Plaintiff v First Defendant Second Defendants

"(ii) TO PAY out of the income thereof and if the income shall not suffice from the capital thereof such generous and appropriate sums as may in the opinion of my trustees be necessary or desirable after taking into account the income of which she is in receipt from any other source to support my wife the said DOROTHEA SINCLAIR during her lifetime or until her remarriage in the same style of life as that to which she was accustomed immediately prior to my death and with power to make generous and appropriate additional payments for her medical therapeutic and recreational needs;

(iii) TO DIVIDE the surplus income thereof (if any) as to two-thirds thereof for my said son DONALD LESLIE SINCLAIR and as to one-third thereof for my said daughter JUNE LORRAINE WITHERS for their own respective use and benefit;

(iv) Upon the death or remarriage of my said wife, TO HOLD all the rest and residue of my converted estate as to two-thirds thereof for my said son and as to one-third thereof for my said daughter PROVIDED THAT in the event of my said son or my said daughter predeceasing me or having survived me predeceasing my said wife leaving a child or children who shall survive me and attain the age of twenty-one years such child or children shall take and if more than one equally between them the share of my converted estate which his her or their parent would have taken if such parent had survived me and my said wife."

4 In this judgment I shall use the expressions "outside income" to refer to "the income of which [Mrs Sinclair] is in receipt from any other source" and "support requirements" to refer to the sums "to support [her] during her lifetime or until her remarriage in the same style of life as that to which she was accustomed immediately prior to my death". Furthermore, I do not construe the expression "immediately prior to my death" in any narrow sense. What is spoken of here is her lifestyle in the years prior to her husband's death.

5 Mrs Sinclair, the widow, died without having remarried on the seventeenth anniversary of her husband's death, 14 February 2000. Every year throughout her widowhood the trustees of the estate made payments to her totalling $710,898. Mr Sinclair in this proceeding sues as an executor and trustee of his late father's estate and on his own behalf as a residuary beneficiary under cl. 9(d)(iii) of the will. He says that, when the trustees made their annual determinations to make payment to his stepmother, their discretion miscarried so that each of their determinations was void or voidable. He then seeks repayment to his father's estate of these annual payments made to Mrs Sinclair on a restitutionary basis.

6 There are some unusual features of this proceeding. The plaintiff who argues for the invalidity of the seventeen annual determinations is one of the trustees who made those determinations. It is clear from the evidence that he then concurred in each of them. The second trustee, Mr Moss, is a party joined for conformity; no relief is sought against him. I was told that he was joined as a defendant because he declined to be a plaintiff, but he said in the witness box that he was never asked. Although he was represented, he took no part in the trial. Mrs Sinclair, the third of the trustees and the person who has been the beneficiary of the trustees' determinations, is now deceased so that the administrators of her estate have been joined as second defendants.

7 There were two persons who were affected by the trustee's determinations. These are Mr Sinclair and his sister, Mrs Withers. Under cl. 9(b)(iii) they were to receive in unequal shares the surplus income which was not paid to their stepmother. Mrs Withers died on 1 April 1998. Her widower, Barry Edmund Withers, who was her sole beneficiary, himself died on 16 August 1998, leaving a will and three children, Lisa Robyn McAsey, Kerry Annette Mitchell and Ian Leslie Withers. At the time of the death of their mother these grand-children of the deceased were of full age. The grand-children were advised by the solicitors for the plaintiff in February 2002 of the commencement of this proceeding and were advised to seek legal advice if they wished to take part in it. I was told, too, that they are aware of this trial. There is no evidence as to what, if anything, they have done in response to this letter.

8 The complaints made about the seventeen determinations are two:

(1) In each case the trustees failed to take into account in the exercise of their discretion, the income of which Mrs Sinclair was in receipt from any other source as is required by cl. 9(b)(i); and

(2) In each case the trustees failed to turn their minds to the question what sum was appropriate or desirable to support Mrs Sinclair in the same style of life to that to which she was accustomed immediately prior to the death of the deceased.

9 It is necessary to underline at this point what this trial is not about. In their opening, counsel for the plaintiff made it clear that their client was not pressing his claim as beneficiary of the estate of his late father and, further, that he was not asserting against any of the trustees a breach of trust; it was just that the discretion of the trustees had miscarried. They told me that the plaintiff made no allegation that any of the trustees acted with an improper motive; it was just that they failed to address the task entrusted to them under the will. They told me, too, that the plaintiff made no allegation of impropriety against Mrs Sinclair. She, who doubtless was aware of the amount of her own outside income, failed to tell her co-trustees that she had a substantial and adequate income from her own investments and that she did not require further money from her late husband's estate to meet her support requirements. They said, nevertheless, that they make no complaint about this in the sense that they do not assert against her any fraud or breach of fiduciary duty or other wrong in failing to disclose her true financial position.

10 By way of background, the deceased was in business for many years as a fibrous plasterer. He conducted a successful business at Maryborough, Albury and Castlemaine. Mrs Sinclair was the bookkeeper for the business when her path crossed with that of the deceased. They married in the late 1950s. At the time, they lived in a flat on the site of the factory at Albury and had a weekend house at Porepunkah. Eventually, the Albury factory was sold and the couple moved to live at Porepunkah. Mr Sinclair commenced work in his father's business when he was 17, in 1956, and in the 1970s he became manager of the Maryborough business.

11 Meantime, in the early 1960s, Mr Les Sinclair and Mrs Sinclair sold Porepunkah and moved to Queensland where they lived at 38 Paringa Drive, Paradise Beach at Surfers Paradise. This was sold in the early 1970s when they moved a short distance to 77 Paringa Drive.

12 In the late 1960s a company, L Sinclair Holdings Pty Ltd, was registered. Its activities included holding an investment portfolio of listed shares and loans mostly under the management of Wardley Investment Management Ltd ("Wardleys"). This portfolio was valued at the date of the deceased's death at $85,675. Another company, L Sinclair Nominees Pty Ltd, was the trustee of the Sinclair family trust. The trust, too, held a substantial investment portfolio which, at the date of the deceased's death was worth $253,893 including at call deposits of some $33,399. The deceased also, in his own right, held a substantial portfolio of shares which he purchased, again through Wardleys. These were valued at nearly $350,000. At the same date, Mrs Sinclair also was an investor, but not in such a large way. As at 30 June 1983 her investments were valued at about $178,000. She, too, did her trading through Wardleys.

13 Much of this information appears in the tax returns for the various entities and persons. These returns were prepared by the accountant for the business and the family, Kenneth Rex Evans. Mr Evans, however, did not act as their financial advisor.

14 The deed of settlement constituting the Sinclair family trust is dated 4 April 1966. It appears to be a typical discretionary trust which vests upon the death of the deceased. Thereafter, by cl. 4, the trust assets are to be held upon discretionary trust to apply them for a charitable purpose and, in default:

"(a) to pay out of the income thereof and if the income shall not suffice from the capital thereof such generous and appropriate sums as may in the opinion of the Trustees be necessary or desirable after taking into account the income of which she is in receipt from any other source to support the said Dorothea Sinclair wife of the said Leslie William Sinclair during her lifetime or until her remarriage in the same style of life as that to which she was accustomed prior to the Vesting Day and with power to make generous and appropriate additional payments for her medical therapeutic and recreational needs;

(b) as to the surplus income thereof and as to so much of the capital thereof as in the opinion of the Trustees is not required for the support and needs of the said Dorothea Sinclair as aforesaid and upon her death or prior remarriage as to the residue thereof upon trust for the children of the said Leslie William Sinclair living on the Vesting Day as tenants in common in equal shares in the following shares and proportions:-

DONALD LESLIE SINCLAIR - two equal one third shares JUNE LORRAINE WITHERS - one equal third share provided always that the children (if any) of any child of the said Leslie William Sinclair who dies before the Vesting Day shall take as tenants in common in equal shares the share which such deceased child would have received had he or she survived to the Vesting Day."

The resemblance of these objects to cl. 9(b)(ii) of the will made 13 years later is apparent.

15 One further background matter was seen as significant in this case, particularly on behalf of Mrs Sinclair. It was that Mr Sinclair held his stepmother in great affection; she was like a mother to him and was accepted as an important member of the Sinclair family. He said, too, that in his father's last illness, the dying man said to his son "whatever happens, make sure that Dot's looked after" and that he, Don, promised that he would do so. And after his death this was the spirit in which the estate was administered. Mr Moss emphasised this:

"You see, in the atmosphere that was applicable at the time over the years very different from sadly what has developed since. The plaintiff for example showed great affection for Mrs Sinclair. He was very concerned about her, and indeed it's recorded in one of my notes had said to me at one point, 'She is to be our first consideration'. Now against that background I feel today that even had all this material been available Mrs Sinclair, sir--- [After an interruption, the witness continued.] I believe, sir, Mrs Sinclair would have been given by decision of the trustees a generous figure notwithstanding what her other income might be. But it's pretty clear it may not have been the figure that in fact was paid."

16 I turn now to the principal issue in this case, whether the exercise by the trustees of the power conferred upon them by cl. 9(b)(ii) in respect of any of the years of income 1983 to 2000 has miscarried.

THE LAW

17 The legal principles applicable to this case which I apply were not seriously in controversy.

(1) The onus of establishing that the discretion in the year miscarried lies upon the plaintiff.[1]

(2) The Court will interfere where a clear case is made out[2] that the discretion is not exercised upon a real and genuine consideration of the matter entrusted to the trustees' discretion[3]:

"If it can be shown that the trustees considered the wrong question, or that, although they purported to consider the right question they did not really apply their minds to it or perversely shut their eyes to the facts or that they did not act honestly or in good faith, then there was no true decision and the court will intervene,"[4]

(3) A discretionary determination may be impugned if the trustees in making it failed to take into account matters which are relevant,[5] that is, matters which they should have taken into account or which should have affected their decision or where they took into account matters which they should not have taken into account.[6] The importance of the word "should" in this context is emphasised in the 1993 decision of Hayne J in Esso Australia Ltd v Australian Petroleum Agents' & Distributors' Association[7]:

"The bare fact that there was material that was not placed before the trustee and which the trustee might have taken into account is not to say that the trustee should have considered it. Thus proof that there was material not considered by the trustee and which was material that the trustee might have taken into account does not show that the decision is ill founded."

(4) This principle, which is referred to in England as the Rule in Hastings-Bass,[8] is there said to contain the further requirement that, had the trustees taken into account the matter which they should have taken into account but did not, they would not have exercised their discretion in the way that they did. There seems to be some uncertainty whether the Rule in Hastings-Bass is accepted as the law in Victoria.[9] Principal (3), however, is well established by the cases to which I have referred. In argument before me nothing was made of the Hastings-Bass gloss.

(5) Notwithstanding that it is not a case where the trustees provided reasons for their determinations, the Court may examine the material available to the trustees and enquiries which they did or did not make in order to determine whether they took into account matters which they should have taken into account.

"As part of the process of, and solely for the purpose of, ascertaining whether there has been any such failure, it is relevant to look at evidence of the inquiries which were made by the trustees, the information they had and the reasons for, and manner of, their exercising their discretion. However, it is not open to the Court to look at those things for the independent purpose of impugning the exercise of discretion on the grounds that their inquiries, information or reasons or the manner of exercise of the discretion, fell short of what was appropriate and sufficient. Nor is it open to the Court to look at the factual situation established by the evidence, for the independent purpose of impugning the exercise of the discretion on the grounds the trustees were wrong in their appreciation of the facts or made an unwise or unjustified exercise of discretion in the circumstances. The issues which are examinable by the Court are limited to whether there has been a failure to exercise the discretion in good faith, upon real and genuine consideration and in accordance with the purposes for which the discretion was conferred. In short, the Court examines whether the discretion was exercised but does not examine how it was exercised."[10]

(6) Where the trustees make a determination after taking into account all matters which they should have taken into account, the Court will not interfere with the determination on the ground that the trustees made an error in their assessment of fact.

(7) There may be a point of distinction between a discretion which is unfettered or absolute and that which requires the trustees to be satisfied of or to form an opinion about a fact.[11] In the present case this is not of significance since the plaintiff contended that the trustees' failure to address the questions of Mrs Sinclair's outside income and her support requirements involved the conclusion that they did not form the view as to this and that this infected their decision.

(8) Where, as here, the trustees are required to take into account a particular matter, it is part of the decision-making process that the trustee make some effort to form a view upon that matter.[12] What those efforts might be will depend upon the circumstances.

18 I have expressed the above propositions in terms restricted to the relatively confined issues in this case. There is no allegation that the trustees' power was exercised in bad faith or for some ulterior purpose. As I have mentioned, the case for the plaintiff is that the trustees failed to take account of Mrs Sinclair's outside income and of her support requirements in terms of cl. 9(b)(ii). It was put affirmatively that what the trustees did in each year was to form a view as to the amount of income available and then to decide, as between Mrs Sinclair and her stepchildren, how this income should be fairly distributed and that these were matters which they should not have taken into account.

19 I would not be prepared to conclude that these last two matters are matters which were irrelevant, in the sense that the trustees should not have taken them into account. The discretion conferred upon the trustees admitted a considerable degree of flexibility. The provision for Mrs Sinclair was to be "generous and appropriate"; she was entitled to receive further provision for her recreational needs. It was entirely proper, in my view, for the trustees to form a view as to the amount of money they had to dispose of. Likewise, in fixing the amount for Mrs Sinclair, it was proper for them to consider the interests of those who might expect to receive the surplus. This, however, does not detract from their obligation to have regard to the two matters which are specifically provided for in the will, her support requirements and her outside income.

THE FACTS

20 I turn now to consider the facts relating to each of the seventeen determinations in order to determine whether in any case the discretion miscarried.

21 Before I do so, I wish to make some general observations about the principal witnesses, for their credit was put in issue. The events with which I am particularly concerned occurred over 20 years ago. No one other than Mr Moss kept any notes of meetings, discussions and decisions. I accept his notes as generally accurate. Much reliance too was placed on contemporaneous correspondence much of which was not in any event controversial. It was apparent to me that, although it was not a case of deliberate prevarication, each of the principal witnesses, Mr Sinclair and Mr Moss, was conscious of the delicacy of his position. This has inclined each of them to see these events of long ago in a particular light: Mr Sinclair in downplaying his involvement in the decision-making process, and Mr Moss in emphasising his consultation with Mrs Sinclair. I therefore approach this evidence with some caution.

22 My assessment of Mr Moss is that he is an astute man who conducted himself as a careful solicitor. As will appear, it seems to me that he treated the task of the trustees principally as that of achieving a distribution which was fair. This is understandable given the good relations between the family members and the benevolence which they had towards Mrs Sinclair. He now realises that their task was rather different and that, as solicitor, he must accept some responsibility for what has occurred. With that qualification, I accept him as a reliable witness and a careful and accurate note taker.

23 Mr Sinclair's approach to the decision-making process attitude appears to have been that of acquiescing in the course which was acceptable to the others. He was doubtless affected by his promise to his dying father and by his affection and benevolent disposition towards his stepmother. He presented as a businessman of some experience who had held the position of production manager of the Sinclair businesses at Maryborough. Notwithstanding the office he held, I perceive him not to be a sophisticated businessman and reject the submission put on behalf of the secondnamed defendants that he was more astute than he claimed. I accept, that subject to this he, too, generally is a reliable witness, but his recollection of the events with which this litigation is concerned is slight.

1983

24 The deceased died on 14 February 1983 so that their remained in this financial year only four-and-a-half months. Probate of the will was not granted until 21 September 1993.

25 Mr Sinclair told me that, soon after the death of his father, he and his stepmother attended a meeting at the office of the solicitors for the estate. There the will was read and explained. He received, too, a copy of the will.

26 On 14 July 1983, the solicitors for the estate wrote to the trustees setting out in broad terms the financial structure of the assets of the deceased, their amount and the terms of the trust and of the will. The trustees of the will were to become shareholders in and directors of the company which was the trustee of the Sinclair family trust. The letter sets out the effect of cl. 4(a) of the Trust Deed.[13] Of the relevant entitlements under the will, the letter, in Schedule C, says simply that Mrs Sinclair is to have "income for life" and that the two stepchildren were to have "in the event any surplus income from the estate [two, or one-thirds respectively] thereof".

27 In their letter of the following day the solicitors wrote to Mrs Sinclair with a copy to the co-trustees a letter which included the following:

"The method of distribution of the assets of the Estate has been summarised in the Annexed Schedule marked 'C'. As mentioned, we have not yet ascertained the amount of income for yourself. We also draw your attention to the fact that the amount apportioned to you under the Will will be affected by the amount apportioned to you under the Sinclair Family Trust."

28 On 23 August 1983, the trustees met in conference[14] with the solicitors and determined that all of the trust income and all of the estate income for the year 1983 should be distributed to Mrs Sinclair. The account showed that the net estate income from the date of death was $18,686.27. The income of the trust for that year was $47,092.87.

29 This decision, insofar as it concerned the trust, was varied on or about 1 September when it was agreed between the trustees that Mrs Sinclair should receive only $20,000 from the trust with the balance passing to Mr Sinclair and Mrs Withers as to two-thirds and one-third respectively.

30 The decision, too, insofar as it concerned the estate income did not have the consequence that Mrs Sinclair received the $18,686.27. In fact, this income was taxed in the hands of the trustees so that the amount she actually received was only $13,898.

31 What, then, was the state of knowledge of the trustees as the time of this determination about Mrs Sinclair's outside income and her requirements? Mrs Sinclair herself was informed by Mr Evans as to these matters.

32 Mr Sinclair said that he did not know what was her outside income and that she was never asked. He said, too, that he never discussed with her or with Mr Moss her outside income or her support requirements. He had no recollection of the meeting of 23 August or of the telephone conversation which led to the reduction of the distribution on 1 September 1983. I accept this to be correct.

33 Mr Moss also said that he did not know what was her outside income at that time and that he never asked her. He did say, however, that on this occasion, as on others, he asked Mrs Sinclair what were her needs. I accept this also.

34 The two men, however, did know that Mrs Sinclair had a portfolio of shares but they did not know its amount or her income position. It may be inferred that they knew she had some investment income but not the amount of this. They, or at least Mr Sinclair, knew that she received a salary for her employment in the Sinclair business and that this was $4,040.

35 It will be recalled that the terms of cl. 9(b)(ii) of the Will and those of cl. 4(b) of the trust deed are in very similar terms. No complaint has been made of the exercise of the discretion of the trustees of the trust. It seems likely in these circumstances that the trustees of the estate who were also the decision-makers of the trustee of the trust saw their task as a composite one. In these circumstances Mrs Sinclair's outside income for the purposes of the estate should not include that part of her allowance which is referrable to the trust. For the same reason, the amount which they distributed as a generous and appropriate allowance in 1983 should be seen as the composite figure of $38,686, of which about half was subject to tax. The decision, therefore, which the plaintiff now seeks to impugn is the decision to pay this sum to the widow on top of her outside income.

36 I remind myself at this stage, first that it is for the plaintiff to show that this exercise of discretion has miscarried and, second, that it is not for me to enter upon the correctness of the determination if it was properly made. The plaintiff will make out his present case if I am satisfied first, that the trustees did not have regard to one or both of the two pleaded matters in their decision-making process and, second, that such matter was one which was relevant to their decision, in the sense that they should have taken it into account, that is, they were obliged to do so. The second was not in issue in this case; this is not surprising having regard to the terms of cl. 9(b)(ii).

37 As to the first, the two pleaded matters were to a large extent intertwined. What might be paid to Mrs Sinclair as a generous and appropriate sum for her requirement needs must inevitably depend upon her outside income. For example, however extravagant might be her requirement needs, she may not be entitled to payment under the clause if she had an enormous outside income. On the other hand, if her outside income was minimal, then, it would be important for the trustees to form a view as to her requirement needs.

38 Mr Moss, in his evidence, appeared to recognise that this was so. He said on numerous occasions that he enquired of his client or of Mr Evans, the accountant, in most if not every year what were her requirements. In his evidence he said this:

"Apart from the income from the family trust that Mrs Dorothea Sinclair received, at any time from the date of Mr Leslie Sinclair's death were you aware of what other income Mrs Sinclair had from sources other than Mr Sinclair's estate?---No I was not.

At any time from the time that Mr Sinclair died, did you make any enquiries to ascertain what Mrs Sinclair's income from sources other than Mr Sinclair's estate was?---I did not ever ask Mrs Sinclair to provide me with evidence of any other income, but I raised questions with her as is recorded in several places in the court book, aimed at learning of her actual financial position.

Did she tell you anything about what her other income was or what her financial position was?---Not as to what her other income was, but we discussed whether or not the figure that was under discussion between the trustees as an appropriate distribution in any particular year, whether her need was such as to call for that payment."

"Yes, and then did you exercise your own judgment as to whether, given what you knew of Mrs Sinclair's circumstances, having no knowledge of her other income from other sources, but knowing the amounts that she requested, whether those amounts were amounts that she would require for her support in the style to which she had been accustomed, prior to Mr Sinclair's death?---That, sir, I think, inimitably [inevitably?] my answer must be, yes, I thought about it, but I was seeking to rely on these questions and answers so that I certainly had personal thoughts as to what one might expect an individual like Mrs Sinclair to require but they were just my own personal reactions.

On these occasions we'll go to where you raise this query, was there reason that you raised a query as to whether those sums were really required?---I wanted to be assured in my own mind, that they were regarded as required by Mrs Sinclair, I may well have felt that they were rather generous, on a purely personal level.

And that is having no information at the time concerning her income from other sources?---Yes."

"Are you able to say from any meetings or discussions with Don, Donald Sinclair and Dorothea Sinclair, that they were likewise familiar with the terms of that clause?---No specific occasion that I recall was the clause discussed by the three of us.

But were the provisions, the income provisions in the clause, the basis of discussions that occurred from year to year in terms of the payment of income to each of the beneficiaries?---The basis of discussion as was mentioned on Friday, was rather more as to Mrs Sinclair's requirements year by year.

Including reference to the fact that the will provided for generous income payments to be made to her?---I don't necessarily say that there was reference in so many words to the will provision, but as I did put it to His Honour and the court on Friday, my repeated questioning went along the lines, are your requirements for the year as stated, or as suggested, or has been discussed.

When you did that, did you have it in your own mind, the discretion that was provided in Clause 9B(ii) of the will?---Yes."

Mr Sinclair's role in this was more passive. He acknowledged that he really had little, if any, recollection of the decision-making process other than to agree to pay to his stepmother whatever she said she required, subject only to the availability of sufficient income to meet her requirements.

39 This was certainly the attitude of the two trustees in making their determination for the year 1983. While this may have been perfectly understandable in the circumstances which existed in that year, it ignored entirely the entitlement of the other beneficiary, Mrs Withers, to have them take into account the matters specified in cl. 9(b)(ii). The evidence showed that she was not consulted about these matters. I am therefore obliged to conclude that in respect of the 1983 year of income, the trustees' discretion miscarried.

40 In this year, Mrs Sinclair's outside income was $22,418 of which she received for her own use only $16,443.[15] Her income from the estate, which was not taxed in her hands, was $13,898 and that from the trust was $20,000. The determination of the trustees that she should have a net $33,898 mean that her total disposable income for 1983 was $56,313. The Hastings-Bass principle would then require the Court to consider whether, had they known that her disposable outside income was $16,443, they would in that year have exercised their discretion differently. No evidence to this effect was given.

41 Mr Moss was asked about this in the context of the determination for the year 1988, when she received from the estate $29,521 after tax on top of her outside income of $38,758 after tax. His answer, I would accept as representing also his attitude to the year presently under consideration:

"Had you been aware that Mrs Sinclair was receiving income in this order during those years, and if you'd had regard to it, and considered it in deciding as trustee what amounts should be distributed to Mrs Sinclair, would it have affected your decision?---I would have considered it very necessary that it be debated between the three trustees in order to decide whether or not it affected a final figure certainly."

42 I bear in mind that he had in mind what might generally be the support requirements for a woman in the position of Mrs Sinclair and that the direction in the will, made by a relatively wealthy man, was that the payment to her be appropriate and generous. In the circumstances, I am not satisfied that he would have acted differently had he known the detail of the true situation with respect to her outside income and her support needs. Mr Sinclair would have acquiesced in any decision of his co-trustees, particularly if this was on the generous side. The Court will not intervene with respect to this determination.

1984

43 A good deal of attention at the trial was directed to a letter written by Mr Evans to Mrs Sinclair and Mr Sinclair on 22 December 1983. A copy of this letter was sent to Mr Moss. The letter encloses draft income tax returns for 1983 including that of Mrs Sinclair and it is likely that this return was enclosed in the copies sent to the other trustees. In any event, the letter includes a statement that her taxable income for 1983 was $42,418, including the $20,000 received by her from the trust. The trustees would also have seen from her tax return that she received a salary of $4,040 from the Sinclair business, $20,000 from the trust as well as income and dividends totalling $19,865. They would have seen, too, that her share portfolio was valued at $177,986 and that she had loans totalling $76,200. This information post-dated the decision for payment to her out of the 1983 estate income, but it was available to the trustees for use in their subsequent determinations.

44 In May 1984 the trustee of the Sinclair Family Trust decided to wind up the trust and to distribute the assets to the beneficiaries. The estimated distribution was as follows:

This distribution, however, was not implemented in the year 1984.

45 The net income of the estate for the year 1984 was $53,483 of which the trustees determined on or about 14 December 1984 to pay to Mrs Sinclair $25,000. For some reason, she received only $24,994 from the estate in that year, but nothing turns on this discrepancy. She also received in respect of that year $7,665 from the trust, so that her total income from those two sources was $32,659. In the same year she ceased to be an employee of the Sinclair business, receiving in total only $580 salary.

46 The circumstances leading to the determination of the trustees for that year are not documented and no witness gave evidence of them other than of their general approach to the determinations generally which I have set out above. There was, however, a note of a meeting held on 3 April 1984 between Mrs Sinclair, Mr Sinclair and Mr Hoy, the solicitor for the estate and for the trust, in which she is recorded as saying that her needs for the current year were $40,000. The note also records that the combined income for the trust and the estate was then estimated to be $85,000.

47 I was pressed with the content of the letter of 22 December to which I have referred. This showed that in the previous year Mrs Sinclair had a taxable income of $42,418 of which $20,000 was received from the trust and $4,040 from salary. This was known to the trustees. It was said, therefore, that, as a matter of arithmetic, the trustees of the estate knew that she had some $18,378 outside income. It was contended from this that, when they addressed the determination for the year 1984, they would have known that her outside income was of the order of $580 by way of salary and a sum of about $18,500 by way of investment income, assuming her portfolio produced the same return as in the previous year and that inflation was minimal.[16] This made a total outside income of about $19,000. In fact, such an assumption would have been fairly accurate as her tax return for the year 1984 showed a net outside income of $20,155 after deduction of $1,250 being the Wardleys management fee. But her co-trustees did not have access to this information.

48 The taxable income of the trust for the year 1984 is shown in the tax return as $1,954, but it is likely that this was after the distribution to Mrs Sinclair and the other beneficiaries. The estate income was $53,483. Mrs Sinclair received from these sources less than her requested $40,000; she received $32,659. On this analysis, she and her co-trustees may well have thought that, subject to tax, the total income for 1984 available for her support was of the order of $51,659. In fact her tax for that year was $29,761 leaving disposable income of $21,898.

49 Some evidence was led of her lifestyle prior to her husband's death. I will not rehearse this. Mr Moss said he had his own views as to what a person in Mrs Sinclair's position might require and I would suppose that Mr Sinclair would also. It is not for this Court to substitute its own views as to what was in 1984 a generous and appropriate allowance for her support, even if I had the evidence to undertake that task, which I do not. The evidence of the actual decision-making process for that year is very sparse. While I accept that the trustees did not ask her what was her outside income, they had in their possession information which entitled them to form a view as to this. I will not, in these circumstances, infer that they did not bring this information to their task.

1985

50 The documentation for this year is more plentiful. The net income of the estate was $56,606.46 and that of the trust was $19,735. On 18 June 1985 Mr Evans wrote to the trustees in these terms:

"As you will be aware, Clause 9(a)(ii) of the Will of L.W. Sinclair (Deceased) requests the Trustees to pay out of the income of the Estate such sums to support Mrs. D. Sinclair during her lifetime, as in the opinion of the Trustees may be necessary or desirable.

Having recently spoken with Mrs. D. Sinclair, advice was received that the distribution of an amount equal to that distributed from the 1983/4 income (namely $25,000) would be appropriate.

Accordingly, I hereby submit to the Trustees a draft Determination dealing with this matter. Following your consideration, and discussions with your co-Trustees, would you please advise of any amendments to, or acceptability of, the enclosed draft."

While the accounts had not then been prepared, it is likely that Mr Evans had an idea of the income position of the estate and of the trust. When the trustees received Mr Evans' letter Mr Sinclair and Mr Moss on 11 July 1985 discussed its contents and, while they were in general agreement that $25,000 would be appropriate, Mr Moss told his co-trustee that he would prefer to wait and see the accounts before making a final decision. Mr Moss on 19 July wrote to Mrs Sinclair advising her of this.

51 In due course, on 26 August, Mr Evans sent the estate accounts to the trustees which included the income figure which I have mentioned. These accounts were examined by Mr Moss and he queried and discussed aspects of them with Mr Evans on 13 September 1985.

52 On 7 October 1985 Mr Evans sent to Mrs Sinclair a summary of her income position for the year 1985. This showed her investment and loan portfolio to be valued at $272,846 on 30 June 1985 and that her gross income from these sources was $22,275. This information was not made available to her co-trustees. In his letter to her, Mr Evans estimated her income from the estate at $20,000, not $25,000, and that from the trust at $4,933. On the same day, he sent to all of the trustees the draft trust accounts which included a gross income of $23,778 and proposed a distribution to Mrs Sinclair from the trust of $4,933.

53 The trustees met on 12 December 1985 and determined that Mrs Sinclair should receive from income of the estate, not $25,000 as recommended, but $30,000 and this was paid to her by an instruction to Wardleys to transfer it to her portfolio. No witness was able to recall why this figure was selected. Her combined income from the estate and trusts for this year was therefore approximately $35,000.[17]

54 As in the preceding year, neither the trustees nor the trustee of the trust knew the amount of her outside income nor any detail of the amount of her support requirements. If they assumed that her outside income was $18,500 as in the previous year,[18] they would have assumed her total income available for her support to be about $53,500, subject to tax, approximately the same as for 1984. In fact this would have been an over-estimate, for her net outside income is shown in her tax return as $26,693 and her total income before tax $62,874. She paid tax of $33,630 leaving disposable income of $29,244. Having regard to all of this evidence, I am not persuaded that, in making their determination for 1985, the discretion of the trustees miscarried.

55 On 14 December 1984 the trust began to be wound up. A deed of appropriation for this purpose was entered into with the beneficiaries under which Mrs Sinclair received a distribution of capital in the sum of $47,053, of which $15,853.84 was made by a transfer of shares in public companies. Having regard to the terms of cl. 9(b)(ii) of the will, this distribution of capital is not a matter which the trustees of the estate are specifically directed to take into account. Nevertheless, they would have appreciated that this injection of capital would be likely to increase her dividend and interest income. As directors of the trustee of the trust, they would have appreciated, too, that her income from the trust would also cease in the years following 1985. Following this distribution there remained of the trust capital only $15,307.

56 For a reason which is unclear, Mrs Sinclair's allocation of $30,000 from the estate for the year 1985 was not paid to her following the trustees' determination.

1986

57 In this year the trust made a loss so that there was no distribution of income from that source in this year or, indeed, any subsequent year. The net income of the estate was $71,629.29.

58 On 27 August 1986 Mr Moss spoke by telephone to his co-trustees. He discussed with Mrs Sinclair whether she "might look to receive $25,000 or up to $30,000". She replied that she would like to have $30,000, as in 1985. He referred to this discussion in his later conversation with Mr Sinclair as a "phone conversation with Dot S need". Mr Sinclair's reaction was consistent with his attitude generally on this topic. Mr Moss' note records it as follows:

"Don S said that he regards Dot's position is the one to be considered mainly - he said that if she is agreeable to take $30,000 from the Este for the Y/ending 30/6/86, then he certainly agrees."

59 On 23 October 1986 Mr Evans wrote to the trustees advising that the net estate income for the year was $71,644, an increase of about $13,500 from the previous year. The trustees met on 20 November 1996 and determined that Mrs Sinclair should receive $30,000 and on the same day, Wardleys was instructed to transfer this amount and the like amount for 1985 from the estate account to her portfolio. This was done.

60 So far as the position of her co-trustees is concerned, their knowledge of her outside income and of her requirement needs for this year was as I have set out. They knew she had a portfolio with Wardleys but they knew nothing about its size or makeup other than its income for the year 1983 and with the further knowledge that it had been increased by the capital distribution in December 1985. They knew, too, that she had been able to live over the past 12 months without the payment of the $30,000 income from 1985. They knew, too, that she was astute and intelligent and shrewd with money.

61 If they assumed that, as in previous years, her income from investments was $18,500 plus something for inflation[19] and that she would have received further income of about $1,000, representing six months income from the capital distribution of some $47,000 in 1985, they would have, even so, underestimated her true position. Her investment portfolio was valued at $353,860[20] as at 30 June 1986, an increase of about $81,000. Her external income for 1986 is shown at $35,848 after deducting the usual Wardleys management fee of $1,250. Nonetheless her net income, including the $30,000 distribution from the estate, was on, the same basis, $66,213 so that the income available for her support after tax was much as it was in the previous years, $34,233.

62 As in the two previous years, I am not persuaded that the discretion of the trustees miscarried in making their determination for 1986. As in those years they were familiar with the provisions of cl. 9(b)(ii); they had available to them facts which entitled them to reach a conclusion as to the external income of Mrs Sinclair with a fair degree of confidence and without interrogating her as to the details; she had told them what was her need or requirement; and they doubtless had an idea of the current costs of living for a woman in her situation, maintaining the standard stipulated in the will. The plaintiff bears the burden of showing that their discretion miscarried. The plaintiff has not achieved this.

1987

63 The determination for estate income distribution for this year appears to have been similar to that in the previous year and the procedures adopted in 1987 were followed in each of the following years.

64 Mr Evans would send to the trustees a set of draft estate accounts for the completed year including a proposal for distribution of income for the consideration of the trustees. The details of these letters and his recommendations are set out in Annexure A to this judgment. He was familiar with the terms of the will and, as her accountant, with the financial position of Mrs Sinclair. He may have had regard to this and certainly had discussions with her as to her support requirements in making his recommendation. He said that he included the distribution recommendation upon her advice to him as to the amount she needed. He did not, however, see himself at liberty to disclose to Mr Moss or to Mr Sinclair any detail of her financial position and he did not do so. Mr Evans did not see his proposal to the trustees as anything more than that, and it was not suggested that the trustees did or could have delegated to him the task of investigating the financial position of Mrs Sinclair. In subsequent years he expressed his distribution proposal in more guarded terms; it was merely an assumption on his part based on the determinations of previous years and was put forward for consideration by the trustees and for their confirmation or variation.

65 The trustees would then discuss the content of Mr Evan's letter each year by telephone and reach agreement as to the amount to be paid to Mrs Sinclair. They did not always accept his recommendation. Prior to 1990 they met at a formal annual meeting which was minuted. After that year, to save Mr Sinclair and Mrs Sinclair the trouble of travelling to Melbourne, their meetings were by telephone with Mr Moss. Details of their decisions are set out in Annexure A to this judgment. In many years the trustees signed a formal determination and usually backdated it to a date prior to the end of August.

66 The amounts paid to Mrs Sinclair each year pursuant to their determinations together with the net amount received in her hands after tax is set out in Annexure B to this judgment. For completeness, I set out in Annexure C to this judgment, Mr Evans' assessment of the outside income of Mrs Sinclair for each year.

67 Returning to the year 1987, Mr Evans sent his letter and the estate accounts to the trustees on 16 July disclosing that the net income for that year was $74,260, a little higher than in 1986. He included a proposal for distribution to Mrs Sinclair of $30,000.

68 Mr Moss spoke with each of his co-trustees by telephone on 28 August 1987 and received their agreement to the proposed distribution figure.

69 The trustees met on 1 December 1987 and formally resolved to pay to Mrs Sinclair $30,000 for the year 1987 and on the same day they signed an instruction to Wardleys to transfer this sum to her portfolio.

70 The task which I have undertaken for the preceding years of analysing the material available to the trustees is more difficult for this year 1987. This is because of the passage of the years since 1983 and the injection of capital in December 1985. Applying the CPI adjustment of 1.093% to the previous year's figure representing the current value of the $18,500 of 1983, this figure would now become $19,305. To this they might add the income earned on the $47,000 which she received in December 1995. They would know from their own investment returns produced by Wardleys for that year that the estate dividend on its investment portfolio was about 3%. On this basis, they may have thought that her total external income was of the order of $21,000. Again, such an analysis would produce an understatement, for her tax return for 1997 shows that her external income after deduction of the Wardleys management fee was a little over $40,000. But, given her marginal rate of tax for that year, the difference between the trustees' supposed estimate and the figures in the tax return would have been about $5,000.

71 This is not to say that the trustees undertook this exercise. There is no evidence that they did; Mr Sinclair and Mr Moss were not asked whether they did. I undertake the task to show what they might have done with the material available to them. Their evidence was very uncertain as to what thought processes led them to accept the accountant's proposal of $30,000 for this year other than to have regard to the amount of the available estate income. They relied heavily in this regard on Mr Moss' note of the 28 August 1987 telephone discussions. I recall at this point what the trustees said was their general approach to their task and to the evidence of Mr Moss that he enquired in general terms as to the requirements of Mrs Sinclair for that year.

72 Weighing this up as best I can, and having regard to the onus which lies on the plaintiff, coming along as he does nearly 20 years after the event to impugn his own decision, I am not satisfied that he has demonstrated that the determination of the trustees for 1987 miscarried.

1988-2000

73 The same procedure was followed in each of these years. In 1988 the position is a little complicated by the impact of the 1987 stock market collapse and by the introduction of dividend imputation credits which were attached to certain dividends. Mr Evans recommended to the trustees, and they accepted, that each of the beneficiaries should receive in addition to their distribution a rateable proportion of these credits received by the estate. The consequence of this was to increase the after tax benefit of the distribution. The effect of this appears in Annexure B to this judgment.

74 In the same year the accountant included in his letter of 18 October 1988 a proposed distribution of the estate income showing the percentages referrable to Mrs Sinclair and the other beneficiaries. This approach was adopted in his letter of 30 October 1989 for the following income year, and in each year thereafter he included a distribution proposal which provided that she received more or less 40% of the net income of the estate. The trustees accepted this approach, but it had the unfortunate consequence that in the years that followed the focus of their discussions in arriving at the annual determinations became the maintenance of this percentage. There is no evidence to suggest that they had regard to any matter other than this equitable distribution of the available income. And so, as counsel for the plaintiff contended, any consideration of Mrs Sinclair's outside income and of her support requirements just disappeared. That this is so appears from Annexure A to this judgment: if it be assumed that Mrs Sinclair's outside income and her support requirements were such that the payments to her in the early years complied with the requirements of cl. 9(b)(ii), there is no explanation for the fluctuations in the amount of the trustees' determinations after 1987 other than that they represented a response to fluctuations in the net estate income from year to year.

75 The matter moves from inference to established fact when the manner of arriving at the determination for the year 1993 is examined. In the years 1989 to 1991 Mrs Sinclair had received between $45,000 and $50,000 per annum, representing about 42% of the net estate income. In the year 1992 the net estate income dropped by 28%. The trustees in that year sought to maintain parity between the beneficiaries by reducing her payment to $35,000, maintaining her share at 41.57%. In the year 1993 the net estate income increased by 15% so Mr Evans proposed that her payment should be increased to $45,000, but this represented 46.25%. The trustees' discussions regarding the disposition of the trust income which followed appear to have been principally concerned with its fairness to Mrs Withers and her income needs. In the end, in that year, a compromise position was achieved when the trustees determined to give Mrs Sinclair $42,500 or 43.68%. Again, I emphasis that this is perfectly understandable and reflects the sense of fairness which has underlaid all of the trustees' dealings. Nor was it an irrelevant consideration. But, so doing to the exclusion of the matters mentioned in cl. 9(a)(ii), led them to the position of acting as if they were trustees with an unfettered discretionary power to distribute income among a number of potential beneficiaries. The problem is this that this is not what the will required.

76 I repeat at this point that Mrs Withers was never consulted about these things. As it happened, she was the beneficiary of the critical consideration by the trustees of the accountant's proposal for 1993. It is indeed an ironic aspect of this unsatisfactory case that this example of generosity by Mrs Sinclair, as well as of her co-trustees, is now relied upon by the two beneficiaries of her generosity to claw back the money which she received in that and in other years.

77 And so matters proceeded in each of the years 1988 to 1998. The question of the distribution for the year 1999 arose again after the accounts for that year were prepared and distributed on 12 November 1999. The year had been a very profitable one for the estate. The accountant allowed Mrs Sinclair 40.783%, about the same as in the previous year. At that time, Mrs Sinclair was in the Brighton Nursing Home where she had moved in 1998. The date of the determination for 1999 is not known other than that the formal document signed by the surviving trustees is dated 25 February 2000, 11 days after her death. I suppose the money paid to her estate pursuant to his determination and that for the year 2000 might have been intended to reimburse her for past support requirements.

78 Having regard to these matters, I am obliged to conclude that, in 1988 and thereafter, the trustees in their decision-making process strayed from the path established under the will. Putting it in the language of the authorities, in those years the trustees did not give a genuine consideration to the matter entrusted to their discretion; they failed to take account of two matters which by the will they were obliged to have taken into account: that is, the external income of Mrs Sinclair and her support requirements. Moreover, the amount of her outside income in each of these years is such that I am unable to conclude otherwise than that the trustees, had they known the true position, would have made a different determination. Accordingly, I find that their discretion in each of these years has miscarried.

VOID OR VOIDABLE

79 There was some debate before me as to whether a determination made consequent upon a discretion which had miscarried was void or voidable. The preponderance of authority leans towards the conclusion that such an exercise of discretion is ineffective so that the determination is void. The case cited in support of this conclusion is Turner v Turner[21]. This was an unusual case inasmuch as the trustees exercised a power of appointment at the direction of the settlor, being unaware that they had any discretion to act otherwise and without reading or understanding what they were signing. Mervyn Davies J held that, in the circumstances, there was no exercise of the power and that the purported appointment was a nullity.[22] This meant that, with respect to the conveyance of real estate executed as a consequence of the miscarried discretion, the conveyance was effective as a conveyance of legal estate; it was however, "set aside insofar as it purports to operate as an exercise of the trustees' powers of appointment".

80 Such a conclusion is consistent with that which I reached in Flegeltaub v Telstra Super Pty Ltd[23]. This conclusion was unaffected by the successful appeal.[24]

81 More recently in England the question has been examined by Lightman J in Abacus Trust Co (Isle of Man) v Barr[25]. His Lordship concluded that, apart from a case like Turner v Turner where it appeared that there was in truth no exercise of discretion at all, where the trustee's discretion is shown to have been exercised, but it had been infected by a failure to take into account a matter which should have been taken into account, this should be treated as a voidable exercise of discretion, rather than no exercise at all.

82 The difficulty, however, which troubled his Lordship in the Abacus case is a practical one. The application of a rule that would render void a purported exercise of a discretion in circumstances where this was the consequence of a failure to have regard to a matter which the trustees should have had regard to may be productive of much uncertainty. It may be a matter of some controversy whether, in a given case, a trustee should have had regard to a particular matter. It may be that the matter was , in the circumstances of such marginal relevance that little purpose might be served by setting it aside and remitting the question to the trustees where the same result would then be obtained. Even accepting that the rule is qualified by the further requirement that it be demonstrated that the trustee would have exercised the discretion differently had the relevant matter been taken into account, the application of the rule which renders a determination and a consequent transaction void might work an injustice. In the normal case questions such as this will be likely to arise in a proceeding brought by a disappointed potential beneficiary against the trustees asserting personal liability. In such a case they might be entitled to rely upon the statutory protection afforded by the Trustee Act 1958 s. 67. Even so, there may be difficulties in the way of the delinquent trustees recovering the sums paid out to persons who received them in good faith. To cater for such cases there is much to be said for conferring upon the Court a power to mould the relief or even deny it where the justice of the case requires. This is not available where the rule produces the result that the determination is void.

83 The question was the subject of further consideration in England in Sieff v Fox[26], a case which considered the rule in Hastings-Bass in some detail. Lloyd LJ was of opinion that the authorities showed that a determination arrived at as a consequence of such a miscarriage of discretion is void; it is not merely voidable. His Lordship did, however, point to a means of resolving or mitigating the practical difficulty[27]:

"It seems to me, however, that on authority, the main ways at present open to the court to control the application of the principle are: (a) to insist on a stringent application of the tests as they have been laid down, (b) to take a reasonable and not over-exigent view of what it is that the trustees ought to have taken into account, and (c) to adopt a critical approach to contentions that the trustees would have acted differently if they had realised the true position, perhaps especially so in cases (unlike the present) where it is in the interests of all who are before the court that the appointment should be set aside. As Park J said in Breadner's case[28]:

"It cannot be right that whenever trustees do something which they later regret and think that they ought not to have done, they can say that they never did it in the first place."

84 Faced with these authorities and the cases referred to in them, I consider my duty as a judge at first instance is to treat the determinations arrived at in this way as void.

ACQUIESCENCE

85 A number of matters raised by counsel for the secondnamed defendants was presented under the general rubric of acquiescence. It was put that Mr Sinclair, who participated in the flawed determinations, was thereby himself implicated in the miscarriage of discretion which led to those determinations. It was contended, then, in different ways, that he was disentitled from asserting his own breach of trust in order to recover a benefit.

86 Accepting for the purposes of the argument that this rule applies, the difficulty in its application in this case is that Mr Sinclair does not now seek relief in his personal capacity. He sues on behalf of the estate of his late father. Acquiescence cannot in this case bind the estate. The trustees of the estate have the duty to recover the funds which their breach has lost to the estate. The fact that he is also a major beneficiary in the estate is beside the point.

87 Then, it was said that, the estate of Mrs Withers was also bound by an acquiescence on her part. This suggestion must be rejected on any of a number of grounds: it was not pleaded; she was not implicated in the breaches; she or her estate is not seeking relief, although her estate is likely to be a beneficiary of any order for restitution. Some attempt was made to overcome the factual difficulties by relying upon the fact that the estate has taken no part in the proceeding. As I mentioned in argument, there is no reason why it should have done so. In any event, I know nothing of its interest in or support for the plaintiff's case.

88 I reject the arguments based on acquiescence however they be put.

89 Finally, in support of an argument based on unconscionability it was said that Mr Sinclair brings this proceeding for an improper motive. It was put that he brought the claim for personal gain. Again, it is difficult to see how this argument might assist the second defendants in this case. My reasons for rejecting it are numerous. It was not pleaded. Personal gain as a motive for bringing a civil claim is not of itself an improper motive. Improper motive may entitle a party to a permanent stay in certain circumstances none of which are here present.

90 Moreover, the facts do not support this contention. It is true, as counsel contended, that, after the death of Mrs Sinclair, her stepson, and perhaps other family members, supposed that her estate was worth about $1M. Later, he learnt that it was worth about $2.4M. He now seeks to recover about $1M in void payments. The position in fact is a little more complicated. A tragic aspect of this case is that Mrs Sinclair entirely omitted from her will a mention of any member of the Sinclair family. When he learnt of this Mr Sinclair was hurt and disappointed. He considered that she had been welcomed by the Sinclairs and treated as if she was their mother and grandmother. She was given all the consideration appropriate for such a family member including generous treatment in the application of cl. 9(b)(ii) of the will. When he discovered that she had profited from this and had accumulated substantial assets and had given this to her own family, his hurt to turned to anger. In his conversation with Mr Moss of 27 June 2000 he is recorded as saying this:

"There was a family conference at Easter - then thought Dot's Este might be $1M - now find about $2.4M. Think much of this would be from Sinclair sweat. Say if Dot had acknowledged or recognised Sinclair family members in her will - then sufficient.

Mr Sinclair's anger born of disappointment was not assuaged and this proceeding was commenced on 12 February 2002. I know nothing of what passed between the parties in the interval and it is not relevant for my purposes that I do so. It is sufficient that I record that the bringing of this proceeding was the product of disappointment, hurt and anger, all of which were understandable. That it is now, perhaps, a dispute over money is beside the point. There is here no impropriety such as would cause me to stay the proceeding or deny relief to the estate.

RESTITUTION

91 It follows from what I have written that the determinations of the trustees for the years are void. No argument was presented against restitution once I reached this conclusion. In the circumstances, this was a proper concession: as one of three trustees, Mrs Sinclair had participated in the impugned determinations; as co-trustee in possession of the true facts about a matter which they should have taken into account, she had failed to disclose them; and as recipient of the payments, she received them in those circumstances and having had the terms of the will explained to her. Nor was there any other consideration brought forward which might protect her from a restitutionary order. Counsel were agreed upon the figures if I arrived at this point. These are the amounts shown in Mr Evans' Exhibit KRA11 as the amounts which were received by Mrs Sinclair each year after deduction of the tax paid by her on them. They are the following:

92 In conclusion I would make an order that the secondnamed defendants pay to the trustees of the estate of Leslie William Sinclair the sum of $520,612. I will hear counsel further on the questions of interest and costs.

Income of Dorothea Sinclair from the Estate (after tax)

Outside Income of Dorothea Sinclair (after tax and excluding capital profits)

Tax Imputation Credits included in External Income

[1] Guazzini v Pateson (1918) 18 SR (NSW) 275 at 289, per Street CJ.

[2] Turner v Turner [1984] Ch 100 at 111, per Mervyn Davies J. See too, Sieff v Fox [2005] EWHC 1312; [2005] 3 All ER 693 at 719 [82], per Lloyd LJ, quoted at para [83] below.

[3] Rapa v Patience (unreported) SC (NSW), McLelland J, 4 April 1985, at 11, BC8500888; Telstra Super Pty Ltd v Flegeltaub [2000] VSCA 180; (2000) 2 VR 276 at 283 [26], per Callaway JA.

[4] Dundee General Hospitals Board of Management v Walker [1952] 1 All ER 896 at 905, per Lord Reid.

[5] Edge v Pensions Ombudsman [2000] Ch 602 at 619.

[6] This case, as presented, did not involve a contention that the trustees took into account a matter which they should not have taken into account.

[7] [1999] 3 VR 642 at 652 [41].

[8] Re Hastings Bass, decd; Hastings-Bass v Inland Revenue Commissioners [1975] Ch 25.

[9] See ASEA Brown Boveri Superannuation Fund No 1 Pty Ltd v ASEA Brown Boveri Pty Ltd [1999] 1 VR 144 at 154 [32] ff, per Beach J.

[10] Kargar v Paul [1984] VicRp 13; [1984] VR 161 at 164, per McGarvie J.

[11] See Telstra Super Pty Ltd v Flegeltaub [2000] VSCA 180; (2000) 2 VR 276 at 283 [25], per Callaway JA. Compare at 285 [33] per Batt JA.

[12] Scott v National Trust for Places of Historic Interest or Natural Beauty [1998] EWHC 318; [1998] 2 All ER 705 at 717, per Robert Walker J; Telstra Super Pty Ltd v Flegeltaub [2000] VSCA 180; (2000) 2 VR 276 at 284 [28], per Callaway JA; Abacus Trust Co (Isle of Man) v Barr [2003] Ch 409 at 415, [16] per Lightman J.

[13] Set out at para [14] above.

[14] Mrs Sinclair by telephone

[15] See Annexure C

[16] In fact the figures produced by Mr Evans showed a CPI movement from the previous year of 1.067%, so that this supposed return might have been about $18,700.

[17] In fact the amount paid was $34,931.

[18] Mr Evans' CPI adjustment in this year is 1.043% so that the figure of $18,500 in 1983 would now increase to nearly $18,900.

[19] In this year the CPI adjustment was 1.084%, so that this income might be about $19,100.

[20] No loans are shown in her portfolio for this year.

[21] [1984] Ch 100.

[22] [1984] Ch 100 at 111

[23] [2000] VSC 107.

[24] Telstra Super Pty Ltd v Flegeltaub [2000] VSCA 180; (2000) 2 VR 276.

[25] [2003] Ch 405 at 419 [28] ff.

[26] [2005] EWHC 1312; [2005] 3 All ER 693.

[27] [2005] EWHC 1312; [2005] 3 All ER 693 at 719 [82].

[28] Breadner v Granville-Grossman [2001] Ch 523 at 543 [61]. Cf ASEA Brown Boveri Superannuation Fund No 1 Pty Ltd v ASEA Brown Boveri Pty Ltd [1999] 1 VR 144 at 157 [40], per Beach J.

[29] The dates of the formal resolutions of the Trustees are unreliable as they had the belief that the determination had to have been made each year before 31 August. The document was often backdated to comply with this supposed requirement.

[30] This is taken from Exhibit KRE8 to Mr Evans' witness statement.

[31] This is taken from Exhibit KRE6 to Mr Evans' witness statement.

[32] The figure is intended to be calculated by deducting from Mrs Sinclair's total income from sources other than the trust or the estate shown in her income tax returns the expenses incurred in deriving it.

[33] My examination of the tax returns for this year suggests that this figure might be too high; but nothing turns on this.

[34] My examination of the tax returns for this year suggests that this figure might be too high; but nothing turns on this.