Richard v AXA Trustees Ltd [2000] VSC 341

Supreme Court of Victoria|2000-09-01|Before: Eames J

TESTATORS FAMILY MAINTENANCE - will - application by adult daughter - substantial estate - residue held on discretionary trust for benefit of daughter during lifetime, and the remainder to form perpetual charitable trust - whether testatrix made adequate provision for proper maintenance and support - whether threshold test met - daughter suffering mental illness - testatrix not having accurate knowledge of extent of illness - daughter an invalid pensioner living in rental accommodation - whether daughter should have provision for purchase of home - relevance of autonomy, independence and control of funds by daughter - further provision ordered - section 91 Administration and Probate Act 1958

This is an application for family provision pursuant to s. 91 of the Administration and Probate Act 1958. The plaintiff, Caroline Anne Beresford Richard, is the sole natural daughter of Pauline Anne Browne who died on 11 March 1999. The plaintiff was born in 1943 and is now aged 56 years. Her parent's marriage failed in 1957 when she was 14 years of age. The testatrix remarried in 1958 and her second husband, Patrick Browne, died in 1997.

The plaintiff married Luciano Saccotelli from which union three children were born. After the birth of the third child in November 1971 the plaintiff suffered post natal depression and was hospitalised for a month, having been misdiagnosed as suffering paranoid schizophrenia. She was treated on drugs but suffered a second nervous breakdown in 1983 after ceasing medication. She was then hospitalised again. On the occasion of this breakdown her mother was very supportive of the plaintiff. In 1978 the plaintiff and her husband separated and later divorced, and her husband retained custody of the three children. Between 1980 and 1993 the plaintiff was in and out of work and finally in 1993, on the advice of her doctor, left her job in the circulation department of Il Globo newspaper. She then received a disability support pension. Since that time she has been incapable of holding employment.

Since April 1992 the plaintiff has been a patient of Dr Lester A. Walton, a consultant psychiatrist. In a report tendered before the court without objection Dr Walton stated that the plaintiff sufferers from the major psychiatric illness of bipolar mood disorder (manic depressive psychosis). Dr Walton said that the plaintiff has not required any further psychiatric hospitalisation since 1990 at which time she was first diagnosed as suffering a bipolar disorder, having suffered the characteristic mood swings of that disorder. Dr Walton reports that since 1992 the plaintiff's condition has been reasonably stable. There have been no frank manic episodes or serious episodes of depression, but he continued: "She does continue to suffer from a degree of fluctuation in mood, at times hypo mania and hyper activity being evident, most particularly in relation to pressured speech and rather flamboyant attire. There have also been periods of short lived depression, accompanied by inertia, lowering of mood and despondency. However, overall the pattern has been one of containing of the more disabling symptoms."

Dr Walton opined that it is highly likely that the same pattern of there being some instability of mood but short of a major mental breakdown, will continue into the foreseeable future. Dr Walton continued:

"Bipolar mood disorder is a notorious condition in terms of the sufferers mismanaging their financial affairs, especially in states of mania where profligate overspending is not uncommonly encountered. However, these particular features have not been present with Ms Richard, largely because her illness has been reasonably well controlled. In fact, Ms Richard impresses as a thoroughly competent money manager, she being a person of quite limited financial resources but she seems to have utilised her meagre income most prudently, as best I can judge. It is certainly my view that, at this time, there could be no doubt that she is legally competent."

Dr Walton said that a significant factor in stress which the plaintiff has suffered over the years has been her "relative state of impoverishment". Though there was some ambiguity in the report which he provided to me, I conclude that Dr Walton was of the opinion that the fact that funds would be available through the estate of the testatrix (and perhaps also that funds had been received and invested from the estate of her grandmother) meant that the mood swings should be reduced. As to the handling of her funds Dr Walton added "I am unaware of the details but I understand that Ms Richard now faces quite marked external constraints upon her access to funds and the like and I am concerned that those circumstances again place her in a situation of significant stress, which may well have adverse implications for maintaining control of illness. Thus, while it may be well intentioned that this woman is subjected to external controls to prevent her from mismanaging her financial resources, ironically that may well have precisely the opposite effect."

Dr Walton did not give evidence before me and I told counsel that I would not be prepared to conclude from the terms of the report which was tendered that if the application by the plaintiff was refused totally - so that she was left with the provision of support as proposed by the defendant - that this would cause any deterioration in her illness. I am prepared to accept, however, that an increased autonomy over her funds might be a factor which would enhance the stability of the plaintiff and promote the reduction of mood swings.

Section 91 of the Administration and Probate Act 1958 was amended by Act No.88 of 1997. It was submitted by counsel for the defendant, and I accept, that notwithstanding the fact that substantial amendments to the legislation were then made the overall effect of the changes in the legislation were to codify that which had been well established as the relevant principles at common law, but to expand the category of persons for whom applications for family provision might be made. Counsel for the plaintiff agreed with that analysis.

Section 91 now reads as follows:

"91. Power of the Court to make maintenance order (1) Despite anything in this Act to the contrary, the Court may order that provision be made out of the estate of a deceased person for the proper maintenance and support of a person for whom the deceased had responsibility to make provision. (2) The Court must not make an order under sub-section (1) in favour of a person unless - (a) that person has applied for the order; or (b) another person has applied for the order on behalf of that person. (3) The Court must not make an order under sub-section (1) in favour of a person unless the Court is of the opinion that the distribution of the estate of the deceased person effected by - (a) his or her will (if any); or (b) the operation of the provisions of Part 1, Division 6; or (c) both the will and the operation of the provisions - does not make adequate provision for the proper maintenance and support of the person. (4) The Court in determining - (a) whether or not the deceased had responsibility to make provision for a person; and (b) whether or not the distribution of the estate of the deceased person as effected by - (i) the deceased's will; or (ii) the operation of the provisions of Part 1, Division 6; or (iii) both the will and the operation of the provisions - makes adequate provision for the proper maintenance and support of the person; and (c) the amount of provision (if any) which the Court may order for the person; and (d) any other matter related to an application for an order under sub-section (1) - must have regard to - (e) any family or other relationship between the deceased person and the applicant, including the nature of the relationship and, where relevant, the length of the relationship; (f) any obligations or responsibilities of the deceased person to the applicant, any other applicant and the beneficiaries of the estate; (g) the size and nature of the estate of the deceased person and any charges and liabilities to which the estate is subject; (h) the financial resources (including earning capacity) and the financial needs of the applicant, of any other applicant and of any beneficiary of the estate at the time of the hearing and for the foreseeable future; (i) any physical, mental or intellectual disability of any applicant or any beneficiary of the estate; (j) the age of the applicant; (k) any contribution (not for adequate consideration) of the applicant to building up the estate or to the welfare of the deceased or the family of the deceased; (l) any benefits previously given by the deceased person to any applicant or to any beneficiary; (m) whether the applicant was being maintained by the deceased person before that person's death either wholly or partly and, where the Court considers it relevant, the extent to which and the basis upon which the deceased had assumed that responsibility; (n) the liability of any other person to maintain the applicant; (q) the character and conduct of the applicant or any other person; (p) any other matter the Court considers relevant."

In an affidavit sworn by Stewart Clifford Hollingworth, Manager, Personal Trusts at AXA Trustees, the proposed financial arrangements which the defendant would undertake on behalf of the plaintiff were set out in detail. Although the trustee has an uncontrolled discretion and cannot fetter that discretion by guaranteeing that it would embark upon a particular course of conduct Mr Hollingworth deposed that, having regard to the plaintiff's need for accommodation and the clear wishes of the testatrix that she be adequately provided for in her life, the trustee would favourably view an application by the plaintiff for a sum in the order of $300,000 to $500,000 to be invested by the trustees in the purchase of a home in which the plaintiff could reside. The trustee would also pay auxiliary costs.

Mr Hollingworth added "obviously the trustee would have to be satisfied that the particular piece of real estate was an appropriate investment (particularly that it was not over priced or that there were not any other features about the property that would create higher than usual obligations for maintenance or greater than usual outgoings in the future)".

On the purchase of such a property the plaintiff would be entitled to reside in the property for life but since the property would be part of the assets of the trust the trustees would meet all outgoings, including municipal and water rates and any body corporate charges. The trustee would also pay reasonable and necessary maintenance costs.

As to the balance of the funds which would then be available (in the order of $800,000) they would be invested, with appropriately 80% being allocated into equities and 20% into fixed interest investments, returning a gross income of $30,000 per annum for the plaintiff which after payment of the defendant's commission of 6.6% would leave her between $24,000 to $28,000 per annum.

Additionally, Mr Hollingworth deposed that all health insurance expenses and medical expenses would be met by the trust upon production of evidence of such expenditure. He deposed that the trustee would further provide approximately $20,000, as suggested by the plaintiff, for the purchase of a new motor vehicle when the time comes to purchase such a vehicle and would also provide, as she suggested, between $15,000 to $20,000 for an overseas holiday. Such a request for funds would be considered "most favourably". The trustee would also consider favourably any requests for additional amounts of capital for recreation and holiday needs.

Mr Hollingworth deposed that having regard to these matters the trust would be more than adequate to ensure that all existing needs of the plaintiff, during her lifetime, would be met. Mr Hollingworth gave evidence affirming the truth of the material in his affidavit.

Mark Linton Hutchison also filed an affidavit and gave evidence on behalf of the defendant. Mr Hutchison is the Manager of Investment Administration for the defendant. He deposed that the testatrix appointed the defendant as her attorney under a power of attorney and that on behalf of the defendant he was responsible for taking instructions from the testatrix as to the manner in which she wished the company to operate. He obtained instructions from her as to the wills which she made and the reasons for the provisions which she made in her wills. The testatrix told Mr Hutchison that whilst she wanted her daughter, Caroline (the plaintiff), to be the primary beneficiary of her estate "she was concerned that her said daughter was not capable of properly managing money for her own benefit".

Mr Hutchison attended the testatrix again in August 1998 when she gave instructions for a new will to be prepared and for the revocation of her 1993 will. At that time Mr Hutchison discussed with the testatrix the intended provision for the daughter, the plaintiff. The testatrix told him that her daughter was to receive a cash legacy of $50,000 and that the residue of her estate was to be held in trust so as to apply the income and capital for the maintenance and general well-being of her daughter. The testatrix instructed Mr Hutchison "that her daughter Caroline suffered from a bipolar disorder and as a consequence thereof was not capable of properly managing her money. The deceased then instructed that upon Caroline's death the remaining residuary estate was to be held in a perpetual charitable trust for the benefit of the Brotherhood of St Laurence, the Royal Victorian Institute for the Blind and the Salvation Army".

In January 1999 Mr Hutchison again attended on the testatrix who advised him that she was intending to amend her 1998 will to remove legacies which she had given to the three grandchildren, and in January 1999 he attended with the amended will for her to execute. He added: "after reading over the will that I had prepared the deceased indicated that she had reconsidered the cash legacy of $50,000 to her daughter Caroline and wished it to be deleted from the will. The deceased indicated to me that she had reached this decision because she believed that Caroline's bipolar disorder affected her in such a way that she would not be likely to use the $50,000 wisely and would therefore not obtain the benefit from it that the deceased had intended".

Although the testatrix was concerned that the plaintiff would not handle money wisely it appears that she had limited, if any, knowledge of the particular features of the plaintiff's illness, but had read generally in a newspaper report what were the reputed features of bipolar disease. Insofar as the testatrix was concerned that the plaintiff would be profligate with money the evidence suggests that there was no such behaviour on the part of the plaintiff. In 1991 the plaintiff invested $20,000 with a solicitor who defrauded her, together with many other clients, and she lost the money. The investment was otherwise an appropriate one but for the fact that the solicitor with whom she conducted the business was dishonest. The plaintiff received a legacy of $34,000 from her maternal grandmother's estate in April 1999 and very prudently and carefully invested that fund, allowing for herself the mild extravagance of a four day holiday in Tasmania and a two day holiday in Warrnambool. In December 1999 she received a further $7,000 from her grandmother's estate and invested $5,000 of that wisely and provided gifts to her family in the sum of $2,000 together with food and drinks for Christmas.

The plaintiff's present financial position is that she has appropriately $30,000 invested and receives a disability pension of $366.00 per fortnight, and resides in a one bedroom public housing unit in St. Kilda.

Both counsel agreed that notwithstanding the amendments to s. 91 the plaintiff must first establish, as a threshold issue, that there has been a failure of the testatrix to make adequate provision for the proper maintenance and support of the plaintiff.[1] Mr Fraser, counsel for the defendant, submitted that the plaintiff's application fails at the threshold because it has not been demonstrated that the testatrix failed to make adequate provision for the plaintiff, as required. He pointed to the fact that by her will the testatrix bequeathed the residue of both her real and personal estate to be held on trust for the plaintiff and to provide "so much of the net annual income arising therefrom and so much of the corpus thereof as my trustee shall in its absolute and uncontrolled discretion think fit to or for the maintenance, benefit and support in life of my said daughter... during her lifetime". Upon the death of the plaintiff the balance then remaining of the residuary estate was to be provided for a perpetual charitable trust named after the sister of the testatrix. The residuary estate as it stood at the death of the plaintiff was to be invested with the net annual income being paid in perpetuity to one or more of three charities, the Brotherhood of St Laurence, the Royal Victorian Institute for the Blind and the Salvation Army.

Thus, it may be seen that the trustee was given a very wide discretion to employ so much of either the capital or income of the estate for the benefit and support of the plaintiff during her lifetime, as it deemed appropriate.

In Collicoat v McMillan[2] Ormiston J examined in some detail the requirements for establishing whether adequate provision for the proper maintenance and support of a person has been established at the threshold. His Honour previously examined the principles, which had been established over many years, in his decision in Anderson v Teboneras[3]. The decision of Ormiston J in Collicoat v McMillan was cited with approval in the Court of Appeal in Grey v Harrison[4]. As his Honour held, at p. 65, an applicant must show what would have amounted to proper maintenance and support and at the same time show that the distribution which was made in the will was not adequate or sufficient to provide such proper maintenance and support having regard to the needs of the applicant. Ormiston J also considered the concept of the moral duty which should have motivated a just and wise testator, which was discussed in Allen v Manchester[5] and which was further discussed in Singer v Berghouse[6].

In Coates v National Trustees Executors and Agency Co Ltd[7] the court held, by a majority, that the court might take into consideration facts which had either not occurred or which were not known to the testator at the time of making the will. As Fullagar J observed, at 523:

"I do not think, generally speaking, that the courts, when they have referred to `moral duty' have really intended to do more than suggest that the court ought to do what it supposed that the testator would have done if he had known and properly appreciated all the circumstances of the case."

As was held by Gibbs J in Hughes v National Trustees Executors and Agency Co of Australasia Ltd[8]:

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

In this case there was plainly some reserve in the relationship between the testatrix and her daughter. The plaintiff said that she believed that the testatrix had not wanted a child, so that her birth was an undesired event, and that after the divorce of her mother and father, her mother - the testatrix - was so affected by the trauma of that event that she became reluctant to deal with the plaintiff, whose physical appearance was very close to that of her father. Whatever may be the reason for the coolness of the relationship there is no suggestion on the evidence before me that there was any hostility of a lasting kind and there plainly was substantial affection between them, although there were certainly occasions of disputation. For example, the testatrix was angry at the fact that the plaintiff was pregnant with her first daughter when she married. On another occasion the testatrix was angry (quite unreasonably) at the fact that the plaintiff had been obliged to accept a disability pension. But notwithstanding those relatively minor disputes there was no lasting animosity, albeit, there was a coolness between the pair. It cannot be said, therefore, that there was a deliberate decision taken by the testatrix to reduce the sum, or the manner of provision, which she might otherwise have provided for her daughter by virtue of some anger or disaffection with her daughter. Indeed, it is apparent that the testatrix, by the terms of her will, was intending to provide generously for the plaintiff's needs during her lifetime, but because of her belief that the bipolar disorder suffered by her daughter would cause the plaintiff to waste any funds which were in her own name, or to squander any property, she adopted the course which she did of placing the estate in the hands of a trustee and providing that the residue of the estate would be payable to charities after the death of the plaintiff.

The submissions made on behalf of the plaintiff really turned on the fact that in making the provision which she did the testatrix denied to the plaintiff the autonomy, independence and self-determination which would have been provided had money or property been bequeathed on an outright basis to the plaintiff.

Mr Boaden submitted that the plaintiff has been left in the position that she must go cap-in-hand to the trustee and although it may well exercise its unfettered discretion generously and sympathetically, it is its decision, not the plaintiff's, which would apply with respect to the sort of life choices that other persons would expect, or demand, to have. On behalf of the defendant it was submitted that the plaintiff does, indeed, have a serious illness and it was simply in recognition of that fact - and appropriately so - that the testatrix structured her estate in the way that she did.

As noted earlier, in assessing whether adequate provision for the proper maintenance and support of a person has been made the court is entitled to have regard to circumstances which were not known to the testatrix, and to assess what the testatrix would have done had she known and properly appreciated all of those circumstances. In my view, there were a number of circumstances which could not have been properly appreciated by the testatrix in this case, and which, had they been properly appreciated or known, would have led the testatrix to make different provision to that which she did make. In the first place, the testatrix appears to have assumed that bipolar disorder would be likely to result in the plaintiff wasting any funds which were left in her own name. It appears on the evidence before me that what was known by the testatrix about bipolar disorder was only that which was gleaned from a newspaper report. The testatrix made no effort to enquire of the psychiatrist who was then treating her daughter. Had she done so, then she would have learned - as the report of Dr Walton asserts - that whilst bipolar mood disorder is notoriously associated with mismanagement of the financial affairs of a sufferer, especially when in a manic state, "those particular features have not been present with Ms Richard, largely because her illness has been reasonably well controlled. In fact, Ms Richard impresses as a thoroughly competent money manager, she being a person of quite limited financial resources but she seems to have utilised her meagre income most prudently as best I can judge".

Ms Richard gave evidence before me and impressed me as a person who was well aware of the dangers of her condition, had insight into the need for caution, but was justifiably proud of the fact that with the exception of the dishonesty of the solicitor with whom she invested funds she has acted prudently in financial affairs in the past. In my opinion the testatrix, had she known the opinion of Dr Walton, would have concluded that the risk of financial mismanagement was much lower in the case of her daughter than it may have been with other persons suffering bipolar disorder. A relevant further factor was that the belief that her daughter would mismanage funds was substantially based on the fact (apart from the mere fact that she had bipolar disorder) that her daughter had lost $20,000 which she had invested. The solicitor whose defalcations amounted to millions of dollars and affected a very substantial number of clients (and which led to his imprisonment) defrauded many people who did not have the misfortune to suffer any mental illness. In my view, the loss of those funds in those circumstances, by the plaintiff, could not in any way be regarded as evidence of a tendency to financial mismanagement and/or evidence of the impact of bipolar disorder on the plaintiff.

In my opinion, had the testatrix been aware of the facts relating to the true state of the plaintiff's bipolar disorder, and the circumstances surrounding the loss of her investment, she would not have concluded that no funds or property, at all, could be safely placed in the hands of the plaintiff.

When considering whether the plaintiff has met the threshold test and also whether, if adequate provision had not been made then what amount of further provision should be made, the court is directed by s. 91(4) to have regard to a range of factors set out in paragraphs (e) to (p). I have, therefore, had regard to all of those factors in considering whether the threshold test has been met. Those factors do not include any reference to a question of autonomy and right of self-determination of a beneficiary. Counsel told me that their researches had located no authority which dealt with the question of the autonomy which accompanies the grant to a beneficiary who receives the funds or property in her own name, and the relevance of the denial of autonomy when the beneficiary is at the mercy of the discretion of another as to the allocation and use of such funds. In my view, there is no reason why such a factor is not one relevant consideration, amongst all others, to which the court might have regard.

In this case, as I have said, there is good reason to believe that the decision of the testatrix to structure her estate in the way that she did was based on a flawed understanding of the nature and impact of the bipolar disorder which her daughter suffered and on an inadequate understanding of the circumstances surrounding the loss of funds in the previous investment. I recognise that the testatrix not only had the object of ensuring that the mental illness of the plaintiff did not lead to the dissipation of the fund but also to provide a fund in the name of her sister for the future benefit of the three charities. In my view, however, had the true facts been known a wise and just testatrix would have appreciated that the need for caution - so as to ensure that funds were not wasted - had to be balanced against the need to provide the maximum degree of freedom and autonomy possible to her daughter as the beneficiary of her estate. In particular, she would have concluded that it was appropriate that her daughter own the home in which she resided and that her daughter's illness was not so severe as to necessitate that the entirety of the remaining estate be administered by the trustee.

Mr Fraser, counsel for the defendant, submitted that whilst the control of the estate by the trustees imposed limitations on the personal autonomy of the plaintiff, the plaintiff is the sole beneficiary of the estate during her lifetime and there was no reason to presume that the trustee would exercise its unfettered discretion in an unreasonable way. He submitted that were that to be the case - for example, were the trustee to object to the plaintiff's choice of home and refuse to provide funds for the purchase - then the plaintiff would be entitled to return to the court by way of appropriate proceedings to enforce the terms of the trust. Mr Boaden, counsel for the plaintiff, responded to that suggestion by stating that not merely would that be a cumbersome course for the plaintiff to adopt, it would be highly unlikely that the court would intervene so as to overturn the discretion of the trustee, given its unfettered scope by the terms of the will. He submitted that provided the trustee could show that it had performed its duties bona fide and without malice and had given genuine consideration to the exercise of its discretion, rather than act in a perverse or capricious way, there was no reasonable likelihood that the court would intervene. He referred to Hartigan Nominees Pty Ltd v Ridge[9] and Esso Australia Ltd v Australian Petroleum Agents and Distributors Association[10]. Mr Fraser submitted that the exercise of a discretion by a trustee was often challenged in the courts, and cited Karger v Paul[11]. That decision, however, supports the contention of Mr Boaden that an exercise of discretion given in broad and unfettered terms would not be reviewed by the courts where the discretion was exercised in good faith and upon real and genuine consideration and in accordance with the purposes for which the discretion was conferred. Although, as Mr Fraser pointed out, the discretion here was to be exercised "to or for the maintenance benefit and support in life" of the plaintiff, in my view Mr Boaden is right in suggesting that it would be very difficult for the plaintiff to effectively challenge a decision taken in good faith by the trustee rejecting an application for particular funding made by the plaintiff.

In this case, after additional provision of $100,000 for each of the three step-daughters of the testatrix is taken into account, the estate, as at the date of hearing, amounts to $1,396,000. The plaintiff is now, and was at the time of the death of the testatrix, living in a one bedroom public-owned flat, for which she pays rent. She exists on a pension. In having regard to whether adequate provision has been made for her the disparity between the size of the estate and the circumstances of the plaintiff at the time of the death of the testatrix is stark indeed. In my view, adequate provision was not made for the plaintiff in the circumstances of this case.

Mr Boaden sought on behalf of the plaintiff the sum of $750,000 by way of absolute pecuniary legacy, with the residue of the estate to be held by the defendant on trust to pay the income to the plaintiff during her lifetime with an absolute discretion in the trustee to advance corpus to her from time-to-time. The residue of the estate upon the demise of the plaintiff should then be applied for the three charities in equal shares in the terms provided by the will. Of the sum of $750,000 Mr Boaden proposed that the plaintiff would apply the sum by allocating between $300,000 and $500,000 to the purchase of a home in St Kilda, with an additional stamp duty payable of $21,000 to $33,000 and an allowance for initial renovation or repairs of $15,000 to $25,000. In addition, the sum of up to $50,000 would be allocated to the purchase of furniture and furnishings. Furthermore, provision would be made for a new vehicle in five to 10 years, at a cost up to $20,000. Additionally, the plaintiff would allocate $15,000 to $20,000 towards an overseas holiday. Having paid such sums as were required to purchase a house and for such furnishings and other items as described, the balance would be invested by the plaintiff, herself, with the funds being managed on her behalf by a qualified accountant. That accountant, Mr David Gorman of Griffith Gorman Pty Ltd, had been chosen by the plaintiff upon advice of the Institute of Chartered Accountants in Australia. An investment program prepared by Mr Gorman was tendered before me and it gives the appearance of being a suitably cautious and sensible strategy of investment. It was not said otherwise on behalf of the defendant.

There was some discussion as to whether the house which the plaintiff would purchase would be in her own name, alone. She volunteered her desire that title to the property would be registered in the names both of herself and of one or more of her children (one son being a solicitor). Mr Boaden submitted that the beneficial ownership, in that event, would be solely the plaintiff's and the registered proprietors would hold it on trust for her. In that way the required protection against profligacy on the part of the plaintiff could be ensured, Mr Boaden submitted.

In my view, it is appropriate that the plaintiff purchase a property in her own name from funds provided by way of further provision from the estate. Whether she resolves to structure the ownership of the property in the way suggested by Mr Boaden seems to me to be a matter which she and those advising her can consider, but it is not, in my view, an essential pre-condition for my decision that it is appropriate that a grant of funds for the purpose of purchasing a house should be made.

In the course of her evidence the plaintiff said that she would like to have funds in her name so that she could benefit her children by leaving something to them from her own estate. As Mr Boaden conceded, it would not be a proper consideration as to whether there was adequate provision under a will - nor as to a sum which should be provided in the event that there had not been adequate provision - to have regard to the benefits which might flow to others should additional provision be made. As Kitto J observed in Worladge v Doddridge[12] it is not appropriate that the purpose of the provision of funds was "not to provide for the recipient's maintenance or support but to add to his disposable assets and so as to enable the Act to be turned to the indirect benefit of other persons".

Notwithstanding that the plaintiff made the comment in her evidence about benefiting her children, in my view that is not the primary purpose for which she is seeking the funding. To quote Kitto J, again:

"The fact that a payment may produce an incidental effect going beyond maintenance and support cannot put it beyond power, I think, if its substantial character is that of a provision for maintenance and support."

That appropriately describes the situation in the present case.

The order sought by counsel for the plaintiff is that a specific sum of money be allocated to the plaintiff for the purposes which he described, primarily for the purchase of a house in which she can live. It is appropriate in my view that funding for the purposes identified should be made but it is obviously essential that the funds be directed to those purposes and not to others which have not been the subject of consideration by me. The court has power by s. 96(2) to impose conditions, restrictions and limitations upon the benefit of any provision which it might make, and I intend, therefore, to make an express order that ensures that the funding is allocated for the primary purpose intended. I have not heard from the daughter or sons of the plaintiff and no suggestion has been made that any of the children of the plaintiff would seek to gain personal benefit from the funds which may be allocated by me to the plaintiff for the purposes which have been discussed. Nonetheless, it is the plaintiff's maintenance and support with which I am concerned and I will seek the assistance of counsel to draft appropriate orders to ensure that it is to that end that the funding is allocated.

In seeking a lump sum provision in excess of that required for the purchase of a house, and costs related thereto, the plaintiff sought the opportunity to invest some funds herself and to have them managed otherwise than by the defendant. The defendant opposes that suggestion on the basis that since it is an experienced trustee it makes sense for there to be only the one body supervising the property and assets of the estate. In my view, it is not unreasonable that the plaintiff have the opportunity to invest some funds on her own behalf, as she has suggested. The fact that she will therefore have investments which are not controlled by AXA, and income therefrom, may, of course, bear upon any decisions which the defendant as trustee might make in the allocation of funds to the plaintiff, from time-to-time. There is, therefore, the potential for argument between the plaintiff and the defendant trustee which might not arise if the trustee was the sole body or person responsible for the investment of funds of the estate on behalf of the plaintiff. Notwithstanding that possibility (which seems to me can be met, and the potential for confusion or uncertainty be reduced, by appropriate liaison between the plaintiff's intended personal manager of her funds and AXA) there appears to me to be no compelling reason why a relatively small fund might not be available to the plaintiff for this purpose. In any event, the plaintiff already has some funds invested otherwise than through AXA.

The relationship between the plaintiff and the defendant has not commenced particularly well. The plaintiff complains, through her counsel, that although the defendant trustee has had access to the funds for 16 months and has had the opportunity, with its broad discretion, to make funds available to the plaintiff (who to its knowledge was living on a pension in rental accommodation) no step whatsoever had been taken by the trustee to make any funds available to the plaintiff. In his evidence Mr Hollingworth said that that was so because no request for funds had been made. Whilst an application for funds may well have been an appropriate step for the plaintiff to have taken, it seems to me a sympathetic trustee would not have waited for such a request but would have itself offered such support as may have been appropriate. In any event, the plaintiff was quite prepared to have AXA manage the bulk of the estate, and that is appropriate, in my opinion. Nonetheless, it does seem to me that for there to be proper provision for her daughter's maintenance and support the deceased, as a wise testatrix, should have concluded that by allowing a small fund to be held and managed for the plaintiff otherwise than through AXA might more likely reduce the potential for disputation between her daughter and the trustee, rather than increase that risk.

In all the circumstances, I propose that further provision by way of payment of a sum of $650,000 be made to the plaintiff from the estate. The residue of the estate will be held by the defendant on trust to pay the income to the plaintiff during her lifetime with an absolute discretion in the trustee to advance corpus to her from time-to-time. Upon the death of the plaintiff the residue of the estate will be applied by the trustee in the terms provided by the will.

It is to be noted that the offer made by AXA to purchase a dwelling house in which the plaintiff might live also was coupled with an acceptance of the obligation to pay all rents and charges which fell due on that property, since it would be an asset of the estate. If the plaintiff purchases a property herself then it would not necessarily follow that such expenses would be met by the trustee from the balance of the estate, although the unfettered discretion would allow the trustee to allocate funds for that purpose if it so chose.

As to the further provision of $650,000**,** I will direct as a condition that some portion of that sum, not exceeding $550,000, be allocated to the purchase of a dwelling house by the plaintiff (inclusive of stamp duty, legal costs, maintenance and repairs, and furnishings) and that the balance of the funds then remaining shall be available to the plaintiff to be invested or applied by her in such manner as she thinks fit, having regard to the advice of an appropriately qualified funds manager, of her choosing.

I will hear counsel as to the appropriate terms of the orders, including costs.

[1] See Stott v Cook (1960) 33 ALJR 447 at 448, per Kitto J; Singer v Berghouse (No2); (1994) 181 CLR 210 at 208-210 [1994] HCA 40; (1994); 68 ALJR 653 at 656-7.

[2] Unreported 30 August 1995, Ormiston J.

[10] Unreported, Supreme Court, 5 October 1993, Hayne J.

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Judgment (65 paragraphs)

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Cases Cited (6)