Public Trustee Act 1941, s 23, s 49(1)(n)

Trustees Act 1962, s 59

Property Law Act 1969, s 124

Appellant (Defendant) : Mr G T W Tannin & Mr J A Thomson

Respondent (Plaintiff) : Acting Director of Legal Aid

Australian Competition & Consumer Commission v Giraffe World Australia Pty Ltd [1998] FCA 819; (1998) 156 ALR 273

Re Badger [1913] 1 Ch 385

The Bank Officials' Association (South Australian Branch) v The Savings Bank of South Australia [1923] HCA 25; (1923) 32 CLR 276

Barker v Edger [1898] AC 748

Re Brooks (1903) 21 WN (NSW) 4

Cadman v Cadman (1886) 33 Ch D 397

Cory v Gertcken [1816] EngR 726; (1816) 2 Madd 40; 56 ER 250

Re Hambrough's Estate [1909] 2 Ch 620

Re Hamilton (Infants) (1885) 31 Ch D 291

Re Kirwan (1869) 8 SCR (NSW) (Eq) 21

R Leslie Ltd v Sheill [1914] 3 KB 607

Overton v Banister [1844] EngR 510; (1844) 3 Hare 503; 67 ER 479

Saraswati v The Queen [1991] HCA 21; (1991) 172 CLR 1

Wright v Snowe [1848] EngR 552; (1848) 2 De G & SM 321; 64 ER 144

1 KENNEDY J: Under s 19 of the Criminal Injuries Compensation Act 1985, the Chief Assessor is empowered to award compensation for a criminal injury, and to direct that the compensation, or part of it, be held by a specified person on trust on such terms and conditions as the Chief Assessor may declare. By s 5B, the Governor may appoint one or more qualified persons as Assessors for the purpose of exercising or performing the functions, other than the administrative functions, assigned to the Chief Assessor by the Act.

2 By an order dated 24 October 1991, an Assessor awarded the respondent compensation in the sum of $20,000 for injuries and losses suffered by him in consequence of criminal offences, and she ordered that "that sum be paid to the Public Trustee for investment not limited to the Common Fund for the benefit of [the respondent] until he attains the age of 18 years on 14 October 1995 absolutely". The order also contained a direction that, prior to 14 October 1995, no part of the compensation sum, or any interest therefrom, should be paid to the respondent or to Beverley Janine Hughes while she remained the guardian of the respondent. This direction apparently contemplated that, except when Ms Hughes was the respondent's guardian, payments could be made on behalf of the respondent, not only out of income, but also out of the capital comprising the compensation sum.

3 By s 7(2) of the Public Trustee Act 1941, subject to that Act, the powers, duties, immunities and rights of the Public Trustee under an appointment as trustee are to be the same as if the appointment had been of a private person. Consistently with that provision, s 23(1) was amended in 1968 to provide that, in addition to any other powers conferred by the Act, the Public Trustee shall have, and may exercise, all rights, powers and authorities conferred upon, and may avail himself of all defences open to, trustees under the provisions of the Trustees Act 1962, the Trustees' Powers Act 1931, or any other Act.

4 In Pt IV of the Public Trustee Act, dealing with general matters, s 49 sets out what are described as "general powers" of the Public Trustee. It relevantly provides:

"49(1) The Public Trustee, for any of the purposes of this Act, unless expressly prohibited by or under an instrument or order of the Court may, at his discretion and in addition to and not in restriction of any other powers under this or any other Act, exercise the following powers - ... (n) pay such sum or sums for the maintenance of any person (and, in the event of death, for funeral expenses), and for the maintenance of his wife or any child, parent or other person dependent on him, and for the education of his children, as to the Public Trustee seems expedient and reasonable."

The provision is very awkwardly drafted. It makes no express reference to the trust property. It does not identify "any person". It does not expressly limit the amount which may be paid by way of maintenance. Nor does it restrict the source of the payment to the income of any fund.

5 At the time of the enactment of the Trustees Act 1962, the Trustees Act 1900, which it repealed, did not itself empower a trustee to apply trust property for the maintenance, education, advancement or benefit of a beneficiary. However, a limited power to apply the whole or part of the income of a trust fund towards the maintenance or education of an infant beneficiary, whether the beneficiary was absolutely or contingently entitled to the fund, was to be found in s 26 of 23 & 24 Vic c 145 (Imp), adopted by Ordinance 31 Vic No 8. That statute was also repealed by the Trustees Act 1962.

6 A trustee's power with respect to the maintenance and advancement of beneficiaries, apart from statute, is considered in Jacob's Law of Trusts in Australia, 6th edn (1997) at par 2057. Omitting references, it is there said:

"If the testator or settlor omitted to make the necessary provision for maintenance in the instrument, or provision for advancement, the trustee had to apply to the court, which had inherent jurisdiction to allow maintenance, education or advancement of beneficiaries out of the income or corpus of the trust estate. It was held that, even without an order of the court, a trustee was justified in expending money for the maintenance of the beneficiary, and even to make an advancement to the beneficiary out of corpus, in cases where the court, if it had been approached, would have sanctioned the expenditure. However, this course subjected the trustee to the liability of showing that the expenditure of corpus or income on maintenance, education and advancement was proper, and therefore the safe course was to apply to the court in the first instance.

The court could apply the income of an infant's share in property for maintenance even though the interest of the infant was subject to defeasance, but not where the interest was contingent unless the interest of the infant was a portion charged on land. The court was generally unwilling that corpus should be applied for maintenance and education of an infant unless there were exceptional circumstances. However, the court could do so in proper cases and could order maintenance in excess of the provision made by the trust instrument. It also could in proper cases, and still can, make orders allowing amounts for the past maintenance of infants out of income or corpus.

Apart from statute, a trustee's power of advancement was limited. He had such a power when it was expressly conferred by the trust instrument, and also an implied power of advancement, subject to the approval of the court, out of any capital in which an infant had an absolute interest or (with the consent of other persons interested) out of capital in which he had less than an absolute interest."

7 The explanation for the language of s 49 of the Public Trustee Act is probably to be found in the Minister's Second Reading Speech on the Public Trustee Bill in 1941. He said:

"The Bill has been drafted so as to make it as uniform as possible with other similar legislation. The draftsman has consulted other Acts dealing with Public Trustees so that our measure will be as similar as possible to those enacted in other parts of Australia."

This consultation proved to be more enthusiastic than effective.

8 It is apparent that s 49 can be traced back to s 32 of the Victorian Public Trustee Act 1939. That section, however, was to be found in Div 2 of the Victorian Act, which was concerned with the management of the estates of patients and infirm persons. By s 30, subject as therein set out, the Victorian Public Trustee was required to undertake the general care, protection and management of the estates of all patients and infirm persons in Victoria, being those persons physically or mentally incapable of managing their affairs - see also the Lunacy Act 1928 (Vic), s 189 and cf the Lunacy Act 1903 (WA), s 132, s 133 and s 138. He was given the duty, subject to the Act, to take possession and care of, recover, collect, preserve and administer the property and estates of all patients and infirm persons in Victoria. Section 32 then goes on to provide as follows:

"32. In addition to any other powers and duties conferred or imposed on him under this or any other Act the Public Trustee may subject to this Act with respect to the estates of patients and infirm persons - ... (p) pay such sum or sums for the maintenance of any such patient or infirm person (and, in the event of his death, for funeral expenses) and for the maintenance of his wife or any child parent or other person dependent upon him and for the maintenance and education of his children as to the Public Trustee seems expedient and reasonable."

Unlike the Western Australian section, the Victorian provision is grammatically expressed, and it identifies the particular estates out of which, and the persons for whom, maintenance may be provided. As with the Western Australian Act, there is no reference to payments being made out of corpus or out of income; but it is, in my opinion, sufficiently clear, having regard to the obvious purpose of the section, that payments may be made either out of capital or income at the discretion of the Public Trustee. The aim was primarily to provide maintenance for patients and infirm persons and the power to resort to corpus, if necessary, at the discretion of the Public Trustee must have been self-evident. As Dixon J said in a different context, the purpose was to enable the trustee to use for the immediate advantage of the cestui que trust what would otherwise be withheld until the period of distribution - Fenton v Perpetual Trustee Co Ltd [1940] HCA 28; (1940) 64 CLR 52, at 63.

9 Section 58 and s 59 of the Trustees Act 1962 (WA) provide for the making of payments towards the maintenance, education, advancement or benefit of an infant, whether his interest in the fund is vested or contingent. By s 59, a trustee is given power to pay or apply any capital money subject to a trust for the maintenance, education, advancement or benefit of a person entitled to the capital of the trust property or any share thereof, whether absolutely or contingently, subject to the proviso that the money or assets so paid or applied should not exceed $2,000 or half of the presumptive or vested share or interest of that person in the trust property, whichever is the greater. I can find no sufficient reason for restricting the power of the Public Trustee to apply the corpus of the trust fund in this case towards the respondent's maintenance to one-half of the fund.

10 I agree with White J that the provisions of s 58 and s 59 cannot diminish the existing powers of the Public Trustee. The powers conferred by the Trustee Act 1962 are expressly said by s 23(1) to be in addition to any other powers conferred by the Public Trustee Act or any other Act.

11 Notwithstanding the awkward language of s 49(1)(n) of the Public Trustee Act, in my view, the power which it confers must be taken to relate to trust property vested in the Public Trustee unless excluded by the trust instrument or the order of the Court. In the present case, the restriction imposed by the order of the Assessor was as to payments out of the compensation sum while Beverley Janine Hughes remained the guardian of the respondent. It follows that the payment of the sum of $590 to the respondent during this period was unauthorised and the respondent is now entitled to that sum.

12 I am also of the view that "any person" referred to in par (n) of s 49(1) must be a reference to the beneficiary under the trust and that any such payment of maintenance may be made out of the trust fund, capital as well as interest.

13 On the basis of the foregoing, the Public Trustee was empowered, at his discretion, to pay such sums out of the capital or income of the trust fund for the maintenance of the respondent "as to the Public Trustee seems expedient and reasonable". In addition, he had the power, under s 59 of the Trustees Act, to pay or apply any capital money of the fund for the education, advancement or benefit of the respondent "as he may in his absolute discretion think fit, but not exceeding one half of the capital of the fund". I agree with White J that, as to the payment of the sum of $3,118.10, the subject of the fifth ground of appeal, the appellant, due to his fraudulent misrepresentation of the position, is unable to recover that sum from the Public Trustee. At first sight it appears that, apart from the sum of $590, which was paid in breach of the order of the assessor while his mother remained his guardian, the payments out of the capital of the trust fund do not exceed one half of the fund for the maintenance alone of the respondent while the payments out of the other half of the trust fund were for the education, advancement or benefit of the respondent. I would propose, however, to hear counsel on the orders which should be made herein.

14 WHITE J: This is an appeal against the judgment of a single Judge of this Court awarding to the respondent an amount of $14,017.10 and 60% of the respondent's costs of the action to be taxed. I have had the advantage of reading in draft the judgment delivered by Kennedy J, with which I am in agreement. I also agree with his Honour's suggested disposition of the appeal.

15 The learned trial Judge summarised the relevant facts as follows:

"The plaintiff is a 21 year old man who at the age of 14 years, on 24 October 1991, was the recipient of an award of criminal injuries compensation made by the Assessor of Criminal Injuries Compensation under the provisions of the Criminal Injuries Compensation Act 1985. The award was $20,000 and it was by way of compensation for injuries and losses in respect of criminal injuries which had been committed against the plaintiff. He had been injured on 12 February 1989 at Balga by his stepfather, Keith Leicester Hughes and his mother, Beverley Janine Hughes. Keith Leicester Hughes was convicted in the Perth Children's Court on 21 February 1989 of grievous bodily harm as a consequence of the injuries he had inflicted upon the plaintiff, and Beverley Janine Hughes was convicted in the same court on 3 October 1989 of assault upon the plaintiff.

The Assessor ordered that the sum of $20,000 be paid to the Public Trustee for investment, not limited to the Common Fund, for the benefit of the plaintiff until he attained the age of 18 years on 14 October 1995 'absolutely'. The Assessor imposed a condition which was in these terms:

'And notwithstanding the provisions of the Trustees Act 1962 as amended I DIRECT THAT prior to that date no part of that sum or any other interest therefrom be paid to COREY DAVID WALTER LARKMAN-HUGHES or BEVERLEY JANINE HUGHES whilst she remains the guardian of the said COREY DAVID WALTER LARKMAN-HUGHES.'

Pursuant to the order of the Assessor the sum of $20,000 was paid to the Public Trustee. Between 24 October 1991 and 2 December 1992 Beverley Janine Hughes was the guardian of the plaintiff, but on 2 December 1992 she died. The plaintiff did not attain the age of 18 years until 14 October 1995 and was without a guardian between 2 December 1992 and that date.

Beginning on 23 February 1992 the defendant made a number of payments either to or on behalf of the plaintiff from the moneys held in trust on his behalf. Those payments terminated on 28 November 1996 when the fund was exhausted. The last significant payment made by the defendant was the sum of $2995 made on 11 January 1995 to Pat Murphy Motors for the acquisition of a motor vehicle by the plaintiff. That payment reduced the funds held by the defendant in trust for the plaintiff to the sum of $317.56.

The plaintiff claims that the expenditure of the entire capital and interest of the trust prior to his attainment of majority on 14 October 1995 was in breach of trust; in breach of the orders of the Assessor; and in breach of the fiduciary duty which the defendant owed to the plaintiff. It is further pleaded by the plaintiff that in the alternative, pursuant to s 59(a) of the Trustees Act 1962, the defendant was authorised to advance only half the capital of the trust, or $2000, whichever was the greater, to the plaintiff; and in contravention of s 59(a) of the Trustees Act, the defendant advanced the whole of the trust capital to the plaintiff before the plaintiff attained the age of 18 years. The relief sought by the plaintiff is (a) payment of the sum of $20,000; (b) interest on the principal at the rate of 8% per annum from 24 October 1991 until judgment pursuant to s 32 of the Supreme Court Act 1935; (c) costs."

"Under the provisions of s 75 of the Trustees Act the defendant may be excused for the breaches of trust which I have identified. This is so where the defendant has

(iii) ought fairly to be excused for the breach of trust and for omitting to obtain the directions of the court in the matter.

All three limbs must be satisfied before a trustee can be excused: National Trustees Co of Australasia Ltd v General Finance Co of Australasia Ltd [1905] AC 373.

I have no reservations in concluding that the defendant acted honestly in making the unauthorised payments, but I do not accept that the defendant acted either reasonably or ought fairly to be excused for the breach of trust. There was, in my view, a failure to act reasonably by reason of the fact that the defendant, through its various officers, failed properly to take account of the fact that by authorising payment from the second half of capital, the plaintiff's trust was gradually diminishing to the point where, in the year 1994 alone, the capital sum reduced from $9700 to $2982. Thereafter, within the month of January 1995 the fund reduced to $287.56. Notwithstanding evidence from witnesses called for the defendant that this has occurred on other occasions in relation to other trusts, I find it impossible to accept that it was reasonable for the defendant to run down the trust to the point of extinction well before the plaintiff attained the age of 18 years. In leaving nothing in the trust for the date upon which he attained his majority, the conduct of the defendant was, in my view, unreasonable, and there is no basis upon which the defendant ought fairly be excused for what I consider to be those breaches of trust."

17 The appellant (to whom I shall refer as "the Public Trustee") appeals against his Honour's decision on several alternative grounds.

18 The first submission in the first ground of appeal is to the effect that the learned trial Judge erred in holding that the amendment to s 23 of the Public Trustee Act 1941 effected by s 8 of the Public Trustee Amendment Act 1968 meant that the general power conferred on the appellant by s 49(1)(n) of the Public Trustee Act was thereafter impliedly limited by s 59(a) of the Trustees Act 1962. His Honour dealt with this aspect as follows:

"Section 49(1)(n) of the Public Trustee Act 1941 provides that the Public Trustee, for any of the purposes of the Act, unless expressly prohibited by or under an instrument or order of the court may, at his discretion and in addition to and not in restriction of any powers under this or any other Act, exercise the following power:

'(n) pay such sum or sums for the maintenance of any person (and, in the event of death, for funeral expenses), and for the maintenance of his wife or any child, parent or other person dependent on him, and for the education of his children, as to the Public Trustee seems expedient and reasonable;'

The power given to the Public Trustee under this section is specifically limited to the payment of such sum or sums as he considers expedient and reasonable for the maintenance of any person.

The provisions of s 58 and s 59 of the Trustees Act 1962 give further and wider powers to the Public Trustee. Under s 58 the Public Trustee may, during the infancy of a person on whose behalf moneys are held in trust at his sole discretion apply 'for or towards his maintenance, education ... or his advancement or benefit, the whole or such part, if any, of the income of that property as may in all the circumstances be reasonable'. This power is given whether or not there is any person bound by law to provide for the maintenance, education, advancement or benefit of the infant.

Under s 59 of the Trustees Act the Public Trustee is empowered at any time to pay or apply any capital money subject to a trust for the 'maintenance, education ... or advancement or benefit in such manner as he may in his absolute discretion think fit of any person entitled to the capital of the trust property'. There is, however, a proviso contained within s 59(a):

'(a) the money or asset so paid or applied for the maintenance, education, advancement or benefit of any person shall not exceed altogether two thousand dollars or half of the presumptive or vested share or interest of that person in the trust property, whichever is the greater;'

The provisions of the Trustees Act 1962, and in particular the provisions of s 58 and s 59 thereof are specifically extended to the Public Trustee under s 23 of the Public Trustee Act.

It was submitted by counsel for the defendant that notwithstanding the constraints imposed upon payments from the second half of the trust capital contained within s 59(a) of the Trustees Act, the Public Trustee was nevertheless by reason of the provisions of s 49(1)(n) of the Public Trustee Act authorised to make payments for the 'maintenance' of the plaintiff from the second half of the trust capital. This is a threshold issue in the case, but one which I am not prepared to resolve in favour of the defendant. In my view, the powers contained within s 49 of the Public Trustee Act are general powers, intended to give the Public Trustee the widest possible discretionary powers in relation to trust moneys, but they are to be read subject to the provisions of s 58 and s 59 of the Trustees Act, the powers under which Act are expressly conferred upon the Public Trustee by reason of s 23 of the Public Trustee Act.

When the Public Trustee Bill was introduced into the Legislative Assembly in 1941, the Minister for Justice, in the Second Reading Speech (Hansard, 9 September 1941, p 500) said:

'The public trustee when acting in any capacity under and for the purposes of this legislation, will have the same powers as a private trustee in respect of his duties and responsibilities, and will also enjoy the same rights and immunities. He will have under his jurisdiction a safe deposit office where wills and other important documents may be kept under his control and care. He will also act as trustee for the parties concerned and will no doubt act judiciously in that capacity. He will have power to sell or exchange, to bring or defend cases at law, and will be able to act in any way required in that capacity. The object of these powers is to ensure stability of administration regarding investments, and to provide machinery for the speedy and cheap administration of estates.

In England and New Zealand, the value of trustee offices has been amply proved, and it is to be hoped that the office proposed to be established in Western Australia will be of great assistance to the people, just as it has demonstrated itself to be in other parts of the British Commonwealth of Nations. The need for the appointment of a public trustee has long been felt, and the convenience proposed is one to which the people are justly entitled. The public trustee will have more extensive powers than those exercised by the Curator of Intestate Estates and the Official Trustee. By this means beneficiaries in estates will be greatly assisted and revenue will benefit.'

In the Legislative Council (Hansard, 15 October 1941, p 1203) the observations of the Chief Secretary on the Second Reading of the Bill were to like effect. Clearly, it was the intention of Parliament in 1941 that the Public Trustee should have the same powers as a private trustee, and that he should be enabled to exercise those powers for the benefit of the public at large.

In 1968, s 23 of the Public Trustee Act 1941 was amended to provide that the Public Trustee should have all the powers open to trustees under the Trustees Act 1962. The section had previously referred to the Trustees Act 1900, but now reads:

'In addition to any other powers conferred by this Act, the Public Trustee shall have and may exercise all rights, powers, and authorities conferred upon, and may avail himself of all defences open to, trustees under the provisions of the Trustee (sic) Act 1962, the Trustees' Powers Act 1931, or of any other Act.'

The amendment to s 23 of the Public Trustee Act, thus gave to the Public Trustee for the first time the powers contained within s 58 and s 59 of the Trustees Act 1962. It also imposed the limitation contained within s 59(a).

By implication, the amendment to s 23 of the Public Trustee Act meant that the general power given to the Public Trustee under s 49(1)(n) of the Public Trustee Act to pay for the maintenance of any person (and for the maintenance of his wife or child, parent or other dependent and for the education of his children) was thereafter to be limited to payment from the first half of trust capital by reason of the provisions of s 59 of the Trustees Act 1962."

19 The respondent did not seek to support with argument that finding by his Honour but argued that, nevertheless, s 49(1)(n) of the Public Trustee Act does not assist the Public Trustee as its scope is far more limited than the powers contained in s 58 and s 59 of the Trustees Act. The respondent, as a result of the written submission by the appellant that the respondent was not entitled to contend on appeal that the decision of the court below should be affirmed on grounds other than those relied upon by that court without giving notice, filed a notice of contention dated 6 April 1999 (the day of the hearing of this appeal.) In that Notice the respondent argued that s 49(1)(n) did not authorise the Public Trustee to make payments out of the capital of the fund, only out of the income and that the misrepresentations made by the respondent in relation to the payments totalling $3,118.10 did not induce or cause the appellant's breach of trust. Counsel for the respondent explained that this second contention was intended to say that, because the payments in question would nevertheless have been in breach of trust even if what the Public Trustee believed to be the factual position were true, the misrepresentations made by the respondent did not go to the breach of trust. The learned trial Judge found that the payments totalling $3,118.10 were made as the result of the respondent's misrepresentations. In my opinion, that finding disposes of this point in favour of the appellant.

20 The provision in s 23 of the Public Trustee Act that the Public Trustee shall have and may exercise all rights powers and authorities and may avail himself of all defences open to trustees under the Trustees Act in addition to any other powers conferred by the Public Trustee Act (my added emphasis) suggests to me, with respect, that s 59 of the Trustees Act should not be construed so as to derogate from the powers of the Public Trustee under s 49(1)(n) of the Public Trustee Act but, rather, only so as to supplement such powers. By s 49(1) of the Public Trustee Act, the powers set out in par (a) to par (s) of that subsection may be exercised by the Public Trustee in addition to and not in restriction of any other powers under this or any other Act.

21 That the Public Trustee, as the statutory office holder established specifically to administer estates that require protection, in the light of the role of the Crown as parens patriae, occupies a special position has been recognised in several decisions, including Morris v Zanki (1997) 18 WAR 260 at 286 and Wood v Public Trustee (1995) 14 WAR 251 at 256 - 7, citing Payne v Egan [1967] 2 NSWR 775 at 778.

22 In Royal Automobile Club v Sydney City Council (1992) 27 NSWLR 282, Kirby P (as he then was) said, at 294:

"In the absence of the express repeal of earlier or other statutory provisions, it will normally be presumed that Parliament intended the two statutes to work harmoniously together so that each operates within its respective field of application . . . "

23 His Honour cited a number of authorities in support of that proposition.

24 I see no difficulty in the contemporaneous operation of s 49(1)(a) of the Public Trustee Act and s 58 and s 59 of the Trustees Act and no conflict between them when it is understood that the powers under the former are in addition to those under the latter. It follows that, in relation to the payment of maintenance, the powers of the Public Trustee are greater than those enjoyed by other trustees who are bound by the provisions of s 59 of the Trustees Act while in respect of the payment of moneys for the education, advancement or benefit of a beneficiary, the Public Trustee's powers are limited, as are those of other trustees, by those provisions. Accordingly, I would uphold the Public Trustee's submission to the effect that the power conferred upon the Public Trustee by s 49(1)(n) of the Public Trustee Act is not limited by s 59(a) of the Trustees Act, while mentioning that the result of that conclusion is not necessarily determinative of the appeal.

25 The second submission in the first ground of appeal contends that the learned trial Judge should have held that payments numbered 62 to 118 in the schedule to his Honour's reasons (being payments from the "second half" of the trust fund) were payments authorised by s 49(1)(n) of the Public Trustee Act and that the discretion conferred upon the Public Trustee by that section was properly exercised in making the payments.

26 In the absence of specific legislative provision or specific directions by the settlor, the trustee's power to make payment of "maintenance" for an infant beneficiary is, in general, limited to payments from the income of the trust fund: see Ford & Lee: Principles of the Laws of Trust, 3rd ed, par 12610 (and cf. s 58(1)(a) of the Trustees Act). The learned authors say:

"The policy of the courts towards the maintenance of infants out of trust funds intended for them was not only to exert original jurisdiction to empower the application of income for their maintenance where no powers were given, but also to enlarge powers given to trustees where those powers proved inadequate to the needs of the infant."

27 The courts have, albeit reluctantly, permitted the trustees to break into capital to maintain an infant where the infant was entitled absolutely (but not only contingently) to the fund and the income arising from it was inadequate for his or her maintenance: Kerferd v Perpetual Executors and Trustees Association of Australasia Ltd [1893] VicLawRp 104; (1893) 19 VLR 700; cf Robinson v Killey [1862] EngR 489; (1862) 30 Beav 520; 54 ER 991. The learned authors of Ford & Lee add:

"Nevertheless the court in Victoria, as in England, has resisted the temptation to discover in a maintenance power conferred in large terms a gift of the entire income of the fund so as to permit the finding of a vested rather than a contingent interest even if such a finding would have prevented the failure of the gift altogether for breach of the rule against perpetuities: Re Hume [1912] 1 Ch 693, followed in Re Benjamin [1926] VicLawRp 55; [1926] VLR 378."

28 The power conferred by s 49(1)(n) of the Public Trustee Act upon the Public Trustee is to make payment for the maintenance and education (and funeral expenses) of a person described therein, whereas s 59 of the Trustees Act empowers the Public Trustee at any time to pay or apply any capital money subject to a trust for the maintenance, education or advancement or benefit in such manner as he may in his absolute discretion think fit of any person entitled to the capital of the trust property.

29 The Trustees Act 1962 repealed, inter alia, the provisions of Pt I and Pt III of 23 and 24 Victoria c. 145 (Imp) ("the repealed Act") adopted by 31 Victoria No 8. Section XXVI of the repealed Act provided:

"XXVI. In all cases where any Property is held by Trustees in trust for an Infant, either absolutely, or contingently on his attaining the Age of Twenty-one Years, or on the Occurrence of any Event previously to his attaining that Age, it shall be lawful for such Trustees, at their sole Discretion, to pay to the Guardians (if any) of such Infant, or motherwise to apply for or towards the Maintenance or Education of such infant, the whole or any Part of the Income to which such Infant may be entitled in respect of such Property, whether there be any other Fund applicable to the same Purpose, or any other Person bound by Law to provide for such Maintenance or Education or not; and such Trustees shall accumulate all the Residue of such income, by way of Compound interest, by investing the same and the resulting Income thereof from Time to Time in proper Securities, for the Benefit of the Person who shall ultimately become entitled to the property from which such Accumulation shall have arisen: Provided always, that it shall be lawful for such Trustees at any Time, if it shall appear to them expedient, to apply the whole or any Part of such Accumulation as if the same were Part of the Income arising in the then current Year."

30 It is conceded by the Public Trustee in particular (iv) of the first ground of appeal that the numerous payments made by the Public Trustee fell within the general category of payments made for the respondent's maintenance, education, advancement or benefit. Traditionally, the terms "maintenance", "advancement" and "benefit", in the context of the law relating to trusts have been regarded as words of art. In Jacob's Law of Trusts in Australia, 6th ed at par [2058] it is said that:

"'Maintenance' denotes a periodical payment or a payment which could validly be made periodically, whereas 'advancement' denotes a definite unique outlay for a specific purpose. Recipients of maintenance must, practically speaking, be infants, but adults may be recipients of an advancement.

An advancement can never be made of a sum of money which the person to whom it is made can immediately put into his pocket, but it may be made with a view to his establishment in a business or profession, or otherwise in some definite way for his benefit, the whole essence of an advancement being the immediate payment of a tolerably large sum for an immediate benefit to one beneficiary."

31 On the other hand, the term "benefit" is used in a large sense to mean any benefit not comprised within the expressions "maintenance" or "advancement". (See Harland: Law of Minors, (1974) par 1127 and Re Howarth (1873) Ch App 415.)

32 In my opinion, the effect of s 49(1)(n) of the Public Trustee Act is to validate payments made by the Public Trustee for the maintenance, including education, of the respondent to the extent that the Public Trustee considered such payments of maintenance to be expedient and reasonable and that, in relation to the payment of maintenance the Public Trustee's powers are not limited by the provisions of s 59 of the Trustees Act. For the reasons indicated by Kennedy J, the Public Trustee was authorised by s 49(1)(n) of the Public Trustee Act to make such payments from income or from capital of the estate.

"(6) I am satisfied that the payments made from the second half of capital can generally be described as 'necessaries' for or on behalf of the plaintiff; see Cheshire and Fifoot's Law of Contract (7th Australian Edition) 1997, para 17.5, recognising that 'necessaries' are not confined to articles necessary for the support of life, but include articles and services fit to maintain a person in the station of life in which he or she moves ' . . . what amounts to "necessities" must change over time . . . (older) cases provide little guidance as to whether . . . a walkman cassette player is a "necessary" for a modern teenager.' I am by no means satisfied, however, that authority dictates that the defendant has an equitable right allowing a set-off against the plaintiff's claim for the $590 paid to him in breach of the express terms of the trust and/or the $10,022.10 paid to him or on his behalf in relation to the second half of capital. Arguments propounded by counsel for the defendant that the plaintiff is required by law to make counter-restitution of any benefits derived from breach of the trust before being entitled to any benefit flowing from the breach of trust are not directly supported by the authorities cited, and the urging of a general policy to that effect in texts cited to me is insufficient, in my view, to allow me to conclude that there is an effective set-off or an entitlement by counter-restitution in relation to the moneys in question. No direct authority was cited in support of the defence raised, and those cases that were cited are concerned with contractual capacity: see Birks, An Introduction to the Law of Restitution (1988) at 436;O'Sullivan v Management Agency Ltd [1985] 1 QB 428."

34 Counsel for the appellant argued that a power of "maintenance" must at least extend to the supply of common law "necessaries". I would uphold that submission.

35 He submitted that, in circumstances where there are findings that the appellant's officers bona fide considered the exercise of their discretion and also objectively provided "necessaries", there can be no review of the discretion by a court. In Karger v Paul [1984] VicRp 13; [1984] VR 161 (per McGarvie J) it was held that the exercise of a discretion in broad and unfettered terms will not be examined or reviewed by the court if the discretion is exercised by the trustees in good faith, upon real and genuine consideration and in accordance with the purposes for which the discretion is conferred and not for some ulterior purpose; provided however that the validity of the trustees' reasons for the exercise of their discretion will be examined and reviewed if they choose to state their reasons for the exercise of the discretion.

36 The powers exercisable by the Public Trustee in relation to a trust fund administered by him are to be found in one or more of three sources, namely (1) the terms of the trust itself, (2) the Public Trustee Act and (3) the Trustees Act.

37 In the present case, the terms of the trust were set out in the Award Order of the Assessor of Criminal Injuries Compensation as follows:-

"I, PHILIPPA SUZAN THOMSON, the Assessor as defined in the Act pursuant to the powers vested in me award COREY DAVID WALTER LARKMAN-HUGHES the sum of $20,000.00 compensation for those injuries and losses in respect of those Offences and order that that sum be paid to the Public Trustee for investment not limited to the Common Fund for the benefit of COREY DAVID WALTER LARKMAN-HUGHES until he attains the age of 18 years on 14 October 1995 absolutely.

And Notwithstanding the provisions of the Trustees Act 1962 as amended, I DIRECT THAT prior to that date no part of that sum or any interest therefrom be paid to COREY DAVID WALTER LARKMAN-HUGHES or BEVERLEY JANINE HUGHES whilst she remains the guardian of the said COREY DAVID WALTER LARKMAN-HUGHES."

38 The express provisions of the award order show that the trust fund was set up for the benefit of the respondent. The provision that no part of the trust fund or interest thereon was to be paid to the respondent or to Beverley Janine Hughes (the respondent's mother) whilst she remained the guardian of the respondent suggests that payments from the trust fund could validly be made to the respondent at a time when his mother was not his guardian, so long as such payment was for his benefit. Accordingly, I am of the opinion that the terms of the trust were sufficient to authorise the Public Trustee to apply moneys from the trust fund for the benefit of the respondent after the death of his mother on 2 December 1992. In that context, the word "benefit" does no more than identify the respondent as the beneficiary of the trust fund and I do not construe the award as authorising the payment of a "benefit" within the technical meaning of that term which I have discussed above. In respect of the latter, the source of the Public Trustee's powers is to be found in the provisions of s 49(1)(n) of the Public Trustee Act and of s 59 of the Trustees Act.

39 In my opinion, none of the funds actually paid by the Public Trustee was in fact paid by way of "advancement" of the respondent, as that term is understood in relation to the law of trusts.

40 In the result, I conclude that, relevantly, the Public Trustee was authorised by s 49(1)(n) of the Public Trustee Act to pay from the income and corpus of the trust fund such amounts for the maintenance of the respondent as to the Public Trustee seemed expedient and reasonable.

41 The appellant submits that the learned trial Judge erred in not holding that the respondent was not entitled to recover from the appellant those payments procured by the respondent's express fraudulent misrepresentations. The respondent admitted that payments totalling $3,118.10 were procured in consequence of his misrepresentations. The payments were made ostensibly to provide necessaries.

42 The appellant submitted that the typical example of the maxim "he who comes into equity must come with clean hands" is where an infant procures a breach of trust by representing that he or she had reached majority before doing so.

43 In Snell's Equity (29th ed, 1990) at 32, the learned authors say:

"For example, 'Infants have no Privilege to cheat Men,' [Evroy v Nicholas (1733) 2 Eq Ca Abr 488 at 489, per Lord King LC] and so if an infant, fraudulently misrepresenting himself to be of age, thereby obtains from his trustees a sum to which he is entitled only on coming of age, neither he nor his assigns can compel the trustees to pay the sum over again when in fact he attains full age."

44 And see Meagher, Gummow and Lehane, Equity Doctrines and Remedies, 3rd ed 1992, par [323] and the cases there cited.

45 In the present case, the respondent admittedly induced the Public Trustee to provide funds as the result of his false misrepresentations. If the amount of $3,118.10 was not paid as maintenance, and was, therefore paid in breach of trust by the Public Trustee, I am of the opinion, accordingly, that he would not, in equity, be entitled to be paid again the amount of $3,118.10 which was paid to him in that context.

47 The appellant did not pursue the third ground of appeal and the other grounds of appeal are all conditioned on the assumption that the Public Trustee was in breach of trust in making the payments he did to the respondent. As the Public Trustee was not in breach of trust, it is unnecessary to deal with these remaining grounds.

48 Accordingly, I would allow the appeal and set aside the judgment in favour of the respondent and, in lieu thereof, order that the respondent's claims be dismissed.

49 PARKER J: For the reasons published by Kennedy and White JJ I agree the appeal should be allowed and I concur in the orders proposed by White J.