Vigolo v Bostin

Case [2005] HCA 11

HIGH COURT OF AUSTRALIA

GLEESON CJ,
GUMMOW, HAYNE, CALLINAN AND HEYDON JJ

VIRGINIO VIGOLO  APPELLANT

AND

WANDA MARY BOSTIN & LEOPOLDO  RESPONDENTS

VIGOLO (AS EXECUTORS OF THE WILL OF
LINO VIGOLO DECEASED) & ORS

Vigolo v Bostin [2005] HCA 11

9 March 2005
P30/2004

ORDER

1.        Appeal dismissed.

2.The appellant pay the costs of the respondents as between party and party. 

3.The costs of the appeal of the first and second respondents be taxed on the trustee basis and, to the extent that those costs exceed the costs borne and paid by the appellant as between party and party, be paid out of the estate.

On appeal from the Supreme Court of Western Australia

Representation:

R I Viner QC with P Mendelow for the appellant (instructed by SS Chohaan)

M J Buss QC with L A Tsaknis for the respondents (instructed by Hudson Henning & Goodman)

Notice:  This copy of the Court's Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports.

CATCHWORDS  

Vigolo v Bostin

Testator's family maintenance – Adequate provision for proper maintenance – Application by son of deceased – From 1973 to 1993 appellant made substantial contribution to deceased's family farming business – Deceased promised appellant that he would inherit family farm in return for his work in building up family assets – In 1993 relationship between appellant and deceased broke down – As a consequence parties entered Deed of Settlement to rearrange family affairs including ownership of family farm, which was purchased by the appellant and his wife – Deceased's will made no provision for the appellant – Jurisdictional question – Whether appellant left without adequate provision for his maintenance, education or advancement in life – Effect of Deed of Settlement on totality of relationship – Relevance of moral duty criterion.

Words and phrases – "adequate provision from his estate for the proper maintenance, support, education or advancement in life" – "moral duty".

Inheritance (Family and Dependants Provision) Act 1972 (WA), s 6.

  1. GLEESON CJ.   The appellant made an application under the Inheritance (Family and Dependants Provision) Act 1972 (WA) ("the Act"). The application was dismissed by McLure J[1].  An appeal to the Full Court of the Supreme Court of Western Australia failed[2]. The further appeal to this Court should be dismissed. The decision of McLure J was correct. The appellant, an able-bodied adult son of the testator, and a man of substantial means, based his application, not upon financial need, but upon what was said to be a moral claim upon the testator's bounty, arising out of previous business and family dealings. His case failed, not because moral claims are irrelevant, but because he was unable to bring himself within the relevant provisions of the Act.

    The Act and moral claims

  2. The short title of the Act refers to provision for family and dependants. The long title describes it as an Act…

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Details
AGLC
Vigolo v Bostin [2005] HCA 11
Case
[2005] HCA 11
Decision Date

CaseChat Overview and Summary

The appeal concerned an application by the appellant, a son of the deceased, for provision out of his father's estate under the *Inheritance (Family and Dependants Provision) Act 1972* (WA). The deceased's will made no provision for the appellant, who was one of five adult children. The appellant had worked in the family farming business for many years, from the age of 16, and alleged that his father had promised him the family farm as his inheritance in return for his contributions and low wages. In 1993, the relationship between the appellant and his father deteriorated, leading to a deed of settlement where the appellant and his wife purchased the family farm. The High Court of Australia heard the appeal.

The central legal issues before the High Court were whether the appellant, who was of substantial means and had received significant financial benefit through the purchase of the family farm, had been left without adequate provision for his maintenance, education, or advancement in life. The Court also considered the effect of the deed of settlement on the appellant's claim and whether the Act permitted or contemplated orders based solely on the fulfilment of a moral obligation, and if so, what circumstances would give rise to such an obligation.

The High Court dismissed the appeal, upholding the decisions of the lower courts. The Court reasoned that the appellant had received substantial consideration for his contributions to the family business, particularly through the acquisition of the Old Coach Road farm under the deed of settlement, which was significantly subsidised by a gift from his mother. While acknowledging the appellant's evidence of his father's promises and his substantial contributions, the Court found that these factors, when viewed in light of the financial arrangements made in the deed of settlement, did not establish a case for further provision from the estate. The Court indicated that while a moral duty can be a relevant consideration, it must be assessed in the context of the deceased's overall testamentary intentions and the applicant's circumstances, including any benefits already received.

The High Court ordered that the appeal be dismissed and that the appellant pay the costs of the respondents. The costs of the first and second respondents were to be taxed on a trustee basis, and any amount exceeding the party and party costs borne by the appellant was to be paid out of the estate.

Orders

Orders of the court

1. Appeal dismissed.

2. The appellant pay the costs of the respondents as between party and party.

3. The costs of the appeal of the first and second respondents be taxed on the trustee basis and, to the extent that those costs exceed the costs borne and paid by the appellant as between party and party, be paid out of the estate.

Background

Background to the litigation

Should the Court make an order in favour of a son of substantial means for provision out of his late father's estate pursuant to s 6(1) of the Inheritance (Family and Dependants Provision) Act 1972 (WA) ("the Act") in circumstances in which he has received money's worth for his efforts in the family business? Does the Act permit or contemplate that an order may be made in fulfilment of a moral obligation only? If it does, what kinds of circumstances will give rise to such an obligation? These are the questions which this appeal raises.Facts The appellant is the eldest of five adult children whose father died on 3 June 1997, leaving an estate worth about $1.9m. By his will he devised and bequeathed his real and personal property to the other four of his children in equal shares. Neither the appellant, nor his mother who has not made an application under the Act, was a beneficiary. The appellant was born on 20 October 1957. Within a few years of his birth, his parents began to farm land at Narrikup, near Albany. The land was leased from the Crown and covered 284 hectares. In October 1981, the appellant's father bought it. In 1972, the appellant's father and mother had bought two adjoining properties as tenants in common. The aggregation of the properties was called the "Old Coach Road farm". When he was 16 years old, the appellant left school to work full-time on the farm with his parents. He was paid $40 per month. In 1976, as the income from the farm declined, the appellant obtained work in Albany including as a slaughterman, a cleaner and a labourer. He continued to work part time on the farm however. He diligently saved his earnings. In 1978, when he was 21, and had accumulated $10 000, he told his father that he wished to buy his own farm. His father, in response, proposed that they buy a farm together "because at the end of the day when he died, it would all be mine". The appellant maintained that like assurances were given to him over the ensuing years. Furthermore, the appellant claimed, on one occasion his father told him that his wages were low because the farm would be his when he, his father, died. The appellant's evidence of his father's assurances is uncontradicted. It found a measure of confirmation in the respondents' evidence that although they had not heard their father give the assurances, they had heard their mother, who was also a partner in the business, say to the appellant that the farm would be his one day. In June 1978, the appellant and his parents purchased another farming business, the "Albany Highway farm" ("Albany"), as tenants in common. From September in that year, the farming business conducted on the Old Coach Road farm and Albany was carried on by a partnership of the appellant, his father and mother. Two of the appellant's sisters were partners at different times, although this was specifically for taxation reasons. Profits were allocated equally between the partners at the end of each financial year. At no time was the real property an asset of the partnership.

Evidence

Evidence Before The Court

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Decision

Reasons for decision

GLEESON CJ GUMMOW AND HAYNE JJ CALLINAN AND HEYDON JJ
In his leading affidavit, the appellant stated the essence of the case put in support of his application under the Act as follows:"I believe that by reason of the promises made to me by my father which encouraged and persuaded me to live and work on the family farm and the other farming properties for very meagre 'wages', my contribution of my own savings to the purchase of the Albany Highway farm, my commitment to my father all my life until we dissolved our partnership in 1994, that I had to buy what my father had always told me would be my inheritance and the significant personal contribution I made over my lifetime towards 1994 to building up my father's estate, that I have a substantial claim to share in my father's estate at least equally with each of my brother and my sisters such that inadequate provision has been made for me in my father's will."The decisions at trial and on appeal The primary judge found that on a number of occasions the deceased had said to the appellant words to the effect that he would inherit the Old Coach Road farm. On one occasion when the appellant raised with his father the low wages paid to him, he was told that he was paid only a small amount because the appellant would inherit the Old Coach Road farm when his father died. Sheppard AUJ described the course of the appellant's relationship with his father and the family business as follows[35]:"Undoubtedly, the evidence establishes that [the appellant] made a very substantial contribution to the welfare of the family business and that of his father and mother. He made it over many years, commencing full-time work on the Old Coach Road farm when he was 16 years of age. Eventually, he became a partner in the family partnership and then a shareholder in the company which replaced the partnership in 1988. But, as the years went on, [the appellant], although he continued to do what he had done before, additionally began to acquire assets in which the company had no interest. This he did in conjunction with his wife. This was not something that pleased the deceased. So to speak, he wanted everything in the family. He complained to [the appellant] about his going his separate way. But [the appellant] was not receptive to his entreaties. Eventually, it was decided to end the business relationship which had existed between father and son for some 15 years and, really, when one takes into account the past, for much longer. There was a break‑up of the assets effected by the deed of settlement which resulted in [the appellant] and his wife taking over the Old Coach Road farm and the deceased retaining the Albany Highway farm. The other assets of the company were divided or distributed in various ways … The various transactions are perhaps complicated by the existence of trusts. But the essence of what happened is as stated above."[35](2002) 27 WAR 121 at 143. His Honour continued[36]:"The upshot of this was that a balance of over $500,000 became payable by [the appellant] in effect for the acquisition of the Old Coach Road farm. Although the amount he had to pay was substantially reduced by [his mother] making her gift to him of her entitlement under the distribution brought about by the deed of settlement, there was still a substantial balance to pay."[36](2002) 27 WAR 121 at 143.

Ratio Decidendi

Legal Principle Established

Established by: GLEESON CJ, GUMMOW AND HAYNE JJ, CALLINAN AND HEYDON JJ

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