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[1980] HCA 31
appellant. Appeal allowed. Order of the Court of Appeal set aside and in lieu thereof order that the appeal to that court be dismissed with costs. Costs of the appeal to the Court of Appeal of the appellants...
A widow who nursed her terminally ill husband at home for years, despite her own painful illness, successfully appealed to the High Court for more money from his large estate. The will gave her only a small yearly payment that matched an earlier court maintenance order from when they were separated. The Court held that a fair husband would have done better, taking into account her selfless care, the rising cost of living, her need for a new car and holidays, and the fact that his grown children from earlier marriages were already well provided for. The original trial orders giving her an extra $50,000 lump sum and a higher yearly payment were restored.
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Noel Collingwood Goodman died on 1 January 1976 at the age of 77. He had been married three times. His will, executed on 24 March 1975, gave his third wife, Marie Dempster Lascelles Goodman, an annuity of $2,080 per annum until her death or remarriage, charged on a debt owed by a family company. The residue of the estate, after legacies of $1,000 to each of ten grandchildren, gifts of furniture to his two daughters, and four life policies on the widow's life (effectively $2,353 to each of her three children), was divided one-half to his son and one-quarter to each daughter, subject to them attaining 30 years of age. The testator forgave debts totalling $65,275 owed by his three adult children from prior marriages. The net probate value of the estate was $572,062; after duties of $267,906 the distributable estate was approximately $294,000 before administration expenses.
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The appellant had married the testator in October 1965 when she was nearly 45. After an initial period of affluent married life that included overseas holidays and gifts, difficulties arose in 1970. In 1971 she and her children left the Wahroonga home. She obtained a maintenance order in May 1972 of $40 per week for herself and $10 per week for her youngest son. The testator paid that sum until his death. At his request she returned in January 1973. From the middle of 1973 until his death she nursed him through a disease that obstructed his airways. She was a qualified nurse. From mid-1974 he was bedridden. For the last 18 months she nursed him night and day; for the last six months it was full-time care. She washed, shaved and attended to him, performed all household duties, cared for the garden, and rarely left the house. The testator refused hospital or outside nursing help. He paid her $50 per week for housekeeping, apparently the same sum as the maintenance order.
At the testator's death the appellant was 55. She owned a home unit at Hornsby valued at $35,000 in which she lived, bank accounts of $2,478, shares and securities worth approximately $114,000 producing slightly over $6,000 gross per annum, a car worth $2,750, contents worth $6,000, jewellery and effects worth $8,000, and $24,000 in interest-bearing deposits whose income (approximately $2,000 per annum) was paid to or for her children and grandchildren although she remained legally entitled to it. Her tax on separate income was about $1,700 per annum. She had not worked as a nurse for years and could no longer do so because of spondylitis diagnosed in 1966 that caused constant pain. One son remained dependent at the date of death but not at the hearing. Her annual expenses, excluding capital items, were approximately $5,000.
Waddell J accepted that the testator had a moral duty to provide a moderately substantial lump sum for holidays, car replacement, contingencies and assistance to her children without invading her own capital, together with a higher annuity. He ordered a lump sum of $50,000 and an annuity of $3,000. The Court of Appeal unanimously allowed the executors' appeal and dismissed the application, although Mahoney J.A. took a different view from Hutley and Reynolds JJ.A. on the relevance of the widow's nursing care. By majority (Gibbs, Stephen and Mason JJ; Murphy and Aickin JJ dissenting in varying degrees) the High Court allowed the appeal, set aside the Court of Appeal orders and restored the orders of Waddell J, with costs dealt with on a solicitor-and-client basis out of the estate.
Gibbs J (with whom Stephen and Mason JJ agreed) held that the principles stated in Bosch v Perpetual Trustee Co required the court to consider all circumstances, including the "deserts" of the claimant. The widow's devoted nursing for two and a half years, including full-time care for the last six months in accordance with the testator's wishes, was a powerful circumstance. Gibbs J noted the primary judge's estimate that she saved the estate possibly $40,000 in nursing fees. Even without a precise figure, the sacrifice itself strengthened her moral claim. The Court rejected Hutley J.A.'s view that such conduct was relevant only to disentitlement. The quotation from Salmond J in In re Allen was adopted as the governing test: what a just and wise testator fully aware of all relevant circumstances would have thought his moral duty.
Inflation was a mandatory consideration. A wise testator would know that an annuity fixed in 1975 would lose purchasing power. The annuity of $2,080 was the same figure as the 1972 maintenance order made during separation; a just testator would not have continued that sum unaltered after the widow had returned and provided intensive care. The widow's own assets produced income that, with the annuity, exceeded her stated expenses, but she faced future capital drawdowns (for example, to replace her car), the risk that her spondylitis would worsen, and the need for a contingency fund and a holiday of the kind she had previously enjoyed. The testator's children were in comfortable circumstances, had received lifetime benefits and held shares in the family company; their claims were not urgent.
The lump sum was a permissible way to protect against inflation and to provide flexibility. Objections to indexation (delay in administration, increased costs, greater ultimate burden on residuary beneficiaries) were acknowledged. The primary judge had not impermissibly taken into account assistance to the widow's adult children at the stage of quantifying relief. The discretionary judgment was not shown to be erroneous and the strong claim of the widow, coupled with the absence of strong competing claims, justified restoring the orders.
Stephen J agreed, adding a reservation that lump sums have a "hit or miss" quality because future inflation and lifespan cannot be predicted accurately, yet he was not prepared to disturb the primary judge's choice. Mason J agreed with Gibbs J without additional reasons. Murphy J would have dismissed the appeal, emphasising that moral duty alone does not confer jurisdiction; the widow was not left without adequate provision. Aickin J would have allowed the appeal only to the extent of increasing the annuity; he considered the lump sum involved errors of principle once it was accepted that the children were no longer dependent at the hearing date and that there was no evidence she wished to travel overseas again.
Before Goodman v Windeyer the law was settled by Bosch v Perpetual Trustee Co that "proper" maintenance connotes something beyond mere adequacy and requires regard to all circumstances, including the moral claims of the applicant. The statement of Salmond J in In re Allen had been repeatedly approved. Cases such as Coates v National Trustees Executors & Agency Co Ltd and Blore v Lang showed that a claimant's contributions to the testator's affairs could strengthen a moral claim, but there was uncertainty whether this extended beyond financial contributions and whether it applied to wives as well as to adult sons. Hutley J.A. in the Court of Appeal had treated nursing care as relevant only to disentitlement, relying on dicta in Blore v Lang.
Goodman v Windeyer clarified that the claimant's conduct towards the testator, including selfless nursing that involves personal sacrifice, is positively relevant to the assessment of deserts and the content of proper maintenance, whether or not it produces a calculable financial saving. It confirmed that inflation is not merely a discretionary factor at the second stage but must be considered at the threshold jurisdictional stage. It also confirmed that the existence of a dependent child of the claimant is relevant, though the weight diminishes if the child ceases to be dependent by the hearing date. The decision reinforced that a lump sum may be ordered to hedge inflation and meet foreseeable capital needs, notwithstanding traditional judicial reluctance to give large capital sums to elderly widows.
After the decision the law continued to treat the twin questions of jurisdiction and quantum as involving overlapping discretionary judgments, as later discussed in White v Barron (cited in the judgments). The emphasis on holistic consideration of the claimant's "deserts" has guided subsequent family provision applications where caregiving has been prominent.
Gibbs J at the passage citing Salmond J: "The Act is designed to enforce the moral obligation of a testator to use his testamentary powers for the purpose of making proper and adequate provision after his death for the support of his wife and children, having regard to his means, to the means and deserts of the several claimants, and to the relative urgency of the various moral claims upon his bounty. The provision which the Court may properly make in default of testamentary provision is that which a just and wise father would have thought it his moral duty to make in the interests of his widow and children had he been fully aware of all the relevant circumstances."
Plain-English translation: The law exists to make sure people do the right thing in their wills towards their closest family. "Proper" means what a decent, sensible husband or father would have done if he knew everything about his wife's efforts, her health, the children's needs and what the estate could afford. It is not just about paying the bare minimum to keep the lights on.
Gibbs J on the relevance of conduct: "One of the circumstances that must be considered in deciding upon the deserts of a claimant to a testator's estate, and in determining whether proper maintenance has been provided, is the manner in which that claimant has conducted himself or herself in relation to the testator... the very fact that a claimant has been a dutiful and devoted spouse or child is one of the relevant circumstances of the case..."
Plain-English translation: How the wife behaved towards her husband while he was alive matters. If she dropped everything to nurse him at home as he wanted, that counts in her favour when deciding whether the will was fair. The court is not handing out prizes for good behaviour, but it cannot ignore real sacrifice when working out what "proper" support looks like.
On inflation: "There can, in my opinion, be no doubt that the Court, in deciding whether the appellant had made out a case for relief, was entitled, and indeed bound, to consider the likely effect of inflation. That this is so seems well established: see Coates... and Re Buckland."
Plain-English translation: Everyone knows money loses value over time. A sensible husband planning his will would factor that in. Leaving an annuity that will be worth less and less each year can mean the will does not make proper provision, even if the numbers look all right on the day he dies.
On the lump sum: "It has been recognized that it may be appropriate to make to a widow an out-and-out payment to provide a fund to meet eventualities that are likely to occur... and the same course can, I consider, be taken to provide for inflation."
Plain-English translation: Sometimes the best way to protect someone is to give her a lump of capital she can invest herself rather than tying her to a fixed yearly sum that inflation will erode. The judge was entitled to do that here.
The decision is triggered where a surviving spouse, usually a widow, has provided significant personal care to the testator during a prolonged terminal illness, especially where that care fulfilled the testator's express wishes and avoided substantial external nursing costs. It applies when the testamentary provision is limited to a modest annuity that replicates a pre-death maintenance order made during separation, even though the spouse has separate assets that produce income exceeding current expenses. The estate must be large enough that the testator's children from prior relationships have no pressing financial need and have already received inter vivos benefits. The claimant's own ill-health that prevents employment, the presence (at death) of a dependent child, and the foreseeability of future capital needs (new car, medical costs, holidays previously enjoyed) are all material. The combination of strong caregiving "deserts", weak competing claims, and the erosive effect of inflation on fixed income will ordinarily satisfy the threshold that the testator failed to make adequate provision for proper maintenance, opening the discretion to order both an increased annuity and a lump sum.
The precedent does not apply where the caregiving was short or assisted by paid help, where the claimant's own resources are ample and liquid, where the competing beneficiaries themselves have genuine needs, or where the will already contains indexed or inflation-protected benefits. It is not engaged by moral duty in the abstract; concrete inadequacy measured at the date of death must be shown.
The judgment has been treated as authoritative on the positive relevance of a claimant's non-financial sacrifices. Gibbs J's rejection of the Court of Appeal's limitation of conduct to disentitlement only has been followed in subsequent decisions that weigh caregiving as strengthening the moral claim. The adoption of the In re Allen formulation from Bosch v Perpetual Trustee Co is routinely cited as the starting point for the jurisdictional inquiry. The confirmation that inflation is a mandatory consideration at the first stage, rather than a discretionary add-on, has guided assessments of fixed annuities. The approval of lump sums to hedge inflation and meet contingencies, despite traditional caution, has been followed where the estate is substantial and residuary interests will not be unduly prejudiced.
Aickin J's separate reasons emphasising that the two-stage process involves overlapping value judgments have been cited in later cases that decline to draw a bright line between jurisdiction and discretion. Murphy J's insistence that moral duty alone cannot create jurisdiction if adequate provision has in fact been made has been referred to in decisions that dismiss claims by applicants with substantial independent means. The discussion of Coates, Blore v Lang and Hughes has reinforced that services to the testator, whether or not financially valuable, are relevant across all classes of applicant, not merely adult sons. Overall the decision is treated as confirming a holistic, fact-sensitive approach that gives real weight to devoted spousal care in large estates where other claims are weak.
The judgments left open whether an appeal from a finding of inadequate provision is governed by discretionary appeal principles or by the stricter House v The King standard; both Gibbs J and the discussion in White v Barron (cited) noted the question but found it unnecessary to decide. The extent to which a claimant's "diversion" of income from assets legally hers to children or grandchildren can be ignored by the court remains unsettled; Gibbs J accepted it should not be treated as available income in the circumstances, but the limits of that approach were not defined. Whether a lump sum can be ordered solely to enable support of adult non-dependent children without invading the claimant's own capital was touched on but not conclusively resolved; Gibbs J held only that the primary judge had not impermissibly taken that purpose into account at the quantification stage.
The interaction between the statutory power and equitable doctrines of estoppel or constructive trust arising from caregiving was not addressed. How courts should quantify savings from unpaid nursing when evidence is "vague and unsatisfactory" (as here) was left to case-by-case estimation. Finally, the judgments contain divergent views on the weight to be given to prior inter vivos maintenance orders once reconciliation and caregiving have occurred; whether such an order sets a floor, a ceiling or is simply one circumstance among many was not exhaustively determined. These areas continue to require careful factual analysis in each case.
For the reasons given by Gibbs J., I would allow the appeal and restore the order made by Waddell J.
Mrs Goodman claims an order making adequate provision for her "proper maintenance and advancement" out of the estate of her late husband, Noel Collingwood Goodman, who died on 1st January 1976. The facts are set out in Gibbs J's, judgment. The primary judge made an order in Mrs Goodman's favour which increased her annuity from $2,080 to $3,000 and provided in addition a legacy of $50,000. This order was set aside by the Full Court of the Supreme Court. In my opinion, the Full Court was correct. Mrs Goodman did not establish that she was "left without adequate provision for (her) proper maintenance, education, or advancement in life" (s. 3 of the Testator's Family Maintenance and Guardianship of Infants Act, 1916 N.S.W., as amended), and was therefore not entitled to any order for provision out of the estate.
This is another case in which the question of whether an applicant was left without adequate provision is confused by the introduction of considerations of moral duty. In Re Bodman [29] , Hoare J. said:
Unless the applicant can show that he or she was, at the relevant time, in "need" of proper provision from the estate then the Court has no jurisdiction to make an order even though it considers that there was a clear failure of a moral obligation on the part of the testator. 1. [1972] Qd. R. 281, at p. 284.
The reference to lack of jurisdiction is inappropriate but the principle stated is correct. Unless an applicant is left without adequate provision, he or she is not entitled to an order, even if the circumstances disclose a breach of moral obligation. I adhere to what I said in Hughes v. National Trustees Executors and Agency Co. (Australasia) Ltd. [30] .
"Left without adequate provision" means that an applicant did not have adequate provision from the will or otherwise. A person may fail to satisfy the description of being "left without adequate provision" even though no provision is made for him or her in the will. In considering what is adequate provision, the fact that a widow has a child dependent on her (even though not a child of the testator) is a relevant consideration. "Adequate provision" for persons in the designated class may include provision which would enable them to discharge legal or moral obligations, such as the care of children. "Advancement in life" is not confined to the early part of an applicant's life, although it is generally applicable to younger rather than to older persons (see Blore v. Lang [31] ). Provision for advancement may, for example, extend to retraining or the gaining of a qualification which could advance and perhaps enable an applicant to maintain himself or herself.
This appeal comes to this Court from the Court of Appeal of the Supreme Court of New South Wales which has allowed an appeal from a judgment of Waddell J. in the Equity Division. Waddell J. has made an order under the Testator's Family Maintenance and Guardianship of Infants Act, 1916 N.S.W., as amended, in favour of the widow of Noel Collingwood Goodman deceased, having found that the testator had not by his will made provision for the widow's proper maintenance. The Court of Appeal decided that adequate provision had been made by the will and accordingly allowed the appeal. It is from that order that the present appeal is made.
The testator died on 1st January 1976. He had been married three times, each of his previous wives having died. He was survived by three children, a son aged forty-seven who was a child of the first marriage, and two daughters aged twenty-six and twenty-three respectively, both being children of the second marriage. The appellant had been previously married, her husband having died on 9th June 1965. There were three children of that marriage, a daughter and two sons. The appellant was born in 1920 and had married the testator on 22nd October 1965.
The testator left a net estate of some $572,062. After payment of duty his distributable estate amounted to some $294,306. By his will, he left to the appellant until her death or remarriage an annuity of $2,080, payable half-yearly, which was to be charged upon a fund of $30,000 being part of a debt due to the testator by Collingwood Investments Pty. Ltd. He gave pecuniary legacies of $1,000 to each grandchild living at his death, there being in fact ten. He gave to one of his daughters half of his furniture and a quarter share in residue provided that she should attain the age of thirty years and he also forgave a debt owed by her to him of $11,000. He gave to his other daughter the other half of his furniture and a quarter of the residue subject to the same proviso and forgave her a debt of $22,275. His son was given one half of the residue and a debt of $32,000 owed by him to the testator was forgiven. He left four life assurance policies on the life of the appellant to such of the appellant's children (by a former marriage) as should survive him and attain the age of twenty-one years. That bequest provided in effect a legacy of $2,353 to each of the appellant's three children.
At the date of the testator's death, the appellant had the following assets: (a) a home unit at Hornsby valued at approximately $35,000; (b) amounts to her credit in a savings and current account, $2,478; (c) two interest-bearing deposits amounting to $11,000, the interest on which was paid directly to her son David James Woodburn; (d) a savings investment account of $2,000, interest on which was also paid directly to him; (e) an interest-bearing deposit of $4,000, the interest on which was paid directly to Michael John Woodburn; (f) three interest-bearing deposits amounting to $7,000, the interest on which was paid into a trust account to be used for the benefit of the plaintiff's grandson, Daniel Joseph Trotter; (g) shares and securities having a market value of some $114,000; (h) a 1972/73 Toyota Corona motor car valued at about $2,750; (i) furniture, crockery, cutlery and other contents of the home unit valued at approximately $6,000; (j) jewellery, clothing and other personal effects valued at approximately $8,000.
The appellant's income from stocks and securities for the year ended 30th June 1975 was $6,192 and for the year ended 30th June 1976 was $6,522. The income from the deposits and savings investment account which she had diverted to her children and a grandchild amounted to approximately $2,000 a year. The testator had, during the period immediately prior to his death, paid to her on account of housekeeping, the sum of $50 per week, out of which she paid for food, gas, electricity, rates and taxes and household replacements. The income tax on her separate income for the year ended 30th June 1975 amounted to about $1,700. She did not derive any income from the home unit which she owned and, as Waddell J. observed, it was "presumably occupied by one or more of her children". The appellant was a registered nurse and held a certificate in general nursing and a diploma from an obstetrical training school. She did not work as a nurse during her previous marriage nor during her marriage to the testator and since about 1966 she had suffered from spondylitis and was not at the date of the hearing able to work because of her condition.
After the marriage, the appellant had lived with the testator with their respective children at the testator's house at Wahroonga. The testator had apparently retired from active work shortly after the marriage when he was in his early fifties. There is no material showing his income during the years of the marriage. However, he had made a number of substantial presents to the appellant and they had had some holidays abroad together. He had given her $1,000 for her daughter's wedding and $2,000 to purchase a motor car. However, in October 1970 the testator had ordered her out of the house and on 16th July 1971 she left with her children. In October 1971 the appellant brought proceedings in the Hornsby Children's Court for maintenance and on 19th May 1972 an order was made that the testator pay her $40 per week maintenance for herself and $10 per week for her son of her former marriage. The testator subsequently asked her to return and she did so in January 1973 and remained with him until his death. The testator paid that amount to her until the date of his death.
It appears that he became ill in about May 1973 and spent a short time in hospital. After his return home the appellant nursed him. During a period of six months prior to his death he required full-time nursing which was provided by the appellant. It appears that the testator was unwilling to have nursing attention from anyone else during that period.
As well as the provision made by the testator in his will for his children, it appears that he had established a family company called Collingwood Investments Pty. Ltd., of which he was governing director until his death and in which his children held shares. It appears from the judgment of Waddell J. that each of his children held in aggregate about 70 per cent of the issued shares in that company. During the year ended 30th June 1975 each received a dividend of $7,700 and during the year ended 30th June 1976, $9,180. The articles of association were not put in evidence but Waddell J. assumed that each of the testator's three children would be entitled on a winding-up to a pro-rata share of the assets. Those assets comprised shares and securities said to have a market value as at 30th June 1976 of about $600,000. The extent to which these shareholdings arose from gifts or other forms of benefaction from the testator did not appear. The only relevance of these shareholdings is that, with other material, they show that the children were not in need of further provision out of the estate.
Waddell J. accepted an argument put to him on behalf of the appellant that, although she had substantial independent means of her own, the estate of the testator was of such a size that he should have provided for her a lump sum to enable her to have a comfortable overseas holiday, she not having had one since 1969, to replace her car when necessary and to deal with unexpected contingencies and "to assist her with her responsibilities with her children" without making inroads into her own assets. He concluded that the testator had a moral duty to provide a "moderately substantial lump sum" and "an annuity somewhat higher than that provided by the will". He concluded that there should be a lump sum payment of $50,000 to the appellant and that her annuity should be increased to $3,000.
Waddell J. proceeded upon the basis that there would be an available balance in the estate of approximately $200,000 but this is affected by two factors which make the achievement of that figure uncertain. The first is the value of the remaining assets in the estate, namely the business of "Newport Liquor Service", the premises upon which the business was conducted and the premises occupied by the manager. No up-to-date valuations of those assets were provided by the executors but one of the executors swore an affidavit in which he said that the executors were of the opinion that the value of the goodwill of the liquor business (probate value $148,095) had diminished considerably since the date of death of the deceased due to price-cutting which had taken place in the liquor retailing industry since that date. He was not cross-examined on that affidavit and he did not quantify the amount of the reduced value to which he referred, nor did he provide comparative figures as to turnover or profits. Waddell J. appears to have regarded the evidence as having been to the effect that some other similar businesses had diminished in value but adopted the probate value in the absence of any other evidence as to valuation. This appears to have been the only course open to him. It cannot, however, be regarded as satisfactory for the executors not to provide current valuations of the remaining assets or estimates thereof when, as the authorities establish, the question of quantification of any further provision must be made upon the basis of the value estimated as at the date of the hearing. A second qualifying factor is that no estimate at all was provided as to the amount of the costs of the administration of the estate. It is clear that the administration is by no means complete and could not be carried further until the final result of these proceedings is known. That, however, does not appear to me to be a sufficient reason for failing to provide any estimate at all. Under the provisions of the will the executors are entitled to commission and some estimate of that should have been provided, as well as an estimate of other costs of administration incurred to date and expected for the future. It would have been proper also to provide some estimate of the costs at first instance of the present proceedings upon the footing that it was likely that at least some part of those costs would have to be borne by the estate.
In the result, considerable uncertainty exists as to the amount which will be available when all the expenses of administration, including such part of the costs of this litigation as have to be borne by the estate, are known. If the view is to be taken that proper provision was not made for the appellant, the quantification of "adequate provision for proper maintenance" must present substantial difficulties, some of which would have been avoidable.
It is well settled that the determination of applications under this legislation involves two stages, the first of which is the determination of the adequacy of the provision made in the will, a process which is not discretionary in the ordinary sense even though it does, or often may, involve a value judgment. Thus the two stages overlap to some extent because a conclusion that the provision in the will is inadequate will often, though not always, involve a comparison between what is given and what ought to have been given. If it is determined that adequate provision was not made for an applicant, then the amount of the provision to be made by the court does involve the exercise of a judicial discretion, the review of which on appeal is subject to well-recognized limitations. The authorities establishing these propositions are referred to in my judgment in White v. Barron [32] . Other authorities dealing with this matter generally are discussed in that case in all the judgments and there is no need to go over that ground again. The present case does not appear to me to involve any new principle or new problem; it involves no more than the application of well-settled principles to the particular facts of the case.
It was argued for the appellant that there was a moral duty on the testator to make additional provision so as to allow for the maintenance of the children of the wife's former marriage. The Court of Appeal took the view that in having regard to this factor Waddell J. made an error of law. To treat this factor as a matter of law would in my opinion be itself an error of law. In the present case it would have been a demonstrable error of fact because at the date of the hearing the evidence showed that none of the wife's children was dependent on her. To the extent that Waddell J. based his conclusion on this consideration he was in error.
It may be that cases could occur in which the particular facts might warrant taking this factor into account in considering whether there was adequate provision but this is certainly not such a case. It would nevertheless be wrong to regard this factor as always irrelevant as a matter of law.
It is important to avoid elevating what are purely factual considerations into questions of law or of principle. Conclusions of fact for which there is no evidentiary basis may however constitute a ground of appeal for the discretion may miscarry because of such errors.
The details of the appellant's assets at the date of the death of the testator have been set out above, from which it appears that she had a home unit which was at least adequate for her purposes and considerable investments. The investments comprised shares in public companies valued at that date at $114,000 and interest-bearing deposits at varying rates of interest between 8.75 per cent and 9.5 per cent the interest from which she had "diverted" to her children, the youngest of whom was aged sixteen years on the date of the testator's death. The details of the arrangement by which this "diversion" was effected were not stated, other than that it was said not to be a permanent arrangement and that it either would end or could be brought to an end so that the income thereafter would come to the appellant. Those deposits totalled $24,000. Thus the appellant had income-earning assets of approximately $138,000 together with the contents of the home unit (furniture, crockery, etc.) and jewellery, clothing and personal effects and a motor car, the approximate total value of which came to $16,750 but which were, from their nature, not income-earning. The home unit was valued at some $35,000 at the date of death and, if the appellant lived in it, no income would be derived from it. As against this, the estate after payment of death duties was estimated on probate valuations at approximately $265,000 plus the sum of $30,000 upon which the annuity of $2,080 given to the appellant was charged. From the figure of $265,000 there must be deducted the costs of administration and so much of the costs of these proceedings as will have to be borne by the estate, of which there are no estimates.
The Court of Appeal took the view that the provision was not inadequate and therefore set aside the order of Waddell J. In my opinion there was not adequate provision made by the will in so far as income was concerned, the amount provided having in the circumstances been fixed without regard to circumstances prevailing at the date of death and likely to prevail thereafter. I am however satisfied that discretion in ordering further provision by way of a lump sum as well as an increase in the annuity miscarried. The argument which the trial judge accepted with respect to the provision of a lump sum appears to me to involve errors in principle which warrant interference with the exercise of his discretion. By the time of the hearing, at which date the discretion is to be exercised, none of her children was dependent on her and it could not be said that there was any duty resting on the testator to "assist her with her responsibilities with her children" or to provide for an overseas holiday, there being no evidence that she wished to have such a holiday. The fact that during the testator's lifetime he and his wife had travelled abroad is no warrant for concluding that there was a moral duty to make provision to enable her to do so again out of an estate reduced by some 50 per cent by death duties. In my opinion there was no basis for providing a pecuniary legacy of $50,000.
I have said that there was inadequacy in the income provision. It was plainly open to the trial judge to conclude that the income provision should be increased and there is no basis for interfering with his discretion in ordering the increase in the annuity referred to. The additional annuity should be secured in such manner as the executors think fit.
In the course of argument for the appellant reliance was placed on the nursing assistance which the appellant had provided during his illness. There may be cases where such material could be relevant, particularly if it bore on a widow's state of health or otherwise on her needs. There is however no suggestion of that kind in this case.
A further question was raised which asked whether a testator fails in his moral duty if he does not make provision for the effect of inflation on an annuity given by his will. In my opinion there is no such general rule and so to argue is to attempt to turn a factual consideration into a general principle or a rule of law. The discretionary nature of the jurisdiction has been repeatedly emphasized since the legislation was first introduced, and its exercise involves careful consideration of all relevant facts in each individual case. In some cases failure to make some such provision may warrant the court's intervention. In many cases the making of such a provision by some form of indexation of an annuity will delay the administration of the estate and perhaps prevent any distribution of the residue until the death of the annuitant. Moreover it may over a period require resort to capital to maintain the process of "indexation", perhaps to the point of exhaustion of the residuary estate. Whether such an event may occur will depend on many factors, in particular the size of the estate, the age of the annuitant, competing claims and of course the rate of inflation. Such a provision seems to me to be more likely to create difficulties than to solve them and a provision by way of income from a share of residue more likely to be fair in many cases. The present is not a case where such a provision was sought or considered. It is enough to say again that it is not a matter suitable for a general rule of "principle" and can never be more than one possible means of making further provision if all the circumstances warrant it, bearing in mind not merely the interests of the applicant but also those of other persons taking under the will.
For the reasons which I have given I would allow the appeal and restore so much of Waddell J.'s order as directed that the annuity should be increased to $3,000 per annum.
Goodman
Windeyer
High Court of Australia Gibbs, Stephen, Mason, Murphy and Aickin JJ. Goodman v Windeyer [1980] HCA 31
Appeal allowed. Order of the Court of Appeal set aside and in lieu thereof order that the appeal to that court be dismissed with costs. Costs of the appeal to the Court of Appeal of the appellants in that court on the trustee basis and of the respondent in that court on the common fund basis to be paid out of the estate. Costs of the appeal to this Court of all parties as between solicitor and client to be paid out of the estate.