testator, although, if that question be answered in the affirmative, the court, in exercising its discretionary power to make such provision as it thinks fit, must take into account the facts as they exist at the time of making its order. In the present case therefore the fact that Michael was dependent on the appellant was relevant to the question whether the preliminary condition of the power to grant relief had been satisfied, but could not be considered once the Court, having answered that question in favour of the appellant, proceeded to determine what relief should be granted. (at p499)

14. There can, in my opinion, be no doubt that the Court, in deciding whether the appellant had made out a case for relief, was entitled, and indeed bound, to consider the likely effect of inflation. That this is so seems well established: see Coates v. National Trustees Executors &Agency Co. Ltd. (1956) 95 CLR, at pp 504, 511 and Re Buckland, deceased (1966) VR 404, at pp 415-416 . The fact that inflation steadily erodes the purchasing power of money is something of which a wise and just testator would be aware and which he would take into account in making his testamentary dispositions. For example, it could not be said that adequate provision had been made for the proper maintenance of a claimant because she had an income large enough for her present support, when it could reasonably be foreseen that the purchasing power of that income would be so reduced by inflation that it would be inadequate in a few years' time. There is no true analogy between an award of damages for loss of earning capacity, which provides compensation for a loss already suffered, and the grant of relief under the Act, which provides for maintenance in the future, and the decision in O'Brien v. McKean (1968) 118 CLR 540 , which deals with the former situation, is of no present assistance. (at p499)

15. I may now return to the circumstances of the present case. There is no doubt that the appellant had quite substantial assets. I do not favour the suggestion that the Court should take into account the possibility that by a rearrangement of her investments she might have increased her income. The appellant had in fact made her investments under the guidance of the testator and there was no evidence that without his guidance she was likely to be able profitably to reinvest her shares and securities. The wise and just testator would consider the circumstances as they were, rather than as ideally they might have been. Nor do I consider that the Court should make its decision on the basis that the appellant might apply for her own purposes the income from the deposits and accounts previously devoted to her children and grandchildren, although it appears that she was legally entitled to do so. These amounts had been saved for the children and grandchildren, and the evidence shows that the children in fact paid tax on the interest derived from them. In this, as in other matters, it must be remembered that the estate of the testator was not a small one, and that the competing claimants had no financial need. In these circumstances it would not be reasonable to require the appellant to resort to these funds to eke out her own maintenance. However, when these things are said, there remains force in the respondents' submission that the appellant was not left without adequate provision for her proper maintenance. She had a home unit, which she agreed was a comfortable one, and which was fully furnished. Her income, after tax, amounted to about $4,300 - although it was of course liable to fluctuation - and this, with the annuity left by the will, gave her about $6,380 per annum. Since her estimated expenses were only $5,000 per annum it is apparent that she was provided with the necessities of life, at least at the date of death. (at p500)

16. To accede to the respondents' submission would, however, give too little weight to other matters. In the first place, regard should be had to the contingencies of life, including the possibilities that the effect of inflation will be soon to render the appellant's income inadequate and that her degenerative condition may increase in its severity as time goes on and may thus place heavier financial burdens upon her. Further, it is apparent that from time to time it will be necessary for the appellant to draw on her capital - for example, to buy a new car - thus reducing her source of income. Moreoever, it is necessary to give proper weight to the constant nursing care which she provided for the testator during the last two and half years of his life, including the full time nursing for the last six months. The learned primary judge found that the appellant, by nursing the testator at home, saved him possibly $40,000 in nursing fees. In the Court of Appeal Hutley J.A. said that there was no evidence of the amount of savings which her efforts effected. However, there was some evidence on which it was possible to make a very rough estimate of the amount which her services saved the testator's estate. The appellant said that on one occasion in 1975 it cost $15 to employ somebody (presumably a nurse) while she was away from home for two hours on a Sunday afternoon. On another occasion, during the last six weeks of the testator's life, the appellant paid $50 to employ someone over a period of three days, apparently for from two to four hours a day. This evidence, vague and unsatisfactory as it is, suggests that the figure of $40,000 mentioned by Waddell J., although high, could quite possibly represent the saving to the estate by reason of the fact that the appellant's services made it unnecessary to employ nurses. In any case it is not only the pecuniary benefit to the estate that must be considered. The fact that the appellant sacrificed herself to meet the testator's wishes itself gave her a claim on his bounty. A further matter that is relevant, although its weight is comparatively slight, is that, as has already been mentioned, at the date of the death of the testator the appellant still had one child dependent upon her. (at p501)

17. In all the circumstances, the appellant had a strong claim on the testator's bounty and, having regard to the means of the testator's children, there were no strong competing claims. In all these circumstances I consider that the learned primary judge was correct in concluding that the testator had failed to make adequate provision for the appellant's proper maintenance. This conclusion is strengthened by the fact that the amount which the testator provided for her - which was equivalent to $40 per week - is the same as that ordered to be paid for her maintenance by the Court in 1972. It is unlikely that a wise and just testator would have thought that an amount ordered by a magistrate to be paid to his wife at a time when she was separated from him would be an appropriate provision to be continued during her entire widowhood notwithstanding that, after the separation, she had devotedly nursed him during his final illness. (at p501)

18. Since I am in agreement with the conclusion reached by Waddell J. that the appellant was left without adequate provision for her proper maintenance, it is unnecessary for me to decide whether an appeal from a conclusion of that kind should be governed by the principles that regulate appeals from decisions made in the exercise of a discretion. That question was recently discussed in White v. Barron (1980) 144 CLR 431 but in that case also it was unnecessary to decide it. Under s. 3 of the Act, the power of the court to make an order depends upon proof that the testator has died leaving a will that does not make adequate provision for the proper maintenance, education or advancement in life of the applicant; if that is proved, the court may, at its discretion, order that such provision for such maintenance, education and advancement as the court thinks fit shall be made out of the estate for such applicant: see McCosker v. McCosker (1957) 97 CLR 566, at p 575 . It is commonly said that the fact that the applicant has been left without such adequate provision is a condition of jurisdiction, but to express the matter in that way shows "more respect for the language of Chancery tradition than of juristic theory": per Dixon C.J. in Blore v. Lang (1960) 104 CLR, at p 128 ; the condition is, strictly speaking, a condition of the power. The decision of the question whether this condition has been fulfilled "involves the application to the facts of a legal criterion", to use the words of Aickin J. in White v. Barron (1980) 144 CLR 431 , but the nature of the criterion is such that in its application the court, in my respectful opinion, is called upon to exercise a discretionary judgment. As Dixon C.J. pointed out in Pontifical Society for the Propagation of the Faith v. Scales (1962) 107 CLR 9, at p 19 , the words "adequate" and "proper" are always relative. 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: see In re Hodgson, deceased (1955) VLR 481, at p 491-492 , per Sholl J. For those reasons I share the view expressed by Mason J. in White v. Barron (1980) 144 CLR 431 at p 443 that the twin tasks which face the primary judge are similar, and that it would be artificial to say that the exercise of discretion begins only when the judge has completed the first of his tasks and decided that the appellant was left without adequate provision for proper maintenance. (at p502)

19. The final question is whether Waddell J., having rightly held that the condition of his power to grant relief was satisfied, was wrong in ordering that the provision to be made for the appellant should include a lump sum of $50,000. No doubt exists as to his power to make such an order: see s. 3 (3) of the Act. However, if, in exercising his discretionary power, he took into account a matter which he should not have considered, one of the grounds on which an appellate court may interfere with a discretionary judgment will have been established. As I have mentioned, Waddell J. said that it was the testator's duty to provide the appellant with a lump sum "for purposes of the kind put forward by her counsel", and if by this he intended to express agreement with the submission that it was proper to award a lump sum to enable the appellant to assist her children without having recourse to her own assets he was in error; at the date of the application her children were not in need. However, that remark was made by Waddell J. in relation to the question whether the appellant had been left without adequate provision for her proper maintenance. When he turned to the question what provision should be made, he gave as his reason for awarding the lump sum the need to protect the appellant's income from the effects of inflation and to enable her to make appropriate investments while leaving her with money free for contingencies and for an overseas holiday. He did not say that one of the purposes of awarding the sum was to enable the appellant to help her children without making inroads into her own assets, and I am not satisfied that he took this matter into account in making his order. In my opinion it was for the learned primary judge to decide in the exercise of his discretion how best to protect the appellant from inflation. It is not right to say that the only proper way of doing so was by providing for increases in the appellant's annuity, for example by means of a formula relating it to rises in the cost of living. In a case of this kind there is considerable objection to making provision for "indexation"; the result may be to delay the administration of the estate, to inflate the costs of administration and in the end to put the other beneficiaries to far greater disadvantage than the award of a lump sum would have done. It has been recognized that it may be appropriate to make to a widow an out-and-out payment to provide a fund to meet eventualities that are likely to occur (see Worladge v. Doddridge (1957) 97 CLR 1, at p 19 , per Kitto J.), and the same course can, I consider, be taken to provide for inflation. Opinions might well differ as to whether it was fitting to provide the appellant with the means of having an overseas holiday, but in all the circumstances of the present case it was within the discretionary power of the learned primary judge to do so. It must be remembered that it requires a strong and cogent case before an appellate court should interfere with a discretionary estimate made by a court of first instance of a monetary sum such as this: Sampson v. Sampson (1945) 70 CLR 576, at p 586 . I have not been persuaded that the learned primary judge fell into error either in awarding a lump sum, or in fixing the amount to be awarded. (at p503)

20. For these reasons I would allow the appeal, and restore the order made by Waddell J. (at p503)

STEPHEN J. I have had the advantage of reading the reasons for judgment of Gibbs J. With one minor reservation, I would agree with all his Honour has said. That reservation concerns how best a court may seek to protect an annuitant against the effects of future inflation. There are, broadly speaking, two ways of seeking to do this: by some indexation of the annuity or by the provision of a lump sum supplement. Each is open to certain objections. Gibbs J. has spoken of the undoubted disadvantages associated with indexation. Perhaps a major disadvantage, and there are others, of lump sum supplements is their "hit or miss" character: the inability to foretell the future as it relates both to future rates of inflation and to the future lifespan of the annuitant makes impossible any at all accurate calculation of an appropriate lump sum. Moreover any lump sum is likely to be too large when first awarded, yet may prove insufficient later on. (at p504)

2. In the present case the primary judge chose to provide a lump sum and I am not prepared to say that, in all the circumstances, the order which he made should be disturbed on that account. (at p504)

3. I would accordingly allow the appeal and restore the order of Waddell J. (at p504)

MASON J. For the reasons given by Gibbs J., I would allow the appeal and restore the order made by Waddell J. (at p504)

MURPHY J. Mrs Goodman claims an order making adequate provision for her "proper maintenance and advancement" out of the estate of her late husband, Noel Collingwood Goodman, who died on 1st January 1976. The facts are set out in Gibbs J's, judgment. The primary judge made an order in Mrs Goodman's favour which increased her annuity from $2,080 to $3,000 and provided in addition a legacy of $50,000. This order was set aside by the Full Court of the Supreme Court. In my opinion, the Full Court was correct. Mrs Goodman did not establish that she was "left without adequate provision for (her) proper maintenance, education, or advancement in life" (s. 3 of the Testator's Family Maintenance and Guardianship of Infants Act, 1916 (N.S.W.), as amended), and was therefore not entitled to any order for provision out of the estate. (at p504)

2. This is another case in which the question of whether an applicant was left without adequate provision is confused by the introduction of considerations of moral duty. In Re Bodman (1972) Qd R 281, at p 284 , Hoare J. said:
"Unless the applicant can show that he or she was, at the relevant time, in 'need' of proper provision from the estate then the Court has no jurisdiction to make an order even though it considers that there was a clear failure of a moral obligation on the part of the testator." (at p504)

3. The reference to lack of jurisdiction is inappropriate but the principle stated is correct. Unless an applicant is left without adequate provision, he or she is not entitled to an order, even if the circumstances disclose a breach of moral obligation. I adhere to what I said in Hughes v. National Trustees Executors and Agency Co. (Australasia) Ltd. (1979) 143 CLR, at pp 157-160 . (at p505)

4. "Left without adequate provision" means that an applicant did not have adequate provision from the will or otherwise. A person may fail to satisfy the description of being "left without adequate provision" even though no provision is made for him or her in the will. In considering what is adequate provision, the fact that a widow has a child dependent on her (even though not a child of the testator) is a relevant consideration. "Adequate provision" for persons in the designated class may include provision which would enable them to discharge legal or moral obligations, such as the care of children. "Advancement in life" is not confined to the early part of an applicant's life, although it is generally applicable to younger rather than to older persons (see Blore v. Lang (1960) 104 CLR 124, at p 128 ). Provision for advancement may, for example, extend to retraining or the gaining of a qualification which could advance and perhaps enable an applicant to maintain himself or herself. (at p505)

5. The appeal should be dismissed. (at p505)

AICKIN J. This appeal comes to this Court from the Court of Appeal of the Supreme Court of New South Wales which has allowed an appeal from a judgment of Waddell J. in the Equity Division. Waddell J. has made an order under the Testator's Family Maintenance and Guardianship of Infants Act, 1916 (N.S.W.), as amended, in favour of the widow of Noel Collingwood Goodman deceased, having found that the testator had not by his will made provision for the widow's proper maintenance. The Court of Appeal decided that adequate provision had been made by the will and accordingly allowed the appeal. It is from that order that the present appeal is made. (at p505)

2. The testator died on 1st January 1976. He had been married three times, each of his previous wives having died. He was survived by three children, a son aged forty-seven who was a child of the first marriage, and two daughters aged twenty-six and twenty-three respectively, both being children of the second marriage. The appellant had been previously married, her husband having died on 9th June 1965. There were three children of that marriage, a daughter and two sons. The appellant was born in 1920 and had married the testator on 22nd October 1965. (at p505)

3. The testator left a net estate of some $572,062. After payment of duty his distributable estate amounted to some $294,306. By his will, he left to the appellant until her death or remarriage an annuity of $2,080, payable half-yearly, which was to be charged upon a fund of $30,000 being part of a debt due to the testator by Collingwood Investments Pty. Ltd. He gave pecuniary legacies of $1,000 to each grandchild living at his death, there being in fact ten. He gave to one of his daughters half of his furniture and a quarter share in residue provided that she should attain the age of thirty years and he also forgave a debt owed by her to him of $11,000. He gave to his other daughter the other half of his furniture and a quarter of the residue subject to the same proviso and forgave her a debt of $22,275. His son was given one half of the residue and a debt of $32,000 owed by him to the testator was forgiven. He left four life assurance policies on the life of the appellant to such of the appellant's children (by a former marriage) as should survive him and attain the age of twenty-one years. That bequest provided in effect a legacy of $2,353 to each of the appellant's three children. (at p506)

4. At the date of the testator's death, the appellant had the following assets: (a) a home unit at Hornsby valued at approximately $35,000; (b) amounts to her credit in a savings and current account, $2,478; (c) two interest-bearing deposits amounting to $11,000, the interest on which was paid directly to her son David James Woodburn; (d) a savings investment account of $2,000, interest on which was also paid directly to him; (e) an interest-bearing deposit of $4,000, the interest on which was paid directly to Michael John Woodburn; (f) three interest-bearing deposits amounting to $7,000, the interest on which was paid into a trust account to be used for the benefit of the plaintiff's grandson, Daniel Joseph Trotter; (g) shares and securities having a market value of some $114,000; (h) a 1972/73 Toyota Corona motor car valued at about $2,750; (i) furniture, crockery, cutlery and other contents of the home unit valued at approximately $6,000; (j) jewellery, clothing and other personal effects valued at approximately $8,000. (at p506)

5. The appellant's income from stocks and securities for the year ended 30th June 1975 was $6,192 and for the year ended 30th June 1976 was $6,522. The income from the deposits and savings investment account which she had diverted to her children and a grandchild amounted to approximately $2,000 a year. The testator had, during the period immediately prior to his death, paid to her on account of housekeeping, the sum of $50 per week, out of which she paid for food, gas, electricity, rates and taxes and household replacements. The income tax on her separate income for the year ended 30th June 1975 amounted to about $1,700. She did not derive any income from the home unit which she owned and, as Waddell J. observed, it was "presumably occupied by one or more of her children". The appellant was a registered nurse and held a certificate in general nursing and a diploma from an obstetrical training school. She did not work as a nurse during her previous marriage nor during her marriage to the testator and since about 1966 she had suffered from spondylitis and was not at the date of the hearing able to work because of her condition. (at p507)

6. After the marriage, the appellant had lived with the testator with their respective children at the testator's house at Wahroonga. The testator had apparently retired from active work shortly after the marriage when he was in his early fifties. There is no material showing his income during the years of the marriage. However, he had made a number of substantial presents to the appellant and they had had some holidays abroad together. He had given her $1,000 for her daughter's wedding and $2,000 to purchase a motor car. However, in October 1970 the testator had ordered her out of the house and on 16th July 1971 she left with her children. In October 1971 the appellant brought proceedings in the Hornsby Children's Court for maintenance and on 19th May 1972 an order was made that the testator pay her $40 per week maintenance for herself and $10 per week for her son of her former marriage. The testator subsequently asked her to return and she did so in January 1973 and remained with him until his death. The testator paid that amount to her until the date of his death. (at p507)

7. It appears that he became ill in about May 1973 and spent a short time in hospital. After his return home the appellant nursed him. During a period of six months prior to his death he required full-time nursing which was provided by the appellant. It appears that the testator was unwilling to have nursing attention from anyone else during that period. (at p507)

8. As well as the provision made by the testator in his will for his children, it appears that he had established a family company called Collingwood Investments Pty. Ltd., of which he was governing director until his death and in which his children held shares. It appears from the judgment of Waddell J. that each of his children held in aggregate about 70 per cent of the issued shares in that company. During the year ended 30th June 1975 each received a dividend of $7,700 and during the year ended 30th June 1976, $9,180. The articles of association were not put in evidence but Waddell J. assumed that each of the testator's three children would be entitled on a winding-up to a pro-rata share of the assets. Those assets comprised shares and securities said to have a market value as at 30th June 1976 of about $600,000. The extent to which these shareholdings arose from gifts or other forms of benefaction from the testator did not appear. The only relevance of these shareholdings is that, with other material, they show that the children were not in need of further provision out of the estate. (at p508)

9. Waddell J. accepted an argument put to him on behalf of the appellant that, although she had substantial independent means of her own, the estate of the testator was of such a size that he should have provided for her a lump sum to enable her to have a comfortable overseas holiday, she not having had one since 1969, to replace her car when necessary and to deal with unexpected contingencies and "to assist her with her responsibilities with her children" without making inroads into her own assets. He concluded that the testator had a moral duty to provide a "moderately substantial lump sum" and "an annuity somewhat higher than that provided by the will". He concluded that there should be a lump sum payment of $50,000 to the appellant and that her annuity should be increased to $3,000. (at p508)

10. Waddell J. proceeded upon the basis that there would be an available balance in the estate of approximately $200,000 but this is affected by two factors which make the achievement of that figure uncertain. The first is the value of the remaining assets in the estate, namely the business of "Newport Liquor Service", the premises upon which the business was conducted and the premises occupied by the manager. No up-to-date valuations of those assets were provided by the executors but one of the executors swore an affidavit in which he said that the executors were of the opinion that the value of the goodwill of the liquor business (probate value $148,095) had diminished considerably since the date of death of the deceased due to price-cutting which had taken place in the liquor retailing industry since that date. He was not cross-examined on that affidavit and he did not quantify the amount of the reduced value to which he referred, not did he provide comparative figures as to turnover or profits. Waddell J. appears to have regarded the evidence as having been to the effect that some other similar businesses had diminished in value but adopted the probate value in the absence of any other evidence as to valuation. This appears to have been the only course open to him. It cannot, however, be regarded as satisfactory for the executors not to provide current valuations of the remaining assets or estimates thereof when, as the authorities establish, the question of quantification of any further provision must be made upon the basis of the value estimated as at the date of the hearing. A second qualifying factor is that no estimate at all was provided as to the amount of the costs of the administration of the estate. It is clear that the administration is by no means complete and could not be carried further until the final result of these proceedings is known. That, however, does not appear to me to be a sufficient reason for failing to provide any estimate at all. Under the provisions of the will the executors are entitled to commission and some estimate of that should have been provided, as well as an estimate of other costs of administration incurred to date and expected for the furture. It would have been proper also to provide some estimate of the costs at first instance of the present proceedings upon the footing that it was likely that at least some part of those costs would have to be borne by the estate. (at p509)

11. In the result, considerable uncertainty exists as to the amount which will be available when all the expenses of administration, including such part of the costs of this litigation as have to be borne by the estate, are known. If the view is to be taken that proper provision was not made for the appellant, the quantification of "adequate provision for proper maintenance" must present substantial difficulties, some of which would have been avoidable. (at p509)

12. It is well settled that the determination of applications under this legislation involves two stages, the first of which is the determination of the adequacy of the provision made in the will, a process which is not discretionary in the ordinary sense even though it does, or often may, involve a value judgment. Thus the two stages overlap to some extent because a conclusion that the provision in the will is inadequate will often, though not always, involve a comparison between what is given and what ought to have been given. If it is determined that adequate provision was not made for an applicant, then the amount of the provision to be made by the court does involve the exercise of a judicial discretion, the review of which on appeal is subject to well-recognized limitations. The authorities establishing these propositions are referred to in my judgment in White v. Barron (1980) 144 CLR 431 . Other authorities dealing with this matter generally are discussed in that case in all the judgments and there is no need to go over that ground again. The present case does not appear to me to involve any new principle or new problem; it involves no more than the application of well-settled principles to the particular facts of the case. (at p510)

13. It was argued for the appellant that there was a moral duty on the testator to make additional provision so as to allow for the maintenance of the children of the wife's former marriage. The Court of Appeal took the view that in having regard to this factor Waddell J. made an error of law. To treat this factor as a matter of law would in my opinion be itself an error of law. In the present case it would have been a demonstrable error of fact because at the date of the hearing the evidence showed that none of the wife's children was dependent on her. To the extent that Waddell J. based his conclusion on this consideration he was in error. (at p510)

14. It may be that cases could occur in which the particular facts might warrant taking this factor into account in considering whether there was adequate provision but this is certainly not such a case. It would nevertheless be wrong to regard this factor as always irrelevant as a matter of law. (at p510)

15. It is important to avoid elevating what are purely factual considerations into questions of law or of principle. Conclusions of fact for which there is no evidentiary basis may however constitute a ground of appeal for the discretion may miscarry because of such errors. (at p510)

16. The details of the appellant's assets at the date of the death of the testator have been set out above, from which it appears that she had a home unit which was at least adequate for her purposes and considerable investments. The investments comprised shares in public companies valued at that date at $114,000 and interest-bearing deposits at varying rates of interest between 8.75 per cent and 9.5 per cent the interest from which she had "diverted" to her children, the youngest of whom was aged sixteen years on the date of the testator's death. The details of the arrangement by which this "diversion" was effected were not stated, other than that it was said not to be a permanent arrangement and that it either would end or could be brought to an end so that the income therafter would come to the appellant. Those deposits totalled $24,000. Thus the appellant had income-earning assets of approximately $138,000 together with the contents of the home unit (furniture, crockery, etc.) and jewellery, clothing and personal effects and a motor car, the approximate total value of which came to $16,750 but which were, from their nature, not income-earning. The home unit was valued at some $35,000 at the date of death and, if the appellant lived in it, no income would be derived from it. As against this, the estate after payment of death duties was estimated on probate valuations at approximately $265,000 plus the sum of $30,000 upon which the annuity of $2,080 given to the appellant was charged. From the figure of $265,000 there must be deducted the costs of administration and so much of the costs of these proceedings as will have to be borne by the estate, of which there are no estimates. (at p511)

17. The Court of Appeal took the view that the provision was not inadequate and therefore set aside the order of Waddell J. In my opinion there was not adequate provision made by the will in so far as income was concerned, the amount provided having in the circumstances been fixed without regard to circumstances prevailing at the date of death and likely to prevail thereafter. I am however satisfied that discrtion in ordering further provision by way of a lump sum as well as an increase in the annuity miscarried. The argument which the trial judge accepted with respect to the provision of a lump sum appears to me to involve errors in principle which warrant interference with the exercise of his discretion. By the time of the hearing, at which date the discretion is to be exercised, none of her children was dependent on her and it could not be said that there was any duty resting on the testator to "assist her with her responsibilities with her children" or to provide for an overseas holiday, there being no evidence that she wished to have such a holiday. The fact that during the testator's lifetime he and his wife had travelled abroad is no warrant for concluding that there was a moral duty to make provision to enable her to do so again out of an estate reduced by some 50 per cent by death duties. In my opinion there was no basis for providing a pecuniary legacy of $50,000. (at p511)

18. I have said that there was inadequacy in the income provision. It was plainly open to the trial judge to conclude that the income provision should be increased and there is no basis for interfering with his discretion in ordering the increase in the annuity referred to. The additional annuity should be secured in such manner as the executors think fit. (at p511)

19. In the course of argument for the appellant reliance was placed on the nursing assistance which the appellant had provided during his illness. There may be cases where such material could be relevant, particularly if it bore on a widow's state of health or otherwise on her needs. There is however no suggestion of that kind in this case. (at p511)

20. A further question was raised which asked whether a testator fails in his moral duty if he does not make provision for the effect of inflation on an annuity given by his will. In my opinion there is no such general rule and so to argue is to attempt to turn a factual consideration into a general principle or a rule of law. The discretionary nature of the jurisdiction has been repeatedly emphasized since the legislation was first introduced, and its exercise involves careful consideration of all relevant facts in each individual case. In some cases failure to make some such provision may warrant the court's intervention. In many cases the making of such a provision by some form of indexation of an annuity will delay the administration of the estate and perhaps prevent any distribution of the residue until the death of the annuitant. Moreover it may over a period require resort to capital to maintain the process of "indexation", perhaps to the point of exhaustion of the residuary estate. Whether such an event may occur will depend on many factors, in particular the size of the estate, the age of the annuitant, competing claims and of course the rate of inflation. Such a provision seems to me to be more likely to create difficulties than to solve them and a provision by way of income from a share of residue more likely to be fair in many cases. The present is not a case where such a provision was sought or considered. It is enough to say again that it is not a matter suitable for a general rule of "principle" and can never be more than one possible means of making further provision if all the circumstances warrant it, bearing in mind not merely the interests of the applicant but also those of other persons taking under the will. (at p512)

21. For the reasons which I have given I would allow the appeal and restore so much of Waddell J.'s order as directed that the annuity should be increased to $3,000 per annum. (at p512)

Orders

Appeal allowed.

Order of the Court of Appeal of the Supreme Court of New South Wales set aside, and in lieu thereof order that the appeal to that court be dismissed with costs.

Costs of the appeal to the Court of Appeal in the Supreme Court of New South Wales of the appellants in that court on the trustee basis and of the respondent in that court on the common fund basis to be paid out of the estate.

Costs of the appeal to this Court of all parties as between solicitor and client to be paid out of the estate.