Wentworth v Wentworth

[1992] HCATrans 212

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry

Sydney No S36 of 1992

B e t w e e n -

KATHERINE WENTWORTH

Applicant

and

PETER FITZWILLIAM NEVILLE

WENTWORTH as Executor of the

estate of the late

G.N. Wentworth

Respondent

Application for special leave

to appeal

Wentworth(2) 1 3/8/92

MASON CJ -
BRENNAN J

GAUDRON J

TRANSCRIPT OF PROCEEDINGS

AT SYDNEY ON MONDAY, 3 AUGUST 1992, AT 2.51 PM

Copyright in the High Court of Australia

MR R.V. GYLES, OC: If Your Honours please, I appear with my

learned friend, MR R.M. GOOT, for the applicant.

(instructed by Russo & Partners)

MR D.F. JACKSON, OC:  May it please the Court, I appear with

my learned friend, MR G.C. LINDSAY, for the

respondent. (instructed by Dunhill Madden Butler)

MASON CJ: Yes, Mr Gyles.

MR GYLES:  If Your Honours please, we submit that the issues

which arise in the appeal are matters of public

importance for the following reasons. ·This is the

first consideration by the Court of Appeal of the
notional estate provisions of the Family Provisions
Act. Indeed, it would be the first consideration
by this Court, I believe, of the Family Provisions

Act, full stop.

MASON CJ: But I do not know that that is a ground for

granting special leave, that we have not looked at

it before.

MR GYLES:  It is not sufficient, Your Honour, but it is a

factor, we would submit. Of course, it goes

without saying that we submit that the way in which

the Court of Appeal dealt with the notional estate

provisions and with the general provisions of the

Act are in error. We also submit that the matter

is one in which the administration of justice

requires the grant of special leave or would
warrant the grant of special leave, leaving aside

public importance, because in the events which have

happened the Court of Appeal has substituted its

own view on a discretionary issue, and that thereby

this is the only opportunity for that to be

reviewed.	We submit that is to be also taken into
account.

There is a separate question which arises in

relation to costs where it appears that the judge

below seriously misunderstood the basis of

exercising a discretion in relation to matters of

this kind, and the Court of Appeal have said there

was no error in that respect. As it relates to the

grant of costs in a matter which would normally

have involved a common fund basis of costs, where that has been departed from for reasons which the trial judge exposes which we submit are in error,

general and public importance and questions of justice in the particular case which would warrant the grant of leave.

for that to be then given the imprimatur of the

MASON CJ: What do you say are the errors of principle here

on the part of the Court of Appeal?

Wentworth(2) 2 3/8/92

MR GYLES:  I am not sure whether Your Honours are familiar

with the notional estate provisions.

MASON CJ:  Only generally. We have had no occasion to look

at them but for this application.

MR GYLES:  No, I appreciate that. I do not know whether

Your Honours have the Act.

MASON CJ:  I have the Act and the other members of the Court

have the Act.

MR GYLES:  Can I just draw Your Honours' attention to a

couple of matters before answering Your Honour's

question. The first does not deal with the

notional estate provisions but with the general

framework of the Act, because it differs somewhat

from the Acts with which Your Honours would be more

familiar. Section 7 is the principal section, and

that says that:

Subject to section 9, on an application in relation to a deceased person in respect of

whom administration has been granted, being an

application made by or on behalf of a person

in whose favour an order for provision out of

the estate or notional estate of the deceased

person has not previously been made, if the

Court is satisfied that the person is an

eligible person -

and I will come back to that, Your Honours -

it may order that such provision be made out circumstances at the time the order is made,
of the estate or notional estate, or both, of
the deceased person as, in the opinion of the

to be made for the maintenance, education or

advancement in life of the eligible person.

MASON CJ: So it is not expressly conditioned on a failure

on the part of the testator or testatrix to make

adequate provision for the proper maintenance of

the applicant?

MR GYLES: That is true, Your Honour, but section 9, to

which section 7 is subject, has a similar effect,

although it is not an identical effect, to that

under the previous legislation. Subsection (2) is

the relevant section of 9:

The Court shall not make an order under

section 7 .•..• unless it is satisfied that:

(a) the provision (if any) made in favour of

the eligible person by the deceased person

Wentworth(2) 3 3/8/92

either during his lifetime or out of his
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.

The net result of that, Your Honours, is that the

so-called jurisdictional fact which used to be the

foundation of the order under the previous

legislation, the same sort of work is done by 9(2)

but in a different way. In particular, there is no

requirement that the court determine that there was

a failure of moral duty on the part of the testator

as at the time of his death, which Your Honours

will recall was the previous law, and which

required the armchair exercise properly understood

at that time.

Then, if the precondition were established, the court would have its own discretion to make

whatever order was appropriate, having in mind the

facts as they existed at the time of the hearing. In relation to the present Act, it is all done at the time of the hearing and it is, we submit,

liable to mislead if the notion of sitting in the

testator's armchair is driven too far or carried

too much into this legislation.

I indicated to Your Honours earlier that I

would go back to "eligible person". I do so for

this reason - it is defined in section 6(1) under a

series of headings, and (b) is "a child of the

deceased person", and we come under that heading.

Your Honours will see that so far as section 9 is

concerned, section 9(1) places some special

barriers in the way of an application by a person who qualifies under (c), that is a former wife or

husband, or (d):

a person:

(i) who was, at any particular time, wholly or

partly dependent upon the deceased

person •.•.. grandchild .•.•. member	of	a
household -

and so on.

MASON CJ:	We are not concerned with that.
MR GYLES:	No, Your Honours are not, save for this, that in

relation to somebody coming within (b), it may be

assumed that the legislature has said there is a

moral duty; you do not have to prove anything

beyond the mere relationship. In relation to

people coming within (c) and (d), you do have to

Wentworth(2) 4 3/8/92

prove extra facts. Your Honours, that is the

general framework of the Act.

BRENNAN J: There is no question then of a breach of a

testator's moral duty; that is irrelevant?

MR GYLES:  Your Honour, in so far as that may be a shorthand

way of helping the court to do its work, it may be

accepted that that can be taken into account.

Strictly speaking, it is irrelevant, as it always was, I suppose. It is a question of what the court

will do in its own discretion.

BRENNAN J: There is no jurisdictional fact.

MR GYLES:  No, there is not.

BRENNAN J: All you have got to have is a child who has not

got enough money at the time that the application

is made.

MR GYLES:  That is right, and it becomes in effect at large.

Of course, Your Honours, the way in which the

courts have approached the matter down the years is

not to be disregarded.

BRENNAN J:	Why not?
MR GYLES:	So far, Your Honours, the courts have not disregarded it, but certainly there is a
respectable submission that one ought to be very
cautious about introducing the concepts under the
previous Act to this Act. If I may hand up to
Your Honour a passage from Mr Justice Kitto in
Coates' case which we submit expresses that same idea .
. MASON CJ:	But that is the old statute.
MR GYLES:	It is the old statute, but it expresses the

thought that has just been put to me quite well,

and we would submit with respect that it should be

given a special force now.	It deals with this
question of moral duty.	I do not stay,

Your Honours, to read it all, but His Honour, at

page 526, refers to Bosch's case and the statements

about moral duty. At page 527 point 5:

The point I seek to make is that

references to the moral duty of "the" testator

should not be allowed to create the kind of

misconception which Wynn-Parry J had to

correct in In re Franks .•... which gives the

court a jurisdiction similar -

Where notions of unreasonableness of a particular

testator start to creep in, it really is, in our

Wentworth(2) 3/8/92

submission, even more plain now than it was then

that it is not appropriate to encrust this

legislation with notions of morality and

reasonableness except in so far as that may or may

not assist the court in deciding what is the

appropriate order to make to provide the necessary

advancement and maintenance. Your Honours, the

notional estate provisions, section 6(1) defines

notional estate:

means property designated by the Court under

section 23, 24 or 25 as notional estate of the

deceased person.

The division commences at section 21 which defines

disponee and disponer. Section 22 describes the

prescribed transaction. For present purposes,

Your Honours, it is really the equivalent of a

gift for less than full consideration, or the

passing of property for less than full

consideration, but noting that an omission may be

such an act.

As Your Honours will appreciate from the

judgments below, the particular prescribed

transactions here were a fairly conventional series

of transactions familiar in the days of death and

stamp duties, which have not been so familiar

recently. I have not, I must confess, gone back to

see whether it was a Gorton transaction or some

other form of transaction, but it is very similar,

where the donor, whilst retaining the power through

his governing director's shares to recapture the benefit of the property at any time, went to his

death choosing not to do so. So it was that there

was the necessary prescribed transaction according

to the judge below and to the Court of Appeal.

·MASON CJ: You do not need to spend much time on this. You

have got concurrent findings in your favour on

that.

MR GYLES: That is correct, Your Honours, and I therefore do

not stay to analyse section 22 in any detail except

to remind Your Honours of the general nature of the

prescribed transaction in the present case.

Section 23 is the operative section:

if the Court is satisfied:

(a) that an order for provision ought to be

made on the application; and -

the prescribed transaction had been entered into:

the Court may, subject to sections 26, 27 and

28, make an order designating as notional

Wentworth(2) 3/8/92

estate of the deceased person such property as

it may specify -

et cetera. Section 26, although argued below, I do

not think I need trouble Your Honours with at the

moment. Section 27:

On an application in relation to a deceased

person, the Court shall not make an order

designating property as notional estate of the

deceased person unless it has considered:

(a) the importance of not interfering with

reasonable expectations in relation to

property;

(b) the substantial justice and merits

involved in making or refusing to make the

order; and

(c) any other matter which it considers

relevant in the circumstances.

In subsection (2):

the Court shall have regard to:

(a) the value and nature of property the

subject of any relevant prescribed

transaction ••... consideration ••••. changes over

the time .•••. whether property of the same

nature .••.. any other matter which it considers

relevant in the circumstances.

Then there are some machinery provisions,

Your Honours, which relate to it, most importantly

perhaps, for the purposes of the present case,

section 28(2):

the Court shall not make an order designating

as notional estate •.••. property in excess of

that necessary to allow the making of

provision that, in its opinion, should be

made.

Your Honours will appreciate that in the present

case the judge below considered with some care the nature of the - first of all, concluded at page 74

point 4:

that the plaintiff has been left without

adequate provision for her proper

maintenance -

within section 9. Then from pages 94 and

following, he dealt with the 1984 reorganization of the company, Recato 10, which led to the prescribed

Wentworth(2) 3/8/92

transaction. Your Honours, the findings to which

we would particularly draw attention are at the

foot of page 95:

In my view it is quite clear, indeed on

the evidence not in substance disputed that,

in the terms of s 23(b)(i) the transactions of

October 1984 were entered into by the testator

with the intention of denying provision of any
kind for the plaintiff out of his estate or

out of any source.

At the foot of 98:

The exercise was, and plainly was

intended to be carried out for the purpose,

which was achieved, of transferring (but not

immediately) almost all of the value which

earlier attached to the testator's 10,770

shares -

At page 99 point 4, the defendant retained the

governing director's shares. At page 108, line 20

and following, His Honour summed up the effect of

the transactions as they stood. Then at 110,

His Honour comes to really sum up what he did on

this point. At line 21:

The actual estate of the testator is

relatively small, as the defendant's counsel

has repeatedly emphasised. When adverting to

this counsel usually added that the estate had

been more than exhausted by the costs of these
proceedings. The size of the testator's

estate i~ entirely a matter of contrivance

between the testator and the defendant; the

estate comprises as such -

that must be "of such" -

property as the testator and the defendant,

acting together, thought fit to leave in it.
They actually foresaw that the plaintiff might

make a claim like this and took active steps

to defeat such a claim. In relation to
assets, or benefit which in fact or in

appearance were removed out of the testator's

ownership or control in and after 1984 the

defendant's submissions based on his
reasonable expectations are very hollow; his
expectations were based on contrivance with
the intended effect of defeating the

plaintiff.

Then, Your Honours, at line 17 on 111:

Wentworth(2) 3/8/92

As I am satisfied that an order for

provision ought to be made, and that there was

a prescribed transaction which took effect on

the death of the testator I have power

pursuant to s 23 to make an order designating

as notional estate of the testator any

property held by the defendant and this power

is not limited to designation as notional

estate of the valuable benefit to which I have

referred. It is appropriate to designate all

the defendant's shares in Recato Ten Pty Ltd.

This case furnishes lessons in the ways in

which the value of shares may be altered.

There is room for consideration whether the

designation of property as notional estate

ought to be more extensive. There may be a

need for the Court to take control -

and so on. So we respectfully submit that at that

point His Honour had correctly followed the various

steps which need be attended to by him. You then

turn to section 26, which I need not trouble

Your Honours with, and he then, at line 21 on 112:

As appears from this judgment I have

considered the matters referred to in

subs 27(1). The dominating (but not

exclusive) consideration is the amplitude of

the resources which will remain to the
defendant notwithstanding the effect of my
order and their being far more than sufficient
for the reasonable needs of the defendant and

his family. I have had regard to the matters

referred to in subs 27(2). In this judgment I

have dealt in terms with such of those matters

as were expressly drawn to my attention.

His Honour then turns to section 28. At line 5:

In view of the nature of the defendant's shares in Recato Ten Pty Ltd as private

company shares and in view of the defendant's

control over the rights and advantages which

attach to them, I regard it as necessary to

designate all of them as notional estate so as

to allow the making of the provision which in

my opinion should be made.

So that so far as the designation of shares is

concerned, I would respectfully submit that

His Honour with some care has gone through all of

the statutory steps, has satisfied himself about each one of them and has designated those shares

for entirely appropriate grounds and for

appropriate reasons.

Wentworth(2) 9 3/8/92

BRENNAN J: Which part of section 22 do those shares fall

under?

MR GYLES:  Your Honour, section 22(1), but I do not think

that is the answer to Your Honour's question.

BRENNAN J: 

It may be that you need to go down to (4).

the closest attention because of the way in which
the matter was dealt with in the court below.

MR GYLES: 

Your Honour, I must admit I have not given that

BRENNAN J: 

I can understand that, Mr Gyles, but it does

seem to me that it is important for your case so

you do not have to, as it were, do more than say,

"Well, I'm ahead on this one so far". Unless it

does fall within 22, the fight is over.

MR GYLES:  Yes, quite. Could I give Your Honour the

substance of the answer and then come back to the

way we get to it. That is, that the non-exercise

of the governing director's powers to recapture by

means at his disposal operated at all material

times and for relevant purposes operated at the

time of death. We would submit it is a fairly

traditional notional estate idea in revenue law

terms.

BRENNAN J: Yes. It just seems to me that if the shares of the defendant are to be designated as the notional

estate, then one needs to focus on those.

MR GYLES: That is the notional estate, the property

designated. The transaction which gives rise to

the power to do so is the non-exercise - there were

a number of transactions in 1984, but the

judge - - -

·BRENNAN J: But the non-exercise of the 81A power is what is said by you to justify the designation of the son's

shares as notional estate.

MR GYLES: Yes. That is what the judge held. There were a

number of other arguments which were advanced as

well, but that is the one that appealed to the

trial judge. As is implicit in what I have just
put, there does not need to be a correspondence

between the transaction and the property as such,

provided the property is the appropriate thing to

designate having in mind the transaction.

Certainly there must be a relevant link between

them. You do not, in other words, designate a

section 81 power; you designate the shares, in our
respectful submission.

I should also draw Your Honours' attention to the fact that His Honour below held, when the

Wentworth(2) 10 3/8/92

matter was before him, that the value involved in

these shares - the defendant's equity, if you

like - was about $2.8 million. I am instructed,

Your Honours, that if the matter were to be gone into now, then it would be clear that the amount is

both now and always was more than that, but for

present purposes it is sufficient to know that the

judge below found the relevant transactions, found

them entered into with the relevant intent, that is

to defeat our claim, that that made the difference

between a net estate of $160,000 on the one hand,

to an estate of a number of millions of dollars on

the other hand - a very critical difference in

assessing the discretionary order which lay within

the power of the court.

Your Honours, what did the Court of Appeal do

about that? At page 317, His Honour

Mr Justice Priestley, delivering the leading

judgment, at the foot of the page:

The facts I have just discussed -

which were the motives and the effect of the

arrangements -

taken together with the activities of the defendant and his wife in regard to their

assets, from 1984 until the testator's death

raise further matters requiring serious

consideration.

I am sorry, I should read the paragraph above that:

Although failure to take this possibility

into account may not require the testator's

motivation at the time to be described as

unfair or unworthy, it is a circumstance

which, taken together with the plaintiff's

situation at the time of her father's death,

tells against exonerating the shares from

designation as notional estate.

That attempt by the respondent here failed.

However, Your Honours, the way in which the Court

of Appeal dealt with notional estate was to leave

the shares designated as they had been designated,

but to arrive at that result by a different route,

if I could put it that way. By construing the

notional estate provisions in a way which we submit

respectfully was not open to the court, the

ultimate - and perhaps the error is revealed at

page 320. The basis for the error may be revealed at the first half of page 320 where His Honour had

referred to his analysis of what was required and

then said:

Wentworth(2) 11 3/8/92

One of the consequences of this change -

that is by this Act -

may be that a fiction that was introduced by

the Testators Family Maintenance Act 1916 and

which has been continued by the present Act

has additionally been very much enlarged.

Under the 1916 Act, the court in cases when an

order was to be made, put itself in the place

of the testator and then did what the testator

should have done had the testator known all

the relevant facts and been irreproachably

wise and just. Under the present Act, s 7

requires the court to put itself in the

testator's position at the time the order is

made, sometimes long after the testator's

death. Further, it seems that Division 2 may

require the court to put itself in the

testator's position also some time before

death.

Your Honours, it appears from that that the Court

of Appeal were under the impression that the task under the earlier Act was to make an order in the
light of the facts as they were known at the time

of death rather than at the time when the order is

made. One would hesitate before coming to that

conclusion because it is such, with respect, an obvious boner, but it is difficult to read what appears at page 320 without coming to that
conclusion. The notion that the court, as it were,

travels on armchairs up and down the years in my

submission has led the Court of Appeal into error

in this case.

There is nothing in those notional estate

provisions at all which requires the court to put

itself in the testator's position some time before

death. It simply looks at the statutory

requirements, goes through them and decides what

order to make. Certainly the court has a wide
discretion as to how it exercises those powers, but

there was no indication that Mr Justice Bryson had
in any way miscarried in the exercise of his

judicial function in relation to that exercise.

When Your Honours read then what appears at

the balance of 320 and the top of 321, and indeed

over to 322, it appears that the task which

His Honour engaged upon was to put himself in the

place of this very testator from time to time from

1984 onwards and to say that a testator would not

have recaptured, exercised his powers, in this

case; therefore, although the shares were
designated and remain designated, I will put them

out of account when considering what order to make

Wentworth(2) 12 3/8/92

and will limit that order to the actual estate.

That appears most clearly perhaps, Your Honours, from line 5 on page 318:

In view of the arrangements made in 1984

it would in my opinion have been wrong of the

testator, so long as his son lived and

continued to act in the loyal way that he had

done all his life, and in the absence of some

compelling reason to do so, to exercise the

special powers given to him by the

article 81A.

Then on the following page, 319, about line 10:

The only types of situation in which it

would have been acceptable for the testator to

use the powers would have been of the

following kinds -

and he then instanced various cases. So whilst at

the end of the section dealing with notional

estate the shares and the whole of them remain

designated, the reality is that the Court of Appeal

had in those passages to which I have referred

fundamentally changed the basis upon which

His Honour Mr Justice Bryson made that designation,

and did so without in terms saying so and without

identifying any error on the part of the trial

judge.

Of course, that comes into sharp focus when

the actual order is made. That appears at 323 to

324. They are very short passages; may I read

them, starting at line 25 on 323:

I should make it clear that, with respect to

the trial judge, I disagree with the approach
taken by his orders in two ways that would not

have been curable, even with cooperation by

the parties. One is that it seems to me that

the evidence in this case discloses that no

set of orders and conditions enforcing on the

plaintiff and defendant continual, indeed

lifelong, contact between them concerning moneys to be paid by the defendant to the

plaintiff from the defendant's legal assets

with the plaintiff being obliged as recipient

of the payments to comply with complicated

conditions concerning them, is likely to work

in practice. It seems to me highly probable

that the orders made would produce further

litigation between the parties.

So ground 1 are the conditions, and Your Honours

will see those at page 138 and following of the

book. The conditions themselves are at 139 in the

Wentworth(2) 13 3/8/92

paragraph numbered 5. The scheme of the order,

Your Hono~rs, was an annuity of $21,000 indexed but

on the conditions set out in paragraph 5. Those

conditions, it was agreed - nobody particularly

wanted those conditions;	we did not and they did
not.	However, those conditions related only to the

terms of payment of an annuity.

The other reason for my view is that

explained in dealing with Question (c); I do

not think that the provision to be made should

go further than what the court thinks the

testator should reasonably have done by way of

provision for the plaintiff from his actual

estate upon his death. The net value of that

estate was of the order of $160,000.

The view I have arrived at is that - - -

Your Honours might regard that as a very surprising

result. The defendant in this case had appealed,

he had put in issue, as it were, the qualifying

factors, whether an order should be made at all;

failed.	He challenged the designation of notional
estate;	failed. He relied upon various aspects of

conduct and substantially failed in relation to

those.

So far as the annuity was concerned, having in

mind age and so on, an estimate was made, I

believe, on the appeal that to capitalize it would

have been in excess of $400,000, and that would

accord with Your Honours' idea of common sense, I

would submit. If all one were doing were to remove

the effect of the condition and capitalize the

annuity, whilst there may be arguments one way or

another about how one would capitalize it, it would

obviously be much in excess of $100,000.

In view of the fact that His Honour below had

designated property worth, on any view, well over	$2 million and had made his order on the basis of
that amount, to limit it to $160,000 is, to say the least, surprising. The reasons are to be found in
one paragraph:

The view I have arrived at is that the

testator, acting wisely and justly, and being

entitled, as Bryson J found, to regard the

plaintiff's conduct during the last year of

his life in particular as undutiful and

hurtful to an extent bearing heavily on the

amount of the provision he should make and

bearing in mind also that he had previously

made provision which, with good management,

should have needed no supplement, but bearing

in mind also that neither of his other two

Wentworth(2) 14 3/8/92

children was in need of any further provision,

should have left to the plaintiff by his will

a legacy of $100,000.

So His Honour is saying, "Well, I'll limit it to

160 and out of the 160, she gets 100." It bears no

relationship to her need for maintenance and

advancement. I should not overlook the fact,

Your Honours, that the other challenge in the case

was that His Honour below made a provision for

maintenance by way of annuity but declined to make

any provision for advancement in life. His Honour

Mr Justice Priestley held that that was wrong and

that His Honour should have made allowance for
advancement in life.

How that was to be reflected in the order and what is to be taken into account is another issue

which would be gone into on the appeal. There are

questions of the plaintiff's intention to practise

at the bar if permitted, there is the question of

mortgages which she has over her real estate which

inhibit her ability to organize her affairs and so

on. So that the result is even more surprising

when it is appreciated that she won on the issue of

advancement which should have been added to the

provision made below.

BRENNAN J: Mr Gyles, could you help me a little? This is

under section 7, I presume, that you are speaking

of advancement?

MR GYLES:	Yes.
BRENNAN J:	I do not quite see what role notional estate

plays under 7. Is the quantum to be determined

under 7 by reference to the value of the estate and

of the notional estate?

MR GYLES:  I would submit that is so, Your Honour. There

are two alternatives, may I put. The first

alternative is that one simply ignores the size of

the estate altogether, notional or actual, and says

that looking at this woman and having in mind her

station in life and all of the other factors, a

reasonable provision would be half a million

dollars or a million dollars or two million or

whatever the figure may be and you then look to see what can be done. That is one construction of this

section which is perfectly open.

The other construction is that you approach

the question of quantum by taking into account the

size of the actual and notional estate in a

traditional Bosch exercise, if I could put it that

way.

Wentworth(2) 15 3/8/92

BRENNAN J: But that is where I have difficulty because, as

I read it, it is only after the court has decided

how much is to be allowed that you get to

designating what the notional estate is.

MR GYLES:  Your Honour, it is difficult to put it. I cannot

point to anything in the statute which would be to

the contrary of what Your Honour is putting to me.

BRENNAN J: So, unless one adopts your first interpretation,

the draftsman has involved us in a hopeless

circular movement.

MR GYLES:  No more hopeless than the position is under the

Acts of the other States, Your Honour, because in

none of those cases do they list what has got to be

taken into account nor make the size of the estate

a criterion. That is judge-made law that says you

judge maintenance an advancement and reasonable

provision by reference to the available pot.

BRENNAN J: Well, that used to be taken into account in

determining whether there had been any breach of

the testator's moral duty.

MR GYLES:  Yes. Your Honour, I can point to nothing in the

statute which would detract from what Your Honour

puts to me.

BRENNAN J: Here we cast aside the testator's moral duty;

we do not know the size of the pint pot out of
which it is to be drawn, but somehow or other a

decision has to be made as to what the quantum is.

MR GYLES:  Yes, bearing in mind that once you are an

eligible person, section 7 really throws it on the

Court to make an appropriate provision and, in doing so, it may guide itself to the extent it is

assisted by looking at the considerations which the

courts have taken into account under previous or

other legislation.

BRENNAN J: Another task of expounding the unexpressed.

MR GYLES: Yes, that is so, Your Honour, but perhaps no more

unexpressed than always has been the case when one

takes into account the bare words of the previous

Act or the Act as it now exists in other States.

so, in our respectful submission, what has

happened here is that the Court of Appeal have cast

aside the trial judge's approach to the designation
of notional estate so that instead of looking at
the reality of the larger pool, they have taken the

smaller pool.

Wentworth(2) 16 3/8/92

MASON CJ: But is that right what you say, that the Court of

Appeal have cast aside the trial judge's approach

to the notional estate?

MR GYLES:	I would submit so, Your Honour. What the trial judge said was that he would designate all of the
shares and he would take into account - in doing that, he was very much primarily governed by the
fact that the transactions having taken place and
the plaintiff requiring provision, they would take
into account the size of the estate that remained.
I think it is at page 112:

The dominating •••.• consideration is the

amplitude of the resources which will remain

to the defendant notwithstanding the effect of

my order -

and so on, it being borne in mind, Your Honours,

that the defendant is the sole beneficiary. So the

competition, for all relevant purposes, is between

the defendant and this present applicant. What His

Honour Mr Justice Bryson was doing was to take the

available pool and say, "Well now, looking at the

two of them, there is a very substantial amount

available and even though it is part of the estate,

to the extent to which the plaintiff does not get

it, the defendant will."

MASON CJ: But is not the difference between the primary

judge and the Court of Appeal this, that the Court

of Appeal made a point of putting itself in the
position of the testator to a greater extent than

the primary judge did?

MR GYLES:  That is certainly one very significant

difference, Your Honour, but we submit that the

p.rucial difference was really in saying - and
perhaps this is another way of putting the same
point - the Court of Appeal said, in effect, "We as

the testator would not have recaptured these

proceeds." Now, that is not, with respect, the

process of reasoning which the court is entitled to

undertake under the statute. You either designate

or you do not designate.	If you have designated,
then it is part of the estate.	It says if a court,

confronted with an ordinary case of actual estate,

said, "I will ignore the fact that there is

$2 million worth of assets in this estate. I will

limit my consideration of what is an appropriate

provision by reference to $160,000. '' That is

precisely what has happened, Your Honour.

Now, if that had happened in a case of actual

estate; then I would respectfully submit that the

error would be - - -

Wentworth(2) 17 3/8/92

MASON CJ: But basically that conclusion is founded on the

premise, is it not, that in the position of a wise

and responsible testator who had this history of

transactions behind him, particularly the

transaction entered into with a son, it would not be appropriate and responsible for him to attempt

to recall the transaction?

MR GYLES:  That is what led Mr Justice Priestley to that.

That is the critical point.

MASON CJ: Yes, that is it.

GAUDRON J: That may be relevant, I suppose, under 9(2), but

it hardly bears on section 7, you would say, I

imagine?

MR GYLES:  The difficulty is that sections 7 and 9 speak as

at the date that the Court is looking at the

matter.

GAUDRON J: Yes, but you have still got to have regard to

what you can dispose of for the purposes of 9(2).

MR GYLES:  For the purposes of 9(2), yes, actual or notional

estate is to be regarded. We submit that where the

court is placed in a position after the death and

when the facts are known, it is asking the wrong

question or doing the wrong thing to say, "Would I

as testator have recaptured this the moment before

my death?" The question is, "Is there a need for a

provision? How to provide it? What competition is there? What are the available assets?", and so on.

MASON CJ: Your submission, in effect, is that the Court of

Appeal was in error in giving too much emphasis to

what the view of the testator would have been?

MR GYLES: Yes, quite; and not only that, but there was no

case made out, on its own reasoning, for the Court
of Appeal to step in.	There was nothing wrong with

the way the trial judge approached the notional

estate issue.

MASON CJ: No, but you can understand why the Court of

Appeal did it, having regard to the view they took
of the Act, because if you look at the top of
page 318, they refer to Bosch's case and obviously

Mr Justice Priestley took the view that the principles stated in Bosch's case still had an application to the new statute.

MR GYLES:  Yes, he certainly took that view. It would be

our submission that even if Bosch's case did apply,

having in mind the change in the law, it would

apply as at the time the court was looking at the

matter, not at the date of death or at the time of

Wentworth(2) 18 3/8/92

the transactions. You do not relive the testator's

life, in other words; you look at the overall

situation. May I remind Your Honours that one

would have thought that these considerations were

the sort of considerations which would apply under

section 27 in deciding whether to designate.	One
can assume once property is designated that

questions of equity and so on would be taken into

account. The conclusion is that this property

needs to be part of the pot to be distributed, and

it then becomes, we would respectfully submit, a

fairly conventional, although not easy, exercise of

working out what should be done. But what should

be done with, on the findings below, $2.8 million,

and we say more, rather than $160,000.

I have been reminded, and it is quite right:

the notional estate is, of course, much greater
than 2.8; it is, as appears from 119 of the

application book, well over $4.5 million.

His Honour was there speaking of the defendant's

equity.

MASON CJ:  Mr Gyles, we have spent a good deal of time on

this. You have identified this erroneous approach,

on your submission. What else is there?

MR GYLES: Yes. Can I then, Your Honours, refer

Your Honours briefly to the question of costs

because it not only has significance in its own

right, but the net result of this order is that on

any view of the matter, the gap between party and

party costs and the actual costs would eat up the

whole of the $100,000 given. So, this is far from

an academic exercise. The result of the Court of

Appeal order is inevitable that the plaintiff will

be effectively bankrupted. Her equity was
something like $200,000; she is given an extra

$100,000, then given an order for costs which, with

a month's case, is liable to certainly eat up the

whole of the special legacy and probably the whole

of her equity.

Now, Your Honours, because this Court would

not normally be very interested in a question of

costs, may I take just a few minutes to explain

how it arose or what the issue is? His Honour's judgment on the point appears at page 141 of the

application book. His Honour said:

I was first minded to make the usual general

order as to the costs in the plaintiff's

favour.

Now, Your Honours, it is our respectful submission

that generations of cases show that a successful

applicant in a Testators Family Maintenance Act or

Wentworth(2) 19 3/8/92

Family Provision Act case receives costs out of the

estate on a solicitor/client basis or a common fund

basis. I have not brought with me all of the cases

which deal with that but we took the most recent

case in this Court, Goodman v Windeyer, and I hand

up to Your Honours the order made there.

MASON CJ: But there are cases, are there not, in which the

Court has made an order for costs on a party and

party basis where the Court has come to the

conclusion that it really is adversary litigation?

MR GYLES:  Yes, Your Honour, that is quite true but that

will be where the trustee has departed from his

role as trustee and become a contestant.

BRENNAN J:  But that is the whole notion of this Act though,

as I understand it. It transforms the claim that a

child of a deceased makes from a claim against the

estate as such under the old TFM legislation into a

claim against the property of another beneficiary

or a person who has had the benefit of notional

estate.

MR GYLES:  Yes, it -

BRENNAN J: It is adversary litigation in the strictest

sense.

MR GYLES:  In so far as notional estate is concerned,

Your Honours?

BRENNAN J: Yes •

MR GYLES: Well, it may be.

BRENNAN J: Well, it is, is it not?

. MR GYLES It may be where there is a

BRENNAN J:  I mean, it is his property, and she seeks to get

his property from him.

MR GYLES: Yes, in so far as notional estate is concerned.

BRENNAN J: That sounds extremely like adversary litigation

to me.

MR GYLES: Well, may I endeavour to, in answering

Your Honour "Yes" in part, persuade Your Honour

that the normal rule should have applied in this

case in any event.

Your Honours, the sort of example that

His Honour the Chief Justice had in mind, I submit,

is illustrated at least in Ellis v Leeder, 82 CLR,

at page 656 to page 657.

Wentworth(2) 20 3/8/92

MASON CJ: That is certainly a case I had in mind but I do

not know whether the principle should be confined

to that.

MR GYLES:  No, Your Honour, but we are here speaking of what

I submit is a pretty well invariable practice of

the courts. If the principles in Leeder's case, or

that example is borne in mind, it will be seen that

the respondent - and this arose on appeal, not

below, I might add - she was ordered to pay the

costs of both appeals because she was acting in her
capacity not as executrix but as beneficiary.

Now, Your Honours, if I may return to

Mr Justice Brennan's point: the nature of an

application by an applicant under this Act is no

different to the situation that it was before the

Act, I would submit. The Act gives the power

caused by - and it must be caused by - the

inadequacy of provision made. So, the principle

does not change. What is changed is that the

available pot can be increased not against bona

fide purchasers, because the Act does not work that

way, but against those who have received a

provision which, by and large, as in the present

case, is designed to defeat the claim. That is the
purpose of these sections, to prevent avoidance of

claims, and does not affect bona fide purchasers.

So that it is not correct to say that it is

just like adversary litigation. It may lead to the

result that a person who has beneficial property

may have to deal with it.

BRENNAN J: Well, here is an estate of a testator which is

consumed by costs. There then arises the question

of whether, under section 7, an order should be

made.

MR GYLES:  Yes.

BRENNAN J:  Now, depending which construction one places

upon it, one knows that whatever figure is arrived

at under section 7, it has to be made good under an

order made pursuant to section 28(2). Under 28(2)

there will be a designation of notional estate

which is necessary to allow -

MR GYLES:  23, but with 28(2) in mind, Your Honours.

BRENNAN J: Yes, and it will be a designation which is

sufficient to allow the order to be carried into

execution.

MR GYLES:  Yes.

Wentworth(2) 21 3/8/92

BRENNAN J: The property which is notional estate is

property which is held beneficially by some third
person, admittedly not having paid full

consideration for it, but none the less perhaps

having other moral claims to it of whatever kind.

Now, that sounds to me extremely like

adversary litigation which has very little

relationship to the old TFM litigation.

MR GYLES:  Your Honour is looking at it through the

periscope of this case.

BRENNAN J: No, I am looking at it from the language of the

Act.

MR GYLES:  Your Honour, principally the changes are, I

think, the ones I have pointed out and they have a

significance, but ultimately the applicant is

exercising the same nature of right as has always

been exercised.

But when Your Honours go to

Mr Justice Bryson's judgment at page 141, and

coming down to the facts of this case, he says:

This litigation was quite unlike most

Family Provision applications. It is quite clear that the size of the actual estate and the distinction between the notional estate

and the actual estate are the products of

contrivances and shifts by the testator and

the defendant which were undertaken with the

intention of defeating a claim by the

plaintiff. The defendant's position was not

at all like that of an executor or trustee who

is the guardian of the testator's wishes.	He
acted with the testator and he fought the litigation to enhance and protect his own
personal position. This is inter-parties
Now, one would have thought, "Well, on that
litigation.

basis" - and we would submit it is plainly right -

"the judge will be penalizing or not giving the

defendant the benefit of a common fund basis

because he has stepped outside that trustee role."

Indeed, at page 142H:

The costs were incurred in a contest with the

defendant himself and should be ordered to be

paid by the defendant himself.

In other words, what His Honour is endeavouring to

do is to ensure that the defendant bears them, not

the estate.

Wentworth(2) 22 3/8/92

Although the plaintiff did not succeed on

all the issues which she raised, she achieved

substantial success at the trial.

May I then, without reading the balance of it

to Your Honours, say that His Honour essentially

rejected the attacks upon the way the matter had

been conducted by her; said it was a hotly

contested matter on all hands; although she did

not win every point, she had a perfect right to

bring these matters to the court. And at page 144D

and E, His Honour said:

I am not prepared to depart from the ordinary

basis on which costs are awarded.

He was aware of some cases where costs had been awarded on a common fund basis and solicitor/client

basis but said:

The common fund basis is not appropriate.

There was no fund analogous to a common fund

the shares in which were open to debate.

Now, Your Honours, we would respectfully

submit that His Honour has departed from the

accepted basis of ordering costs in this case
without supplying reasoning which would support
disadvantaging the plaintiff. Reading his reasons,

one would be left with quite the other impression,

that it was the defendant who had stepped outside

his trustee's role.

We would respectfully wish to have that matter

adumbrated in this Court. All the Court of Appeal

said was, "No error shown by His Honour", and we

would submit that if this judgment stands, not only

will it lead to great hardship in the present case

but it will lead to what we submit is a

misapprehension as to the proper basis for ordering

common fund costs.

So, for those reasons, we would ask that

special leave be granted.

MASON CJ: Thank you, Mr Gyles. Yes, Mr Jackson?

MR JACKSON:  Your Honours, may I deal with the matters that

our learned friend has raised in the same order as

he has. The starting point is section 7 and,

Your Honours, may I deal for just a moment with the

question of the relationship between the several

provisions of the Act including, importantly,

section 9(3) to which the Court has not yet been

directed.

Wentworth(2) 23 3/8/92

Now, Your Honours will see from section 7,

which is the starting point, that it is the

provision which defines the function of the court

hearing an application of that kind.

it may order that such provision be made out
of the ..•.. as, in the opinion of the Court,

ought, having regard to the circumstances -

be made. Your Honours, the provision sets the

context in which the order in this case is to be found and the second part of the context is that

one must look at the circumstances at the time when

the order was made.

Now, Your Honours, section 9(2) is not a

provl.sion which limits the circumstances which may
be taken into account. It is simply a provision

that says that an order cannot be made unless a

particular fact has been established. It is

and the court shall not make an order unless it is	jurisdictional in that sense, that is, it cannot
satisfied that at that time the provision is
inadequate and so on. But the circumstances to be
taken into account are dealt with by the succeeding paragraph, that is subsection (3), and Your Honours will see from its terms that it by no means places
any limitation upon the matters which may be taken
into account but allows the court to take into
account all the matters that might have been taken
into account in applications under the previous
enactments. And could I direct Your Honours'
attention to, for example, the opening words:

In determining what provision (if any) ought

to be made in favour of an eligible

person ••••• the Court may take into

consideration -

and then Your Honours will see: contributions,

"character and conduct".

(c) circumstances existing before and after

the death of the deceased person1 and

(d) any other matter which it considers

relevant in the circumstances.

Now, Your Honours, that is the first thing one has

to look at and what Your Honours will see is that

both courts in the present case took into account

matters of that kind but, at the same time, clearly

took into account the situation obtaining as at the

time the order was made.

Your Honours, may I demonstrate that as

briefly as I possibly can, and it is this: the

Wentworth(2) 24 3/8/92

judgment of the primary judge clearly and

specifically did have regard to circumstances

obtaining at the time his order was made and the

members of the Court of Appeal specifically treated

that approach as correct.

Now, Your Honours, the relevant summary of the

part of the primary judge's reasons for judgment is

extracted by the Court of Appeal at pages 297 and

298. Your Honours will see towards the bottom of

page 297 the extract from the primary judge's reasons for judgment in which he sets out the various factors and Your Honours will see

specifically Nos (9) and (10) which relate clearly

to the position obtaining at the time when the

primary judge was making his order. Your Honours

will see the concluding words, "and still is".

GAUDRON J:  His Honour is there dealing with section 9(2),

is he not?

MR JACKSON:  No, Your Honour. No, His Honour is dealing

with section 9(3).

GAUDRON J: Yes, thank you.

MR JACKSON:	He is setting out the considerations one way and the other, and these are the considerations in
favour of making the order.

Your Honour, ~section 9(2) is really, if I

could put it this way, a jurisdictional provision

which says you cannot make an order unless you are

satisfied that there is a present need. Neither

section 7 nor section 9(2) requires that such an

order be made.

GAUDRON J: But if I take you back to your answer. I am

just reading from page 297:

When Bryson J came to summarise his reasons,

he said:  "There are claimant considerations

against an order" - - -

MR JACKSON:  Yes, Your Honour.

GAUDRON J: That does seem to be 9(2) rather than the

provision, if any - - -

MR JACKSON:  No, Your Honour. I am sorry, Your Honour,

9(2) - Your Honour, perhaps I could just say this:

it is clear from paragraph 10 on page 298 that he

considered that 9(2) was satisfied but the question

whether there should be an order and what order

should be made and the considerations which

Your Honour will see listed in the preceding

paragraphs are ones that seem to have their genesis

Wentworth(2) 25 3/8/92

in section 9(3). They are all considerations that

he was entitled to take into account.

Your Honours, the point of my reference to 9

and 10 was simply to indicate that it was clear

that he had taken into account the situation

obtaining at the time he made his order and the
Court of Appeal specifically adopted those

findings. Your Honours will see that at page 306,

lines 1 to 12, and could I refer particularly to-.

Your Honours will see a reference at line 9 to

considerations 9 and 10, and then at the conclusion

of that paragraph:

Further, on the materials before him, I do not

see how it can be said that Bryson J made any

error in the findings involved in

considerations (9) and (10) and I do not think
they are open to successful attack in this

court.

And, Your Honours, also at page 307, lines 5 to 10,

the court said those considerations were:

all soundly based ••••. his conclusion, that an

order should be made, seems to me to be a

sound exercise of discretion.

Your Honours, it could not be clearer, we would

submit, that the court both approved the taking

into account of those matters and itself took them

into account.

Your Honours, that is also emphasized by the

discussion on advancement which appears - - -

GAUDRON J:  The difficulty is knowing at what point they are

taken into account. Quite clearly, when you look at 7 and 9(2) and (3), there are different points

on different issues that are to be taken into

account and the difficulty is in finding that they

were taken into account in determining the amount

to be ordered.

MR JACKSON:  Your Honour, they plainly were taken into

account by the primary judge. Your Honour, the

case really, if I could put it shortly, was one

where the primary judge took these matters into

account and set $21,000 indexed a year with

conditions. The matter came before the

Court of Appeal. We said no order should have been

made. We failed. But the applicant's side and our

side, neither side wanted to have an order of that

nature, so the question was: what order should be

made? That was something that the Court of Appeal

decided - it was manifest from, for example,

pages 130 and 131, that the approach taken by the

Wentworth(2) 26 3/8/92

primary judge was that it should be a modest order.

He said so specifically. When it came to the

Court of Appeal, the Court of Appeal took a similar

view. They said it should be a lump sum. The

question then came about: what should the lump sum

be?

Their Honours said, and in our submission

perfectly correctly in the sense of their being

entitled to do it, if one looked at all the

circumstances, the applicant had already had a

large sum of money; she did not have that sum of

money any more. If one looked at it from the

position of someone who is in the position of the

testator but knowing what he knows now, what

provision should be made, and they said that in the light of the relationship with the respondent there should not be any disturbing of the notional estate except to the extent necessary, because of the lack of funds i~ the actual estate, to give her

$100,000. Now, Your Honours, that must be within

discretion, with respect, and no more than that; a

simple exercise of discretion.

Your Honours, I am afraid I got a little ahead

of myself. May I just proceed back to what I was

saying, and what I was seeking to say was this,

Your Honours:  it is clear that the Court of Appeal

dealt with the case on the basis of the present

situation, if one looks at the discussion about

advancement which appears at page 307, line 23,
through to page 309, line 14, and a passage which

appears at page 308, about line 13, is plainly

directed in specific terms to events at the time of

making of the order.

Now, Your Honours, when one looks to the

making of the order by the Court of Appeal, it is

clear, in our submission, that any suggestion that

the court was looking at the position in such a way

that it disregarded the need to take into account

the situation after the testator's death is without

substance, we would submit, with respect. Could I

refer Your Honours to what was said at pages 321

through to 323 by Mr Justice Priestly, but

particularly what appears at page 321, line 17

where he says:

First, for the reasons generally,

mentioned earlier, supporting the conclusion

that an order should be. made in the

plaintiff's favour -

and, Your Honours, that includes

Mr Justice Bryson's paragraphs 9 and 10 and the

other matters relating to the present situation.

Wentworth(2) 27 3/8/92

Then, Your Honours, at page 322, lines 7 to 11, he

speaks specifically of the situation of:

the court with its greater advantages in the

way of knowledge both at the time of trial

before Bryson J and the time of decision in

this court -

and it is speaking of the current situation. Then,

Your Honours, page 324, about line 7, when the

actual order is being considered:

The other reason for my view is that explained in dealing with Question (c) -

and, Your Honours, question (c) - - -

GAUDRON J: But is that not the difficulty? Question (c),

although it was directed to section 28, in the way His Honour expressed it, is probably also relevant to 9(2), but it does not have anything to do with

section 7, does it?

MR JACKSON: Well, it does, Your Honour, because section 7

said - - -

GAUDRON J: Well, perhaps 9(3).

MR JACKSON:  Your Honour, section 7 says that provision may

be made out of notional estate.

GAUDRON J: Yes, but there is only one sort of provision

that can be made under section 7, and that is that

which the court is of the opinion ought to be made

having regard to the circumstances when the order

is made. That is the only one that can be made.

.MR JACKSON:  Yes, Your Honour, but could I just say that it

may order that it be made out of the estate or

notional estate. One has, of course, then,

section 27 and section 28. In relation to

section 27, section 27(1) makes it apparent that
the mere fact that property is notional estate and
the mere fact that there is present need does not
mean that there is to be an order made from or in
respect of notional estate because it looks to, for

example, the importance of not interfering with the

reasonable expectations in relation to property and

the other matters there referred to.

Your Honour, what that means, of course, is

that the court is entitled to have regard, as

indeed the court had regard in the present case, to

the question of the expectations, for example, of

the respondent. Your Honour, I have gone through a

little of what happened in the past, but it is

apparent, as appears at page 131, that there had

Wentworth(2) 28 3/8/92

been provision made in the past and the only reason

why the court thought there should be any resort at

all to notional estate was because actual estate

did not exist, or no longer existed.

Your Honours, could I just say that two

features emerge, we would submit, from what we have

said so far.	The first is that the case does turn
very much on its own circumstances.	We would

submit it gives rise to no issue of general

application. Also, we would submit, that the

decision of the Court of Appeal on that question is

not attended by sufficient data. The court kept

talking about the present situation.

Your Honours, could I go to a second aspect of

it, and that is the question of disregarding a

notional estate. Your Honours, reference - - -

BRENNAN J: Before you do that, could I just take you to the

first aspect of it.

MR JACKSON:  I am sorry, I have not yet come to the quantum, I should say, Your Honour.

BRENNAN J: No, but what I wanted to ask you was this: is

it right to construe sections 7 and 9(3) together

as though at the end of section 7 there appeared

the words, "Taking into consideration (a), (b), (c)

and (d) from 9(3)"?

MR JACKSON:	Yes, Your Honour, and -
BRENNAN J:	Is that the way in which you say it should be

construed?

MR JACKSON:  Yes. Your Honour, may I indicate the way in

which we would do it, and I do not mean by

reasoning but simply the summary of it.

BRENNAN J: Yes.

MR JACKSON: Section 7 gives a discretion. Section 9(2)

provides a matter which must be established before

any order can be made. Section 9(3) indicates the

considerations that are to be taken into account in

deciding - assuming jurisdiction otherwise exists

pursuant to 9(2) - whether an order should be made

pursuant to 7.

BRENNAN J: So that what was taken away from the old

dispensation is given back and then some, under

9(3)?

MR JACKSON: Yes, Your Honour. It puts it perhaps a little

inexactly but perhaps simply enough to say that

what section 7 does which is significantly

Wentworth(2) 29 3/8/92

different is that it requires· that you look at the

situation at the time the order is being made as a

matter of dominating importance, I suppose one

might say - I do not mean dominating in the literal

sense - and also section 9(2) substitutes a new

jurisdictional criteria.

Your Honours, I was going to deal with the

question concerning notional estate. The position
with notional estate is this, that if one gets to
the particular point, it is apparent that the court
did consider the quantum of notional estate, did
not disturb in any way the judge's order about
notional estate, and did make an order for

provision from notional estate. But the only

reason why the court went to notional estate was
because the estate was otherwise exhausted. Your

Honours, could I come then to the - - -

GAUDRON J: But that, in a sense, indicates the difficulty

in this case, does it not? The assumption seems to

be that you only go to notional estate because the

estate is otherwise exhausted, whereas section 7

says something quite different: you go to notional

estate, the whole estate, because of what is

necessary in the circumstances when the order is

made.

MR JACKSON:  Your Honour, may I say two things: the first

is that section 28(2) says, in effect, that the

court shall not make an order designating something
as notional estate in excess of that necessary to
allow the making of provision which the court

thinks should be made. But, Your Honour, I do not

suggest that the court is not to look at the

quantum of potential notional estate in deciding

what is available for the purpose of making an

order, but the court did. The court here
designated the whole of the Recato 10 shares as

being notional estate but the reasons why the court

did not make a substantial order, either at first

instance or in the Court of Appeal, were different.

At first instance one sees the reasons

expressed by the primary judge at page, I think,
130, and he says, specifically, taking into account

everything in favour of the applicant there should

be a modest provision; and in the Court of Appeal

it happened because substantial provision had been

made in the past, the provision had been

dissipated; the only sources were actual estate or

notional Recato 10 shares, and the relationship

between the testator and the respondent was such

that prima facie the Recato 10 shares should be

left alone. Now, in any event, Your Honour, the

case, we would submit, is one turning, indeed, very

Wentworth(2) 30 3/8/92

much on its own facts in that regard and not

appropriate for a grant of special leave.

Your Honours, could I come then to the third

aspect and that is the question of the quantum of

the award. Your Honours, the sum of $100,000 is

not a trivial sum. It was clearly, we would

submit, within the range which was appropriate and

there are two features which should be noted in

relation to our learned friend's submissions. The

first is that it is, we would submit, an incorrect

approach to seek to capitalize in some way the

$21,000 per year ordered by the primary judge and

then say that the lump sum ordered by the Court of

Appeal should have been that capitalized sum. One

reason is that the $21,000 a year was not a sum in

the hand; it was not a sum which was free of

conditions and it came with some strings attached,

whereas the $100,000 did not and the conditions may

be seen at page 139 set out in paragraph 5. The

purposes for which the money might be used were
relatively limited and I will not go through it,
but it is conditional.

The second thing, Your Honours, is that the parties were agreed in effect that the primary

judge's order should be set aside and that meant that the Court of Appeal had to decide the issue

for itself and as is apparent from page 323 and

page 324 they took a somewhat narrower view of the

matter than had been taken by the primary judge, a

somewhat narrower view of the entitlements. Now,

Your Honours, that is purely a matter of impression

from the material which was before them and,

Your Honours, that is a matter in respect of which,

we would submit, there is simply no demonstrated

error. The matter was within the range.

Your Honours, may I turn then to the question of costs. The one thing which, we would submit, is

manifest from the reason's given, both at first

instance and in the Court of Appeal, was that the

judges were consciously exercising a discretion.

So far as the primary judge's decision is concerned

he had heard the case for quite some time, he

identified the nature of it in the passages to

which Your Honours have been referred and,

Your Honours, one has to bear in mind that as a

practical matter what the case was concerned with

was only a notional estate, that is, how much of

the notional estate should be made available to the

applicant.

Now, Your Honours, in those circumstances it

is hardly surprising that it is treated as like
litigation inter partes, but in any event, and if

one goes to the Court of Appeal one sees, at

Wentworth(2) 31 3/8/92

page 327 the first half of the page, that the court

dealt with the matter on a broad discretionary

basis. Now, Your Honours, the level of cost is

really a matter of practice and procedure of the
supreme court, and if Your Honours look at that

page and also the discussion on the preceding page,

the bottom half of the preceding page, in relation

to the costs awarded by the primary judge, we would

submit that there is nothing to indicate error and

it is not a matter which the court should

entertain. Your Honours, those are our

submissions.

MASON CJ: Thank you, Mr Jackson. Yes, Mr Gyles?

MR GYLES: Your.Honours, I think the only two things that I

would wish to put is that section 9(3), to which my

learned friend referred, does not change any

submission that I made. It is not an exhaustive

provision and does not, of course, say anything

about moral duty.

BRENNAN J: But it does not say anything against taking into

account factors which a testator might take into

account.

MR GYLES:  No, no, certainly that is true but if - -

BRENNAN J: And in construing the judgment of the court

below here one must have regard to the fact that

the matters itemized in the paragraphs of 9(3) are

matters to which that court legitimately had

regard.

MR GYLES:  Anything in 9(3) could legitimately be taken into

account by the judge below and, depending upon the

circumstances, the Court of Appeal. I do not, in

any sense, disagree with that, with respect,

Your Honour. But it does not convert - if the

Court of Appeal erred in principle in the way it

dealt with the question of notional estate it

erred, and it cannot be saved by 9(3).

The second thing is, Your Honours, that in my

submissions I have not endeavoured to outline the

challenge to the quantum of the order made by

His Honour below. I had not thought that was an

appropriate topic to raise on a special leave

application. I have to take somewhat higher ground

than that. If Your Honours please.

MASON CJ: The Court will take a short adjournment in order

to consider the course it will take in this matter.

AT 4.16 PM SHORT ADJOURNMENT

Wentworth(2) 32 3/8/92

UPON RESUMING AT 4.30 PM:

MASON CJ:  The questions which the applicant seeks to raise

on appeal necessarily arise in a context set by the

terms of the Family Provision Act 1982 (NSW).	If
ss 7, 9(2) and Division 2 of Part II of the Act
were to be construed without reference to

s 9(3), the judgment of the Court of Appeal would

raise acutely the question whether the discretion

to make an order had been exercised ass 7 directs,
that is having regard to all the circumstances at

the time when the order is made. Those words in

s 7 confer a new and broad jurisdiction on the

Court. However, having regard to the findings of

the trial judge, accepted by the Court of Appeal,

it is apparent that the Court of Appeal had regard

to the circumstances mentioned ins 9(3). That

being so, no particular question of principle

arises and the case can be seen to turn on its own

facts.

The second issue which the applicant seeks to raise relates to the order for costs made by the

trial judge. In the peculiar circumstances of this case, we are not persuaded that there was any error of principle on the part of the primary judge, or

for that matter on the part of the Court of Appeal.

Accordingly, special leave to appeal is refused.

MR JACKSON:  We ask Your Honour for costs.

MASON CJ:  Yes. Do you oppose an order for costs?

MR GYLES:	I have no argument to advance, Your Honour.
MASON CJ:	The application is refused with costs.
AT 4.31 PM THE MATTER WAS ADJOURNED SINE DIE

Wentworth(2) 33 3/8/92