Blair v Blair [2004] VSCA 149

2. Douglas William Blair ("the testator") died on 9 June 1999, aged 78 years. His wife had pre-deceased him, but he was survived by his two sons, Stephen Garde Blair ("the appellant"), who was then aged 41 years, and Richard Malcolm Douglas Blair ("the respondent"), who was then aged 37 years. During his life the testator was a farmer in Tallangatta in north eastern Victoria and, not surprisingly, his estate, which was valued at his death at approximately $775,000, consisted largely of farming properties to which reference will be made later. By his will, dated 27 August 1988, the testator gave a legacy of $150,000 to the respondent and the residue of the estate to the appellant. Not content with this legacy the respondent sought, by originating motion filed on 9 February 2000, further and better provision out of the estate of his deceased father pursuant to Part IV of the Administration and Probate Act 1958 ("the Act") on the ground that, by his will, the testator had failed to make adequate provision for his proper maintenance and support. The appellant, as co-executor, with the respondent, of the estate, was the defendant in the proceeding. The parties filed 27 affidavits in support of their respective cases and the principal protagonists were cross-examined. The hearing occupied some 11 sitting days between 9 and 24 October 2001.

5. On 4 April 2002 the learned judge handed down his reasons for his decision to order that further provision be made to the respondent out of the estate of the testator by varying the amount of the above legacy to $200,000. Subsequently, his Honour heard argument on the question of costs and, on 24 April 2002, pronounced the following relevant orders:

"1. There be further provision for the [respondent] by varying the legacy provided for the [respondent] in the will of the deceased to $200,000, such provision to carry with it all rights and incidents that would have attached thereto had the will provided such a legacy for the [respondent]. 2. The costs of the [respondent] of and incidental to this proceeding including any reserved costs be taxed on a party/party basis and when taxed paid out of the estate."

The appellant appealed against these orders, having obtained, on 7 June 2002, leave of this Court to appeal against the above costs orders. Before dealing with the appellant's challenge to his Honour's decision I shall summarise the relevant background circumstances.

11. The testator's farm in Tallangatta consisted of four adjoining properties although, as will be explained later, he and the appellant leased other land to breed their respective herds of cattle. Two of the four properties were owned by the testator - Telford (approximately 319 acres) and Bullawarra (approximately 156 acres), which he inherited from his mother in 1975. The other two adjoining properties were The Hill (approximately 296 acres), which had been left to the appellant and the respondent in equal shares by their grandmother in 1975, and Ben's (approximately 76 acres), which the appellant and respondent inherited in equal shares when their mother died in 1993. It seems that The Hill and Ben's had a combined value of approximately $220,000 at the time of the testator's death and neither the appellant nor the respondent received any agistment fees or other moneys for the use made by the testator and, later, by the appellant, of the two properties.

14. Until 1972 the testator conducted a dairy farm on the four properties, which were treated as one entity for farming purposes. In that year, however, he suffered a heart attack and shortly thereafter the farm was used to breed beef cattle. In order to supplement the family's earnings after the testator's illness, his wife returned to her former occupation of school teacher.

17. It seems that the appellant and the respondent enjoyed a comfortable home, and received a sound education that was paid for by their parents. They attended the local high school before being sent to board at Melbourne Grammar for the last two years of their secondary education in 1974 and 1975, and in 1978 and 1979 respectively. In 1979 the appellant completed a degree in Agricultural Science, and in 1984 the respondent completed a Veterinary Science degree. After graduating the appellant developed successful businesses in the rural sector, and since 1997 he has worked as an agricultural consultant, principally in Victoria and southern New South Wales. As will be explained later, he also developed a substantial and successful cattle breeding business that he conducted, in large part, on the testator's farm. In 1984 he married and he and his wife have a house in Melbourne and three children, the youngest of whom was born in 1992. Thus, at the date of the testator's death, the appellant was a highly qualified agricultural consultant, who also conducted a substantial cattle breeding business and it is plain that his financial future was sound.

20. Given the issues that will be considered later, it is necessary to set out briefly how the appellant established his cattle breeding business. In 1980 he commenced to breed cattle on his father's farm by purchasing 20 cows with calves for $14,000, which he borrowed. He paid no agistment fees to his father, but as I explain later, he contributed to the improvements that were made to the farm and otherwise assisted his father in his farming activities. Although at the outset of his breeding enterprise the appellant used only his father's farm to graze his cattle, he and his father later leased other properties on which they conducted their respective cattle breeding businesses. At one stage, they leased 14 properties to graze their herds. Over the years the appellant's beef herd grew and by 1990 he owned 200 head of cattle. During the 1990's he and his father substantially improved the quality of the farm and the stock so that, eventually, they conducted, respectively, a substantial Angus stud and a herd of commercial cattle. In the main, the appellant was concerned with operating the stud and his father bred cattle for annual sales. At the time of his father's death, the appellant owned a herd of 922 head - principally stud cattle, which had a value of between $450,000 and $500,000 - and the testator owned 431 head of cattle, which were valued for probate purposes at approximately $217,000.

23. In the circumstances, it is not surprising that, out of the appellant and the respondent, it was the former who was the more frequent visitor to their father's farm. According to the appellant, notwithstanding that his principal business through which he earned his income was consulting, he spent every second weekend working at the farm and made material financial contributions to the purchase of farm equipment and farm improvements. He told his Honour that he gave steers and bulls to the testator in lieu of paying agistment fees, thereby enabling the testator to maintain his annual sales levels. He retained heifers, which contributed to the growth of his own herd. Thus, since 1980, with a couple of minor exceptions, the appellant said he paid for all of the equipment purchased for the farm, including a 4WD Mitsubishi Utility, a Ford 6610 tractor, two hay mowers, a baler, several augers and a Commodore Berlina, all totalling over $150,000. These assets, however, did not form part of the testator's estate. The capacity of the four adjoining properties referred to earlier to carry cattle was limited to 300-400 head, which was, in round terms, the size of the testator's herd.

26. So far as the respondent is concerned, after graduating he worked as a veterinarian in a number of places, including Mornington and, between 1986 and 1990, in Benalla and then Albury. During the latter period, he said, he assisted his father with veterinary advice and some animal husbandry. Being unable to gain entry into the veterinary practice at which he worked in Albury, and to the disappointment of his father, he moved to Geelong in 1990 where his wife's family was located. There he set up his own veterinary practice, at a time when the Geelong area was experiencing economic problems, including the aftermath of the collapse of the Pyramid Building Society. It is not surprising, therefore, that he found it difficult to establish his practice. In order to purchase his first home, where he initially had his surgery, the respondent borrowed $1,000 from his father (which he repaid), $14,000 from his father-in-law and $120,000 from a building society. He also borrowed $50,000 from a bank to purchase equipment and supplies necessary to establish his practice. Save for the above loan of $1000, the testator made no other contribution to the cost of establishing the respondent's practice. Later, the respondent moved to another house in Geelong, and the first premises that he had bought was used to conduct his surgery. Throughout this period he was assisted by his wife in the conduct of that practice, principally in the keeping of accounts in relation to it. Their combined income in 1999 was estimated to be a little under $46,000 and his debt to Macquarie Bank was in the order of $370,000. He told his Honour that, on his present income, he would not be able to afford to provide a private school education for his children. In April 2001 the respondent and his family moved to a small farm of some 100 acres near Geelong that is effectively owned by his wife's parents. The respondent and his family occupy that house rent-free and he runs a few head of cattle on that land. The respondent sought to sell his Geelong residence in order to reduce his debt to Macquarie Bank, but was unable to do so. He therefore leased it at a gross rent of $165 per week.

29. By the time of the trial, the respondent's practice had developed. He employed four veterinary nurses, a dog groomer, two veterinary surgeons and a high school student who worked two hours on a Saturday morning. Nevertheless, the respondent still owed the Macquarie Bank approximately $370,000 and, as his Honour found, he was living on "subsistence" income and his wife was working in his practice.

33. The learned trial judge concluded that, in the circumstances, the testator had a responsibility to provide for the respondent's proper maintenance and support and that he failed to make adequate provision therefor in his will. As I have explained, his Honour ordered that the legacy payable to the respondent out of the estate be increased to $200,000. When the question of costs came to be argued, his Honour was informed that the appellant had made an offer of compromise of $200,000. Consequently, the appellant sought an order for costs as contemplated by Rule 26.08(3) of the Rules of the Supreme Court. His Honour, considered, however, that, because the respondent was entitled to interest on the legacy after the expiration of the executor's period, the appellant's offer was not more favourable to him than the judgment and thus, the appellant was not entitled to the advantage of Rule 26.08(3). As I have noted, his Honour concluded that the respondent was entitled to have his costs paid out of the estate, but directed that they be taxed on a party/party basis, and not, as was sought by him, on a solicitor/client basis.

37. Before analysing the appellant's arguments it is necessary to consider briefly the statutory regime that governed the circumstances in which his Honour could exercise his discretion under Part IV of the Act. So far as is relevant, before such a discretion is enlivened, the claimant must establish the following:

(a) At the date of his or her death the deceased had a responsibility to make provision for the claimant's proper maintenance and support.

(Section 91(1) of the Act.)

(b) The will, where that is relevant, does not make adequate provision for the proper maintenance and support of the claimant.

(Section 91(3)(a) of the Act.)

The legislation also constrains the court as to the factors or matters to which it can have regard when considering whether these jurisdictional requirements have been established and, if so, what amount should be ordered in favour of the claimant. More specifically, s.91(4) provides that, in determining these issues, the court must have regard to the factors specified in paragraphs (e) to (p) of the sub-section.

43. It is apparent, therefore, that there is likely to be a substantial overlap in the matters that the court needs to take into account when determining whether the two jurisdictional requirements have been satisfied. Such matters are not, however, identical. For example, when considering whether the testator had "responsibility" to make provision for the claimant, the terms of the disposition will be largely, if not wholly, irrelevant because the essential enquiry will be concerned with the relevant circumstances that occurred before the date of death of the testator. On the other hand, since the focus of the enquiry under sub-s.(3) is on the adequacy or otherwise of the provisions of the will, its terms will obviously be of critical importance to the resolution of that issue. But, at least in one important respect, there is commonality in the approach that must be adopted in the analysis of the two different jurisdictional questions raised by the relevant sub-sections. The enquiry under each necessarily involves, as I have said, consideration of the relevant factors specified in paragraphs (e) to (p) of s.91(4).

46. Notwithstanding the dictates of this provision, it is probably apt to describe the obligation of the testator that forms the subject of the enquiry under sub-ss. (1) and (3) as a moral obligation, as that concept has been explained in cases that preceded the recent amendments to Part IV of the Act, including the decision of Ormiston, J. in Collicoat v. McMillan[1] and Grey v. Harrison[2]. Thus, it is clear enough that the "responsibility" of which sub-s.(1) speaks is the moral duty or obligation of the testator to make provision for the proper maintenance and support of the claimant.[3] Similarly, sub-s.(3) is essentially concerned with whether the deceased - as a wise and just testator - has fulfilled his moral obligation to make adequate provision for the claimant's proper maintenance and support.[4] Given, however, that the court is now directed by the legislation to have regard to the matters specified in paragraphs (e) to (p) of sub-s.91(4) when determining the jurisdictional issues, characterisation of the deceased's relevant obligation by reference to moral duty is likely to be of less utility than was the case prior to the recent amendments to Part IV of the Act.[5] Be that as it may, it should be noted that while the criterion in each of paragraphs (e)-(o) of sub-s.91(4) is concerned with a specific matter, paragraph (p) is open ended, enabling the court to consider "any other matter [it] considers relevant" and giving it a wide discretion to look beyond the specific statutory matters which are set out in the immediately preceding sub-paragraphs for the purpose of determining if the jurisdictional requirement has been satisfied and, where relevant, bringing into consideration the testator's moral obligation to the claimant.

49. It is in the context of this statutory scheme that the learned judge had to consider the respondent's claim for further provision out of the estate of the testator.

His Honour's alleged failure to recognise freedom of testation

53. Before considering the specific bases on which his Honour's decision was challenged by the appellant, it is convenient to deal with a more general criticism of it, namely, that it does not have sufficient regard to the limits of the court's power to interfere with testamentary dispositions. In my view, however, it is plain enough from the judge's reasons that he fully appreciated, and gave effect to, the importance of the principle of freedom of testation and was mindful of the court's limited power to interfere with testamentary provisions. It was in the context of specifically acknowledging these matters in his reasons that his Honour referred to the well known passage in the judgment of Callaway, J.A. in Grey v. Harrison[6] that deals with freedom of testation and, after analysing the facts relevant to the matters before him, he reminded himself that he had no jurisdiction to interfere with the terms of the testator's will unless he was satisfied, on the balance of probabilities, that their fulfilment would amount to an abuse of the testator's freedom of testamentary disposition. His Honour also made it apparent in his reasons that he well understood, and had regard to, the conditions that must be satisfied by the claimant before the court could exercise the discretion contemplated by sub-s.91(1) of the Act, to which reference has been made earlier. That his Honour gave effect to these principles will become apparent when I analyse the appellant's more specific claims of error on the part of the learned judge.

57. In terms of analysing the respondent's case, his Honour determined separately the threshold issues under each of sub-ss.91(1) and (3), although, not surprisingly, a considerable amount of that analysis was common to both questions. In doing so, his Honour took into account the matters prescribed by the relevant paragraphs of s.91(4) including, as is required by paragraph (l), the benefits that the appellant gained from the testator in launching his cattle breeding enterprise in contrast to the respondent's position in that regard when he started his veterinary practice in Geelong. The learned judge was mindful of the fact that, at first blush, the respondent did not present as one whose means of maintenance and support were "obviously inadequate". And, as I have said, he acknowledged that he must not underestimate the significance of the testator's freedom of testation. It was in that context that his Honour went on to make a careful analysis of the respondent's financial position. He considered that, at the date of the testator's death[7], the respondent was not without financial difficulties - he owed a substantial debt to the bank, earned only a "subsistence income" from his practice, needed the assistance of his wife in the conduct of it and had two infant children. The judge also noted that the respondent received no rent in respect of the use made by the testator (and the appellant) of The Hill and Ben's. Given the assistance that was provided by the testator to the appellant (to start his cattle breeding business) while there was none to speak of given to the respondent, the judge concluded that the testator had a moral duty to provide such assistance to him when he sought to establish his practice and that this obligation remained extant at the date of the testator's death. It is broadly for these reasons that his Honour was satisfied that the respondent had established the two jurisdictional requirements.

60. It is relevant to note in this context that, although the determination of the two jurisdictional questions involved the making of value judgments by his Honour, it did not call for the exercise of discretion on his part.[8] Nevertheless, the majority in Singer recognised[9] that the principles that govern the review of such decisions are those that apply to appellate review of discretionary decisions. A like view was expressed by Tobias J.A. in Collins v McGain[10]. I mention for completeness that each of those cases concerned an appeal against an order made under family provisions legislation that did not contain the equivalent of s.91(4) of the Act. But, in my view, this does not affect the operation of the principles identified by their Honours in each case as governing the review of decisions made under the present provisions of Part IV of the Act.

63. I now turn to consider the specific errors that the appellant claims were made by his Honour in reaching his impugned decision.

Failure to require the respondent to establish special need or special claim

67. In his written submissions Mr Boaden, for the appellant, first submitted that his Honour erred by failing to approach the threshold questions on the basis that, since the respondent was an adult son of the testator, he was required to demonstrate some special need or special claim before the court could relevantly find in his favour. Such an approach, it was said, was sanctioned by the observations of Fullagar, J. in Re Sinnott[11] that: "An adult son is, I think, prima facie able to `maintain and support' himself, and some special need or some special claim must, generally speaking, be shown to justify intervention by the Court under the Act." It was contended that this observation survived the amendments to the Act so that his Honour erred in concluding that such an approach was not open to him. Mr Boaden's alternative submission on this issue, as I understood him, was that an applicant in the position of the respondent, namely, one in good health, earning an income, established in life and able to maintain and support himself or herself, should generally show some special need or special claim to justify intervention by the court under the Act. Furthermore, although Mr Boaden did not so submit in terms, I took him to say by inference that it was not open to his Honour to conclude on the evidence that the respondent had satisfied the jurisdictional requirements, given particularly his age and good health, his sound financial position and prospects and the fact that he received a legacy of $150,000 under the testator's will.

70. In my view, his Honour did not err in rejecting the submission that, merely because he was an adult son of the testator, the respondent was required, as a pre-requisite to obtaining further provision out of the estate, to establish some special need or special claim on the estate. It is plain enough that s.91(4) - particularly paragraphs (e), (f) and (h) - requires the court, in considering the jurisdictional issues, to take into account what could be described as the applicant's moral claims on the estate and his or her financial needs, but they do not elevate them to a "special" status and do not require these matters to be established as a pre-requisite to a successful application. As McDonald, J. pointed out in Allan v. Allan[12], the provisions of s.91(4) draw no distinction between the applicant who is a son or daughter of the testator, and there is nothing in its paragraphs that suggests that an adult son must establish a special need or special claim before the court can exercise its discretion in his favour. On the contrary, it seems to me that, by stipulating the matters to which the court must have regard in determining the jurisdictional questions, the legislature has made it apparent that the court should not approach these matters with the pre-disposition contended for by the appellant. As I have noted, Coombes was a case that involved the claim by an adult son for provision out of his late mother's estate. It was not suggested in that case that the trial judge should have approached the determination of the threshold question in sub-s.(1) of s.91 on the basis of the predisposition contended for by the appellant.

73. For like reasons, I consider that the appellant's alternative submission on this issue must also fail. To say this, however, is not to overlook the observations of Ormiston, J. in Collicoat[13] that "need" must be demonstrated by the claimant "before the jurisdiction is exercised" and that:

"... those who are capable of supporting themselves comfortably, and are likely to be able to do so for the rest of their lives, will find it difficult to show any breach of moral obligation to make adequate provision for proper maintenance and support. The extent to which this requirement has been satisfied ... must, of course, be considered in the light of the provisions made for each applicant."

It is true that Ormiston, J. spoke[14] of an applicant establishing a special claim - because, for example, he or she had "contributed to the building of the testator's estate or given other assistance worthy of recognition" - or a special need - because, for example, he or she suffered a financial disaster - but his Honour did so in a context where he was considering the position of a middle aged son who has enjoyed "reasonable prosperity". On the face of things, such a claimant may well have difficulty in establishing a relevant need, but in certain circumstances, as his Honour postulated, he or she might demonstrate that he or she has a "special claim" on the testator's estate or a "special need," and was thus entitled to a favourable order. But I do not understand his Honour was thereby saying that such matters must be established as a prerequisite to a successful claim merely because the claimant is an adult son of the deceased. I think that his Honour recognised that whether the jurisdictional requirements have been made out by the claimant depends on the relevant facts and circumstances of the case, which are now to be identified by reference to paragraphs (e) to (p) of sub-s.91(4).[15] Similarly, in Hughes v. National Trustees Executors and Agency Co. of Australasia Ltd.[16], Gibbs, J. said in respect of a Part IV claim[17] by a 54 year old son of the testatrix who left the whole of her estate to charity:

"There are no rigid rules; the question whether adequate provision has been made for the proper maintenance and support of the adult son must depend on all the circumstances - that is, on all the facts that existed at the date of the death of the testator, whether the testator knew of them or not, and all the eventualities that might at that date reasonably have been foreseen by a testator who knew the facts."

79. Thus, although it may be very difficult for an adult son, who is in an independently sound financial position, to establish the jurisdictional requirements, it does not necessarily mean that he must show that he has some special need or claim before he can succeed on those issues. As Gibbs, J. said, and as Ormiston, J. inferred, in the above cases, whether the claimant has discharged the burden of establishing the two jurisdictional requirements will depend on all the circumstances of the case.

82. I now turn to what I have described as Mr Boaden's implicit claim that it was not open on the evidence for his Honour to find that the respondent had satisfied the jurisdictional requirements. In this context, Mr Boaden highlighted particularly the respondent's age, health and his established and flourishing veterinary practice. He also emphasised the size of the legacy that was provided to the respondent by the testator's will and that he had a sound start in life. It was contended that, given these factors and that it was the appellant who materially assisted his father in developing his farm and facilitated its increase in value, it could not be reasonably said that the testator abused his testamentary discretion. It seems to me that there is much force in that submission. Nevertheless, there was evidence on which this experienced judge could properly come to the impugned conclusions. His Honour was alive, as I have said, to the fact that the respondent did not present as one whose means of maintenance and support were obviously inadequate, but it was clearly open to him to take into account for these purposes the evidence that, at the date of the testator's death, the respondent was saddled with a debt that was not insignificant and which he tried, unsuccessfully, to liquidate, that he earned a relatively low income, that he needed the assistance of his wife in the conduct of his practice and that he had young children to support. Moreover, it was open to his Honour to take the view that the respondent's financial difficulties were, in large part, a consequence of the testator's failure to provide him with help when he most needed it, thereby giving rise to a moral duty that was extant at the date of his death. Since his Honour's decision on these matters involved, as I have noted, the making of value judgments and, since on appellate review they are to be treated as being akin to discretionary decisions, the appellant must establish, if he is to succeed, that his Honour erred in principle, or that the decisions are plainly wrong.

85. It was probably because Mr Boaden recognised this position that he concentrated in his submissions on seeking to demonstrate that the learned judge erred in principle. It is to these submissions that I now turn.

His Honour allegedly erred in assuming need for equality of treatment of sons

89. Counsel submitted that, notwithstanding that his Honour accepted that equality of treatment was not a necessary element of a testator's testamentary obligations, when it came to calculating the amount of the legacy that he considered should be ordered in favour of the respondent so as to satisfy the testator's moral obligation to him, he erred by seeking thereby to bring about a notional equality of treatment by the testator of his two sons in the provision of financial assistance to them for their respective businesses.

92. In my view, however, this contention misconstrues what his Honour relevantly said and did in determining what legacy should be ordered in favour of the respondent. As counsel accepted, his Honour specifically eschewed in his judgment equality of treatment by the testator of his two sons as a criterion for determining if he owed the respondent a moral duty and, if so, that it was breached. For instance, his Honour emphasised that equality of treatment by the testator of his two sons (in terms of financial assistance) was not "a necessary element of the testator's testamentary duty" and went on to say: "Nor is such equality the appropriate outcome [in this case]". His Honour then proceeded to reject what seems to have been the respondent's argument that the estate should be divided equally between the appellant and the respondent. It is true that, as I have already pointed out, the learned judge had regard to the financial assistance given by the testator to the appellant, but this was clearly a matter that was relevant to his considerations on the jurisdictional issues having regard to the provisions of s.91(4) of the Act, and in particular to paragraph (l).

95. It is also the case that, when the learned judge came to consider what further provision should be made for the respondent out of the testator's estate, he said that he had to determine "the amount which, as nearly as these things can be calculated, will allow [the respondent] an equal start in life to that enjoyed by his brother." It is plain enough, however, that in saying this his Honour meant no more than that he would have regard to the testator's relevant treatment of the applicant only as a rough yardstick by which to quantify the additional amount that should be provided to the respondent in order notionally to discharge the testator's moral obligation to him. There was, of course, no evidence before his Honour as to the value of the assistance that the testator gave the appellant, so that his Honour could only take that benefit into account in a general way for the purpose of quantifying the legacy that he ordered in favour of the respondent.

98. Thus, I consider that this complaint has no substance.

Increase in legacy by $50,000 not open to his Honour

102. The appellant also contended that it was not open to his Honour on the evidence to increase the legacy in the testator's will by $50,000 and that, in any event, the judge gave no explanation of how he arrived at this figure. Mr Boaden advanced six reasons in support of this claim. First, it was said, the determination catered to a past need that had already been fulfilled and thus, there was no residual need that had to be catered for by testamentary provision on the part of the testator. But, for the reasons I have already given, his Honour effectively found that the respondent's need existed at the time of the testator's death and, in particular, that the testator's moral obligation to provide the respondent with seed capital continued and was in existence at the date of his death. Secondly, it was said, his Honour wrongly sought to produce "rough equality between the two sons". Again, for the reasons I have given, this claim must also be rejected. What the learned judge did, as I have noted, was to use the perceived extent of assistance given by the testator to the appellant as a guide to determine the amount of the respondent's relevant entitlement. The third reason was, essentially, that the respondent had failed to demonstrate the existence of financial need on his part at the date of the testator's death. As I have explained, the judge was satisfied that, in view of his findings as to the respondent's financial position, he had demonstrated financial need at the relevant time. The appellant's fourth reason, namely, that the judge's decision failed to take into account that the family of the respondent's wife provided him with the assistance to which I have referred, must also be rejected because it is plain from his Honour's reasons that he took that matter into consideration in coming to his relevant conclusions. The fifth reason really amounts to the contention that his Honour's exercise of discretion constituted "a wrongful assumption of power to take property from the intended donee of the testator's bounty and to give it to someone else". For the reasons already given, however, in light of his Honour's findings that were relevant to the threshold issues, the exercise of discretion by him could not be said to amount to a wrongful assumption of power as the appellant contends.

105. Lastly, it was said that there was no evidence, and no reasons given by his Honour other than the pursuit of equality, to show why the further amount of $50,000 was appropriate. While it is the case that his Honour did not provide an arithmetic basis for reaching this sum, he nevertheless explained, as I have noted and as was accepted by the appellant in his written outline of submissions, that the judge sought to quantify the additional amount by reference to the approximate sum that would be necessary to put the respondent in a position "roughly equivalent with [the appellant] in the amount of the provision each received from his parents for his maintenance and support". Importantly, his Honour recognised, rightly, I think, that, in the circumstances, "[e]xactness in the calculation of [the relevant amount] is impossible". Similarly, his Honour acknowledged that "in these things, perfect equality is likewise impossible, and for that reason the attempt to maintain it might even be unwise." Thus, it is not surprising that, as appears from his Honour's reasons, his determination of the additional sum involved the application of an instinctive synthesis, a process that has been approved by this Court in like cases where an arithmetic calculation was not possible.[18] But, I do not accept the appellant's underlying contention that his Honour arrived at the sum of $200,000 by "plucking a figure out of the air". It is apparent from the judge's reasons that the amount was arrived at by him after a careful analysis of the relevant matters that were required to be considered pursuant to s.91(4)(e)-(p). His Honour was plainly concerned to identify, in broad terms, the amount which would allow the respondent an equal start in life to that enjoyed by the appellant by reason of assistance provided to him by the testator. It also seems clear enough from his Honour's reasons that he recognised that this amount could not be calculated in an arithmetic sense, and the contrary was not argued for the appellant. In arriving at the relevant amount his Honour had regard to matters to which reference has already been made, including the familial relationship, the respective financial position of the brothers, and the assistance provided to each by the testator. In the end, however, the learned judge had to settle on an amount which, in his view, the deceased, as a wise and just testator, would have provided in his will as a legacy for the respondent. In the circumstances, I think it is plain that his Honour discharged the obligation to give reasons for his decision that the legacy in favour of the respondent be increased to $200,000, as that requirement has been explained in cases such as Sun Alliance v. Massoud Insurance Ltd[19], Cropp v. Transport Accident Commission and Beglehole[20], D.P.P. v. Suckling[21], Garrett v. Nicholson[22] and Perkins v. County Court of Victoria[23]. I mention for completeness that, once his Honour resolved the jurisdictional questions in favour of the respondent, what additional amount should be ordered in his favour was a matter that involved an exercise of discretion by the learned judge. In my view, the appellant has not established that his Honour erred in principle in that regard or that the decision is plainly wrong.[24] In the circumstances, I consider that this complaint has no substance.

108. I mention for completeness that, in my view, there is no basis for the appellant's claim that the judge failed to recognise that the legacy in favour of the respondent was $150,000. Without referring to specific parts of his Honour's reasons, there are numerous references in them to the amount of the legacy, such as to make it obvious that the learned judge was well aware of the amount of this disposition in the respondent's favour and took that into account in reaching his conclusions.

Alleged error in dealing with offer of compromise

112. I now turn to consider the appellant's attack on his Honour's order that the estate of the testator pay the respondent's costs (albeit on a party/party basis). I have already described, briefly,[25] the circumstances in which his Honour made this order, but I should add for completeness that the offer of compromise did not state that any interest would be paid on the sum offered.

115. In making the impugned cost order his Honour was, of course, exercising a wide and relevantly unfettered discretion.[26] Thus, in order to establish the error contended for the appellant will have to demonstrate that his Honour erred in principle or that his decision is plainly wrong. I mention in passing that it is quite apparent from his Honour's reasons dealing with the appellant's costs application that he took particular care in the exercise of his discretion in that regard.

118. Although we heard extensive argument on the issue under consideration, ultimately, the question came down to whether his Honour intended that the legacy should not carry interest under Rule 78.05. This Rule provides:

"Where a judgment directs an account of legacies, then, subject to any direction in the will or codicil or any order of the Court, interest shall be allowed on each legacy at the rate of 8% per annum from the end of one year after the testator's death."

It was the appellant's essential case that when his Honour determined the substantive application he did not intend the legacy to bear interest under that Rule, or at all, and thus, made no mention of this in his reasons of 4 April 2002. It was pointed out that it was only when the order was authenticated that it was said that the legacy of $200,000 would "carry with it all the rights and incidents that would have attached thereto had the will provided such a legacy for the [respondent]". The appellant argued that it is unsurprising that his Honour intended that the legacy not carry interest, given that he found that a legacy of $200,000 (and, implicitly, no more) would put the respondent on terms of rough equality with the appellant and that it was (only) this amount that was required to discharge the testator's moral duty to the respondent. Mr Boaden also argued that, for other reasons, the additional amount of $50,000 should not carry any interest. It is not necessary, however, to examine those reasons because, as counsel accepted, the resolution of that issue also depends on whether his Honour intended that the legacy carry interest in the usual way.

123. In my view, it is plain that, at all relevant times, his Honour did not intend to exclude the interest contemplated by Rule 78.05 in relation to the legacy. First, in his reasons of 4 April 2002, his Honour made clear how he determined the capital value of the legacy that he proposed to order in favour of the respondent. That exercise was plainly unrelated to the question whether such a legacy should bear interest. That issue would be resolved, as his Honour well knew, by the operation of Rule 78.05 unless he ordered to the contrary. Consequently, the fact that his Honour said nothing about the matter in his reasons is indicative, I think, of his intention that the Rule was to operate rather than the contrary.

126. Next, his Honour's relevant order was not that the respondent be paid an extra $50,000 out of the testator's estate. Rather, properly characterised, it was an order that the respondent be paid a legacy of $200,000 out of the estate. That this is the legal effect of his Honour's order is made plain by the decision of Herring, C.J. in Re Bishop[27], to which we were referred by Dr Hardingham, who appeared for the respondent. The learned Chief Justice observed[28]:

"... the provision that the Court thinks fit to make in such a case includes both the beneficial interests that the Court adopts from the will as well as the additional ones that it decides to confer upon the applicant. It is, in other words, under the provision made in the order that the applicant thereafter receives such benefits for his or her maintenance and support, as he or she does receive from the estate of the testator and not, partly from this source and partly from the bounty of the testator. The provision in the will, being inadequate, is not just supplemented in such a case, but is supplanted by whatever provision the court thinks fit to make."

It seems obvious enough that his Honour must have understood that his order would have such operation and that, in the ordinary course, the legacy would attract interest after the expiration of the executor's year. In any event, the respondent was clearly entitled to be paid interest on the legacy of $150,000 and it is most unlikely that his Honour intended that he receive interest on that sum, but not on the additional $50,000.

131. 37 Nothing has been said for the appellant that persuades me that his Honour erred in the exercise of his discretion in relation to the operation of the above Rule. In the circumstances, it seems plain enough that the offer was not more favourable to the respondent than the judgment and, therefore, his Honour did not relevantly err in deciding that the appellant was not entitled to the advantage of Rule 26.08(3).

135. For the above reasons, I consider that this appeal must be dismissed.

140. I agree with Chernov, J.A., for the reasons which his Honour gives, that the appeal should be dismissed.

143. I wish, however, to add to his Honour's observations with respect to the continuing relevance of the conception of moral duty to the jurisdictional questions posed by ss. 91(1) and 91(3) of the Administration and Probate Act 1958.

146. The court is bound in answering each of those question to have regard to the matters mentioned in ss. 91(4)(e) to (o) and, pursuant to s. 91(4)(p), to any other matter considered to be relevant. Self evidently, such matters are of themselves incapable of providing an answer to either question. To reason from the matters mentioned in ss. 91(e) to (p) to a conclusion that a testator had a responsibility to make provision for a claimant, or that the testator failed to make adequate provision for the claimant, necessitates the application of a test or standard to the matters to be considered. That test remains one of whether and if so what provision a wise and just testator would have thought it his moral duty to make in the interests of the claimant[29].

[1] [1999] 3 V.R. 803 at 815-824, a case which was decided on 30 October 1995.

[2] [1997] 2 V.R. 359 at 361 per Tadgell, J.A. and at 364-366 per Callaway, J.A., where the decision of Ormiston, J. in Collicoat was cited with approval.

[3] See Coombes v. Ward [2004] VSCA 51 at [2], [6], [7] per Winneke, P., and [11]-[13] per Chernov, J.A. and at [27], [28] per Bongiorno, A.J.A. In that case, this Court upheld the decision of the trial judge who rejected the claim by the deceased's adult son for further and better provisions out of his late mother's estate under Part IV of the Act because he failed to establish the threshold requirement prescribed by sub-s.(1).

[4] I mention for completeness that in Singer v. Berghouse (No.2) [1994] HCA 40; (1994) 181 C.L.R. 201, Mason, C.J., Deane and McHugh, JJ. expressed doubt at 209 that the well-known statement of Salmond, J. in In Re Allen; Allen v. Manchester (1922) 41 N.Z.L.R. 218 at 220-221 reflected the correct approach to be adopted by a court exercising jurisdiction under legislation akin to that of Part IV of the Act. This obiter dictum was criticised by Ormiston, J. in Collicoat at 815-819 and by this Court in Grey v. Harrison at 360-361 per Tadgell, J.A., with whom Charles, J.A. agreed, and at 365-366 per Callaway, J.A.

[5] See Coombes v. Ward at [7] per Winneke, P. and at [12] per Chernov, J.A.

[7] That is the date at which the jurisdictional requirements must be established - Coates v. National Trustees Executors and Agency Co. Ltd. [1956] HCA 23; (1956) 95 C.L.R. 494 at 505-508 per Dixon, C.J.

[8] See Singer v. Berghouse at 210 per Mason, C.J., Deane and McHugh, JJ

[10] [2003] N.S.W.C.A. 190 at [38].

[11] [1948] VicLawRp 48; [1948] V.L.R. 279 at 280.

[12] [2001] VSC 242 at [67].

[15] Notwithstanding that his Honour was concerned with the earlier legislation, so that what he said was referable to the requirements of s.91(3) of the Act, these observations, I think, apply equally to the threshold requirement now imposed by sub-s.(1) of s.91 of the Act.

[16] [1979] HCA 2; (1979) 143 C.L.R. 134 at 147-148.

[17] The legislation under which the son brought his claim was relevantly similar to the provisions of Part IV of the Act as they existed prior to the recent amendments.

[18] Grey v. Harrison at 366-367 per Callaway, J.A., Madden v. Singvongsa [2003] VSCA 62 at [16] per Warren, A.J.A.

[19] [1989] VicRp 2; [1989] V.R. 8 at 19-20 per Gray, J. with whom Fullagar and Tadgell, JJ.A. agreed.

[20] [1998] 3 V.R. 357 at 376 per Charles, J.A.

[21] [1999] VSCA 190 at [5-6] per Tadgell, J.A.

[22] [1999] WASCA 32; (1999) 21 W.A.R. 226 at 248.

[23] [2000] VSCA 171; (2000) 2 V.R. 246 at 270-272 per Buchanan, J.A.

[24] House v. R [1936] HCA 40; (1936) 55 C.L.R. 499 at 504-505. Australian Coal and Shale Employees' Federation v. The Commonwealth [1953] HCA 25; (1953) 94 C.L.R. 621 at 627 per Kitto, J.

[26] Section 24 of the Supreme Court Act 1986 and Rule 63.02. See, for example, Puddy v. Borg [1973] VicRp 61; [1973] V.R. 626 at 628 per Winneke, C.J., Smith and Menhennitt, JJ. and Latoudis v. Casey [1990] HCA 59; (1990) 170 C.L.R. 534 at 557 per Dawson, J. (who was in dissent on a point not relevant to this issue).

[27] [1952] VicLawRp 77; [1952] V.L.R. 543.

[29] Collicoat v McMillan [1999] 3 VR 803 at p. 815, per Ormiston, J.A.