Ts by his tutor PS v Ian Raymond Malouf

[2010] NSWSC 630

CITATION:	TS by his tutor PS v Ian Raymond Malouf [2010] NSWSC 630
HEARING DATE(S):	04.03.10, 05.03.10
JUDGMENT DATE :	15 June 2010
JUDGMENT OF:	Nicholas J
DECISION:	the amended statement of claim be dismissed
CATCHWORDS:	TRUSTS AND TRUSTEES – removal of trustee – application for removal of sole trustee – infant beneficiary – whether trustee’s delay in contributing to beneficiary’s living expenses and relationship between trustee and beneficiary’s father justified removal – whether welfare of beneficiary adversely affected – turns on facts – no question of principle - SUCCESSION – application for provision under s 7 Family Provision Act – whether any evidence that testatrix’s provision for beneficiary was inadequate under s 9(2) – no question of principle
LEGISLATION CITED:	Family Provision Act 1982
CATEGORY:	Principal judgment
CASES CITED:	Craven-Sands v Koch [2000] NSWSC 374 Letterstedt v Broers (1884) 9 App Cas 371 Miller v Cameron (1936) 54 CLR 572 See v Hardman [2002] NSWSC 287 Singer v Berghouse [1994] HCA 40; (1994) 181 CLR 201
TEXTS CITED:	Lewin on Trusts 2008 Ed
PARTIES:	TS (by his tutor PS) - plaintiff Ian Raymond Malouf - defendant
FILE NUMBER(S):	SC 08/279102
COUNSEL:	G P McNally SC - plaintiff L Ellison SC - defendant
SOLICITORS:	Matthews Dooley & Gibson - plaintiff Bartier Perry - defendant

IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION

Nicholas J

15 June 2010

08/279102 TS by his tutor PS v Ian Raymond Malouf

JUDGMENT

1 His Honour: In these proceedings the plaintiff by his tutor seeks an order that the defendant be removed as the trustee of the estate of Kim Marie Malouf (the testatrix), alternatively, other orders for relief in relation to the estate including an order for provision under s 7 Family Provision Act 1982 (the Act).

2 The principal beneficiary of the estate is the plaintiff. He is the son of the tutor (Paul) and the testatrix, and was born on 26 October 2005. The testatrix died on 15 December 2006 aged 44 years. By her informal will made on 9 September 2005 she appointed the defendant, her brother, as executor. Probate was granted to the defendant on 24 August 2007.

3 Relevantly, the will included the following:

“In the event of my death I appoint Ian Raymond Malouf to be the execetor [sic] of my will.

Assets Jiwana Pty Ltd
XX XX Street XXXX.
XX XX Street XXXX.
I leave both of these properties to my son and all income and profits from this company to him.

They are to be held in trust to him until he he [sic] is 21 and then given to him. Until that time Ian Malouf is to manage all moneys from this company. Ian is to use this money directly for my sons education and living expenses he will need until he is 21.
My share of Motors Direct Pty Ltd
I also leave this to my son to be held in trust for him until he is 21. Again all moneys of my share from this company shall be managed by Ian I Malouf until then. Again money from this company shall be given to my son for his life expenses.
In the event of my death and Pauls [sic] death my wishes would be my son to live with Ian and Larrisa Malouf and beautiful family. And for him to be brought up by them.
If in the event of my death only I would wish Ian and Larrissa Malouf to along side Paul help in any major problems, issues & discisions [sic] of his future of his life and always be there for him as you both have been for me.”

4 The will also provided for the disposition of specific items of property such as jewellery and furniture to various persons. In addition there were cash legacies, one for the sum of $5,000, and another in the sum of $30,000.

5 The grounds upon which the application for removal was based were (T pp 68, 97, 98):

(i) the defendant’s failure to make any payments in respect of the plaintiff’s maintenance and education before November 2009; and

(ii) there has existed a state of animosity between Paul and the defendant which is adverse to the best interests of the plaintiff.

6 In par 22 of the amended statement of claim it was pleaded that:

“Paul believes that the Defendant will not act in accordance with the provisions of the Will or the Plaintiff’s best interests as a result of the Defendant’s feelings towards Paul.”

7 No allegation of mismanagement, misconduct, or incompetence is made against the defendant. In opening, senior counsel for the plaintiff accepted that the defendant has acted in the belief that what he was doing was in the plaintiff’s best interests.

Background

8 The following history, which is not exhaustive, and was substantially undisputed, provides a context in which these proceedings were maintained.

9 For some time before the death of the testatrix on 15 December 2006 she and Paul had not been living together although he visited her and the plaintiff almost every day. After her death, and with Paul’s consent, the plaintiff went to live with the defendant and his family, and Paul visited them on occasions.

10 The plaintiff, continuously since early February 2007 has been living with, and cared for, by Paul.

11 On 30 January 2008 Paul attended the defendant’s house for dinner. He informed the defendant that the plaintiff was starting pre-school or day care which would cost about $98 per day, and requested the defendant to contribute half that amount. The defendant declined, saying in effect that there was no cash available, that the estate was in the red, and he would not be selling anything. Paul was then told to leave, which he did. According to the defendant, this was in response to Paul’s assertion that the defendant and his wife were not responsible people.

12 It is common ground that since that time the relationship between Paul and the defendant has been poor.

13 On about 31 May 2008 the defendant met Paul’s sister, Diana, at Watson’s Bay. He informed her that there was no money in the estate, and there was debt to clear. When told that day care for the plaintiff was costing about $100 per day, the defendant said that the estate could not pay, but he would personally contribute one half of the cost. The proposal was not taken up.

14 On 13 June 2008 the summons in these proceedings was filed seeking, inter alia, an order for the removal of the defendant as trustee.

15 On 14 June 2008 there was another meeting between Paul’s sister and the defendant. With reference to the will, the defendant said, in effect, that only profits were to go to the plaintiff’s maintenance, but at that time there were no profits.

16 The last occasion on which Paul spoke to the defendant was at a family function in June 2008 when the defendant declined his request for a meeting to discuss future provision for the plaintiff.

17 Since 2 November 2009 a payment of $800 per month from the estate has been made to Paul on behalf of the plaintiff.

The assets

18 The assets left to the plaintiff consisted of the testatrix’s shares in Jiwana Pty Limited (Jiwana) and Motor Direct Pty Limited (Motor Direct). She was the sole shareholder (100 shares), director and secretary of Jiwana. She and her brother, Craig, were the directors of Motor Direct and each was the owner of 50 of its 100 issued shares.

19 The assets of Jiwana as at 31 December 2009 include:

(a) The property at XX XX Street XXXX with an estimated value of $280,000. It has an annual rental income of $26,000 inclusive of outgoings.

(b) The property at XX XX Street XXXX with an estimated value of $1,150,000. It has an annual rental income of about $90,000 inclusive of outgoings.

(c) Bank accounts: $18,515.

(d) Trade debtors: $14,262.

20 The liabilities of Jiwana as at 31 December 2009 include provisions for rental bonds, taxation, and trade creditors in the amount of about $41,000. The profit of the company for the 2009 financial year after provision for income tax was $55,199. Similar profits were made in each of the years after the death of the testatrix.

21 The assets of Motor Direct as at 31 December 2009 include:

(a) The property at XX XX Road XXXX with an estimated value of $2,400,000. It has a monthly rental income of $17,685 plus outgoings.

(b) Bank account: $41,104.

(c) Loan to the estate: $30,853.

(d) Trade debtors: $3,292.14.

22 The liabilities of Motor Direct as at 31 December 2009 include provisions for loans, a rental bond, and taxation in the amount of about $58,000, and a bank credit facility in the amount of $1,100,000. The profit of the company for the 2009 financial year after providing for income tax was $45,384. Similar profits were made in each of the years after the death of the testatrix.

The evidence

23 Paul is 48 years of age and a businessman. He and the plaintiff are living together at his home in Turramurra. The plaintiff attends a pre-school three days per week at a cost of $90 per day. Paul’s current weekly expenses for the plaintiff, including pre-school, food, medical, clothing and entertainment, amount to $586. His weekly income from his business, Centrelink, bank interest, and from the defendant amounts to $615. He funds the shortfall between income and living expenses by drawing down the capital held in bank accounts.

24 Shortly after the plaintiff came to live with him in February 2007, Paul’s concern about the provision of funds from the estate developed. He described his meeting with the defendant at a dinner on 30 January 2008 during which he requested a contribution of one half of the plaintiff’s pre-school expenses which then totalled $98 per day. He said the defendant refused saying, in effect:

“I’ve already told you that there is no cash available. The Estate is in the red, what do you want me to do sell something [sic], because that won’t be happening … I’ve got nothing else to talk to you about. Get out of my house!”

25 Paul’s resultant feeling that he was being fobbed off by the defendant was reinforced by similar statements made subsequently to his sister.

26 The plaintiff presently attends pre-school three days per week. It is proposed that in 2011 he attends kindergarten fulltime. Whether his primary schooling be private or public is undecided. Paul anticipates the expensive component of the plaintiff’s education will be for secondary schooling in about seven years’ time, and subsequent tertiary education.

27 From 2 November 2009 the defendant has provided from the estate funds the amount of $800 per month for the plaintiff. Before then no funds had been provided. However, Paul said that apart from the request made on 30 January 2008 and the information in his affidavits filed in these proceedings, he gave no information to the defendant about the plaintiff’s expenses and financial requirements past, present or future, and has made no application to the defendant for provision from the estate towards these requirements.

28 He said that based on past experience of personality clashes, he fears that the defendant might in the future disagree with him as to the suitability of an item or activity for the plaintiff, and would refuse to fund it.

29 Nevertheless, Paul said that, regardless of difficulties which may exist in his relationship with the defendant, he accepts that the defendant and his family love the plaintiff and want him to succeed in life. In opening, senior counsel for the plaintiff acknowledged that the defendant has attempted to act in what he perceives to be the plaintiff’s best interests, and is not deliberately attempting to be obstructive.

30 Paul’s financial position and record keeping practice was explored to some extent in cross-examination. However, I do not find the evidence on these matters relevant to the central issue for determination.

31 The defendant is a company director with extensive commercial and financial management experience. He controls a group of companies which conduct a waste disposal and recycling business, and commercial real property development and investments, with about 80 employees and an annual revenue in excess of $30 million.

32 The defendant’s approach to the management and operation of Jiwana and Motor Direct has been to conserve their assets to provide for the plaintiff’s maintenance and education as his needs increase as he becomes older. His view is that it is appropriate to retain the existing real property investments, and to gradually reduce the amount of borrowings secured on them from their rental income. Until liabilities have been reduced to a satisfactory level the amount of funds available to meet the plaintiff’s present needs will be limited.

33 The defendant’s affidavit evidence (11 November 2009) included:

“4. In reliance upon the legal advice I have received in relation to the proper administration of my late sister’s estate I have taken steps to conserve and maintain the income producing real estate assets and, from the income generated by those assets, to pay estate debts, make distribution of bequests and thereafter establish funds from which distributions might be made for the [beneficiary].
5. Real estate assets also have a priority call on the income generated by them in order to preserve, repair and maintain them. The property at XX XX Road owned by Motor Direct Pty Ltd is also the subject of a substantial loan provided by Westpac Banking Corporation in connection with its purchase, with a current balance of about $1,100,000.00. The loan is currently being repaid from the rental income generated by the asset. When the loan has been repaid the asset will generate profits in the company which in turn will be distributed to the estate for the [beneficiary].
6. Income generated by assets controlled by the estate is also subject to taxation at rates depending upon the legal structure of the owner of those assets. It has been my intention to establish and maintain a fund from the income of the estate to meet unforseen contingencies, such as the loss of a tenancy or unexpected claims against the estate.
7. Until the estate debts have been paid and bequests distributed to legatees the pool of funds available from the net income of the estate after tax will remain small and barely sufficient to meet the repair and maintenance costs associated with the assets.”

34 In the circumstances, the defendant’s current view is that it would not be in the plaintiff’s best interests to sell any of the properties in the estate for the purpose of providing a fund from net proceeds for payment out to him. For example, with regard to the property owned by Motor Direct at Alexandria, the defendant’s view is that by reason of its proximity to the Green Square locality, its development potential is significant, and its income is best employed in reducing liabilities.

35 Under cross-examination, the defendant explained his approach as follows: T p 73, l 40 – p 74, l 5

“Q. So do you say there was insufficient cash assets to enable the estate to make any contribution at all toward [the beneficiary’s] day care expenses in January 2008?
A. I say there was no surplus cash in any of the entities, in the estate. No surplus cash available to the estate.

Q. You see, you could have if you hand wanted to easily taken money from the rental that had been made in relation to property owned by Jiwana Pty Limited each week and provided a small proportion of that towards [the beneficiary’s] day care expenses?
A. Why could I have done that easily?
Q. As a simple matter of fact you could have easily done that if you had chosen to?
A. I could easily write a cheque for more than the estate can afford and that would be irresponsible.”

and T p 74, l 21 – p 75, l 14:


“Q. But the fact is you chose not to make any payments out of the State for [the beneficiary’s] living expenses because you regarded, you regarded his father, Paul, as being responsible for meeting those particular expenses in 2008?
A. No I think really at the end of the day I believed getting the estate, specially in the year we are talking about now 2008, which was probably not the best year on a world basis, was a very low priority. There is a short term, medium and long term view of this estate and I have to take all 3. For the smaller amounts of money handing around on this type of thing, I have on several occasions two things. I have volunteered to pay them myself and I have also asked on more than one occasion please give me a list of your expenses and I will see what I can do. I have never seen that. In the only place I can tell you I have seen that, I think it is in an affidavit of Paul's of February 2009, I could not be sure, which shows a list of various expenses which amounts to $401. That is the only guidance I can have on what I should do for [the beneficiary] going forward that I was able to receive from Paul.

Q. And you then determined to pay half of that amount did you?
A. Discussions, as much as, Paul and I do have discussions and they do have their moments but overall we do talk about stuff. Paul has always indicated to me on several occasions he does not expect the estate to pay for everything. My knowing the will of my sister, the needs of [the beneficiary’s], the financial circumstances the best I can assess of Paul is that the big issues coming forward are very, very important for everybody. The big bills. The schooling and all those types of things. This estate will easily cater for those needs in the future if handled well. In the short term we all have to swallow a bit of a tough pill. I have done everything I can to the best of my ability in particular lending money to the estate, interest free, is something I think beyond the call of duty but something that was important to make this thing go okay so you constantly point to the fact that the account should have money where it has an interest free loan from myself of over $80,000 depending on what year you pick it. It's also has may staff working for free, maintenance happening for free for no charge. There is no charge to the estate. On many of these occasions you don't see them on the books because we are not trying to track them for the estate. I can pull them off the records. There is tens of thousands of dollars of stuff spent on things we are doing for the benefit of the estate because of the small boy involved.

Q. What you have decided to do is to look well and truly towards the future in respect of trying to build up an assets, that is a valuable asset, rather than liquidate some of the estate now so there is a fund available for [the beneficiary’s] past and present living expenses?
A. I disagree. We have already turned - this estate has already been turned around. If it wasn't for these legal proceedings there would be quite a significant surplus of cash. The turn around has happened …”

and T p 77, l 25 – l 39:

“Q. I see, so is what you were doing building up a contingency fund out of [the beneficiary’s] entitlement in the estate so when expenses in the future such as tertiary education arose there would be a fund available for that?
A. No, sir. Without the correct planning in place now there would not be funds available for [the beneficiary] for his secondary and tertiary education. If this was stripped of its assets and slowly tied down a bank account, for example, and then the capital asset of that is not growing but it is sinking, then the only result is that there be less funds in the future so to asset strip now is a very short term view for anybody. The longer, I have to take into account the short, medium and long. I have been in business for 25 years and have a proven track record to take all 3 views. To strip the assets to strip anything from that estate in those last couple of years with have been detrimental and that is why I feel my sister's obligations for [the beneficiary], for me to step in personally because I have the ability to do so was, far, far more in the interests of the estate than anything else I could do.”

36 The defendant stated that he very much respects Paul as a father, and remains willing to discuss with him the plaintiff’s needs.

The principles

37 The jurisdiction of the court to remove a trustee was stated in Miller v Cameron (1936) 54 CLR 572 (pp 580-581) by Dixon J (with whom Evatt and McTiernan JJ agreed) as follows:

“The jurisdiction to remove a trustee is exercised with a view to the interests of the beneficiaries, to the security of the trust property and to an efficient and satisfactory execution of the trusts and a faithful and sound exercise of the powers conferred upon the trustee. In deciding to remove a trustee the Court forms a judgment based upon considerations, possibly large in number and varied in character, which combine to show that the welfare of the beneficiaries is opposed to his continued occupation of the office. Such a judgment must be largely discretionary. A trustee is not to be removed unless circumstances exist which afford ground upon which the jurisdiction may be exercised …”

38 The observations of Latham CJ (p 575) and Starke J (p 579) do not differ in principle. With reference to Letterstedt v Broers (1884) 9 App Cas 371 (pp 386, 387) their Honours emphasised that in determining whether or not it is proper to remove a trustee, the court will regard the welfare of the beneficiaries as the dominant consideration, and a trustee may be removed if the court is satisfied that his continuance would be detrimental to their interest.

39 With regard to these principles Bryson J in See v Hardman [2002] NSWSC 287 said:

“17 Within the principle so stated the court has power to remove a trustee who has not acted in breach of trust and has not been guilty of misconduct, and the court might decide, for the purpose of seeing that trusts are properly executed, to remove a trustee whose conduct had not been improper in any way. This could only happen rarely. A state of conflict with a beneficiary or other interested person might, at least in concept, so interfere with the administration of a trust as to cause the court to remove the trustee. An application for removal naturally tends to take the form of charges of misconduct against the trustee, but is not necessarily to be disposed of according to findings upholding or dismissing those charges. The true issue is not whether there have been breaches of trust or misconduct. See Hunter v. Hunter & Anor [1938] NZLR 520 at 529 (Myers CJ) and at 556 where Northcroft J said:

The court, however, is not concerned with a vindication of the appellants, but with the welfare of those for whom the trust was created.”

40 The cases indicate that a state of conflict, tension, friction or dissension between trustees and beneficiaries is not of itself sufficient to justify removal of the trustee. However, where it is likely to hinder the trustee in the performance of his duties to the detriment of the beneficiaries, the court may find that the trustee should be removed (Letterstedt p 389; Craven-Sands v Koch [2000] NSWSC 374 pars 204, 209; Lewin on Trusts 2008 Ed pars 13-50, 13-56).

Determination

41 The relevant terms of the will are set out above. In my opinion the requirements imposed upon the defendant as the trustee of the estate are, as a matter of construction, clear. The testatrix has dealt separately with the assets of Jiwana of which she was the sole shareholder, and also with her share in Motor Direct of which she was a 50 per cent shareholder.

42 In my opinion it was the intention of the testatrix to leave the Jiwana properties at Surry Hills and Alexandria, and the income and profits earned by the company, to the plaintiff. She appointed the defendant as trustee to hold and manage the properties until the plaintiff reached the age of 21 when they are to be transferred to him. Similarly, the defendant is also to manage the companies’ money for the same period and then give it over to the plaintiff. He is also to draw on the companies’ funds to meet the plaintiff’s necessary education and living expenses until he becomes 21.

43 Similar provision was made for the testatrix’s share in Motor Direct, the intention being that until the plaintiff reaches the age of 21 the monies referable to her share be managed by the defendant, and be available to meet the plaintiff’s living expenses.

44 In my opinion the will manifests the testatrix’s intention that the plaintiff should be given the Jiwana properties and her share in Motor Direct in specie. As is evident, the management discretion of the defendant is wide, subject to the general condition that the interests and welfare of the plaintiff are paramount considerations.

45 It may be observed that the will does not guarantee the availability at all times of funds to meet the plaintiff’s expenses. It directs the trustee in the exercise of his discretion to provide monies for that purpose, presumably if and when available. It is not for the court to interfere with the trustee’s role absent grounds for doing so. The question does not arise in this case as the plaintiff makes no allegation of mismanagement, misconduct or incompetence on the part of the defendant in performance of the trust.

46 For the plaintiff it was submitted that as his legacy consisted of properties of substantial value, the defendant had acted against his interests in declining to contribute to his expenses on the ground that the estate had no money. It was put that the defendant’s refusal to liquidate assets to create a stable source of income to meet the plaintiff’s living expenses was also contrary to his interests. It was put that an additional consideration relevant to removal was the defendant’s evidence that he drew on the income generated by the assets held for the plaintiff to pay estate and other legacies. It was argued that, combined with the fact that Paul and the defendant were not on speaking terms, these matters warranted the conclusion that the continuation of the defendant as trustee would be adverse to the plaintiff’s future welfare and, accordingly, he should be removed, and a new trustee appointed.

47 As I understood the plaintiff’s case, which was based on the defendant’s failure to make any payments before November 2009 and the existence of a state of animosity between Paul and the defendant, the essential question for consideration was whether, in the future, there will be personality difficulties between Paul and the defendant such as to impede the due performance of the trust.

48 Having regard to the totality of the evidence I find that personality differences brought about a tense and poor relationship between Paul and the defendant at about the time of the testatrix’s death, and such relationship continued to the time of the hearing of these proceedings. Other than on occasions concerning these proceedings, and the related mediation in September 2009, they have not spoken since June 2008.

49 Although no payments were made for the plaintiff by the defendant from the estate prior to November 2009 there was no evidence that the lack of funds was detrimental to the plaintiff, or was the product of such animosity as may have existed between the defendant and Paul. Relevantly, apart from the occasion on 30 January 2008 Paul provided no information as to the plaintiff’s needs, and made no request for funds.

50 The defendant’s explanation for the failure to provide funds prior to November 2009 was detailed in his evidence as set out above (pars 32-35). I accept that evidence as truthful. In essence, it reflects the defendant’s present view that it is in the plaintiff’s interests that the trust property not be sold, and that it be so managed that its liabilities are reduced in order to accumulate for the future a surplus of funds sufficient to meet the costs associated with the plaintiff’s secondary and tertiary education, and to contribute towards his living expenses in the interim while his requirements are likely to be less. In my opinion, no criticism can be reasonably made of him for taking this approach, and there was nothing to indicate that it was influenced by his relationship with Paul.

51 At the conclusion of the hearing the court was left with no evidence that the plaintiff’s welfare has been adversely affected in any way whatsoever by the conduct of the defendant as the trustee of the estate, or by conduct attributable to his personal relationship with Paul. My conclusion is that there is no evidentiary support for an order for the removal of the defendant by reason of his failure to make any payment towards the plaintiff’s maintenance and related expenses and/or attributable to the existence of a state of animosity between himself and Paul. However their relationship may be described, there is no evidence that it has adversely affected the plaintiff’s interests.

52 During final submissions I stated (T p 84) that I was satisfied on the evidence (and it was common ground) that both Paul and the defendant are devoted to the plaintiff and each was concerned to act in his best interests.

53 With regard to the future, during the hearing the defendant agreed to provide Paul, on behalf of the plaintiff, accounting information in relation to the trust, Jiwana, and Motor Direct as detailed in Ex B by 31 December each year. He also stated his readiness to discuss with Paul the plaintiff’s requirements from time to time. I do not doubt that he will. There is no reasonable basis for doubting that the defendant is well aware of his duties towards the plaintiff, and would fairly consider, and to the extent it is prudent to do so, would attend to providing for, his requirements as and when he is informed of them.

54 It is evident that Paul and the defendant are each concerned to advance the welfare of the plaintiff. As already stated, the evidence does not prove that the past personal relationship between them operated in any way detrimental to the plaintiff. In my opinion, there is no basis for a reasonable apprehension that in the foreseeable future there is a likelihood that the relationship will develop into one of such animosity as to impede the defendant in the discharge of his duty to the plaintiff. In any event, past failures, if established, do not necessarily justify the prediction that similar failures will occur in the future. The evidence in this case is against such a prediction.

55 For the above reasons, in my opinion no case as propounded by the plaintiff has been made out to justify an order for the removal of the defendant as trustee. This claim must be refused.

The claim under the Family Provision Act

56 In the alternative, the plaintiff sought an order that provision be made for his maintenance, education, or advancement pursuant to s 7 of the Act out of the estate. The precise terms of the order sought were not articulated. Various possibilities were suggested, namely:

(i) an order for provision by way of a lump sum resulting from the sale of assets of the estate to be invested and applied for the payment of the plaintiff’s living and educational expenses;

(ii) an order the effect of which would reimburse Paul for the past payments he has made for the plaintiff’s maintenance;

(iii) an order that the trust vest in the plaintiff when he attains the age of 18 years in lieu of 21 years; and

(iv) an order providing for a legacy to the plaintiff of about $25,000 per year with CPI increases.

57 The claims were opposed.

58 In support of these claims the plaintiff relied upon the evidence in Paul’s affidavit of 12 February 2010. He deposed (par 18) to a current expenditure for the plaintiff of $586 per week, and (par 32) that over the past three years such expenditure amounted to $60,000. The evidence was unchallenged.

59 Section 7 of the Act provides that, subject to s 9, if the court is satisfied that the person applying for provision is an eligible person it may:

“… order that such provision be made out of the estate … of the deceased person as, in the opinion of the Court, ought, having regard to the circumstances at the time the order is made, to be made for the maintenance, education or advancement in life of the eligible person.”

60 Section 9(2) provides that the court shall not make an order under s 7 unless it is satisfied that:

“(a) the provision (if any) made in favour of the eligible person by the deceased person either during the person’s lifetime or out of the person’s estate, …
is, at the time the Court is determining whether or not to make such an order, inadequate for the proper maintenance, education and advancement in life of the eligible person.”

61 The approach to be taken by the court in the exercise of its jurisdiction under s 7 and s 9(2) was stated in the well-known passage from the judgment of Mason CJ, Deane and McHugh JJ in Singer v Berghouse [1994] HCA 40; (1994) 181 CLR 201 (pp 208, 209):

“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" ((4) See, e.g. White v. Barron [1980] HCA 14; (1980) 144 CLR 431 at 456; Bondelmonte v. Blanckensee (1989) WAR 305 at 307; Golosky v. Golosky , unreported, New South Wales Court of Appeal, 5 October 1993.). 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) …
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.”

62 In this case, the determination of the first stage requires an assessment of whether the provision made for the plaintiff by the testatrix was inadequate for his proper maintenance, education and advancement in life.

63 The evidence earlier referred to is, of course, that the valuable and wealth producing properties in Jiwana, and the share in Motor Direct, were left in trust for the plaintiff until he attains the age of 21, with the income to go towards his maintenance, education and living expenses.

64 The question whether the provision made for the plaintiff by the testatrix is inadequate under s 9(2) is to be determined at the present time. In my assessment, neither Paul’s evidence as to the amount of expenditure in relation to the plaintiff for current requirements, nor his evidence as to past expenditure provides the basis for the necessary finding that the testatrix’s provision for the plaintiff is inadequate. As earlier referred to, there was no evidence of inadequacy with regard to the plaintiff, or detriment suffered by him, since he has been in Paul’s care taking into account that no payments were made until November 2009 and thereafter made at $800 per month. Further, there was simply no evidence as to the likelihood of future relevant inadequacy should no order for provision be made and the trust as established under the will remains unchanged.

65 The effect of the plaintiff’s submissions went no further than to claim that some provision be made whereby a lump sum be available from the proceeds of trust assets for the reimbursement of Paul for past expenses for the plaintiff, and to pay the plaintiff’s future maintenance expenses. However, there was no evidence which demonstrated that absent such provision, the provision made under the will was inadequate.

66 My conclusion is that the plaintiff has failed to establish the state of affairs predicated in s 9(2)(a) and, accordingly, has failed to enliven the court’s jurisdiction to make an order in his favour under s 7. The claim under the Act must be dismissed.

Orders

67 It is ordered that the amended statement of claim be dismissed.

68 The question of costs remains outstanding. Failing agreement, I will afford the parties the opportunity to address me on this issue. Having regard to the circumstances and interests of all involved in this litigation an out-of-court resolution of this issue is encouraged. Nevertheless, should it be necessary, arrangements should be made with my associate by 25 June 2010 to re-list the matter.

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