BETWEEN : DAVID JOHN NEALE LEMON (as executor of the Estate of the late MICHAEL JOHN MAYNARD WRIGHT)

Jurisdiction : SUPREME COURT OF WESTERN AUSTRALIA

Citation : MEAD -v- LEMON [2015] WASC 71

Succession - Wills - Inheritance - Appeal against a decision granting an application made by the respondent under s 6(1) of the Family Provision Act 1972 (WA) for further and better provision from the testator's estate - Value of the Deceased's estate about $1 billion - Testator made provision for the respondent in an amount of up to $3 million under a clause of his will read with the terms of a discretionary trust deed - The master held that the will did not make adequate provision for the respondent's proper maintenance and support within s 6(1) of the Act - The master ordered provision for the respondent in the sum of $25 million instead of the provision made for her in the clause of the testator's will read with the terms of the discretionary trust deed - Whether the master erred at the first stage of the process required by s 6(1) of the Act in that he failed to determine what the needs of the respondent were and he misconstrued the will - Whether the master's exercise of discretion at the second stage of the process required by s 6(1) of the Act miscarried in that he regarded his discretion as unfettered because of the size of the testator's estate - Proper construction and application of s 6(1) of the Act

Master's orders making provision for the respondent set aside

Subject to conditions (including bringing to account $3 million already received by the respondent pursuant to the master's orders) provision be made for the respondent in the sum of $6,142,000 in substitution for the provision made for the respondent under the Deceased's will

Second Appellants : Ms J A Needham SC & Ms A A Gomez

Australian Broadcasting Commission v Australasian Performing Right Association Ltd [1973] HCA 36; (1973) 129 CLR 99

Barns v Barns [2003] HCA 9; (2003) 214 CLR 169

Blore v Lang [1960] HCA 73; (1960) 104 CLR 124

Borlaug v University of Western Australia [2001] WASCA 425

Bosch v Perpetual Trustee Co Ltd [1938] AC 463

Brennan v Permanent Trustee Company of New South Wales Ltd [1945] HCA 17; (1945) 73 CLR 404

Buckland v Trustees, Executors and Agency Co Ltd (1966) 40 ALJR 164

Chacmol Holdings Pty Ltd v Handberg [2005] FCAFC 40; (2005) 215 ALR 748

Chappell v Hewson [2013] WASCA 15

Coates v National Trustees Executors and Agency Co Ltd [1956] HCA 23; (1956) 95 CLR 494

Collicoat v McMillan [1999] 3 VR 803

Devereaux-Warnes v Hall [No 3] [2007] WASCA 235; (2007) 35 WAR 127

Ellis v Dariush-Far [2007] QCA 398; (2007) 242 ALR 635

Fell v Fell [1922] HCA 55; (1922) 31 CLR 268

Franklins Pty Ltd v Metcash Trading Ltd [2009] NSWCA 407; (2009) 76 NSWLR 603

Friend v Brien [2014] NSWSC 613

Goodman v Windeyer [1980] HCA 31; (1980) 144 CLR 490

Gorton v Parks (1989) 17 NSWLR 1

Gregory v Hudson (No 2) (Unreported, NSWSC, 18 September 1997, Library No 9704375)

Gregory v Hudson [1999] NSWCA 221

Grey v Harrison [1997] 2 VR 359

Hedman v Frazer [2013] NSWSC 1915

Hickin v Carroll (No 2) [2014] NSWSC 1059

Hughes v National Trustees, Executors and Agency Co of Australasia Ltd [1979] HCA 2; (1979) 143 CLR 134

Hunter v Hunter (1987) 8 NSWLR 573

Lloyd-Williams v Mayfield [2005] NSWCA 189; (2005) 63 NSWLR 1

McCosker v McCosker [1957] HCA 82; (1957) 97 CLR 566

Mead v Lemon [2015] WASC 71

Permanent Trustee Co Ltd v Fraser (1995) 36 NSWLR 24

Perrin v Morgan [1943] AC 399

Pontifical Society for the Propagation of the Faith v Scales [1962] HCA 19; (1962) 107 CLR 9

Re Buckland, deceased [1966] VicRp 58; [1966] VR 404

Re Sinnott, deceased [1948] VicLawRp 48; [1948] VLR 279

Singer v Berghouse [1994] HCA 40; (1994) 181 CLR 201

Taylor v Farrugia [2009] NSWSC 801

Vigolo v Bostin [2005] HCA 11; (2005) 221 CLR 191

Waddingham v Burke [2015] WASC 65

White v Barron [1980] HCA 14; (1980) 144 CLR 431

Worladge v Doddridge [1957] HCA 45; (1957) 97 CLR 1

1 BUSS P: The appellants appeal against a judgment of Master Sanderson entered after the master heard the respondent's claim under s 6(1) of the Family Provision Act 1972 (WA) (the Act) in respect of the disposition of the estate of the late Michael John Maynard Wright effected by his will. I will refer to the late Mr Wright as 'the Deceased'.

2 On 26 April 2012, the Deceased died at the age of 74. On 6 March 2012, he made his last will. On 11 March 2012, the will was altered by a codicil. On 10 July 2012, probate was granted to the first appellant, Mr Lemon, who was the Deceased's solicitor. I will refer to the will, as altered by the codicil, as 'the Will'.

3 The respondent, Ms Mead, is the Deceased's daughter.

4 The Deceased made provision for the respondent in the Will in an amount of up to $3 million. The terms of the Will governing this provision were complex.

5 The respondent contended that the Will did not make adequate provision for her proper maintenance, support, education and advancement in life within s 6(1) of the Act.

6 The first-named and second-named second appellants (Ms Baldock and Ms Burt) are the Deceased's daughters and the respondent's half-sisters.

7 The Deceased's estate was partly distributed before the respondent's claim was determined and, as a result, the third-named second appellant, VOC Group Ltd, is now controlled jointly by Ms Baldock and Ms Burt.

8 The hearing before the master occurred between 2 - 5 February 2015. The master published his reasons for decision on 26 February 2015 and made orders on 24 March 2015.

9 The master decided that the Will did not make adequate provision for the respondent's proper maintenance and support within s 6(1). He made a conditional order, pursuant to s 6(3) read with s 10 of the Act, that a new clause be inserted in the Will, in substitution for the existing clause which made provision for the respondent. The new clause reads:

I GIVE DEVISE AND BEQUEATH to my daughter [the respondent] the sum of $25,000,000.00 absolutely payable by 14 May 2015 and if not paid by that date then so much of the legacy that remains unpaid shall be indexed at the rate of 5% per annum until payment.

10 The master was correct in concluding that the Will did not make adequate provision for the respondent's proper maintenance and support within s 6(1) of the Act. However, the exercise of his discretion to order that provision be made for the respondent in the sum of $25 million was flawed. I would allow the appeal and make lesser provision for the respondent than the provision ordered by the master. My reasons are as follows.

Overview of the relationship between the Deceased, the respondent and the first-named and second-named second appellants

11 The Deceased was survived by his wife, Mary, whom he had married on 2 May 1997, and by his three earlier wives from whom he had been divorced.

12 The Deceased was survived by three adult children born of his earlier marriage to Jennifer Turner. The children were the first-named second appellant, Ms Baldock (born on 28 August 1971), the second-named second appellant, Ms Burt (born on 18 December 1973) and a son, Myles Wright (born on 26 December 1978).

13 The Deceased was also survived by the respondent, Ms Mead, who was born on 3 September 1995. The respondent's mother is Elizabeth Kirkby. Ms Kirkby and the Deceased never cohabited. Their relationship ended when Ms Kirkby was pregnant with the respondent.

14 The respondent grew up with her mother. Her first recollection of the Deceased was from the age of 3 or 4. She wondered why the Deceased did not live with her family. From the age of 6 the respondent had some contact with the Deceased. However, the contact was sporadic and the Deceased appears to have taken little interest in her welfare. He was consistently late when he arranged to meet with her and, apart from one or two nights, the respondent never spent an extended period with him. The respondent did not have a close relationship with the Deceased. That was wholly attributable to his decisions.

15 During the respondent's childhood the Deceased provided little material support to her or her mother. He paid money for childcare in accordance with his statutory obligation. He also paid fees for private schooling and gave the respondent some pocket money. His gifts to the respondent were of nominal value. The Deceased never provided a home for the respondent and her mother, despite the mother having to move on a number of occasions from one rental premises to another.

16 The first-named and second-named second appellants also did not have a close relationship with the Deceased. The master made these observations:

The picture which emerges is of a difficult man more at home in the world of business than dealing with emotions and interpersonal relationships. That is not to say there was not real affection between [the Deceased] and [the first-named and second-named second appellants]. Undoubtedly there was. Moreover, the fact [the first-named and second-named second appellants] had developed the Voyager Estate Winery in such an effective way was clearly a source of great pride to [the Deceased]. But it would be a mistake to suggest [the Deceased] and [the first-named and second-named second appellants] constituted one big happy family [58].

17 The master described the Deceased's estate as 'colossal' [6].

18 The statement of assets and liabilities attached to the first appellant's affidavit sworn on 1 June 2012 in support of his application for probate revealed that:

(a) The gross value of the Deceased's estate in Western Australia was about $865,792,000.

(b) The Deceased had total debts of about $2,000,000.

(c) The Deceased had assets of about $US105,000 in the United States of America.

(d) The principal asset of the Deceased's estate was his interest in Wright Prospecting Pty Ltd, which had an estimated value of $750,000,000.

19 The master noted that counsel for the respondent in his submissions speculated that the size of the Deceased's estate may be in excess of $1 billion. The master said that no issue had been taken by the appellants with that estimate [6].

20 The first appellant distributed the bulk of the Deceased's estate before the hearing. As the master commented, once a claim is made against an estate under the Act an executor and trustee should not distribute or make a further distribution of the estate without obtaining appropriate directions from the court [7].

21 At the time of the hearing before the master the undistributed value of the Deceased's estate was $45,272,231.18. Of that amount, a little over $3 million was cash and the balance comprised inter-company loans.

The entitlement of beneficiaries (other than the respondent) under the Will

22 The Will is a lengthy and detailed document. It confers a variety of benefits on members of the Deceased's family and his friends. Notably, the Will contains the following provisions:

(a) For the Deceased's son, Myles Wright, a home unit together with a capital sum of $15,000,000 to be paid over a five-year period together with an income stream of $649,447 per annum until the capital sum is paid. By cl 3(d)(ii) of the Will, the annual payments 'shall commence not earlier than the 2nd anniversary of the date of [the Deceased's] death'.

(b) For the Deceased's wife, Mary, a capital sum of $10,000,000 to be paid over a five-year period together with an income stream of $865,930 per annum until the capital sum is paid. By cl 4(c) of the Will, the annual payments 'shall commence not earlier than the 2nd anniversary of the date of [the Deceased's] death'.

(c) For the third-named second appellant, VOC Group Ltd, the Deceased's shares in Wright Prospecting Pty Ltd.

(d) For the first-named and second-named second appellants, Ms Baldock and Ms Burt, a beneficial interest as primary beneficiaries in a trust fund to which the residue of the Deceased's estate was paid or transferred.

23 The value of the entitlement of each of the first-named and second-named second appellants under the Will, as set out in the statement of assets and liabilities attached to the first appellant's affidavit in support of the application for probate, is about $400,000,000.

The entitlement of the respondent under the Will

24 The respondent's entitlement under the Will is contained in cl 6A(c)(i)(E). Clause 6A provides, relevantly:

• all shares which may be registered in my name as at the date of my death in public listed companies (hereinafter called 'my Public Company Shares');
• all my real estate as at the date of my death (hereinafter called 'my Real Estate');
• the rest and residue of my estate of whatsoever nature and wheresoever situate,

to my Trustees UPON TRUST to sell, call in and convert the same into money with power to postpone such sale, calling in and conversion for as long as they shall think fit without being liable for loss and after payment of my debts, funeral, testamentary and administration expenses out of the money arising thereby or out of my ready money to hold the residue (if any):

(a) to set up a fund (hereinafter called the 'Trust Fund') to consist of:

(i) my Public Company Shares, my Real Estate and the residue of my estate; and

(ii) any income added to the Trust Fund from time to time;

(b) to invest the Trust Fund as authorised by law or any clause in my Will;

(c) subject to sub-clauses (d) and (f):

(i) to pay or apply the whole or any part of the annual net income of the Trust Fund upon the trusts set out in this clause 6A of my Will in order of priority:

(A) ...

(B) ...

(C) ...

(D) ...

(E) Olivia Trust No. 2

(a) I note that I have given to the trustee of the trust called the Olivia Trust No 2 dated 18 April 2007 between Peter Cornelius Beekink as Settlor and me, Michael John Maynard Wright, as trustee (the 'Trust' as amended, supplemented, novated or replaced from time to time), sufficient funds to purchase a commercial building in Peel Street, O'Connor for $720,000 (which I currently rent from the Trust) plus $20,000.00 in cash. I note that periodically I place surplus cash on deposit with the trust at interest but on call;

(b) I propose to make 5 annual payments to the trustee of the Olivia Trust No 2 to increase the trust fund up to a maximum amount of $3 million in cash and/or property. These annual payments will be increased annually by the CPI increase;

(c) if I die prior to making all of those annual payments, and for so long as [the respondent] is a beneficiary under the Olivia Trust No 2, to pay the balance of those 5 annual payments to the trustee of the Olivia Trust No 2 as if I were alive but only up to a maximum amount of $3 million (subject to CPI Increase) in cash and/or property inclusive of any amounts paid into that trust under Clause 3 above, as well as any loans I may have made to the Trust under Clause 6A(c)(i)(E)(a) above to which I waive repayment;

(d) subject to clause 6A(c)(i)(E)(b) and (c), the amount of the last payment I make to the trustee of the Olivia Trust No 2 before my death will be the amount of each of the balance of these payments to the trustee of the Olivia Trust No 2 under my Will;

(e) the amount of each payment referred to in clause 6A(c)(i)(E)(c) will be increased annually by the CPI increase;

(f) it is my belief that the payments contributed generally in support of [the respondent] and to the trustee of the Olivia Trust No 2 during my lifetime (in this regard my Trustees should have my personal records to ascertain the extent of my support to [the respondent] and provide evidence of this support to such persons as they consider appropriate) and the provision for further contributions to the trustee of the Olivia Trust No 2 after my death, are such as to provide for the adequate and proper maintenance, support, education and advancement in the life of [the respondent];

(g) for the purposes of this clause 6A(c)(i)(E) only:

CPI means the Consumer Price Index - All Groups for Perth, Western Australia, published by the Australian Bureau of Statistics, or any index which officially replaces it. If no index officially replaces it, the trustees will arrange for an expert to assess what it would have been

CPI Increase means the figure determined by dividing the current CPI by the previous CPI

Current CPI means the CPI number for the quarter ending immediately before the relevant payment

Previous CPI means the CPI for the quarter ending immediately before the payment immediately preceding the payment to be increased by the CPI increase

AND IT IS EXPRESSLY DECLARED AND PROVIDED that notwithstanding anything hereinbefore contained my Trustees may in the absolute discretion of my Trustees during the whole or any part of the period from the date of my death until my estate has been fully distributed accumulate the whole or any part of the balance of such income and deal with the same as hereinafter provide BUT SUBJECT THERETO:

(ii) the net annual income arising before my estate has been fully distributed in any year ending upon the thirtieth day of June which has not been paid or applied or appropriated by my Trustees pursuant to the provisions of the preceding clause hereof shall be held by my Trustees UPON TRUST to add such income to the capital moneys of the Trust Fund for the benefit of the person or persons who shall eventually become entitled thereto but my Trustees may in the absolute discretion of my Trustees from time to time and at any time or times pay or apply the said accumulations or any part or parts thereof to any of the persons mentioned in the preceding paragraph (i) as if the same had not been accumulated but were income arising from the Trust Fund in the then current year;

(d) to exercise any powers given by law or my Will and, in this regard, the powers given in Clause 8 to apply assets for the maintenance, education, advancement or benefit of beneficiaries shall apply in relation to both capital and income of the Trust Fund, and in addition my Trustees shall until the Date of Distribution (as defined in sub-clause (g) below) accumulate surplus income to the Trust Fund so that it becomes part of the Trust Fund and shall be distributed on the Date of Distribution in accordance with the provisions of sub-clause (f) below;

(e) to determine in my Trustees' absolute discretion what part or parts of the capital or income of the Trust Fund will be resorted to in payment of any income tax or other liability arising under my Will; and

(f) subject to the provisos to this sub-clause, to distribute the balance of the Trust Fund on the Date of Distribution to the following persons in the following proportions:

(i) my daughter ALEXANDRA ODETTE BURT as to fifty per cent (50%); and

(ii) my daughter LEONIE ANGELA MAYNARD BALDOCK as to fifty per cent (50%),

(g) in the interpretation of this Will 'Date of Distribution' shall mean either:

(i) the date being eighty (80) years from the date of my death; or

(ii) such earlier date as my Trustees may in my Trustees' absolute discretion determine.

(The reference to the 'Olivia No 2 Trust dated 18 April 2007' should be to the Olivia Trust No 2 dated 18 April 2008. The parties acknowledged that this was a typographical error.)

25 The trusts created by cl 6A(c)(i) of the Will provide for the Trustees (subject to cl 6A(d) and (f)) to pay or apply the whole or any part of the annual net income of the fund set up under cl 6A(a) for the objects specified in cl 6A(c)(i)(A) - (F). Clause 6A(c)(i) requires that any payment or application of the income be 'in order of priority' as stipulated in cl 6A(c)(i)(A) - (F). So, the trust created by cl 6A(c)(i)(E) in favour of the Olivia Trust No 2 (the Trust) ranks in order of priority after the trusts created by cl 6A(c)(i)(A) - (D) and before the trust created by cl 6A(c)(i)(F).

The provisions of the Trust Deed creating the Trust

26 The Trust is a discretionary trust. It was created by a deed dated 18 April 2008 (the Trust Deed) between Peter Beekink as settlor and the Deceased as trustee.

27 On 6 October 2013, New Motion Holdings Pty Ltd was appointed as the new trustee of the Trust.

28 In the background or recitals to the Trust Deed it is stated that '[o]ne of the main objectives of [the Trust] is to provide for the advancement and benefit of [the respondent]'.

29 The relevant operative provisions of the Trust Deed are as follows.

30 Clause 1.1 of the Trust Deed contains numerous definitions.

31 The term 'Vesting Date' is defined in cl 1.1 as follows:

Vesting Date means the first to occur of:

(a) the date which is 80 years from the date of this Deed;

(b) any earlier date appointed by [the Deceased] personally to be the Vesting Date;

(c) If [the Deceased] dies before [the respondent], and [the respondent] has not attained the age of 30 years, the earlier of the date [the respondent] attains the age of 30 years or the date [the respondent] dies;

(d) The date [the respondent] attains the age of 30 years;

(e) The date of [the respondent's] death.

32 Clause 5 provides for the disposition of the Trust Fund on the 'Vesting Date'. It reads:

5.1.1 The date on which [the respondent] attains the age of 30 years and:

(a) [the respondent] satisfies the Trustee (acting reasonably) that she is the natural daughter of [the Deceased], and

(b) [the respondent] is not an Excluded Person,

the whole of the Trust Fund will vest in [the respondent].

5.1.2 After the date of [the respondent's] death and:

(a) [the respondent] has not attained the age of 30 years; and

(b) [the Deceased] is still alive,

the whole of the Trust Fund will vest in [the Deceased].

5.1.3 After the date of [the respondent's] death and:

(a) [the respondent] has not attained the age of 30 years; and

(b) [the Deceased] is dead,

the whole of the Trust Fund will vest in the executor of the will of [the Deceased] to be held in accordance with the terms of the distribution of his estate.

5.1.4 any other date than those referred to in clauses 5.1.1 - 5.1.3 the Trustee has a discretion to pay or apply the entire amount, in such shares as the Trustee determines, to or for the benefit of one or more of the Beneficiaries (to the exclusion of the others) who are alive or in existence on the Vesting Date and if there are no Designated Beneficiaries then eligible, the whole of the Trust Fund shall vest in the executor of the will or personal representative of [the Deceased] to be held in accordance with the terms for the distribution of his estate.

33 The term 'Beneficiary' is defined in cl 1.1 as follows:

Beneficiary means any of the following:

(a) [the respondent], [the Deceased], any other person nominated in writing by [the Deceased] personally (Designated Beneficiaries);

(b) any company in which any one or more of the Designated Beneficiaries, either directly or indirectly through one or more interposed entities:

• holds a controlling interest; or
• holds or is beneficially entitled to more than 50% of the voting power in the company or to rights to more than 50% of any dividends or any distribution of capital either on a return of capital or on a winding up,

(but only until such Designated Beneficiary becomes an Excluded Person) excluding

• the Settlor;
• any person in the capacity as trustee of any other trust to the extent that a distribution to that trustee would infringe the rule against perpetuities; and
• any Excluded Person.

(c) Any trust, association or company formed for charitable purposes.

34 The term 'Excluded Person' is defined in cl 1.1 to mean 'any person who has become ... an Excluded Person in accordance with this Deed'. The definition then states that '[o]nce a person has become an Excluded Person that person remains an Excluded Person for the balance of the term of the Trust'. Clause 14 provides:

Excluded Persons

14.1 Any person whether a Designated Beneficiary or not who:

14.1.1 if [the Deceased] at any time before the Vesting Date, declares that person or class of persons is or are an Excluded Person;

14.1.2 is a child of [the respondent];

14.1.3 has become an alcoholic and/or whose capacity for rational behaviour in a competent and satisfactory manner has been impacted by alcohol;

14.1.4 has at any time suffered a conviction relating to drugs, their use or any other illegal association therewith in any recognised form;

14.1.5 is or has been in the opinion of my Trustees recently suspected or knowingly had any involvement or association whatsoever in relation to illegal drugs;

14.1.6 in the opinion of my Trustees has become a drug addict or become involved with illegal drugs in the manner described in the preceding subclauses as a result of the legal use of drugs for any reason whatsoever;

14.1.7 is in the opinion of my Trustees a member of or in any other way involved with any religious body other than the Roman Catholic, Anglican, Presbyterian, Baptist, Uniting or other similar traditional faiths; or

14.1.8 has been convicted of a felony at any time after the death of [the Deceased] or within 10 years preceding the death of [the Deceased],

will be an Excluded Person and, as such, will be excluded as a Beneficiary under this Deed.

Effect of declaration

14.2 A declaration in accordance with, or exclusion under, clause 14.1 takes effect on the date specified in the declaration or the occurrence of the relevant event (as the case may be) and continues to have effect thereafter. However, such declarations and events do not derogate from any interest in the Trust Fund to which any Beneficiary is indefeasibly entitled on or before the date of the declaration.

Declaration revocable unless otherwise specified

14.3 A declaration or opinion made in accordance with clause 14.1 may be revoked at any time before the Vesting Date, unless [the Deceased] specifies at the time of making the declaration or opinion that it is to be irrevocable.

(a) the term 'Capital' is defined to mean 'that part of the Trust Fund which is not Distributable Income';

(b) the term 'Distributable Income' in relation to an Accounting Period is defined to mean, subject to cl 3.1, 'all amounts of the Trust Fund which are either Trust Income or Tax Income and includes both in respect of that Accounting Period'; and

(c) 'Trust Fund' is defined to mean the sum of $10 initially settled on the Trustee by the Settlor; any other property which is settled on the Trustee to be held on the trusts described in the Trust Deed; any other property which is borrowed or raised by the Trustee to be held on the trusts described in the Trust Deed; and all accretions thereto.

36 Clause 3 is concerned with the income of the Trust Fund. It provides:

Distributable Income

3.1 Notwithstanding the definition of Distributable Income in clause 1.1, the Trustee has a discretion to determine the amount of the Distributable Income of the Trust Fund with respect to an Accounting Period. Subject to the exercise of this discretion, the amount of the Distributable Income with respect to an Accounting Period is whichever is the greater of Trust Income or Tax Income for that Accounting Period.

Trustee's discretion

3.2 In relation to the Distributable Income of the Trust Fund, the Trustee has a discretion either:

3.2. 1 to pay or apply all or part of the Distributable Income as or for the benefit of [the respondent] and in particular for her education (to the date [the respondent] attains the age of 23 years or the attainment of her first tertiary qualification, whichever is the earlier to occur), maintenance, health and medical expenses;

3.2.2 to pay or apply all or part of the Distributable Income, in such shares as the Trustee determines, to or for the benefit of one or more of the Beneficiaries (to the exclusion of the others) who are alive or in existence from time to time; or

3.2.3 to accumulate all or part of the Distributable Income.

Exercise of Trustee's discretion

3.3 On or before the last day of each Accounting Period until the Vesting Date, the Trustee may exercise its discretion under clause 3.2 in respect of part or the entire Distributable Income of the Trust Fund for that Accounting Period.

Failure to exercise discretion

3.4 Where the Trustee fails to exercise its discretion in accordance with clause 3.3 in respect of all or any part of the Distributable Income of the Trust Fund for an Accounting Period (unallocated amount), the Trustee is deemed to have accumulated the Distributable Income.

Exercise of discretion irrevocable

3.5 Where the Trustee has exercised its discretion in accordance with clause 3.3 or is deemed to have exercised its discretion in accordance with clause 3.4 that exercise of discretion is irrevocable.

37 Clause 4 is concerned with the capital of the Trust Fund. It provides:

Trustee's discretion

4.1 In relation to the Capital of the Trust Fund, the Trustee or [the Deceased] has a discretion to pay or apply all or part of the Capital, in such shares as the Trustee or [the Deceased] determines, to or for the benefit of one or more of the Beneficiaries (to the exclusion of the others) who are alive or in existence from time to time.

Exercise of Trustee's discretion

4.2 Without:

4.2.1 limiting clause 4.1, it is the intention and wish of the Trustee and the Appointor as at the date of this Deed that there will not be any vesting of any of the capital of Trust Fund upon [the respondent] until both of the following events have occurred:

(a) [the Deceased] has died; and

(b) [the respondent] has attained the age of 30 years; and

4.2.2 being under any obligation, until the Vesting Date [the Deceased] may exercise his discretion under clause 4.1 in respect of all or part of the Capital of the Trust Fund at any time.

Exercise of discretion irrevocable

4.3 Where [the Deceased] has exercised his discretion in accordance with clause 4.2, that exercise of discretion irrevocable.

Power of advancement

4.4 In exercise of the discretions conferred by either or both of clause 3 or clause 4 of this Deed, the Trustee may pay, apply or accumulate Property comprising or comprised in the Trust Fund for the advancement or benefit of [the respondent].

38 Clause 7 makes provision for the appointment, removal and resignation of the Trustee. The term 'Appointor' is defined in cl 1.1 to mean '[the Deceased], or any person who becomes the Appointor in accordance with this Deed'. Clause 7 provides, relevantly:

Appointor

7.1 The Appointor may resign at any time provided that the Appointor appoints another person to be Appointor. If the Appointor dies, the office and powers of Appointor will vest in the executor of the will of the appointor or the deceased Appointor's legal personal representative. If the Appointor becomes a Disqualified Person, the office and powers of Appointor will vest in the person responsible for managing the affairs of the Appointor.

Power to appoint and remove Trustee

7.2 Subject to clause 7.3, the Appointor has the following powers:

7.2.1 at any time to remove the Trustee, or, if there is more than one Trustee, to remove one or more of them; and

7.2.2 to appoint a new Trustee or Trustees, either in addition to one or more existing Trustee or Trustees, or in substitution for one or more Trustees who have been removed, who have resigned, or whose office has been vacated.

Ineffective exercise of power

7.3 A purported exercise of the power under clause 7.2 is ineffective and void where the Appointor purports:

7.3.1 to remove a sole Trustee or all of the Trustees without appointing a replacement Trustee; or

7.3.2 to appoint himself or herself as a Trustee; or

7.3.3 to appoint a Beneficiary as a Trustee (unless the Beneficiary is a Beneficiary solely in its capacity as the trustee of another trust).

39 Clause 16 makes provision for the resettlement of the Trust Fund. It provides:

Trustee may resettle Trust Fund

16.1 The Trustee may, at any time before the Vesting Date, with or without consideration, pay or transfer all or part of the Trust Fund to the trustee or trustees of another trust under which all or any of the Beneficiaries are beneficiaries (whether absolutely, contingently, presumptively or prospectively), provided that, as a result:

16.1.1 no person who is excluded from the definition of Beneficiary acquires an interest in the resettled property; and

16.1.2 the rule against perpetuities is not infringed.

Effect of resettlement

16.2 Property which is resettled in accordance with clause 16.1:

16.2.1 is no longer held on the trusts described in this Deed;

16.2.2 becomes subject to the terms of the trust on which it is resettled; and

16.2.3 remains subject to the laws of the State, where the trust on which it is resettled is governed by the laws of the State.

40 Clause 18 makes provision for the alteration of the Trust Deed. It provides:

18.1 Notwithstanding any other provisions of this Deed, the Trustee may, at any time before the Vesting Date, by Deed, alter any provision of this Deed except:

18.1.1 clause 5;

18.1.2 clause 7; and

18.1.3 this clause 18.

provided that:

18.1.4 neither the Settlor nor any person who was formerly the trustee of the Trust (other than in that person's capacity as trustee of another trust) becomes a Beneficiary; and

18.1.5 the rule against perpetuities is not infringed.

The master's findings in relation to the respondent's entitlement under the Will and the Trust Deed

41 The master made the following findings in relation to the respondent's entitlement under the Will and the Trust Deed:

(a) The sole benefit to the respondent under the Will was derived by her pursuant to the Trust Deed.

(b) At the date of the Deceased's death, the assets of the Trust comprised about $20,000 cash and a commercial property in Peel Street, O'Connor which had a market value of about $720,000. A debt charged against the O'Connor property had been extinguished by the Will.

(c) At the date of the Deceased's death, the Deceased had not made any of the five annual payments to the Trust for the purpose of increasing its capital 'up to a maximum amount of $3 million': cl 6A(c)(i)(E)(b).

(d) There was some uncertainty as to the operation of cl 6A(c)(i)(E)(c) of the Will. The master explained:

Assuming the property in the Trust together with the cash amount to $740,000 then the executor is to pay into the Trust an amount of $2,260,000. It may or may not be the case [that the Will] requires annual instalments of $452,000. It may require no more than annual instalments of whatever amount the trustee deems appropriate with a final balloon payment bringing the total capital in the Trust up to $3 million (adjusted by CPI).

It is also not clear what the phrase 'up to a maximum amount of $3 million' actually means. Counsel for [the respondent] suggested it provided the trustee with a discretion to make payments up to that amount or to make payments of a lesser amount. Counsel for [the appellants] submitted the intent of [the Will] was clear and the trustee was required to ensure the capital amount in the Trust was $3 million. It is not for me to determine precisely what cl 6A(c)(i)(E)(c) of [the Will] means. But it does appear the position is arguable [22] - [23].

(e) At the date of the Deceased's death, the first appellant and the respondent had never met.

(f) Clause 3 and cl 4 of the Trust Deed conferred on the trustee an absolute discretion with respect to the income and capital of the Trust. According to the master, 'if the trustee decided to retain all of the earnings of the Trust until [the respondent] was [aged] 30 there is nothing she could do to alter that decision' [24]. The master added that the respondent 'has no right to call for any part of the capital' [25]. In short, the respondent 'under the terms of the Trust is at the mercy of the trustee' [25].

(g) The definition of 'Beneficiary' in cl 1.1 of the Trust Deed includes '[a]ny trust, association or company formed for charitable purposes'. Accordingly, the Trust Deed enables 'all of the income to be distributed to [an organisation formed for charitable purposes]', although that was 'most unlikely [to occur]' [26].

(h) Clause 14 of the Trust Deed was '[t]he strangest aspect of the Trust' and operated in 'an entirely oppressive fashion' [27].

42 As I have noted, at the date of the Deceased's death the assets of the Trust comprised about $20,000 cash and a commercial property in O'Connor which had a market value of about $720,000.

43 After the Deceased's death, the rental for the commercial property was increased in about July 2012 to the market rent for the property. Also, after the Deceased's death the first appellant (as executor and trustee of the Will) made two payments of $100,000 each to the trustee of the Trust pursuant to cl 6A(c)(i)(E)(c) of the Will [37].

44 At the hearing of the appeal, counsel for the appellants informed the court that no other payments had been made by the first appellant (as executor and trustee) to the trustee of the Trust pursuant to cl 6A(c)(i)(E)(c) (appeal ts 51 - 52, 79).

45 At the hearing of the appeal, counsel for the appellants also informed the court that since the master delivered judgment in the primary proceedings, no payments of capital or income had been made by the trustee of the Trust to the respondent (appeal ts 115 - 116).

The relevant provisions of the Act and the applicable legal principles

46 In Devereaux-Warnes v Hall [No 3] [2007] WASCA 235; (2007) 35 WAR 127, I examined (Pullin JA agreeing) the relevant provisions of the Act and the applicable legal principles. It is convenient to reproduce and elaborate upon the relevant substance of what I wrote on that occasion.

If any person (in this Act called 'the deceased') dies, then, if the Court is of the opinion that the disposition of the deceased's estate effected by his will, or the law relating to intestacy, or the combination of his will and that law, is not such as to make adequate provision from his estate for the proper maintenance, support, education or advancement in life of any of the persons mentioned in section 7 as being persons by whom or on whose behalf application may be made under this Act, the Court may, at its discretion, on application made by or on behalf of any such person, order that such provision as the Court thinks fit is made out of the estate of the deceased for that purpose.

48 By s 10, an order takes effect as a codicil to the will or, in the case of intestacy, as a modification to the applicable rules of distribution.

49 Section 7 enumerates the categories of eligible claimants. They comprise, in general, a spouse or de facto partner; a former spouse or former de facto partner who, at the date of the deceased's death, was receiving or entitled to receive maintenance from the deceased; children; grandchildren; and parents.

50 By s 6(1) of the Act, the court is required to carry out a two-stage process.

51 The first stage involves the determination of whether the disposition of the deceased's estate effected by will or the law relating to intestacy is not such as to make adequate provision from his or her estate for the proper maintenance, support, education or advancement in life of the claimant. The first stage has been described as the 'jurisdictional question', which means no more than that the court's power to make an order in the claimant's favour is conditioned upon the court first being satisfied of the state of affairs referred to in the opening passage of s 6(1), ending with the words 'made under this Act'. See Singer v Berghouse [1994] HCA 40; (1994) 181 CLR 201, 208 - 209 (Mason CJ, Deane & McHugh JJ); Vigolo v Bostin [2005] HCA 11; (2005) 221 CLR 191 [4] - [6] (Gleeson CJ), [56] (Gummow & Hayne JJ).

52 The first stage involves a question which is strictly one of fact, notwithstanding that it involves the exercise of value judgments. The evaluative character of the decision arises from the fact that the court must determine whether the claimant has been left without 'adequate' provision for his or her 'proper' maintenance, etc. See White v Barron [1980] HCA 14; (1980) 144 CLR 431, 441 - 443 (Mason J), 456 - 457 (Wilson J); Goodman v Windeyer [1980] HCA 31; (1980) 144 CLR 490, 509 (Aickin J); Singer (210 - 211) (Mason CJ, Deane & McHugh JJ).

53 The second stage, which only arises if the 'jurisdictional question' is determined in the claimant's favour, involves the exercise of discretion: the court may order that such provision as the court thinks fit be made out of the deceased's estate for the proper maintenance, etc, of the claimant. See White (442 - 443) (Mason J), (449) (Aickin J); Goodman (501 - 502) (Gibbs J), (509) (Aickin J); Singer (211) (Mason CJ, Deane & McHugh JJ).

54 The question which arises at the first stage must be formulated and determined as at the date of death of the deceased, having regard to all material facts that existed at the date of death, whether the deceased knew of them or not, and all material eventualities that might at that date reasonably have been foreseen by a deceased who knew the facts. See Coates v National Trustees Executors and Agency Co Ltd [1956] HCA 23; (1956) 95 CLR 494, 508 (Dixon CJ), 515 - 516 (Webb J), 526 - 528 (Kitto J); Hughes v National Trustees, Executors and Agency Co of Australasia Ltd [1979] HCA 2; (1979) 143 CLR 134, 147 - 148 (Gibbs J); White (437) (Barwick CJ), (441) (Mason J), (448 - 449) (Aickin J); Goodman (498 - 499) (Gibbs J).

55 In Coates, Dixon CJ observed that, in determining the question which arises at the first stage, the court must look to what is 'necessary or appropriate prospectively' from the date of death, including events which are contingent as well as those which are certain or exceedingly likely to happen (508). Advantage may be taken of hindsight if the subsequent occurrences are within 'the range of reasonable foresight' (508). See also White (441) (Mason J).

56 At the second stage the court exercises its discretion to order adequate provision for the proper maintenance, etc, of the claimant by reference to the circumstances as they exist at the date of the order. See Coates (509) (Dixon CJ); White (441) (Mason J); Goodman (499) (Gibbs J).

57 In Bosch v Perpetual Trustee Co Ltd [1938] AC 463, Lord Romer (delivering the advice of the Privy Council) observed that the discretionary power given to the court at the second stage 'must always be one of great difficulty and delicacy' and 'must always be one largely of guess-work, especially in a case ... which is concerned with children of tender age of whose needs in the future nothing can be predicted with any certainty' (483).

58 The discretionary power conferred by the Act at the second stage is to interfere with a deceased's dispositions when he or she has left a claimant without adequate provision for his or her proper maintenance, etc. The court is empowered to order such provision from the deceased's estate as the court thinks fit, but the court is not empowered to award more than what is 'adequate' provision for the claimant's 'proper' maintenance, etc. See Coates (509) (Dixon CJ); Blore v Lang [1960] HCA 73; (1960) 104 CLR 124, 134 (Fullagar & Menzies JJ). Those propositions are derived from the statutory text. In particular, the words 'for that purpose' at the end of s 6(1) refer to the purpose identified earlier in s 6(1), namely ensuring that 'adequate' provision is made from the deceased's estate for the claimant's 'proper' maintenance, etc. The text and purpose of s 6(1) qualify the court's power at the second stage. The power is confined by the text and purpose to the making of orders which will ensure that 'adequate' provision is made from the deceased's estate for the claimant's 'proper' maintenance, etc.

59 In Blore, Fullagar and Menzies JJ said that where a testator has chosen to dispose of his or her estate according to his or her inclination, 'the generous treatment of a child who has no need of the testator's bounty [must not] be used to determine the provision to be made for a child whose need has been disregarded or overlooked' (134 - 135). Their Honours added:

The measure to be applied is not what has been given to the one, but what the other needs for his or her proper maintenance, giving due regard to all the circumstances of the case. The Testator's Family Maintenance Act is legislation for remedying, within such limits as a wide discretion would set, breaches of a testator's moral duty to make adequate provision for the proper maintenance of his family - not for the making of what may appear to the court to be a fair distribution of a deceased person's estate among the members of his family (135).

See also Pontifical Society for the Propagation of the Faith v Scales [1962] HCA 19; (1962) 107 CLR 9, 19 (Dixon CJ).

60 The word 'proper' connotes something different from the word 'adequate'.

61 For example, a small sum may be sufficient for the 'adequate' maintenance, etc, of the claimant but, having regard to all the circumstances, including the size of the deceased's estate and the lifestyle to which the claimant had become accustomed during the deceased's lifetime, may be wholly insufficient for his or her 'proper' maintenance. By contrast, a sum may be quite insufficient for the 'adequate' maintenance, etc, of the claimant, and nevertheless be sufficient for his or her maintenance, etc, on a scale that is 'proper' in all the circumstances. See Bosch (476); Worladge v Doddridge [1957] HCA 45; (1957) 97 CLR 1, 14 - 15 (Kitto J); White (457) (Wilson J).

62 The determination of whether the provision, if any, made for the claimant is 'adequate' for his or her 'proper' maintenance, etc, involves not only a scrutiny of the requirements of the claimant for maintenance, etc, that were reasonably foreseeable by the deceased, but also an examination of the totality of the relationship between the claimant and the deceased. See Goodman (496 - 497) (Gibbs J); Hunter v Hunter (1987) 8 NSWLR 573, 574 - 575 (Kirby P); Singer (209 - 210) (Mason CJ, Deane & McHugh JJ).

63 Plainly, the totality of that relationship would include:

(a) any sacrifices made or services given by the claimant to or for the benefit of the deceased;

(b) any contributions by the claimant to building up the deceased's estate; and

(c) the conduct of the claimant towards the deceased and of the deceased towards the claimant.

See Coates (510) (Dixon CJ); Hughes (147) (Gibbs J); Goodman (497) (Gibbs J).

64 Any such sacrifices, services or contributions (whether described as giving rise to a moral duty/moral claim or not) are a relevant consideration (as part of the totality of the relationship between the claimant and the deceased), but are neither a necessary nor a sufficient condition for the making of an order under the Act. See Permanent Trustee Co Ltd v Fraser (1995) 36 NSWLR 24, 28 (Kirby P), 40 - 42 (Sheller JA).

65 'Adequate' is concerned with the quantum, whereas 'proper' prescribes the standard, of maintenance, etc. The propriety of the provision, if any, for the claimant is to be assessed by reference to all the circumstances including contemporary accepted community standards. See Bosch (476 - 479); Worladge (11) (Williams & Fullagar JJ), (15 - 18) (Kitto J); White (440) (Stephen J), (441 - 445) (Mason J), (457) (Wilson J); Goodman (497, 502) (Gibbs J); Singer (209 - 211) (Mason CJ, Deane & McHugh JJ), (227 - 228) (Gaudron J).

66 The capacity of a court to make 'adequate' provision for the 'proper' maintenance, etc, of the claimant may be constrained by practical considerations such as the size and nature of the deceased's estate, and competition from other persons having competing claims upon the deceased's bounty, and their relative urgency. See McCosker v McCosker [1957] HCA 82; (1957) 97 CLR 566, 571 - 572 (Dixon CJ & Williams J); Singer (227) (Gaudron J); Barns v Barns [2003] HCA 9; (2003) 214 CLR 169 [4] (Gleeson CJ).

67 In Scales, Dixon CJ pointed out that the words 'adequate' and 'proper' are always relative and that what the testator regarded as 'superior claims or preferable dispositions' is a relevant consideration:

The 'proper' maintenance and support of a son claiming a statutory provision must be relative to his age, sex, condition and mode of life and situation generally. What is 'adequate' must be relative not only to his needs but to his own capacity and resources for meeting them. There is then a relation to be considered between these matters on the one hand, and on the other, the nature, extent and character of the estate and the other demands upon it, and also what the testator regarded as superior claims or preferable dispositions. The words 'proper maintenance and support', although they must be treated as elastic, cannot be pressed beyond their fair meaning (19).

68 In Vigolo, Callinan and Heydon JJ made this comment about the interaction between the word 'adequate' and the word 'proper':

The use of the word 'proper' means that attention may be given, in deciding whether adequate provision has been made, to such matters as what used to be called the 'station in life' of the parties and the expectations to which that has given rise, in other words reciprocal claims and duties based upon how the parties lived and might reasonably expect to have lived in the future [114].

69 A claimant may fail to establish that the disposition of a deceased's estate was not such as to make adequate provision for his or her proper maintenance, etc, even though no provision was made for him or her in the will. See Goodman (505) (Murphy J); Singer (210) (Mason CJ, Deane & McHugh JJ).

70 The term 'need' has been used to refer to the claimant's inability to satisfy his or her financial requirements from his or her own resources. See Singer (227) (Gaudron J).

71 'Need' has also been used in the context of a value judgment or conclusion, namely, that the claimant is 'in need' of maintenance, etc, because inadequate provision has been made for his or her proper maintenance, etc. See Gorton v Parks (1989) 17 NSWLR 1, 10 - 12 (Bryson J).

72 The determination of whether the disposition of the deceased's estate was not such as to make adequate provision for the proper maintenance, etc, of the claimant will always, as a practical matter, include an evaluation of the provision, if any, made for the claimant on the one hand, and the claimant's 'needs' that cannot be met from his or her own resources on the other. See Hunter (579) (Kirby P).

73 Although the existence or absence of 'needs' which the claimant cannot meet from his or her own resources will always be highly relevant and, often, decisive, the statutory formulation, and therefore the issue in every case, is whether the disposition of the deceased's estate was not such as to make adequate provision for the claimant's proper maintenance, etc. See Singer (227) (Gaudron J). Compare Gorton (6 - 12) (Bryson J); Collicoat v McMillan [1999] 3 VR 803 [38], [47] (Ormiston J).

74 Often 'need', in the sense of the claimant's inability to satisfy his or her financial requirements from his or her own resources, and a 'moral claim', in the sense of a claim arising from the totality of the relationship between the claimant and the deceased (for example, sacrifices made or services given by the claimant to or for the benefit of the deceased or contributions by the claimant to building up the deceased's estate) and contemporary accepted community standards, will co-exist. Sometimes there may be a strong 'moral claim' but no 'need'. Sometimes the 'moral claim' may be slight but the 'need' dire. Whether the court should intervene or not will depend on all the circumstances of the case; in particular, whether the value judgment made upon an examination of those circumstances is that the claimant has been left without 'adequate' provision for his or her 'proper' maintenance etc. See Re Sinnott, deceased [1948] VicLawRp 48; [1948] VLR 279, 281 (Fullagar J).

75 In Vigolo, Callinan and Heydon JJ construed the words 'maintenance', 'support' and 'advancement' in s 6(1):

'Maintenance' may imply a continuity of a pre-existing state of affairs, or provision over and above a mere sufficiency of means upon which to live. 'Support' similarly may imply provision beyond bare need. The use of the two terms serves to amplify the powers conferred upon the court. And, furthermore, provision to secure or promote 'advancement' would ordinarily be provision beyond the necessities of life. It is not difficult to conceive of a case in which it appears that sufficient provision for support and maintenance has been made, but that in the circumstances, say, of a promise or an expectation reasonably held, further provision would be proper to enable a potential beneficiary to improve his or her prospects in life, or to undertake further education [115].

76 In Re Buckland, deceased [1966] VicRp 58; [1966] VR 404, Adam J made these remarks in relation to the exercise of the court's discretionary power at the second stage where the deceased's estate is of sufficient magnitude to allow competing claims to be ignored:

I consider the proper conclusion to be drawn from the authorities is that the court's jurisdiction, whatever the size of the estate, is limited by the claimant's need for maintenance and support; but that the maintenance and support to which he or she may for this purpose be treated as needing is that appropriate to his or her station or condition in life. For a child, particularly a dependant daughter of an exceptionally wealthy father, the standard of maintenance may justly be set high ensuring a degree of comfort and freedom from anxiety for the future which for those not so circumstanced might well seem somewhat extravagant, but it should fairly come within the conception of maintenance and support. The greater the estate the more may contingencies, even remote contingencies which may arise in the future, be provided for in the assessment of such maintenance (415).

The High Court dismissed an appeal from Adam J's judgment. See Buckland v Trustees, Executors and Agency Co Ltd (1966) 40 ALJR 164.

77 In Lloyd-Williams v Mayfield [2005] NSWCA 189; (2005) 63 NSWLR 1, the Court of Appeal of New South Wales considered the notion of 'need' in an application under family provision legislation where the notional estate of the deceased was very large and the claimant did not have 'any needs in terms of lack of present provision for necessities and amenities of life, on ordinary scales of needs as understood in the community generally' [31]. Bryson JA (Giles JA & Stein AJA agreeing) said:

In almost all applications under the Family Provision Act questions of needs are prominent because of the scale of the resources available. The present case is one of the few which are free of that limitation. The focus of attention on needs is not an underlying legal limit on provision which can be ordered, but a subject which usually arises for consideration when the court addresses the circumstances of each case, as it is required to do. Decisions in the past show that judges formerly took a very limited view of the provision appropriate to be made, for example, for able-bodied adult sons and a limited view of the appropriate provision for married daughters. These decisions belong to past times and do not express the values of the present age. See Hunter v Hunter (1987) 8 NSWLR 573.

...

The facts in the present proceedings have features which are rarely encountered in contentious claims under the Family Provision Act; particularly rarely are they encountered together. One is that the interests involved and the value of the shares designated as notional estate are very large, in comparison with estates ordinarily dealt with. Another is that the provision ordered for the respondent by [the primary judge] cannot in reality have any significant adverse affect on the wellbeing of the appellant and cannot impose any hardship upon her, as she is otherwise provided for out of the estate of Mrs Shirley Stewart in an extremely ample way; there was no attempt to show that she could incur any kind of hardship. Another is that the respondent does not have any needs in terms of lack of present provision for necessities and amenities of life, on ordinary scales of needs as understood in the community generally. The concepts of needs and competition for their satisfaction out of the estate are usually prominent in litigation under the Family Provision Act, but they have no place here.

It was open to [the primary judge] and altogether appropriate to look well beyond needs when interpreting and applying community standards to decide what provision the court ought to order. The concept of advancement in life can take consideration well beyond needs [29] - [32].

78 In Lloyd-Williams, Bryson JA asserted that the court's discretionary power at the second stage, namely to order adequate provision for the claimant's proper maintenance, etc, is not limited to making provision for the bare needs, subsistence or necessities of life of the claimant. However, his Honour did not suggest that the court's discretionary power at the second stage extends beyond the statutory criterion as explained by the High Court in numerous decisions.

79 The term 'moral duty' has been used as a shorthand expression referring to a deceased's 'duty' to make adequate provision for the proper maintenance, etc, of persons within the statutory class, the nature and extent of that 'duty' in any case being determined by reference to the totality of the relationship between the claimant and the deceased, and contemporary accepted community standards. Where 'moral duty' has been used in this sense, the term 'moral claim' has referred to the 'right' which is correlative to that 'duty'. See Permanent Trustee Co (27 - 29) (Kirby P); Collicoat [43] - [45] (Ormiston J).

80 In Vigolo, Gleeson CJ held that the concept of the 'moral duty' of a deceased was useful as part of an exposition of the legislative purpose embodied in s 6(1), and in the understanding and application of the statutory text [21]. His Honour referred to the observations of Mason CJ, Deane and McHugh JJ in Singer (209) to the effect that it was doubtful that references to 'moral duty' or 'moral obligation' provided useful assistance in elucidating the statutory provisions, and may well be understood as amounting to a gloss on the statutory language. Gleeson CJ said [21]:

In Singer v Berghouse ((1994) 181 CLR 201 at 209), Mason CJ, Deane and McHugh JJ doubted that the statement of Salmond J, [in In re Allen; Allen v Manchester [1921] NZGazLawRp 155; [1922] NZLR 218 at 220 - 221] provided useful assistance in elucidating the statutory provisions. I do not share that doubt.

I add, however, that it is one thing to seek assistance in elucidating statutory provisions, and another to substitute judicial exposition of statutory purpose for the legislative text. Their Honours went on to describe references to 'moral obligations' as a gloss on the statutory text. If, by that, they meant that such references are not to be used as a substitute for the text, I agree. If they meant that such references are never of use as part of an exposition of legislative purpose, then I regret that I am unable to agree (A detailed examination of this aspect of Singer v Berghouse appears in the judgment of Ormiston J in Collicoat v McMillan [1999] 3 VR 803 at 815 - 821). The descriptions of references to moral duty or moral obligations as a gloss upon the text was not new. In 1956, in Coates v National Trustees Executors and Agency Co Ltd ((1956) [1956] HCA 23; 95 CLR 494 at 523), Fullagar J said: 'The notion of "moral duty" is found not in the statute but in a gloss upon the statute. It may be a helpful gloss in many cases, but, when a critical question of meaning arises, the question must be answered by reference to the text and not by reference to the gloss.'

81 In Vigolo, Callinan and Heydon JJ noted that for many years several justices of the High Court had found it convenient and generally useful to resort to the concepts of 'moral duty' and 'moral claim' in deciding both whether, and how much, provision should be made for a claimant under the Act [121]. Their Honours added:

In our respectful opinion they have not been wrong to do so. These are not concepts alien to, or in any way outside, the language of s 6 of the Act [121].

82 By contrast, Gummow and Hayne JJ said in Vigolo that references to the 'moral duty' of the deceased and the 'moral claim' of the claimant, as a convenient shorthand expression, may mislead, and it is therefore better to forego any convenience that those expressions may offer in favour of adherence to the statutory language [73].

83 Although the discretionary power at the second stage is, no doubt, very broad, the discretion must be exercised by reference to the evidence before the court or, in appropriate circumstances, facts of which the court can take judicial notice. See Chappell v Hewson [2013] WASCA 15 [31] (Newnes & Mazza JJA & Edelman J)

The first appellant's offer of undertakings to the court

84 Prior to the hearing before the master, the first appellant (as executor and trustee of the Will) offered to undertake to the court that he would, within 28 days after judgment, increase the capital value of the Trust to $3 million [32]. It was submitted to the master on the appellants' behalf that the undertaking and the first appellant's action pursuant to it would remove any uncertainty as to what the respondent would receive from the Deceased's estate [32]. The master was of the view that '[a]n undertaking proffered subsequent to the death of [the Deceased] can have no bearing on the decision [in relation to the first stage of the process required by s 6(1) of Act]' [33].

85 In her closing submissions at the hearing before the master, counsel for the appellants said that the first appellant was prepared to undertake to the court that he would relinquish his position as appointor of the Trust and ensure that a person acceptable to the respondent assumed the position of appointor [34]. The master was of the view that '[o]nce again that undertaking cannot inform the decision of whether or not the provision in [the Will] was adequate' [34].

The master's views in relation to cl 14 of the Trust Deed

86 The master expressed the following views in relation to cl 14 of the Trust Deed:

The strangest aspect of the Trust is cl 14. This provision could operate in an entirely oppressive fashion. It is arguable if [the respondent] were convicted of a drink driving offence she could be excluded as a beneficiary under the terms of cl 14.1.3. The same is true if she were convicted of simple possession of marijuana. It may even be the case if she was suspected of involvement with someone who used an illicit substance she could be excluded under cl [14.1.5].

The most egregious of all the provisions is cl 14.1.7. If [the respondent] converted to Buddhism, or perhaps Islam, she would be an 'Excluded Person'. In fact it is arguable if she took a deep interest in, or was associated with persons who practiced these faiths, she would fall foul of the provision. Most Australians would regard freedom of religion as part of their birthright. [The respondent] in order to be sure the Trust would vest in her when she turned 30 would have to give up that basic human right. That is an extraordinary proposition [27] - [28].

The first appellant's exercise of his power to appoint a new trustee of the Trust

87 The master made the following observations about the first appellant's retirement as trustee of the Trust and his appointment of New Motion Holdings Pty Ltd as the new trustee:

[The first appellant] has, pursuant to his power as appointor, retired as trustee and appointed a new trustee. There is no suggestion the new trustee is anything but independent. However, it is difficult to know why [the first appellant] took this step. Doubtless he is well motivated. But he did not discuss the appointment of a new trustee with [the respondent] and it would appear [the respondent] has had no contact with the new trustee. She knows nothing of the new trustee and presumably the new trustee knows nothing of her. This serves to illustrate again the capricious nature of the power given to [the first appellant] by the terms of the Trust [38].

The respondent's evidence before the master

88 The respondent deposed in her affidavit sworn 7 November 2014 that she was not receiving an income other than the distributions she received under the Trust [8]. Since on or about 27 May 2014 she had been receiving payments of about $1,200 per month.

89 The master noted that the respondent's solicitors had asked her to specify the expenditure that she was likely to need for the rest of her life.

That was a big task for a 19-year-old girl. She specified expenditure on some items which were clearly fanciful. For instance [the respondent] has a keen interest in music and learned to play the guitar. When specifying what guitar she might purchase if she had funds available she specified a guitar valued at $250,000. No one needs a guitar of that value - particularly a 19-year-old girl who is not now and never will be a professional musician and who has not had guitar lessons for some years. There were other items in a similar vein.

Counsel for [the appellants] was particularly effective in drawing attention to the fact [the respondent's] likely expenditure throughout her life was overstated. But I was not left with the impression [the respondent] was a gold digger or in some way a narcissistic greedy individual. Faced with a question about what guitar she might like she let her imagination run wild. A 19-year-old boy in the same position would probably, when asked about a car, have nominated a Ferrari or a Lamborghini [42] - [43].

91 The master said he did not draw 'any adverse inferences against [the respondent] consequent upon her answers to her solicitors' inquiries' [43].

92 He summarised aspects of the respondent's evidence as follows:

What did emerge from the evidence was [the respondent] was a 19-year-old woman who faced all the uncertainties and possibilities of a young adult in today's world. Upon completing a one year bridging course she enrolled to study commerce at Notre Dame University. She then changed her mind and is now studying for a Bachelor of Arts Degree with a double major in media and marketing and public relations. She had no real idea of what career path she would follow. She anticipated undertaking post-graduate studies but there was no certainty she would be in a position to do so. She hoped to live either in the Eastern States or overseas for a period but she had no concrete plans and much would depend on her academic results. No doubt this case and the uncertainty in her life as a consequence made formulating any plans difficult.

[The respondent] did say she had a boyfriend whom she hoped to marry within the next two years. She anticipated having four children. Of course it is possible after one child she might reconsider; most sensible people do. Alternatively the joys of motherhood might be such that she may have six children [44] - [45].

93 The master then made a number of observations about those aspects of the respondent's evidence:

The point about all of this is [the respondent's] future is uncertain. Attempting to speculate now where she may be in two years time, let alone in 50 or 60 years time is impossible. Her relationship with her boyfriend may break down. She may decide media, marketing or public relations is not for her. The possibilities are endless. All that can be said is based upon the affidavit material she filed and the way she handled herself in cross-examination [the respondent] is a well-balanced, reasonably intelligent 19-year-old. She has a life in front of her the same as any other 19-year-old. Beyond that trite statement nothing is certain [45].

94 At the hearing before the master, the appellants and the respondent called actuarial evidence.

95 The appellants relied on the evidence of Catherine Nance, an actuary with PricewaterhouseCoopers Securities Ltd. The respondent relied on the evidence of Corey Plover, an actuary with Cumpston Sarjeant. After a conference, Ms Nance and Mr Plover prepared a joint memorandum dated 24 October 2014.

96 In her report dated 2 October 2014, Ms Nance addressed the question put to her by the appellants' solicitors, namely 'what can $3 million provide a healthy 18-year-old with a normal life expectancy and a reasonable earning capacity and for how long?'. Ms Nance undertook:

(a) an analysis of an investment of $3 million (as at 30 June 2014) for the purpose of providing an annuity for the respondent;

(b) an analysis of an investment of $3 million (as at 30 June 2014) until the respondent attained the age of 25 for the purpose of providing an annuity for the respondent, at which time capital would be withdrawn from the investment (of about $500,000, alternatively $750,000, alternatively $1 million) to purchase a house for the respondent, with the balance of the investment continuing to provide an annuity for her; and

(c) an analysis of an investment of $3 million (as at 30 June 2014) with interest being accumulated until the respondent attained the age of 25 years, at which time capital would be withdrawn from the investment to purchase a house for the respondent (in accordance with par (b) above), with the balance of the investment then providing an annuity for her.

97 In his report dated 18 December 2013, Mr Plover calculated the individual net present values and the total net present value of the items of expenditure which the respondent had indicated she was likely to need for the rest of her life and, also, other items including:

(a) land and a dwelling at a cost of $2,500,000 or approximately five times the then median house price in Western Australia;

(b) a wedding at a cost of $100,000 when she attained the age of 28;

(c) the cost of raising four children to the age of 18; and

(d) the cost of engaging legal, accountancy and financial advisory services during each year of her life.

98 In the joint memorandum dated 24 October 2014, Ms Nance and Mr Plover calculated the individual net present values and the total net present value of the respondent's estimated expenses throughout her life, based on:

(a) the respondent having a life expectancy of 77 years;

(b) alternative discount rates of 2% per annum, 3% per annum and 4% per annum (those rates applying irrespective of the taxation treatment of investment returns); and

(c) the item for 'Miscellaneous goods & services' excluding education fees.

99 Ms Nance and Mr Plover prepared the following table:

100 The master said the actuarial evidence was 'of little assistance in determining the outcome of this application' [46].

Counsel for the respondent's submission before the master as to the amount of the provision which the court should order for the respondent

101 Counsel for the respondent submitted to the master that he should order provision for the respondent from the Deceased's estate in the amount of $12 million absolutely in lieu of the provision made for her under cl 6A(c)(i)(E) of the Will (ts 373).

The first stage of the process required by s 6(1) of the Act: the master's findings and conclusion

102 The master said it was 'clear' that the Will 'did not make adequate provision for [the respondent]' [29]. He elaborated:

The starting point in reaching that conclusion is the size of the estate. The [Deceased] had a vast fortune and he was in the fortunate position of being able to provide for all of the parties who had a claim on his bounty. It may be that providing [the respondent] with a sum of $3 million tied up in a Trust could be regarded as adequate - although for reasons which follow I am not satisfied that is the case. But this structure does not guarantee [the respondent] $3 million. There is a real prospect she might get nothing.

Furthermore, the whole structure is unwieldy. To have her fate in the hands of a man she had never met and who had close ties with other family members is unreasonable. How could [the first appellant] be expected to understand the wants and needs of a 19-year-old girl living in Perth's outer suburbs when he was a solicitor in Sydney? How was [the first appellant] to ensure [the respondent] did not fall foul of any of the provisions of cl 14? The terms of the Trust make it incumbent upon him to ensure [the respondent] did not breach any of the terms of that clause. [The first appellant] may well have had a philosophy that it was best to retain earnings in the Trust so that when [the respondent] turned 30 she would come into a substantial fortune. All of that is uncertain. The whole system is unworkable [29] - [30].

103 The master concluded that 'given the size of [the Deceased's] estate and the uncertainty surrounding the interaction between [the Will] and the Trust taken together with the terms of the Trust itself there has not in this case been adequate provision made for [the respondent]' [39]. The master was satisfied that the jurisdictional question should be answered in the respondent's favour.

The second stage of the process required by s 6(1) of the Act: the master's exercise of discretion

104 The master then embarked on the second stage of the process required by s 6(1) of the Act.

105 The master noted that s 6(1) confers a discretion on the court [61]. He continued:

Once the jurisdiction question is answered in a plaintiff's favour then it is open to the court to make 'such provision as it thinks fit'. The approach of [the appellants] was to say if a plaintiff is entitled to an award then that award should be no more than adequate provision for the proper maintenance, support, education or advancement of life of the plaintiff. With respect that puts a gloss on the statute. The discretion in the Act is unfettered. It must be exercised judicially and all relevant factors must be taken into account. But there is no warrant for assuming that the award should be no more than that which will provide adequate provision for a plaintiff [61].

106 Next, the master observed that, ordinarily, the discretion conferred on the court by s 6(1) is exercised by reference to three factors, namely the size of the deceased's estate, the needs of the applicant and the interests of other parties having a legitimate call on the deceased's bounty [62]. The master said that the weight to be given to each of those factors 'varies between the cases, as is to be expected', but 'the result is always what might be called a triangulation - a balancing exercise within the reference points provided by the three factors' [62]. However, according to the master, the present case was different:

The estate is massive and its value irrelevant [sic] in determining the outcome. No other individual will be prejudiced no matter what award (within reason) I make. That means there is no way of triangulating here; put another way, there are no factors to weigh in the balance. There are no markers for an exercise of discretion [62].

107 The master decided to award the respondent 'a cash payment of $25 million conditional upon her forfeiting any right or interest in the Trust' [64]. He reasoned:

It is always necessary to remain cautious about reaching a decision in an evidence free zone. But it is difficult to see in this case what evidence could have been led and which was not led which might in some way influence the exercise of my discretion. As I have indicated, taking into account all of the evidence of [the respondent], I was satisfied she was an honest level-headed young woman. But she is subject to all of the vagaries and uncertainties of youth. The actuarial evidence really took the matter no further. None of the other evidence was [of] such weight as to influence my decision.

In the exercise of my discretion I would award to [the respondent] a cash payment of $25 million conditional upon her forfeiting any right or interest in the Trust. Subject to hearing from the parties that amount ought be paid to [the respondent] within 60 days.

Clearly this decision requires some explanation. I need to make it plain [that] in settling on this figure I am exercising a discretion. The one factor which has influenced me most is the size of the estate. This award will set up [the respondent] and her children and perhaps their children for their lives. Wisely invested the fund will provide enough income so [the respondent] and her relatives will never want for anything again. All that against a background of the award making no difference whatever to the position of the other beneficiaries. Even in this day and age $25 million is a considerable amount of money. But in the context of this estate it is little more than a rounding error [63] - [65].

108 The master expressed the view that the notion of the 'moral duty' of a testator 'feeds into two approaches which are prominent in the authorities' [68].

109 According to the master, the first approach is 'the concept of what a wise and just testator would do in the position of [the Deceased]' [69]. He postulated:

This conjures up the rather archaic image of a grey haired gentleman in a smoking jacket, pipe in mouth, sitting at a leather top desk, fountain pen in hand, attempting to balance the interests of his wife and children. With that image in mind the internal dialogue might go something like this:

I am a fabulously wealthy man. I am able to provide for my wife, my children and others to such an extent that all will be well provided for without any of the others suffering. My two daughters Leonie and Alexandra [that is, the first-named and second-named second appellants] have proved themselves loyal and have run the Voyager Estate business extremely well. They have supported me in every possible way. They deserve the lion's share of my estate and they will have it. My son Myles is a successful musician who has forged his own career without much help from me. I should provide for him, conscious of the knowledge he has not been involved in the family business and will always be in a position to provide for himself.

That leaves my daughter Olivia [that is, the respondent]. At her age she has no real idea of what she wants to do - she might get married and have four children. She might become an arts administrator when she finishes university or she may change her mind. She should have complete financial security so that she can pursue whatever interests she wishes into the future. She is young but she is level-headed and with sound advice she can doubtless invest anything I leave to her to provide for her long term benefit. I can afford to spoil her and there is no reason why I should not do so.

Whether or not those ruminations would have led to the wise and just testator leaving [the respondent] $25 million is open to question. In my view it would and it is on that basis I have made the award [69] - [70].

110 According to the master, the second approach is 'what might be called the community expectation test' [71]. He explained:

That is to say, what amount should be left to a person in [the respondent's] position to meet community expectations. Whether or not I am the ideal person to judge community expectations must be open to doubt. No doubt at one end of the scale a section of the community would believe [the respondent] should get nothing beyond what her father left her in [the Will]. At the other end of the scale there would be those who could see no reason why the estate ought not be split equally between the deceased's children. The majority view no doubt falls between those two extremes.

What can be said about community expectation is that most people would expect [the respondent] to be more than adequately provided for. Given the size of the estate and the lack of limitation on any award it is difficult to believe a majority would not see it appropriate to set up [the respondent] for life. How members of the community would settle on a figure is a rather more difficult question. In my view an award of $25 million would not fall outside the reasonable expectation of most members of the community [71] - [72].

111 The master concluded his reasons with the following gratuitous remark:

When the $25 million is paid to [the respondent] the rest of the residuary estate will pass to the [first-named and second-named second appellants]. They will get about $10 million each less perhaps $1 million for costs. That is on top of the $400 million they already have; and they can rest easy in the knowledge their half-sister will be financially secure for the rest of her life [76].

The formal orders made by the master to give effect to his reasons

112 On 24 March 2015, the master made formal orders to give effect to his reasons, relevantly, as follows:

1. By 14 May 2015, the parties shall execute all documents, and do all acts as may reasonably be required, to facilitate the relinquishment of any right or entitlement which, but for this order, [the respondent] has as a designated beneficiary or otherwise in relation to the Olivia Trust No. 2 dated 18 April 2008 between Peter Cornelius Beekink as settlor and [the Deceased] as trustee with such relinquishment being conditional upon payment of the provision ordered in order 3.
2. By 14 May 2015, the trustee of the Olivia Trust No. 2 will transfer to the executor of the estate of [the Deceased], [the first appellant], all the assets of Olivia Trust No. 2, including the property at Peel Street, O'Connor.
3. By way of codicil pursuant to section 10 of the Family Provision Act 1972 (WA) to [the Deceased's] Will dated 6 March 2012 there be inserted in the [the Deceased's] Will, in substitution for the existing clause 6A(c)(i)(E), a new clause 6A(c)(i)(E) as follows:

'I GIVE DEVISE AND BEQUEATH to my daughter [the respondent] the sum of $25,000,000.00 absolutely payable by 14 May 2015 and if not paid by that date then so much of the legacy that remains unpaid shall be indexed at the rate of 5% per annum until payment.'

1. The burden of the payment of the legacy referred to in order [3] be charged upon the residuary estate of [the Deceased] and be paid to [the respondent] by [the first appellant] by 14 May 2015.

113 On 1 May 2015, Newnes JA ordered, relevantly, that:

(a) orders 1, 2, 3 and 4 made by the master on 24 March 2015 be stayed pending determination of the appeal or other order of this court; and

(b) pending determination of the appeal or other orders of this court, by 15 May 2015 the first appellant (as executor and trustee of the Will):

(i) pay to the respondent (care of the trust account of her solicitors) the sum of $3 million; and

(ii) pay the sum of $22 million into an interest-bearing account established by the first appellant (as executor and trustee), the signatories to which include a director or directors from the respondent's solicitors, on the basis that any fees or costs associated with the establishment or maintenance of that account are met by the first appellant on behalf of the Deceased's estate.

114 At the hearing of the appeal, counsel for the appellants informed the court that the first appellant had complied with those orders (appeal ts 45 - 46). She said it had not been intended that the $3 million would be held by the respondent's solicitors on trust (appeal ts 85). The intention was that the respondent's solicitors could pay the $3 million to the respondent and that she would be able to use it for her own purposes (appeal ts 85).

115 The terms of Newnes JA's orders are consistent with counsel's understanding.

116 The appellants rely on seven grounds of appeal.

(a) the master erred in law in relation to the jurisdictional stage of s 6(1) of the Act in that he failed to determine a material fact necessary to the finding of whether the respondent had been left without adequate provision for her proper maintenance, etc; and

(b) the master failed to determine what the needs of the respondent were.

118 Ground 2 alleges that the master erred in fact in holding that the respondent's entitlement under cl 6A(c)(i)(E) of the Will was not adequate provision for her proper maintenance, etc, by construing it to the effect that the respondent might get nothing.

119 Ground 3 alleges that the master's discretion miscarried in relation to the second stage of s 6(1) on the basis that he erred in fact by finding that $25 million was adequate provision for the proper maintenance, etc, of the respondent by:

(a) disregarding the financial and other circumstances of the respondent as a material factor to be taken into account in the exercise of his discretion, despite finding that the respondent's 'Schedule of Estimated Expenses' was overstated and fanciful, and that she had not taken into account either the prospect of earning a living or any income earned by a partner;

(b) failing to determine what the needs of the respondent were;

(c) failing to have regard to the expert evidence of the appellants as to the adequacy and extent of $3 million or any other sum as adequate and proper provision for the respondent;

(d) taking into account the immaterial factor of the needs of persons other than the respondent; and

(e) failing to have regard to the intention of the testator to provide $3 million in a trust to the respondent.

120 Ground 4 alleges that the master erred in law by regarding his discretion as unfettered in relation to the second stage of s 6(1) due to the size of the estate.

121 Ground 5 alleges that the master erred in law in relation to the second stage of s 6(1) in applying an improper construction of s 6(1) by taking into account the support of persons other than the respondent.

122 Ground 6 alleges that the master erred in law in relation to the second stage of s 6(1) by importing into the Act a statutory duty arising at death which does not exist.

123 Ground 7 alleges that the master failed to ensure that the appellants were provided with procedural fairness in determining the case:

(a) on a basis not argued by either party (that is, without reference to the respondent's needs); and

(b) by making an order for provision more than twice the amount conceded by the respondent as required for the provision of expenditure for her projected lifetime:

1. the master should have held that the provision made for the respondent in the Will was adequate provision from the estate for the proper maintenance, etc, of the respondent;
2. alternatively to A, the master should have held that provision of an amount which reflected the evidence of the respondent's proper needs (in a protective trust or otherwise) was adequate provision for the proper maintenance, etc, of the respondent.

124 Grounds 1 and 2 relate to the first stage of the process required by s 6(1) of the Act.

125 The appellants allege in grounds 1 and 2 that the master erred in finding that the provision for the respondent in the Will was 'not such as to make adequate provision from [the Deceased's] estate for the proper maintenance, support, education or advancement in life' of the respondent, within s 6(1).

Ground 1: the master's findings and reasoning

126 The essence of the complaint in ground 1 is that the master erred by failing to determine a fact that was essential in deciding whether the disposition of the Deceased's estate effected by the Will was not such as to make adequate provision for the respondent's proper maintenance, etc. The alleged essential fact was 'what the needs of the respondent were'.

127 The master made these findings and observations:

(a) the Deceased had a vast fortune and he was able to provide for all of the parties who had a claim on his bounty [29];

(b) there was a real prospect that the respondent might get 'nothing' under cl 6A(c)(i)(E) of the Will read with the relevant provisions of the Trust Deed [29], [30], [39]; and

(c) as to the respondent's plans, as at the date of the hearing, when she was aged 19:

What did emerge from the evidence was [the respondent] was a 19-year-old woman who faced all the uncertainties and possibilities of a young adult in today's world. Upon completing a one year bridging course she enrolled to study commerce at Notre Dame University. She then changed her mind and is now studying for a Bachelor of Arts Degree with a double major in media and marketing and public relations. She had no real idea of what career path she would follow. She anticipated undertaking post-graduate studies but there was no certainty she would be in a position to do so. She hoped to live either in the Eastern States or overseas for a period but she had no concrete plans and much would depend on her academic results. No doubt this case and the uncertainty in her life as a consequence made formulating any plans difficult.

[The respondent] did say she had a boyfriend whom she hoped to marry within the next two years. She anticipated having four children. Of course it is possible after one child she might reconsider; most sensible people do. Alternatively the joys of motherhood might be such that she may have six children. The point about all of this is [the respondent's] future is uncertain. Attempting to speculate now where she may be in two years time, let alone in 50 or 60 years time is impossible. Her relationship with her boyfriend may break down. She may decide media, marketing or public relations is not for her. The possibilities are endless. All that can be said is based upon the affidavit material she filed and the way she handled herself in cross-examination [the respondent] is a well-balanced, reasonably intelligent 19-year-old. She has a life in front of her the same as any other 19-year-old. Beyond that trite statement nothing is certain [44] - [45].

128 The master's findings and observations at [44] - [45] were made after he had reached his conclusion in relation to the first stage of the process required by s 6(1) and by reference to the circumstances as they existed at the time of the hearing and not at the date of the Deceased's death.

129 Counsel for the appellants submitted that '[i]n order [to decide] whether provision is adequate, it must be determined what the provision is, what the respondent's needs are (and this will involve a review of her circumstances) and what would in fact be adequate'.

130 In her affidavit sworn 19 December 2013, the respondent deposed:

(a) She was studying at university [145] - [146].

(b) She was working on a casual basis at a restaurant in Victoria Park. She was paid $15 per hour [147].

(c) She could not afford to pay the fees for her tertiary study and would therefore have to rely on the Higher Education Contribution Scheme (HECS) [148].

131 In her affidavit sworn 7 November 2014, the respondent deposed:

(a) She was no longer working at the restaurant in Victoria Park. She was working at Woolworths on a casual basis, but in recent months had not been given any shifts [7].

(b) She had been unable to find other employment and was not receiving any income apart from distributions under the Trust. Since on or about 27 May 2014 she had been receiving about $1,200 per month from the trustee of the Trust [8] - [9].

(c) Her expenses included petrol, food and drink, books and stationery for her university study, maintenance and insurance for her car, and clothing [11].

(d) She did not currently pay rent or board because she was living at her mother's home [12].

(e) Her only asset was her car, which was worth about $1,500 [13].

(f) Her only liability was her HECS debt, which was currently $5,404 [14].

132 Those facts, as deposed to by the respondent in her affidavits, were not in contest at the hearing before the master.

133 I have already examined the concept of 'need' and a claimant's 'needs'. It is sufficient, for present purposes, to note that although the existence or absence of 'needs' which a claimant cannot meet from his or her own resources will always be highly relevant and, often, decisive, the statutory formulation, and therefore the issue in every case, is whether the disposition of the deceased's estate was not such as to make adequate provision for the claimant's proper maintenance, etc.

134 The decision of the respondent's solicitors to ask the respondent to specify the expenditure that she was likely to need for the rest of her life was unhelpful and did not assist her case. It was inevitably an artificial and speculative exercise even if the more extravagant items of expenditure are disregarded. When the Deceased died the respondent was still a child and her needs in the future could not be predicted with any certainty.

135 Similarly, the actuarial calculations made by Mr Plover, on the basis of the instructions given to him by the respondent's solicitors (including, in particular, the items of expenditure which the respondent had specified she was likely to need for the rest of her life), was of no utility because it was undertaken by reference to facts and circumstances that were largely the product of guesswork and wishful thinking.

136 I am satisfied that, in the present case, it was neither necessary nor feasible, in all the circumstances, for the master to make specific or detailed findings as to 'what the needs of the respondent were'.

137 The general nature of the respondent's needs, at the date of the Deceased's death, were able to be inferred from the uncontested facts to which she deposed in her affidavits and the facts that were agreed between the parties or not in dispute at the hearing.

138 The respondent was aged 16 at the date of the Deceased's death. She had very modest financial resources. Her mother's capacity to provide for her was very limited. The respondent's needs at the date of the Deceased's death could not be predicted with specificity or certainty. However, there is no doubt (indeed, it is obvious) that the respondent had needs which she could not meet from her own resources.

139 The respondent's needs included the present or reasonably foreseeable need for education, a home, furniture and furnishings, a motor vehicle, clothing, other necessities of life, and entertainment and other leisure activities. The respondent required capital or income to satisfy those needs and also to satisfy contingencies (including remote contingencies) which may arise in the future having regard to the respondent's circumstances and the vicissitudes of life generally.

140 Although the master did not make an express finding as to the respondent's needs, at the date of the Deceased's death, the absence of an express finding on that issue does not advance the appellants' case in relation to the first stage of the process because the general nature of her needs was able to be inferred from the uncontested facts to which she deposed in her affidavits and the facts that were agreed between the parties or not in dispute. As I have mentioned, her needs could not be predicted with specificity or certainty, but there is no doubt that she had needs. The master's failure to make an express finding was not, in the circumstances, a material error.

Ground 2: the master's findings and reasoning

142 The essence of the complaint in ground 2 is that the master misconstrued cl 6A(c)(i)(E) of the Will by holding, in effect, that the respondent might get nothing under cl 6A(c)(i)(E) and, consequently, that the Will did not make adequate provision for her proper maintenance, etc.

143 It is convenient to reproduce the master's findings on this issue:

In my view it is clear [the Will] of [the Deceased] did not make adequate provision for [the respondent]. The starting point in reaching that conclusion is the size of the estate. [The Deceased] had a vast fortune and he was in the fortunate position of being able to provide for all of the parties who had a claim on his bounty. It may be that providing [the respondent] with a sum of $3 million tied up in a Trust could be regarded as adequate - although for reasons which follow I am not satisfied that is the case. But this structure does not guarantee [the respondent] $3 million. There is a real prospect she might get nothing.

Furthermore, the whole structure is unwieldy. To have her fate in the hands of a man she had never met and who had close ties with other family members is unreasonable. How could [the first appellant] be expected to understand the wants and needs of a 19-year-old girl living in Perth's outer suburbs when he was a solicitor in Sydney? How was [the first appellant] to ensure [the respondent] did not fall foul of any of the provisions of cl 14? The terms of the Trust make it incumbent upon him to ensure [the respondent] did not breach any of the terms of that clause. [The first appellant] may well have had a philosophy that it was best to retain earnings in the Trust so that when [the respondent] turned 30 she would come into a substantial fortune. All of that is uncertain. The whole system is unworkable [29] - [30].

144 The master had examined earlier in his reasons the likely future operation of a number of provisions of the Trust Deed. For example, the master gave consideration to:

(a) The fact that cl 3 and cl 4 of the Trust Deed conferred on the trustee an absolute discretion with respect to the income and capital of the Trust and, consequently, the trustee could accumulate the earnings of the Trust until the respondent attained the age of 30 without, in the master's view, the respondent having a remedy in respect of the trustee's exercise of discretion [24].

(b) The possibility that the trustee of the Trust might receive a request from the respondent for a distribution of income for a particular purpose and that the trustee might refuse the request [24].

(c) The possibility that, as a consequence of the breadth of the definition of 'Beneficiary' in cl 1.1 of the Trust Deed, the trustee might distribute income or capital to a body or entity formed for charitable purposes [26].

(a) 'the structure' of cl 6A(c)(i)(E) of the Will read with the relevant provisions of the Trust Deed did not 'guarantee [the respondent] $3 million' and there was 'a real prospect she might get nothing' [29]; and

(b) 'the whole structure' was 'unwieldy', the provisions with respect to the control of the Trust were 'unreasonable' and the likely operation of the relevant provisions of the Will and the Trust Deed was 'uncertain' [30].

146 The foundation for the master's decision at the first stage of the process was:

(a) the master's views, which I have summarised, as to the structure, unreasonableness and uncertainty of cl 6A(c)(i)(E) of the Will read with the relevant provisions of the Trust Deed; and

(b) the size of the Deceased's estate in the context of the provisions made in the Will for other persons (notably, Ms Baldock and Ms Burt) having claims upon the Deceased's bounty.

147 Counsel for the appellants submitted that if the master had taken into account, as he was bound to, the manner in which certain provisions of the Will and the Trust Deed may have operated, together with the undertakings offered by the first appellant at the hearing, the master would have found that the Deceased had made adequate provision for the respondent in the sum of $3 million.

148 Specifically, counsel for the appellants argued that the master was bound but failed to take into account the following matters:

(b) the respondent was a minor at the date of death;

(c) the Trust Deed had provisions which enabled the trustee to be changed (cl 7.2) and provisions which enabled the Trust Deed, including cl 14.1, to be amended (cl 18);

(d) the first appellant's undertaking to ensure that the capital of the Trust was increased to $3 million;

(e) the evidence of Ms Nance as to the substantial benefits of a provision of $3 million; and

(f) the first appellant's undertaking to ensure that a person acceptable to the respondent was substituted as the appointor of the Trust.

(a) The master's conclusion that there was a 'real prospect' that the respondent might get 'nothing' was erroneous in that at the time of the hearing she had already received distributions under the Trust.

(b) Although the master recognised, to some extent, that the provision for the respondent in cl 6A(c)(i)(E) of the Will was substantial, his decision that the provision was not adequate was based partly on the form of the provision (that is, the terms of the Trust Deed) and partly on an incorrect understanding of the manner in which the Trust was to be administered.

(c) The master failed to construe the whole of the relevant provisions of the Will and the Trust Deed for the purpose of determining what provision had actually been made for the respondent. He merely stated that the provisions were 'unwieldy', 'uncertain' and 'unworkable'. The undertakings offered by the first appellant removed any uncertainty as to whether the trustee was bound to ensure that the capital of the Trust was increased to $3 million.

(d) The master failed to recognise that, whatever the deficiencies in the provisions of the Trust Deed, the Trust would vest, at the latest, upon the respondent attaining the age of 30 years and that it was possible for the capital of the Trust to be distributed before she attained that age.

(e) The respondent was, at the date of the Deceased's death, a minor. It was therefore appropriate for provision to be made for her in the Will by the mechanism of a trust. Cases which have decided that provision pursuant to a discretionary trust is, in general, inadequate have not concerned trusts for minors or young adults which will vest within a relatively short period. Rather, those cases have dealt with discretionary trusts for older people with a gift over of capital rather than a vesting of capital. Counsel referred to Gregory v Hudson (No 2) (Unreported, NSWSC, 18 September 1997, Library No 9704375) 11 - 13 (Young J); Gregory v Hudson [1999] NSWCA 221 [4] (Handley JA; Mason P & Cole AJA agreeing); Taylor v Farrugia [2009] NSWSC 801 [62] (Brereton J); and Hedman v Frazer [2013] NSWSC 1915 [309] - [319] (Hallen J).

(f) The master held that the Trust's structure was 'unwieldy', but did not consider those provisions of the Trust Deed which allowed unwieldy provisions to be altered. He considered that the imposition of a trust was 'paternalistic and unjustified', but failed to explain why that was so. At the hearing before the master there was evidence that the respondent, who was then aged 19, was inexperienced with money (ts 205 - 206) and, when asked about her needs, the respondent engaged in an exercise which the master characterised as 'clearly fanciful' [42] and 'overstated' [43]. In the circumstances, the trust structure established by the Deceased was appropriate.

(g) The master's criticism of cl 14.1.7 of the Trust Deed in relation to the possible membership or involvement of the respondent with a non-traditional Christian religious body failed to take into account the law of trusts relating to the imposition of a requirement that the beneficiaries be or become members of a specified Christian denomination. Counsel referred to Hickin v Carroll (No 2) [2014] NSWSC 1059 [113] - [137] (Kunc J). Further, it was not against public policy for the respondent to be constrained in relation to alcohol and drugs in the manner stipulated in cl 14.1. In any event, by cl 14.3, a declaration or opinion made in accordance with cl 14.1 may be revoked at any time before the Vesting Date.

(h) The master's view as to the appropriateness of the first appellant acting as appointor of the Trust and as to the appropriateness of the appointment of the new trustee were not a proper basis for concluding that the provision for the respondent under the trust structure was inadequate. The mere fact that a beneficiary of a trust has not met or does not know a trustee is not a proper basis for deciding that provision for the beneficiary under a trust structure is inadequate.

150 It is necessary to construe the whole of the relevant provisions of the Will and the Trust Deed for the purpose of ascertaining what provision has actually been made for the respondent and then determining whether that provision is adequate for her proper maintenance, etc, within s 6(1) of the Act.

151 A will must be so construed as to give effect to the testator's intention. The intention is to be ascertained from the language of the will read in the context of the circumstances in which the will was made. See Fell v Fell [1922] HCA 55; (1922) 31 CLR 268, 273 - 276 (Isaacs J), 281 - 282 (Higgins J); Perrin v Morgan [1943] AC 399, 420 (Lord Romer; Lord Russell of Killowen agreeing); Brennan v Permanent Trustee Company of New South Wales Ltd [1945] HCA 17; (1945) 73 CLR 404, 415 (Dixon J). The language of the will is to be read in the sense which the testator appears to have attached to the expressions used. See Brennan (414); Borlaug v University of Western Australia [2001] WASCA 425 [15] (Olsson AUJ; Wallwork & Steytler JJ agreeing). The whole of the will has to be considered because the meaning of one part may be revealed by other parts. The language of every clause must, if possible, be construed so as to render them all harmonious. See Australian Broadcasting Commission v Australasian Performing Right Association Ltd [1973] HCA 36; (1973) 129 CLR 99, 109 - 110 (Gibbs J).

152 In my opinion, the proper construction of cl 6A of the Will is, relevantly, as follows.

153 By cl 6A, the Deceased gave, devised and bequeathed his Public Company Shares, his Real Estate and his residuary estate to the first appellant (as executor and trustee of the Will) upon trust to pay the Deceased's debts, funeral, testamentary and administration expenses and to hold the balance including any income derived from and added to the balance from time to time (the cl 6A Trust Fund) upon the trusts specified in cl 6A.

154 Section 6A(c) is expressly made subject to cl 6A(d) and cl 6A(f). Clause 6A(d) provides, relevantly, that the first appellant (as executor and trustee of the Will) must until the Date of Distribution (as defined in cl 6A(g)) 'accumulate surplus income to [the cl 6A Trust Fund] so that it becomes part of [the cl 6A Trust Fund] and shall be distributed on the Date of Distribution in accordance with [cl 6A(f)]'. Clause 6A(f) provides that, subject to the provisos to cl 6A(f), on the Date of Distribution the first appellant (as executor and trustee) must distribute the balance of the cl 6A Trust Fund to Ms Baldock as to 50% and to Ms Burt as to 50%. In cl 6A(g) the expression 'Date of Distribution' is defined to mean either the date being 80 years from the date of the Deceased's death or such earlier date as the first appellant (as executor and trustee) may in his absolute discretion determine.

155 By cl 6A(c), subject to cl 6A(d) and cl 6A(f), the first appellant (as executor and trustee of the Will) is 'to pay or apply the whole or any part of the annual net income of [the cl 6A Trust Fund] upon the trusts set out in [cl 6A]' in the following order of priority.

156 First, subject to various conditions, in satisfaction of the cash bequests made by the Deceased to his wife, Mary, under cl 4(c) of the Will and to his son, Myles, under cl 3(d)(ii) of the Will (cl 6A(c)(i)(A)).

157 Secondly, to provide financial support to the Deceased's former wife, Jennifer Wright, in an amount sufficient to meet her accommodation, medical expenses and personal care for the balance of her life (cl 6A(c)(i)(B)).

158 Thirdly, to fund the business activities of the Voyager Estate vineyard and winery and other expenses incurred in relation to the Deceased's estate (cl 6A(c)(i)(C)).

159 Fourthly, in satisfaction of a cash bequest made by the Deceased to the University of Notre Dame Australia (Fremantle campus) and thereafter the other cash bequests made by the Deceased to other beneficiaries under cl 3 of the Will (cl 6A(c)(i)(D)).

160 Fifthly, if the value of the trust fund of the Trust has not been increased 'up to a maximum amount of $3 million' (as the Deceased indicated in cl 6A(c)(i)(E)(b) that he proposed to do, before his death, by making five annual payments to the trustee of the Trust) and 'for so long as [the respondent] is a beneficiary under [the Trust]', in making 'the balance of those [five] annual payments to the trustee of [the Trust]' for the purpose of increasing the value of the trust fund of the Trust 'up to a maximum amount of $3 million (subject to CPI Increase)' (cl 6A(c)(i)(E)).

161 Clause 6A(c)(i)(E) does not expressly state the date at which a determination is to be made as to whether the value of the trust fund of the Trust has been increased 'up to a maximum amount of $3 million', but the preferable and correct implication, having regard to the text and subject matter of cl 6A as a whole and its presence in a will, is that the determination is to be made at the date of the Deceased's death. The significant contextual matters are these. First, as stated in cl 6A(c)(i)(E)(b), the Deceased had proposed to make five annual payments to the trustee of the Trust for the purpose of increasing the value of the trust fund of the Trust 'up to a maximum amount of $3 million'. Secondly, the provision in cl 6A(c)(i)(E)(c) for the payment by the appellant (as executor and trustee of the Will) of the balance of the five annual payments is engaged if the Deceased did not make all of those payments, for the purpose of increasing the value of the trust fund 'up to a maximum amount of $3 million', before his death. So, the focus of cl 6A(c)(i)(E) is on whether the Deceased did not make all of the five annual payments before his death and, if so, the value of the trust fund of the Trust at the date of the Deceased's death.

162 The trust fund of the Trust includes any loans the Deceased may have made to the trustee of the Trust, as contemplated by cl 6A(c)(i)(E)(a), in that under cl 6A(c)(i)(E)(c) the Deceased waives repayment of those loans.

163 If the value of the trust fund of the Trust, at the date of the Deceased's death, has not been increased 'up to a maximum amount of $3 million' then (subject to cl 6A(d) and cl 6A(f) and subject to the preferential order of priority in relation to the trusts created by cl 6A(c)(i)(A) - (D)) the first appellant (as executor and trustee of the Will) is to pay or apply 'the whole or any part of the annual net income of [the cl 6A Trust Fund]' in or towards paying the balance of the five annual payments referred to in cl 6A(c)(i)(E).

164 Clause 6A(c)(i) does not expressly state that the first appellant (as executor and trustee of the Will) is obliged (as distinct from being empowered), subject to cl 6A(d) and cl 6A(f), to pay or apply the whole or any part of the annual net income of the cl 6A Trust Fund in accordance with the trusts created by cl 6A(c)(i). However, the proper construction of cl 6A(c)(i), having regard to the text and subject matter of cl 6A in the context of the Will as a whole, is that the first appellant (as executor and trustee) is not merely empowered, but is obliged, subject to cl 6A(d) and cl 6A(f), to pay or apply the annual net income in accordance with those trusts. The following textual matters are of significance:

(a) Clause 6A(c)(i) states that, subject to cl 6A(d) and cl 6A(f), the first appellant (as executor and trustee) is to hold the cl 6A Trust Fund 'to pay or apply the whole or any part of the annual net income of [the cl 6A Trust Fund] upon the trusts set out in [cl 6A] in the [following] order of priority'. The language imports a direction to the first appellant. It does not import a discretion. The words 'or any part' merely indicate that the whole of the annual net income for a period may not be required to make the payments contemplated by the trusts created by cl 6A(c)(i). If that is so in relation to the annual net income for a period then the balance of the annual net income for that period will be added to the capital of the cl 6A Trust Fund in accordance with cl 6A(c)(ii).

(b) The text of cl 6A(c)(i)(A) read with cl 4(c) and cl 3(d)(ii) plainly conveys that the first appellant (as executor and trustee) must apply the annual net income from the cl 6A Trust Fund in payment of the cash bequests to the Deceased's wife, Mary, and his son, Myles.

(c) The text of the other trusts created by cl 6A(c)(i)(B) - (F) is consistent only with the first appellant (as executor and trustee) having an obligation (and not a discretion) to pay and apply the annual net income in accordance with those provisions, subject to cl 6A(d) and cl 6A(f) and the stipulated order of priority and subject also to the annual net income being sufficient for that purpose.

165 Clause 6A(c)(i)(E) does not expressly state the date on which the first of the five annual payments is to be made, but the preferable and correct implication, having regard to the text and subject matter of cl 6A as a whole and its presence in a will, is that, subject to cl 6A(d) and cl 6A(f) and the stipulated order of priority and subject also to the annual net income being sufficient, the first annual payment is to be made not later than the last day (that is, 30 June) of the second complete taxation year immediately following the date of the Deceased's death. The significant contextual matters include the necessity to obtain a grant of probate; the income to be paid or applied is the annual net income of the cl 6A Trust Fund; cl 6A(c)(ii) refers to 'the net annual income arising ... in any year ending upon the thirtieth day of June'; the possibility that it may be necessary for the first appellant (as executor and trustee) to convert some of the Public Company Shares or some of the Real Estate into money; the necessity for the first appellant (as executor and trustee) to comply with the provisions of cl 6A(c)(i)(A) - (D) before complying with the provisions of cl 6A(c)(i)(E); and by cl 3(d)(ii) and cl 4(c) of the Will the annual payments to Myles and Mary under cl 3(d)(ii) and cl 4(c) respectively 'shall commence not earlier than the 2nd anniversary of the date of [the Deceased's] death'. A reasonable testator in the position of the Deceased would have understood that obtaining a grant of probate, the possible conversion of some assets into money and compliance with cl 6A(c)(i)(A) - (D) would require some time.

166 A question arises as to whether the reference in cl 6A(c)(i)(E) to 'up to a maximum amount of $3 million' is to $3 million or merely to an amount not exceeding $3 million as determined by the first appellant (as executor and trustee of the Will) in his discretion. The proper construction of cl 6A(c)(i)(E) is that the phrase 'up to a maximum amount of $3 million' means $3 million and not merely an amount not exceeding $3 million as determined by the first appellant (as executor and trustee) in his discretion. The better view is that the words 'up to' refer to the gradual and progressive increase in the value of the trust fund of the Trust by the making of the five annual payments. The requirement in cl 6A(c)(i)(E)(c), (e) and (g) that the amount of the balance of the five annual payments to be made by the first appellant (as executor and trustee) be increased by reference to the Consumer Price Index - All Groups for Perth (the CPI) is significant. It is unlikely that the Deceased would have made provision for the CPI increase if he had intended that the first appellant (as executor and trustee) should have a discretion as to whether the value of the trust fund of the Trust should be increased to $3 million or merely to some lesser amount.

167 Clause 6A(c)(i)(E) does not expressly state the amount of each of the five annual payments. The total amount of the five annual payments is the amount by which the value of the trust fund of the Trust at the date of the Deceased's death was less than $3 million. The preferable and correct implication, having regard to the text and subject matter of cl 6A as a whole and its presence in a will, is that there are to be five equal annual payments, subject to:

(a) cl 6A(d) and cl 6A(f) and the stipulated order of priority governing cl 6A(c)(i);

(b) the amount of each of the second, third, fourth and fifth payments being increased in accordance with the CPI, as required by cl 6A(c)(i)(E)(c), (e) and (g); and

(c) the amount of the annual net income for each period being sufficient.

168 The mechanism for the CPI increase, as stipulated in cl 6A(c)(i)(E)(g) is that the amount of each of the second, third, fourth and fifth payments is to be increased by reference to the increase in the CPI number since the payment immediately preceding the payment in question. It is unlikely that the Deceased would have intended that the benefit of the CPI increase to the Trust could be diminished significantly by the first appellant (as executor and trustee) making minimal payments on the first, second, third and fourth occasions and a very large payment on the fifth occasion.

169 The provisions of cl 6A(c)(i)(E) in relation to payments made by the Deceased to the trustee of the Trust after the date of the Will and before his death do not apply because, as I have mentioned, the Deceased did not make any such payments.

170 Sixthly, in making payments for the benefit of the first-named and second-named second appellants and their lineal issue in the following proportions: Ms Baldock and her lineal issue as to 50% and Ms Burt and her lineal issue as to 50%, provided that no such beneficiary falls within the operation of proviso (3) to cl 6A(f) (cl 6A(c)(i)(F)).

171 Seventhly, any annual net income of the cl 6A Trust Fund which is not distributed pursuant to cl 6A(c)(i) is to be held by the first appellant (as executor and trustee of the Will) upon trust as an accretion to the capital of the cl 6A Trust Fund (cl 6A(c)(ii)).

172 Eighthly, subject to the provisos to cl 6A(f), the balance of the cl 6A Trust Fund on the Date of Distribution (that is, either the date being 80 years from the date of the Deceased's death or such earlier date as the first appellant as executor and trustee of the Will may in his absolute discretion determine) is to be distributed to Ms Baldock as to 50% and to Ms Burt as to 50% (cl 6A(f)).

173 I am satisfied, based on my construction of the relevant provisions of the Will, that the first appellant (as executor and trustee of the Will) was obliged to pay to the trustee of the Trust the amount by which the value of the trust fund of the Trust at the date of the Deceased's death was less than $3 million. The amount of the shortfall was payable by five equal annual payments, subject to:

(a) cl 6A(d) and cl 6A(f) and the stipulated order of priority governing cl 6A(c)(i);

(b) the amount of the second, third, fourth and fifth payments being increased in accordance with the CPI; and

(c) the amount of the annual net income for each period being sufficient,

with the first annual payment to be made not later than the last day (that is, 30 June) of the second complete taxation year immediately following the date of the Deceased's death.

174 In my opinion, the proper construction of the relevant provisions of the Trust Deed is as follows:

(a) The background or recitals to the Trust Deed state that one of the main objectives of the Trust is to provide for the advancement and benefit of the respondent. However, the range of beneficiaries is potentially very broad.

(b) Clause 14 makes provision for a person who would otherwise be a beneficiary to be excluded from the class of beneficiaries. The circumstances in which a person will be excluded include the person becoming an alcoholic, or being convicted of an offence relating to drugs, or in the opinion of the trustee becoming a drug addict, or in the opinion of the trustee becoming a member of or in any other way involved with any religious body other than specified traditional Christian dominations, or being convicted of 'a felony'.

(c) Clause 3.2 confers on the trustee a discretion in relation to the payment or application of the Distributable Income of the trust fund of the Trust. In particular, the trustee has a discretion:

(i) to pay or apply all or part of the Distributable Income 'as or for the benefit of [the respondent] and in particular for her education (to the date [the respondent] attains the age of 23 years or the attainment of her first tertiary qualification, whichever is the earlier to occur), maintenance, health and medical expenses'; or

(ii) to pay or apply all or part of the Distributable Income, in such shares as the trustee determines, to or for the benefit of one or more of the beneficiaries (to the exclusion of the others) who are alive or in existence from time to time; or

(iii) to accumulate all or part of the Distributable Income.

(d) By cl 3.3, on or before the last day of each Accounting Period until the Vesting Date, the trustee may exercise its discretion under cl 3.2 in respect of part or the entire Distributable Income of the trust fund for that Accounting Period.

(e) By cl 3.4, where the trustee fails to exercise the discretion under cl 3.2 in accordance with cl 3.3 in respect of all or any part of the Distributable Income of the trust fund, the trustee is deemed to have accumulated the amount in question.

(f) By cl 3.5, where the trustee has exercised the discretion under cl 3.2 in accordance with cl 3.3 or is deemed to have exercised the discretion in accordance with cl 3.4, that exercise of discretion is irrevocable.

(g) Clause 4.1 confers on the trustee a discretion in relation to the payment or application of all or part of the capital of the trust fund of the Trust. The trustee has a discretion to pay or apply all or part of the capital, in such shares as the trustee determines, to or for the benefit of one or more of the beneficiaries (to the exclusion of the others) who are alive or in existence from time to time.

(h) By cl 4.2.1, '[w]ithout limiting cl 4.1, it is the intention and wish of the Trustee and the Appointor as at the date of this Deed that there will not be any vesting of any of the capital of [the trust fund] upon [the respondent] until both of the following events have occurred'; namely, the Deceased has died and the respondent has attained the age of 30 years.

(i) By cl 4.4, in exercise of the discretions conferred by either or both of cl 3 or cl 4, the trustee may pay, apply or accumulate property comprising or comprised in the trust fund for the advancement or benefit of the respondent.

(j) In the events which have happened after the Trust Deed was executed and before the Deceased died, the Vesting Date, as defined in cl 1.1 of the Trust Deed, will be the earlier of the date on which the respondent attains the age of 30 years or the date of the respondent's death.

(k) By cl 5.1.1, if the Vesting Date is the date on which the respondent attains the age of 30 years and:

(i) the respondent satisfies the trustee (acting reasonably) that she is the natural daughter of the Deceased; and

the whole of the trust fund will vest in the respondent.

(l) By cl 16.1, relevantly, the trustee may, at any time before the Vesting Date, resettle the trust fund of the Trust by paying or transferring all or part of the trust fund to the trustee of another trust under which all or any of the beneficiaries of the Trust are beneficiaries (whether absolutely, contingently, presumptively or prospectively). By cl 16.2, relevantly, property which is resettled in accordance with cl 16.1 is no longer held on the trusts created by the Trust Deed and becomes subject to the terms of the trust on which it is resettled.

175 In my opinion, on a proper construction of the relevant provisions of the Trust Deed:

(a) the Vesting Date under the Trust Deed will be the earlier of the date on which the respondent attains the age of 30 years or the date of the respondent's death;

(b) prior to the Vesting Date, the trustee of the Trust has a discretion in relation to the payment or application of the income and capital of the trust fund of the Trust;

(c) prior to the Vesting Date, the respondent does not have a right to receive any distribution of income or capital, but merely a right of due administration;

(d) if the Vesting Date is the date on which the respondent attains the age of 30 years and if the respondent satisfies the trustee (acting reasonably) that she is the natural daughter of the Deceased (a matter that would not occasion any difficulty) and if the respondent is not an Excluded Person, the whole of the trust fund of the Trust will vest in the respondent;

(e) prior to the Vesting Date, the trustee of the Trust has a discretion to resettle all or part of the trust fund of the Trust; and

(f) the value of the trust fund as at the Vesting Date will depend on a number of contingencies, including whether the trustee has paid or applied to or for the benefit of any of the beneficiaries (not necessarily the respondent) any of the income or capital of the trust fund pursuant to cl 3 or cl 4 and whether the trustee has resettled all or part of the trust fund pursuant to cl 16.1 and, if so, the terms of the trust on which the property is resettled.

176 Recitals are separate and distinct from the operative part of a deed. If the provisions of the operative part are clear, it is not permissible to refer to the recitals to contradict or modify the clear meaning of the operative part. See Chacmol Holdings Pty Ltd v Handberg [2005] FCAFC 40; (2005) 215 ALR 748 [38] - [50] (Tamberlin J; North & Dowsett JJ relevantly agreeing). If, however, the operative part is unclear, the recitals may be referred to for the purpose of ascertaining the intention of the parties as expressed in the operative part. See Ellis v Dariush-Far [2007] QCA 398; (2007) 242 ALR 635 [18] (Keane JA; Williams JA & Daubney J agreeing). See also, in relation to the use of recitals in the construction of a deed, Franklins Pty Ltd v Metcash Trading Ltd [2009] NSWCA 407; (2009) 76 NSWLR 603 [379] - [390] (Campbell JA; Allsop P & Giles JA relevantly agreeing).

177 In my opinion, the relevant provisions of the operative part of the Trust Deed are clear. The statement in the background or recitals to the Trust Deed that one of the main objectives of the Trust is to provide for the advancement and benefit of the respondent does not qualify or affect the proper construction of the relevant operative provisions of the Trust Deed. In particular, the background or recitals do not qualify or affect the conclusions I have expressed at [175] above.

178 I accept that a provision of $3 million would, if received by the respondent, confer a substantial benefit on her (as the evidence of Ms Nance indicated), but the likelihood of that outcome must be evaluated in the context of the proper construction of cl 6A of the Will and the proper construction of the relevant provisions of the Trust Deed.

(a) The question which arises at the first stage of the process required by s 6(1) must be formulated and determined as at the date of the Deceased's death, having regard to all material facts that existed at the date of death, whether the Deceased knew of them or not, and all material eventualities that might at that date reasonably have been foreseen by a deceased who knew the facts.

(b) In determining the question which arises at the first stage, the court must look to what is necessary or appropriate prospectively from the date of death, including events which are contingent as well as those which are certain or exceedingly likely to happen. Advantage may be taken of hindsight if the subsequent occurrences are within the range of reasonable foresight.

180 In my opinion, the master was not bound to take into account, at the first stage of the process, the first appellant's undertaking to ensure that the capital of the Trust was increased to $3 million or his undertaking to ensure that a person acceptable to the respondent was substituted as the appointor of the Trust. The undertakings were offered to the court well after the date of death of the Deceased. The provision of the undertakings was not an eventuality that might, as at the date of the Deceased's death, reasonably have been foreseen by a deceased who knew all material facts in existence at that time. In any event, the undertakings were merely offered and not actually given.

181 Similarly, the fact that the Trust Deed contains provisions which enable the trustee to be changed (cl 7(2)) and provisions which enable the Trust Deed, including cl 14.2, to be amended (cl 18) was not a matter that the master was bound to take into account at the first stage of the process. It was unknown and not reasonably foreseeable, as at the date of the Deceased's death, whether and, if so, in what manner those provisions of the Trust Deed might be invoked after the Deceased's death. In any event, no relevant provision of the Trust Deed has been amended.

182 At the hearing of the appeal, counsel for the appellants acknowledged that there was no evidence as to whether the income from the cl 6A Trust Fund would be sufficient to satisfy all of the trusts created by cl 6A(c)(i)(A) - (E) (appeal ts 77 - 78).

183 Also, as I have mentioned, at the hearing of the appeal counsel for the appellants informed the court that the first appellant (as executor and trustee of the Will) had not made any payments to the trustee of the Trust, pursuant to cl 6A(c)(i)(E)(c) of the Will, apart from the two payments of $100,000 each to which I have referred at [43] above (appeal ts 51 - 52, 79).

184 The master's conclusion, in effect, that as at the date of the Deceased's death there was a 'real prospect' of the respondent getting 'nothing' was not falsified by the fact that, at the time of the hearing, she had received some distributions of income under the Trust.

185 As at the date of the Deceased's death there was a reasonable possibility that the respondent would get 'nothing' under the Trust Deed. That possibility would materialise if:

(a) the respondent became an 'Excluded Person' under the Trust Deed prior to the Vesting Date and the trustee of the Trust did not exercise his or her discretion prior to the respondent becoming an 'Excluded Person' to pay or apply any of the income or capital of the trust fund to or for the benefit of the respondent;

(b) the trustee of the Trust exercised his or her discretion prior to the Vesting Date to pay or apply the whole of the income and capital of the trust fund to or for the benefit of a beneficiary or beneficiaries other than the respondent; or

(c) the trustee of the Trust exercised his or her discretion prior to the Vesting Date to resettle the trust fund on terms that would not or may not result in the respondent receiving any material benefits.

186 Further, as at the date of the Deceased's death, there was a reasonable possibility that the respondent would get 'nothing' under the Trust Deed prior to the Vesting Date if the trustee of the Trust did not exercise his or her discretion prior to the Vesting Date to pay or apply any of the income or capital of the trust fund to or for the benefit of the respondent.

187 It is unnecessary (and, in hypothetical or abstract circumstances, very difficult if not impossible) to assess the prospect of an exercise by the trustee of the Trust of his or discretion or a failure by the trustee of the Trust to exercise his or her discretion, in the manner I have indicated at [185] - [186] above, being successfully impugned by the respondent.

188 In my opinion, a provision under a testator's will may not make adequate provision from his or her estate for the proper maintenance, etc, of a person mentioned in s 7 of the Act if, in all the circumstances, the form of the provision is not adequate or proper. That is, the evaluation by the court of the adequacy or propriety of a provision in a will is not confined to whether, in all the circumstances, the actual or potential quantum of the provision is adequate and proper. See Taylor [62] (Brereton J).

189 For example, in Gregory (No 2), the testator, who was wealthy, made provision for his widow under a discretionary trust over which she had no control. Young J held that a provision in that form did not make adequate provision for the widow's proper maintenance and support. His Honour expressed the view that '[t]he community would expect that the widow of such a man would at least have a home in her own name and some capital to which she could resort whenever she felt like it' (12). An appeal from Young J's judgment, which did not relate to the form of the provision under the discretionary trust, was dismissed. See Gregory (1999) NSWCA 221.

190 Hickin (No 2) was concerned with the proper construction of a will. It was not a family provision case. The first, second and third respondents were children of the testator and Jehovah's Witnesses. By his will, the testator made gifts to the first, second and third respondents. The gifts were conditional upon the first, second and third respondents attending the testator's funeral and becoming Roman Catholics within three months after the testator's death. None of the first, second and third respondents became Roman Catholics within the stipulated period but all of them attended the testator's funeral. Kunc J held that the conditions (in particular, the condition that the first, second and third respondents become Roman Catholics) were not uncertain, impossible or contrary to public policy.

191 I am satisfied that, in all the circumstances, the Deceased's provision for the respondent under cl 6A(c)(i)(E) of the Will was not, in form or substance, adequate for her proper maintenance, etc.

(a) there was no evidence that the income from the cl 6A Trust Fund would be sufficient to satisfy all of the trusts created by cl 6A(c)(i)(A) - (E) in circumstances where the trusts created by pars (A) - (D) ranked in order of priority ahead of the trust created by par (E);

(b) as at the date of the Deceased's death, there was a reasonable possibility that:

(i) the respondent would get 'nothing' under the Trust Deed in the circumstances I have described at [185] above;

(ii) alternatively, the respondent would get 'nothing' under the Trust Deed prior to the Vesting Date in the circumstances I have described at [186] above.

193 Also, I am satisfied that, in all the circumstances, even if the respondent did receive $3 million pursuant to cl 6A(c)(i)(E) of the Will read with the relevant provisions of the Trust Deed, that amount is not, in all the circumstances, adequate for her proper maintenance, etc. I consider that adequate provision for the respondent's proper maintenance, etc, requires that she be provided with a capital sum which is likely to ensure her financial security for the remainder of her life. The capital sum should be sufficient to enable the respondent to purchase a reasonably substantial house with part of the capital sum and to invest the balance so that she will receive a reasonably substantial annuity for the remainder of her life. As will be apparent from my reasons in relation to determining what amount is necessary for that purpose, $3 million is inadequate.

194 I consider that, in all the circumstances (including contemporary accepted community standards), the Deceased did not discharge his moral duty to the respondent by providing for her maintenance, etc, in accordance with cl 6A(c)(i)(E) of the Will read with the relevant provisions of the Trust Deed. Those provisions are attended by real uncertainty as to whether and, if so, to what extent financial benefits would actually be received by the respondent.

195 The Deceased was not relieved of his moral duty to the respondent if she happened to become a member of or in any other way involved with a religious body, other than the traditional Christian dominations specified in cl 14.1.7 of the Trust Deed, or if she happened to be convicted of a minor offence involving the possession of a prohibited drug. Those provisions were not contrary to public policy, but that is not the issue. Rather, the issue is whether, in all the circumstances, the Deceased's provision for the respondent in accordance with cl 6A(c)(i)(E) of the Will read with the relevant provisions of the Trust Deed was adequate for her proper maintenance, etc. It is unnecessary to consider the other events which may result in the respondent becoming an Excluded Person pursuant to cl 14 of the Trust Deed.

196 My satisfaction that the Deceased's provision for the respondent in accordance with cl 6A(c)(i)(E) of the Will read with the relevant provisions of the Trust Deed was not adequate or proper is not diminished by the fact that, as at the date of the Deceased's death, the respondent was aged 16; or by the evidence before the master that the respondent (who at the time of the hearing was aged 19) was inexperienced with money; or by the fact that, when asked about her needs, the respondent engaged in an exercise which the master characterised as 'clearly fanciful' [42] and 'overstated' [43].

197 The contingencies as to the respondent's age and her inexperience with money, as at the date of the Deceased's death, could have been dealt with in the Will by, for example, a trust arrangement which did not involve any material uncertainty as to whether and, if so, to what extent financial benefits would actually be received by the respondent. A trust arrangement in that form could not, of itself, be disparaged as 'paternalistic and unjustified'.

198 The master concluded, as he was entitled to, that no adverse inferences should be drawn against the respondent consequent upon her answers to her solicitors' inquiries as to the expenditure she was likely to make for the rest of her life [43].

199 I accept the appellants' submission that the mere fact that a beneficiary of a trust has not met or does not know a trustee is not a proper basis for deciding that provision for the beneficiary under a trust structure is inadequate.

200 Although some criticism can fairly be made of the master's failure to construe the whole of the relevant provisions of the Will and the Trust Deed and, also, of aspects of his reasoning, I am of the opinion that the master was correct in concluding that the Will did not make adequate provision for the respondent's proper maintenance, etc, and that any errors the master made were not material to the outcome of the first stage of the process required by s 6(1).

202 Grounds 3, 4, 5, 6 and 7 relate to the second stage of the process required by s 6(1) of the Act.

203 It is convenient to begin with an examination of ground 4.

Ground 4: the master's findings and reasoning

204 The essence of the complaint in ground 4 is that the master erred by regarding his discretion at the second stage of the process required by s 6(1) as unfettered because of the size of the Deceased's estate.

(a) the discretion of the court in relation to the second stage of the process is 'unfettered' [61];

(b) the discretion 'must be exercised judicially and all relevant factors must be taken into account' [61];

(c) however, 'there is no warrant for assuming that the award [to a claimant] should be no more than that which will provide adequate provision for [the claimant]' [61].

206 According to the master, the present case was different from other cases because:

(a) the Deceased's estate was 'massive' and 'its value irrelevant in determining the outcome' at the second stage of the process [62];

(b) there were 'no factors to weigh in the balance' [62]; and

(c) there were 'no markers for an exercise of discretion' [62].

It is always necessary to remain cautious about reaching a decision in an evidence free zone. But it is difficult to see in this case what evidence could have been led and which was not led which might in some way influence the exercise of my discretion. As I have indicated, taking into account all of the evidence of [the respondent], I was satisfied she was an honest level-headed young woman. But she is subject to all of the vagaries and uncertainties of youth. The actuarial evidence really took the matter no further. None of the other evidence was [of] such weight as to influence my decision [63].

208 The master then said that, in the exercise of his discretion, he would award the respondent 'a cash payment of $25 million conditional upon her forfeiting any right or interest in the Trust' [64]. The master sought to explain that decision as follows:

I need to make it plain [that] in settling on this figure I am exercising a discretion. The one factor which has influenced me most is the size of the estate. This award will set up [the respondent] and her children and perhaps their children for their lives. Wisely invested the fund will provide enough income so [the respondent] and her relatives will never want for anything again. All that against a background of the award making no difference whatever to the position of the other beneficiaries. Even in this day and age $25 million is a considerable amount of money. But in the context of this estate it is little more than a rounding error [65].

209 The master suggested that there were two approaches to the exercise of the court's discretion in relation to the second stage of the process.

210 The first involved 'the concept of what a wise and just testator would do in the position of [the Deceased]' [69]. The master conjured 'the internal dialogue' of the hypothetical wise and just testator in the circumstances of this case. I have reproduced 'the internal dialogue' at [109] above. It concluded with the statement of the wise and just testator that '[he could] afford to spoil [the respondent] and there [was] no reason why [he] should not do so' [69]. The master then said that whether or not 'the internal dialogue' (which he also described as 'ruminations') would have resulted in a wise and just testator making a gift to the respondent of $25 million was 'open to question' but, in the master's view 'it would and ... on that basis [the master had] made the award' [70].

211 The second involved 'the community expectation test'; that is, 'what amount should be left to a person in [the claimant's] position to meet community expectations' [71]. The master said that whether or not he was 'the ideal person to judge community expectations must be open to doubt' [71]. Despite that reservation, the master expressed this view:

What can be said about community expectation is that most people would expect [the respondent] to be more than adequately provided for. Given the size of the estate and the lack of limitation on any award it is difficult to believe a majority would not see it appropriate to set up [the respondent] for life. How members of the community would settle on a figure is a rather more difficult question. In my view an award of $25 million would not fall outside the reasonable expectation of most members of the community [72].

212 The master recorded that he had given 'careful consideration to establishing some form of trust into which [the award of $25 million] could be paid and which would be managed on behalf of [the respondent]' [73]. The master concluded, however, that 'such an approach would be paternalistic and unjustified' and, also, that establishing a new trust 'might be possible [but] would not seem to be practical' [73].

213 Counsel for the respondent submitted that there was nothing to suggest that the master's exercise of his discretion went beyond the bounds of the words 'adequate' and 'proper' in s 6(1) of the Act, or the statute generally.

214 Counsel argued that the master's comments about the size of the Deceased's estate were unremarkable because the value of the estate exceeded $1 billion. The master's statement that '[t]he one factor which [had] influenced [him] most [was] the size of the estate' [65] did not mean that he considered only that factor. According to counsel, the significance of the size of the Deceased's estate upon the respondent's claim was that the need to weigh competing claims was, in contradistinction to other cases, 'of no account' [13]. As the master observed, '[n]o individual will be prejudiced no matter what award (within reason) I make' [62].

215 Counsel for the respondent relied on the following passage in the reasons of Adam J in Re Buckland, deceased:

The greater the estate the more may contingencies, even remote contingencies which may arise in the future, be provided for in the assessment of such maintenance (415).

216 It was submitted that 'the uncertainty intrinsically associated with the future of a 19-year-old woman' appropriately informed the master's view as to 'the inherent limitations associated with the actuarial evidence' and as to the exercise of his discretion in relation to the award.

217 It was contended that the master was entitled to embark upon the application of 'the wise and just testator' test, the 'community expectation' test and the concept of the Deceased's 'moral duty' and the respondent's 'moral claim' with a consideration of the size of the Deceased's estate. It was appropriate for the master 'to look well beyond the needs [of the respondent] when interpreting and applying community standards to decide what provision [the master] ought to order': Lloyd-Williams [32].

218 At the heart of the master's exercise of discretion was his analysis of what a hypothetical wise and just testator, in the position of the Deceased, would have done in all the circumstances of the case and what amount would be an appropriate expression of community standards.

219 Counsel for the respondent submitted that the master adopted the correct approach and, consequently, his decision cannot be impugned because '[t]here is no single provision of which it may be said that that is the provision that a wise and just testator would have made. Instead there is a range of appropriate provisions': Grey v Harrison [1997] 2 VR 359, 366 - 367 (Callaway JA; Tadgell & Charles JJA agreeing).

220 In my opinion, the master's exercise of discretion at the second stage of the process required by s 6(1) miscarried in that he regarded his discretion as unfettered because of the size of the Deceased's estate. I am of that opinion for the following reasons.

221 First, the court's discretion to make an order under s 6(1) is enlivened if the court is of the opinion that the disposition of the deceased's estate is not such as to make 'adequate' provision from his or her estate for the 'proper' maintenance, etc, of the claimant.

222 Secondly, if the court's discretion to make an order under s 6(1) is enlivened (because the court is of the opinion that the disposition of the deceased's estate is not such as to make 'adequate' provision from his or her estate for the claimant's 'proper' maintenance, etc), s 6(1) empowers the court to 'order that such provision as the Court thinks fit is made out of the estate of the deceased for that purpose' (emphasis added). See Blore (134). The phrase 'as the Court thinks fit' does not confer a discretion that is 'unfettered' or at large. The phrase must be read in the context of s 6(1) as a whole. The words 'for that purpose' at the end of s 6(1) refer to the purpose identified earlier in s 6(1), namely ensuring that 'adequate' provision is made from the deceased's estate for the claimant's 'proper' maintenance, etc. The text and purpose of s 6(1) qualify the court's power. The power is confined to the making of orders which will ensure that 'adequate' provision is made from the deceased's estate for the claimant's 'proper' maintenance, etc.

223 Thirdly, the master expressly stated that, in the present case, his discretion at the second stage of the process was 'unfettered' [61]. The master made that statement in the course of rejecting the appellants' submission that 'if [a claimant] is entitled to an award then [the] award should be no more than adequate provision for the proper maintenance, support, education or advancement in life of [the claimant]' [61]. The master said that the submission '[put] a gloss on the statute' [61]. Although the master noted that the discretion 'must be exercised judicially and all relevant factors must be taken into account', he added immediately that there was 'no warrant for assuming that the award should be no more than that which will provide adequate provision for [the claimant]' [61].

224 Those observations (read in the context of the master's reasons as a whole) reveal error. The court's discretion at the second stage of the process is not 'unfettered' or at large. The discretion is conditioned by the requirement that an order for provision or further provision out of the deceased's estate must be for the purpose identified in s 6(1); that is, ensuring that 'adequate' provision is made from the deceased's estate for the claimant's 'proper' maintenance, etc. The master wrongly asserted that the appellants' submission '[put] a gloss on the statute' [61]. The master's statement that there is 'no warrant for assuming that the award should be no more than that which will provide adequate provision for [the claimant]' shows a misunderstanding as to the limits of the discretion conferred on the court at the second stage of the process [61].

225 Fourthly, in exercising the discretion at the second stage of the process, the court must take into account all relevant circumstances. Relevance is determined by reference to the text and purpose of s 6(1). Relevant circumstances include (but are not limited to) the size of the estate; the nature of the relationship between the claimant and the deceased; the claimant's financial and other circumstances as at the date of the hearing; contingencies (including remote contingencies) which may arise in the future having regard to the position and circumstances of the claimant and the vicissitudes of life generally; the position and circumstances of other claimants with legitimate claims on the deceased's bounty; and what the deceased regarded as superior claims or preferable dispositions in relation to his or her estate. The weight to be given to a relevant circumstance will, of course, vary from case to case.

226 Fifthly, it is apparent, on a fair reading of his reasons as a whole, that the master thought that the present case was in a special category because of the size of the Deceased's estate. The following statements by the master support that conclusion:

(a) '[the Deceased's estate] is colossal ... it is difficult for most people to comprehend such wealth' [61];

(b) '[the Deceased's estate] is massive and its value irrelevant [sic] in determining the outcome' [62];

(c) 'there are no factors to weigh in the balance [apart from the size of the Deceased's estate]' [62];

(d) 'there are no markers for an exercise of discretion [apart from the size of the Deceased's estate]' [62];

(e) '[t]he one factor which has influenced me most is the size of [the Deceased's estate]' [65];

(f) '[i]n the context of this estate [$25 million] is little more than a rounding error' [65];

(g) '[the Deceased was] a fabulously wealthy man ... [who] can afford to spoil [the respondent] and there is no reason why [he] should not do so' [69]; and

(h) 'community expectation [would be] that ... [the respondent] be more than adequately provided for ... [and] set up ... for life' [72].

227 Those statements indicate that, consistently with his erroneous observation that the court's discretion at the second stage of the process is 'unfettered', the master proceeded to order that provision be made for the respondent out of the Deceased's estate in the amount of $25 million without regard to the text and purpose of s 6(1); in particular, without regard to the manner in which the text and purpose qualify the court's power. The size of the Deceased's estate did not confer on the master an 'unfettered' discretion. Similarly, the size of the Deceased's estate did not mean that there were 'no markers' for the exercise of the discretion apart from the size of the estate. The master's power at the second stage was confined to the making of orders which would ensure that, in all of the relevant circumstances, 'adequate' provision was made for the respondent out of the Deceased's estate for her 'proper' maintenance, etc.

228 Sixthly, the master's statement that his award of $25 million 'will set up [the respondent] and her children and perhaps their children for their lives' and that '[w]isely invested the fund will provide enough income so [the respondent] and her relatives will never want for anything again', in the context of his observation that the factor which had 'influenced [him] most is the size of the estate', indicates that the master thought, erroneously, that he was entitled, by virtue of the size of the estate, to make an award greater than 'adequate' provision for the respondent's 'proper' maintenance, etc.

229 Seventhly, although the discretion at the second stage of the process is, no doubt, very broad, the discretion must be exercised by reference to the evidence before the court or, in appropriate circumstances, facts of which the court can take judicial notice. See Chappell [31].

230 The master was not exercising the discretion in 'an evidence free zone' [63]. There was evidence before him that was relevant to the assessment of what provision would be 'adequate' for the respondent's 'proper' maintenance, etc. The master was obliged to exercise the discretion by reference to the evidence (in particular, to findings of fact made on the basis of the evidence). He was not entitled to exercise the discretion, wholly or partly, on the basis that, having regard to the size of the Deceased's estate, the respondent could be 'spoiled' or 'community expectation' required that the respondent be 'more than adequately provided for ... [and] set up ... for life' [72].

231 Eighthly, the master made findings that the respondent was 'an honest [and] level-headed young woman' [63] and was not 'a gold digger', 'narcissistic' or 'greedy' [43]. Those findings were not relevant to the second stage of the process. The focus should have been on what was 'adequate' provision for the respondent's 'proper' maintenance, etc, irrespective of whether, in the context of the size of the Deceased's estate, she was 'honest' and 'level-headed', on the one hand, or 'a gold digger', 'narcissistic' and 'greedy', on the other.

233 My examination of the merits of ground 4 has revealed that the master made a number of material errors in relation to the second stage of the process. His decision to award the respondent 'a cash payment of $25 million conditional upon her forfeiting any right or interest in the Trust' [64] was misconceived. The orders he made to give effect to that decision must be set aside.

234 It is unnecessary to deal with grounds 3, 5, 6 and 7.

The re-exercise by this court of the discretion at the second stage of the process

235 This court has the material necessary to re-exercise the discretion at the second stage of the process.

236 At the hearing of the appeal, the court received into evidence data compiled by the Australian Bureau of Statistics in relation to average weekly earnings in Australia as at November 2016. According to the data, the amount of full-time adult average weekly total earnings as at November 2016 was $1,595.50.

237 At the hearing of the appeal, the court ordered the parties to file agreed additional tables of the kind set out in Ms Nance's report dated 2 October 2014. That report was in evidence before the master.

238 After the hearing of the appeal, the parties informed the court that on 26 June 2017 Ms Nance and Mr Plover had agreed that, since 24 October 2014, term deposit rates have fallen from 4.1% per annum, which was the rate agreed upon in their joint memorandum dated 24 October 2014, to 3% per annum, which is the current term deposit rate.

239 On 28 June 2017, a report dated 27 June 2017 from Ms Nance was filed pursuant to the court's order. In her report Ms Nance noted that the additional tables she had prepared included new information as follows:

(a) two alternative amounts had been adopted for the purchase of a house for the respondent with a value of either $1 million or $ 1.5 million as at 30 June 2017 (the Base Amount); and

(b) two alternative amounts had been adopted for the provision of an annuity for the respondent, being either $75,000 per annum or $100,000 per annum, with the annuity to begin as at 30 June 2017.

240 In her report dated 27 June 2017, Ms Nance also noted that she had continued to assume, in accordance with earlier instructions given to her, that:

(b) the respondent was a healthy female with a normal life expectancy;

(c) the amount required to purchase a house for the respondent in 4 years (30 June 2021) will be the Base Amount plus an allowance for house price inflation; and

(d) all calculations valuing investment earnings and personal income were to be gross of tax.

241 Ms Nance's report dated 27 June 2017 contains a number of tables. It is unnecessary to refer to all of them.

242 One table in Ms Nance's report dated 27 June 2017 (Table No 1) shows the results for an annuity indexed with price inflation (term deposit rate 3% per annum):

Total Capital Required (nearest $1,000) (30 June 2017 value)

Total Capital Required (nearest $1,000) (30 June 2017 value)

Total Capital Required (nearest $1,000) (30 June 2017 value)

Total Capital Required (nearest $1,000) (30 June 2017 value)

243 Another table in Ms Nance's report dated 27 June 2017 (Table No 2) shows the results for an annuity indexed with wage inflation. The total value is higher under this table compared to the previous table as the wage inflation index is higher (4% per annum) than the price inflation index (2.5% per annum):

Total Capital Required (nearest $1,000) (30 June 2017 value)

Total Capital Required (nearest $1,000) (30 June 2017 value)

Total Capital Required (nearest $1,000) (30 June 2017 value)

Total Capital Required (nearest $1,000) (30 June 2017 value)

244 The generous treatment by the Deceased of the first-named and second-named second appellants in the Will, must not be used to determine the provision which should be made for the respondent. The measure to be applied in exercising the discretion at the second stage of the process is not what has been given to the first-named and second-named second appellants, but what is adequate provision for the respondent's proper maintenance, etc, having due regard to all the circumstances of the case. The court's discretion is not to be exercised for the purpose of making what may appear to the court to be a fair distribution of the Deceased's estate among his children and other members of his family. See Blore (134 - 135); Scales (19).

245 After evaluating the record in the primary proceedings (including, in particular, the master's unchallenged findings of fact) and the additional evidence received in the appeal, and after taking into account all relevant circumstances including:

(b) the nature of the relationship between the Deceased and the respondent;

(c) the respondent's age as at the date on which judgment in the appeal is to be delivered;

(d) the respondent's financial and other circumstances including her level of education, employment history and personal circumstances;

(e) contingencies (including remote contingencies) which may arise in the future having regard to the respondent's circumstances and the vicissitudes of life generally;

(f) the nature of the relationship between the Deceased and other persons with legitimate claims on the Deceased's estate;

(g) the financial and other circumstances of those other persons; and

(h) what the Deceased regarded as superior claims or preferable dispositions in relation to his estate,

I consider that adequate provision from the Deceased's estate for the respondent's proper maintenance, etc, requires that she be provided with a capital sum which is likely to ensure her financial security for the remainder of her life. The capital sum should be sufficient to enable the respondent to purchase a reasonably substantial house with part of the capital sum and to invest the balance so that she will receive a reasonably substantial annuity for the remainder of her life.

246 At all material times the respondent has resided in the Perth metropolitan area.

247 There was evidence before the master that the median house price in Western Australia (not the Perth metropolitan area) as at 12 December 2013 was about $500,000. There was no evidence before this court as to the median house price in Western Australia or the Perth metropolitan area when the appeal was heard. However, it is notorious and I take judicial notice of the fact that the average house price in the Perth metropolitan area has not increased to any material extent since 12 December 2013.

248 In my opinion, a capital sum of $6,142,000 would constitute adequate provision for the respondent's proper maintenance, etc. I have taken that amount from Table No 2 in Ms Nance's report dated 27 June 2017 which shows the results for an annuity indexed with wage inflation. The $6,142,000 is the total capital required (rounded to the nearest $1,000), as at 30 June 2017, for the purchase of a house in the Perth metropolitan area with a value of $1,500,000, as at 30 June 2017, and the provision of an annuity of $100,000 per annum, from 30 June 2017, on the basis of the 'medium' key assumptions adopted in Table No 2.

249 The respondent will be able to purchase with $1,500,000 a reasonably substantial house in the Perth metropolitan area that is adequate and proper for her. An annuity of $100,000 per annum, from 30 June 2017, indexed with wage inflation, is likely to ensure that the respondent receives an income stream for the remainder of her life that is adequate and proper for her.

250 I consider that indexing the annuity by reference to wage inflation is more appropriate than price inflation. Indexation by reference to wage inflation will maintain the 'standard of living' of the respondent relative to the working population whereas indexation by reference to price inflation would merely maintain the 'buying power' of the annuity.

251 In my opinion, it is unnecessary to make any adjustments to the amount of $6,142,000 to recognise that the respondent has had the use of the $3 million paid to her on or about 15 May 2015 pursuant to the orders made by Newnes JA or to recognise that the actuarial calculations contained in Table No 2 of Ms Nance's report dated 27 June 2017 were made as at 30 June 2017.

252 It will, of course, be necessary to bring the $3 million to account when the court makes orders upon delivering judgment in the appeal.

253 My proposed order for the provision of $6,142,000 to the respondent (subject to the $3 million being brought to account) is in substitution for the provision made in cl 6A(c)(i)(E) of the Will and is conditional upon the respondent executing all documents and doing all acts reasonably required by the trustee of the Trust (and at the expense of the trustee of the Trust) to relinquish any right or interest she has or may have as a beneficiary of, or otherwise in relation to, the Trust.

254 I have considered whether the balance of the $6,142,000, after the $3 million is brought to account, should be held upon trust for the respondent for a stipulated period.

255 The factors which militate against the imposition of a trust are as follows. The respondent is now aged 22. The $3 million was paid to her on or about 15 May 2015 for her own use and without restriction. When the respondent gave evidence at the hearing before the master she was aged 19. Although the respondent specified some items which were fanciful and extravagant, in response to her solicitors' request that she specify the expenditure that she was likely to need for the rest of her life, the master did not draw 'any adverse inferences against [the respondent] consequent upon her answers to her solicitors' inquiries' [43]. The master, who had the benefit of seeing and hearing the respondent in the witness box, formed the view that she was 'well-balanced' [45], 'reasonably intelligent' [45] and 'level-headed' [63]. The respondent does not suffer from any relevant physical or intellectual disability.

256 The factors which militate in favour of the imposition of a trust are as follows. No evidence was sought to be adduced before this court as to the respondent's personal development since the hearing before the master. Although the respondent is now a young adult, her maturity, understanding of the value of money and financial astuteness are still likely to be in the course of development. The $3 million which she has already received for her own use and without restriction was sufficient to enable her to purchase a reasonably substantial house in the Perth metropolitan area and to obtain a reasonable income stream from the investment of the balance. No evidence was sought to be adduced before this court as to how the respondent has invested or spent the $3 million. The Deceased stipulated in cl 6A(c)(i)(E) of the Will read with the relevant provisions of the Trust Deed, in effect, that the respondent would not acquire a vested interest in the capital of Trust until she attained the age of 30. If the balance of the $6,142,000 (after the $3 million is brought to account) (the Balance of the Fund) is held upon trust for a stipulated period, the risk of the Balance of the Fund being dissipated while the respondent is still a young adult will be removed. The imposition of a trust will therefore facilitate the achievement of the object of ensuring the respondent's financial security for the remainder of her life. Also, the imposition of a trust is consistent with the established principle that the Act permits the court to alter a deceased's disposition of his or her property only so far as it is necessary to make adequate provision for the proper maintenance, etc, of the claimant. See Bosch (477); Coates (514); Re Buckland, deceased (409).

257 I am satisfied, after evaluating and weighing the factors I have mentioned, that it is appropriate to order that the Balance of the Fund be held by an independent trustee (to be approved by the court) upon trust as follows:

(a) If the respondent attains the age of 30, to pay the whole of the Balance of the Fund, together with any accrued or accumulated income, to the respondent absolutely.

(b) Prior to the respondent attaining the age of 30 and subject to par (c) below, to invest the Balance of the Fund, and any accrued or accumulated income, as authorised by law.

(c) Prior to the respondent attaining the age of 30, in the independent trustee's absolute discretion, to pay or apply from time to time the whole or any part of the accrued income from the investment of the Balance of the Fund to or for the maintenance, education, advancement or benefit of the respondent or, in the independent trustee's absolute discretion, to accumulate from time to time the whole or any part of the accrued income from the investment of the Balance of the Fund.

(d) If the respondent dies before attaining the age of 30, to pay the Balance of the Fund, together with any accrued or accumulated income, to the executor and trustee of the Will as an accretion to the trust fund set up under cl 6A(a) of the Will and to be held by the executor and trustee of the Will upon the trusts set out in cl 6A (except the trust created by cl 6A(c)(i)(E)).

258 The independent trustee's fees and expenses in connection with investing and administering the Balance of the Fund and the trust are to be a first charge upon and payable out of the trust fund set up under cl 6A(a) of the Will.

260 Counsel for the parties should be heard as to the form of the orders, including the precise and detailed terms of the trust relating to the Balance of the Fund, and as to costs.

261 MITCHELL & BEECH JJA: The background, the facts, grounds of appeal and reasons of the master are set out in the reasons of Buss P.

262 We agree with Buss P that the master did not err in concluding that the first question - the jurisdictional question - was answered affirmatively in favour of the respondent. We agree with Buss P that, assessed as at the date of the Deceased's death, there was a reasonable possibility that the respondent would get nothing under the Trust Deed for the Olivia Trust No 2. This is because, for the reasons Buss P gives,[1] on a proper construction of the Trust Deed:

(1) the Trustee had a discretion whether to distribute any, and if so how much, income or capital to the respondent before she turned 30, so that there was a reasonable possibility that the respondent might not receive anything from the Trust before she turned 30; and

(2) there was a reasonable possibility that the respondent might get nothing under the Trust Deed when she turned 30, in the circumstances referred to at [185](a) - (c) of Buss P's reasons.

263 In the circumstances of this case, a will which made no provision for the respondent could not be regarded as making adequate provision for her proper maintenance etc. In our view, the contingent nature of the disposition to the respondent under the Will, arising from the discretionary nature of the Olivia Trust No 2, compels the conclusion that the Deceased's provision in the Will for the respondent was not adequate for her proper maintenance etc. That is so even if we were to accept the appellant's submissions that, on its proper construction, the Deceased's Will made definite provision for the payment of $3 million to that Trust and that $3 million would constitute adequate provision. Thus, it is unnecessary to decide whether we accept those submissions. We also agree with Buss P at [180] that, in addressing the jurisdictional question, the master was not bound to take into account the first appellant's proposed undertakings to ensure the capital of the Trust was increased to $3 million. Grounds 1 and 2 are not made out.

The master misapprehended the nature and limits of his power

264 We also agree that ground 4 must be upheld. Our reasons for upholding ground 4 may be shortly stated.

265 Section 6(1) of the Family Provision Act 1972 (WA) provides as follows:

If any person (in this Act called the deceased) dies, then, if the Court is of the opinion that the disposition of the deceased's estate effected by his will, or the law relating to intestacy, or the combination of his will and that law, is not such as to make adequate provision from his estate for the proper maintenance, support, education or advancement in life of any of the persons mentioned in section 7 as being persons by whom or on whose behalf application may be made under this Act, the Court may, at its discretion, on application made by or on behalf of any such person, order that such provision as the Court thinks fit is made out of the estate of the deceased for that purpose. (emphasis added)

266 The master said as follows in relation to s 6.[2]

As the Act itself makes plain and as was said in Bondelmonte v Blanckensee s 6(1) provides the court with a discretion. Once the jurisdiction question is answered in a plaintiff's favour then it is open to the court to make 'such provision as it thinks fit'. The approach of the defendants was to say if a plaintiff is entitled to an award then that award should be no more than adequate provision for the proper maintenance, support, education or advancement of life of the plaintiff. With respect that puts a gloss on the statute. The discretion in the Act is unfettered. It must be exercised judicially and all relevant factors must be taken into account. But there is no warrant for assuming that the award should be no more than that which will provide adequate provision for a plaintiff.

267 In our respectful opinion, what the master said in this paragraph, particularly in the last sentence of it, reveals error in the master's construction of s 6 in a critical and fundamental respect. The master found that there was no warrant for 'assuming' that the award should be no more than that which will provide adequate provision for a plaintiff. In our respectful opinion, the plain meaning of s 6 requires that an award under s 6 be no more than that which will provide adequate provision for the proper maintenance, support, education, or advancement in life of the plaintiff. Moreover, this conclusion is supported by a consistent stream of authority.

268 Section 6(1) empowers the court to make 'such provision as the court thinks fit ... for that purpose'. That purpose is the purpose referred to earlier in the section, namely the making of adequate provision for the proper maintenance, support, education or advancement in life of the plaintiff. There is no competing alternative. The power to make provision can only be exercised for that purpose; that purpose controls and limits the power.

269 This feature of the court's power under s 6(1) is fundamental to its proper exercise. It has been recognised in numerous authorities. For example, in Blore v Lang,[3] Fullagar and Menzies JJ observed that the jurisdiction conferred by the Act is to interfere with the testator's dispositions when he has left a member of his family without adequate provision for his or her proper maintenance, etc, and the extent of the interference authorised is to order such provision as the court thinks fit for that person's proper maintenance. Their Honours went on to emphasise that the amount given to a beneficiary under the will was not to be used as an indicator of what should be given to a claimant; provision for the claimant is based on what the claimant needs for his or her proper maintenance, etc.[4] As Dixon J has observed, the power is 'not a discretion to give more than what is adequate for proper maintenance ... '.[5] That is why, in Pontifical Society,[6] Dixon CJ emphasised that the words 'proper maintenance and support', while they must be treated as elastic, cannot be pressed beyond their fair meaning. Adam J correctly observed in Re Buckland[7] that those words 'place a ceiling upon what the court may properly do'. The court's power and function is to 'decide what is now appropriate so as to ensure for the plaintiff's adequate provision for her proper maintenance and support but no more'.[8] In Devereaux-Warnes v Hall (No 3),[9] Buss JA, with whom Pullin JA agreed, recognised that:

Freedom of testamentary disposition is a relevant and important consideration. A will should only be disturbed if, and to the extent that, 'adequate' provision has not been made for the 'proper' maintenance, etc, of the claimant.

That is to say, a testator's freedom of testamentary disposition is to be interfered with only as far as may be necessary to make adequate provision for the applicant's proper maintenance etc. The court must have regard to the will of the testator and interfere only to the minimum extent necessary to make such adequate provision.[10]

270 For these reasons, in our respectful opinion the master misapprehended the nature and limits of the power. As the reasons of Buss P demonstrate,[11] that misapprehension was reflected in and infected what the master did in determining the extent of provision to be made. That error is of a kind that justifies and requires appellate intervention.[12]

271 Consequently, the master's discretion miscarried and ground 4 must be upheld. It is unnecessary to determine grounds 3 and 5 - 7.

272 This court has all the materials necessary to re-exercise the discretion under s 6, and the parties agreed that, if it found error, this court should do so.[13]

273 It is impossible to describe, in terms of universal application, what adequate provision for proper maintenance etc will entail for a parent in respect of an adult child. In many cases adequate provision for proper maintenance will not require the parent to support a capable adult child for the rest of his or her life.[14] However, each case will depend on its own circumstances. As the decisions of the High Court in Coates, McCosker and Buckland v Trustees Executors and Agency Co Ltd[15] illustrate, in certain circumstances an award in favour of a capable adult child will be justified.

274 We agree with Buss P, for the reasons he gives,[16] that, in the circumstances of this case, provision for the respondent should be made to the extent and on the condition he identifies.

275 In the process of re-exercising the discretion, the following observations of Adam J in Re Buckland[17] reflect our thinking:

If my order seems ungenerous to some it is because I feel that more than lip service should be paid to the injunction that it is not for this Court to rewrite the testator's will; if to some it appears more than generous it is because I have seen fit to heed the advice not to be niggardly, by giving, in a case where the estate is so large, and there are no competing moral claims of any relevance, to the words 'adequate provision for proper maintenance and support' as liberal a meaning as I have thought they can fairly bear.

276 The appeal should be allowed and the master's orders set aside. Counsel for the parties should be heard as to the precise form of the orders, including as to the details of the terms of the trust beyond what has been set out by Buss P, and as to costs.

[2] Mead v Lemon [2015] WASC 71 [61].

[3] Blore v Lang [1960] HCA 73; (1960) 104 CLR 124, 134.

[5] Coates v National Trustees Executors and Agency Co Ltd [1956] HCA 23; (1956) 95 CLR 494, 509. See also McCosker v McCosker [1957] HCA 82; (1957) 97 CLR 566, 575; Goodman v Windeyer [1980] HCA 31; (1980) 144 CLR 490, 501 - 502.

[6] Pontifical Society for the Propagation of the Faith v Scales [1962] HCA 19; (1962) 107 CLR 9, 19.

[7] Re Buckland [1966] VicRp 58; [1966] VR 404, 415; see also Lloyd-Williams v Mayfield [2005] NSWCA 189; (2005) 63 NSWLR 1 [39] where Bryson JA described the concept of adequate provision as a limit on the power.

[8] Re Buckland (416), emphasis added.

[9] Devereaux-Warnes v Hall [No 3] [2007] WASCA 235; (2007) 35 WAR 127 [91].

[10] Friend v Brien [2014] NSWSC 613 [35]; Waddingham v Burke [2015] WASC 65 [70].

[11] [226] - [228], [230] - [231].

[12] Singer v Berghouse [1994] HCA 40; (1994) 181 CLR 201, 212.

[14] See Vigolo v Bostin [2005] HCA 11; (2005) 221 CLR 191 [26] - [27].

[15] Buckland v Trustees, Executors and Agency Co Ltd (1966) 40 ALJR 164, dismissing an appeal from the decision of Adam J in Re Buckland [1966] VicRp 58; [1966] VR 404.