MATTER : Inheritance (Family and Dependants Provision) Act 1972

WANDA MARY BOSTIN and LEOPOLDO VIGOLO (as Executors of the Will of Lino Vigolo (Dec))

LEOPOLDO VIGOLO as trustees of the LINO VIGOLO FAMILY TRUST

Family provision - Adult claimant - Claimant excluded from benefits under will - No reliance on financial need - Moral claim said to arise from contribution to farming business carried on with parents - Whether adequate provision for proper maintenance, support and advancement in life - Turns on its own facts

Inheritance (Family and Dependants Provisions) Act 1972, s 6, s 6(1), s 7(1)(c)

First Defendant : Mr E M Heenan QC & Mr L A Tsaknis

Second Defendant : Mr E M Heenan QC & Mr L A Tsaknis

Third Defendant : Mr E M Heenan QC & Mr L A Tsaknis

Fourth Defendant : Mr E M Heenan QC & Mr L A Tsaknis

Fifth Defendant : Mr E M Heenan QC & Mr L A Tsaknis

Anderson v Teboneras [1990] VicRp 47; [1990] VR 527

Goodchild v James (1994) 13 WAR 229

Hawkins v Prestage (1989) 1 WAR 37

Langford v Cleary (No 2) [1998] TASSC 37; (1998) 8 Tas R 52

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

Re Allardice [1910] 29 NZLR 959

Re Goodchild [1997] EWCA Civ 1611; [1997] 1 WLR 1216

Re Hodgson (Deceased) [1955] VicLawRp 77; [1955] VLR 481

Re S (Deceased); H v Thomas [1975] VicRp 3; [1975] VR 47

Re Sinnott (Deceased) [1948] VicLawRp 48; [1948] VLR 279

Stott v Cook (1960) 33 ALJR 447

Wentworth v Wentworth (1995) 37 NSWLR 70

1 McLURE J: This is an application made by originating summons dated 27 February 1999 by the plaintiff, Virginio Vigolo ("Virginio"), under s 6 of the Inheritance (Family and Dependants Provisions) Act 1972 for provision out of the estate of his late father, Lino Vigolo ("testator").

2 Virginio is one of five children of the testator. The first defendants, Wanda Mary Bostin and Leopoldo Vigolo, are Virginio's sister and brother respectively and the executors of the testator's will. Wanda and Leopoldo are also sued in their personal capacity. The fourth defendant Nancy Cunningham ("Nancy") and the fifth defendant Sandra Gangell ("Sandra") are Virginio's sisters.

3 The testator died on 3 June 1997 aged 69. He left an estate worth approximately $1.9 million to four of his five children in equal shares. The testator made no provision in his will for Virginio or for his surviving widow, Rosaria. Rosaria, who was given notice of the proceedings, does not appear and has made no application under the Act_._

(a) receive a sum equal to one fifth of the net assets of the testator's estate; and

(b) be appointed a guardian and appointer of the Lino Vigolo Family Trust with his sisters and brother.

5 Section 6(1) of the Inheritance (Family and Dependants Provisions) Act 1972 (Act) provides:

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

6 Section 7(1)(c) of the Act includes amongst those eligible to apply under s 6(1), a child of the deceased living at the date of the death of the deceased.

7 On an application under s 6(1), the Court is required to carry out a two-stage process. The first stage calls for the determination of whether the disposition of the deceased's estate was not such as to make adequate provision for the proper maintenance, support, education and advancement in life of the applicant. This is described as the jurisdictional question which is to be determined as at the date of death of the testator. If that question is answered in the affirmative, the Court in exercising its discretion to make such provision as it thinks fit, must take into account the relevant facts as they exist at the time of making the order: Bondelmonte v Blanckensee (1989) WAR 305 per Malcolm CJ at 307; Singer v Berghouse [1994] HCA 40; (1994) 181 CLR 201 at 208 - 209.

8 Section 6(1) focuses attention on whether "adequate" provision has been made for the "proper" maintenance, support, education and advancement in life of the claimant. The terms "adequate" and "proper" were considered by Lord Romer in delivering the advice of the Privy Council in Bosch v Perpetual Trustee Co Ltd [1938] AC 463. He said (at 476):

"The use of the word 'proper' in this connection is of considerable importance. It connotes something different from the word 'adequate'. A small sum may be sufficient for the 'adequate' maintenance of a child, for instance, but, having regard to the child's station in life and the fortune of his father, it may be wholly insufficient for his 'proper' maintenance. So, too, a sum may be quite insufficient for the 'adequate' maintenance of a child and yet may be sufficient for his maintenance on a scale that is 'proper' in all the circumstances."

9 The majority of the High Court (Mason CJ, Deane and McHugh JJ) in Singer v Berghouse noted with approval Lord Romer's explanation in Bosch v Perpetual Trustee Co Ltd of the difference between "adequate" and "proper" and the interrelationship between "adequate provision" and "proper maintenance" etc. The majority in Singer v Berghouse continued (at 209 - 210):

"The determination of the first stage in the two-stage process calls for an assessment of whether the provision (if any) made was inadequate for what, in all the circumstances, was the proper level of maintenance etc appropriate for the applicant having regard, amongst other things, to the applicant's financial position, the size and nature of the deceased's estate, the totality of the relationship between the applicant and the deceased, and the relationship between the deceased and other persons who have legitimate claims upon his or her bounty.

The determination of the second stage should it arise, involves similar considerations. Indeed, in the first stage of the process, the Court may need to arrive at an assessment of what is the proper level of maintenance and what is adequate provision, in which event, if it becomes necessary to embark upon the second stage of the process, that assessment will largely determine the order which should be made in favour of the applicant."

10 Although the NSW legislation under consideration in Singer v Berghouse specifies the matters which must be taken into account at the first stage, they are equally applicable to s 6 of the Act: Kitson v Franks [2001] WASCA 134. What is "proper" in the circumstances must be determined in light of all the facts of the case: Bondelmonte v Blanckensee per Malcolm CJ at 308.

11 The jurisdictional question, though it involves the making of value judgments, is a question of objective fact to be determined by the Judge. The decision made at the second stage, by contrast, involves an exercise of discretion in the accepted sense: Singer v Berghouse per Mason CJ, Deane and McHugh JJ at 211.

12 A number of the cases pose the question whether a testator had a moral, as opposed to legal, obligation to provide for a claimant thereby giving rise to a "moral claim" on the part of the claimant to a share of the testator's estate: see Blore v Lang [1960] HCA 73; (1960) 104 CLR 124 per Dixon CJ at 128; Bondelmonte v Blanckensee per Malcolm CJ at 308 - 309; Re Allen (Deceased); Allen v Manchester [1922] NZLR 218 per Salmond J at 220.

13 An oft cited and approved statement of the moral duty is that of Salmond J in Re Allen who said (at 220):

"The provision which the Court may properly make in default of testamentary provision is that which a just and wise father would have thought it his moral duty to make in the interests of his widow and children had he been fully aware of all the relevant circumstances."

14 However, the majority in Singer v Berghouse said (at 209) that references to "moral duty" or "moral obligation" may well be understood as amounting to a gloss on the statutory language.

15 The status of the moral obligation test has been subject to much debate since Singer v Berghouse. In Grey v Harrison (1997) 2 VLR 359 the Full Court of the Victorian Supreme Court held that the comments of the High Court in Singer v Berghouse were obiter dictum and did not displace the law as it has traditionally been understood. In Permanent Trustee Co Ltd v Fraser (1995) 36 NSWLR 24 Kirby P and Sheller JA expressed the view that the dicta in Singer should be followed. Handley J (at 32 - 33) took a different view suggesting the statutory test can be equated with the notion of moral obligation.

16 The Full Court of the Supreme Court of Western Australia has considered s 6 of the Act on at least three occasions since Singer v Berghouse: Lacey v Lacey, unreported; FCt SCt of WA; Library No 980359; 25 June 1998; Nelson v Nelson, unreported; FCt SCt of WA; Library No 990136A; 9 April 1999; Kitson v Franks [2001] WASCA 134.

17 Franklyn J in Lacey was of the view that the statutory test can, in effect, be equated with moral duty or moral obligation. Walsh J in that case approved and applied the moral obligation test. Kennedy J was in general agreement with the reasons of Walsh J. No member of the Court in Nelson v Nelson discussed the moral obligation test in the context of the jurisdictional question. Wallwork J made reference to, and applied, it at the second stage of the inquiry. Malcolm CJ and Parker J in Kitson v Franks cited with approval and applied Salmond J's moral duty test from Re Allen. Kennedy J agreed with Parker J's reasons.

18 I will return to the legal principles in the context of the facts of this case.

19 In general, the facts were not in dispute. Unless expressly stated to be contentious, the following facts are established by the evidence.

20 In the early 1960s the testator and his wife, Rosaria, commenced farming on conditional purchase lease property at Narrikup near Albany in the south of the State. It comprised an area of 284 hectares. In October 1981 the Narrikup property was purchased from the Crown and registered in the name of the testator.

21 In May and June 1972, the testator and Rosaria purchased two properties adjacent to the Narrikup property as tenants in common. This land together with the Narrikup property was known as the "Old Coach Road farm".

22 At least from the financial year ending June 1977, the farming business on the Old Coach Road farm was carried on by a partnership known as L R and N Vigolo comprising the testator, Rosaria and Nancy. The Old Coach Road farm is not shown as a partnership asset in the partnership accounts.

23 In June 1978 the testator, Rosaria and Virginio purchased land which became known as the "Albany Highway farm" as tenants in common in equal shares for a purchase price of $132,851.

24 The purchase price of the Albany Highway farm is reflected in the 30 June 1978 financial accounts of the L R and N Vigolo partnership, in particular, in the loan accounts of the testator, Rosaria and Virginio (notwithstanding Virginio was not a partner at that time).

25 The purchase of the Albany Highway farm was funded partly by loans from the Commonwealth Trading Bank and Commonwealth Development Bank and partly from the partners' loan accounts in the L R and N Vigolo partnership. Virginio is shown in the partnership loan accounts as contributing an equal one-third amount towards the balance of the purchase price of the Albany Highway farm of which $10,000 was a cash advance.

26 The partnership of L R and N Vigolo was dissolved in August 1978 and dissolution accounts were prepared. The assets and liabilities of the L R and N Vigolo partnership were transferred to a new partnership known as L Vigolo and Son comprising the testator, Rosaria, Nancy and Virginio.

27 The financial statements of L Vigolo and Son for the period 1 September 1978 to 30 June 1979 show the Commonwealth Bank loans for the Albany Highway farm as liabilities in the partners' loan accounts introduced on commencement of the partnership. The subsequent accounts of the partnership show that the loans were repaid from the partners' loan accounts. However, although the partnership did not pay rent for the use of the Old Coach Road farm or the Albany Highway farm, the partnership profit and loss statements show that interest on the Commonwealth Bank loans for the Albany Highway farm was paid by the L Vigolo and Son partnership.

28 From 1 September 1978 the farming business conducted on the Old Coach Road farm and the Albany Highway farm was carried on by the L Vigolo and Son partnership. Profits from farming activities were allocated equally between the partners at the end of each financial year. At no time was the Old Coach Road farm or the Albany Highway farm an asset of any of the partnerships.

29 At the end of the 1981/1982 financial year Nancy retired as a partner and was replaced by Sandra. Sandra retired from the partnership at the end of the 1984/1985 financial year. Nancy and Sandra did not receive any direct financial benefit from their involvement in the partnerships. It was not in dispute that their partnership status was for taxation purposes.

30 On 11 July 1988 the assets and liabilities of the partnership of L Vigolo and Son were transferred to L Vigolo and Son Pty Ltd (the "Company") and the partnership was dissolved.

31 The Company was incorporated on 1 July 1988 to acquire the business assets and liabilities of the partnership. Three shares in the Company were issued, one to each of the testator, Rosaria and Virginio. The Company commenced operations on 11 July 1988.

32 By a deed dated 1 December 1990, the Lana Trading Trust was established to conduct the business of the sale of wool. The trustees of the Lana Trading Trust were the testator and Virginio.

33 In the period 1984 to 1992, the testator, Rosaria, Virginio (and on occasions Virginio's wife, Susan) purchased investment properties. The accounts show that the investment properties were purchased by the "L R and V Vigolo partnership" and the "L R V and S Vigolo partnership".

34 In January 1984 the testator, Rosaria and Virginio purchased the Great Southern Produce markets at 422 - 426 Albany Highway as tenants in common in equal shares for the sum of $92,088. The purchase price was funded from the partners' loan accounts in the L Vigolo and Son partnership.

35 In February 1988, the testator, Rosaria and Virginio purchased Lots 12 and 65 Albany Highway as tenants in common in equal shares for the sum of $190,240. This purchase was partially funded by a bank loan of $117,911 (repaid in 1992) and the balance of $72,329 was funded from the loan accounts of each of the partners in the L Vigolo and Son partnership.

36 In 20 July 1990, the testator, Rosaria and Virginio purchased a BP Service Station on Albany Highway ("King Sound Service Station") as tenants in common in equal shares for the sum of $236,202. Of that sum, $200,000 was financed by way of a bank loan (repaid in 1994) and the balance paid by the Company and debited to the loan accounts of each of the testator, Rosaria and Virginio.

37 The Company was also the trustee of the Vigolo Family Superannuation Fund. During 1992, a 30 per cent interest in the King Sound Service Station was transferred to the Vigolo Family Superannuation Fund. The beneficiaries of that superannuation fund were the testator, Rosaria and Virginio.

38 In February 1985, the testator, Rosaria, Virginio and his wife Susan purchased a property at Roberts Road, Albany as tenants in common in equal shares for the sum of $44,000. Susan contributed cash of approximately $11,000 towards the purchase of the Roberts Road property and the balance was funded through the partners' loan accounts in the L Vigolo and Son partnership.

39 In April 1986, the testator, Rosaria, Virginio and Susan purchased a farm, the Chokerup Siding farm, for the sum of $109,988 which was fully funded through the loan accounts of the testator, Rosaria and Virginio in the L Vigolo and Son partnership.

40 In February 1987, the testator, Rosaria, Virginio and Susan purchased a service station at Middleton Road, Albany (Mira Mar) as tenants in common in equal shares for $85,065 of which approximately $28,747 was financed by a bank loan and the balance from the loan accounts of the testator, Rosaria and Virginio in the L Vigolo and Son partnership.

41 The testator and Rosaria had farmed the Old Coach Road farm from the early 1960s until they were joined in active partnership by Virginio in 1978. From 1978 the testator, Rosaria and Virginio farmed the Old Coach Road farm, the Albany Highway farm and subsequently the Chokerup farm. The funds generated by the farming business were used to purchase the various investment properties referred to above. The income from the investment properties was applied to cover the expenses associated with those properties.

42 However, as a result of a breakdown in the relationship between Virginio and the testator, Virginio's involvement with his parents in the farming business came to an end. The parties entered into a Deed of Settlement dated 9 December 1993 ("Deed of Settlement").

43 As at the date of the Deed of Settlement, Virginio and Susan were trustees of the VSV Family Trust.

44 By a further deed of settlement dated 9 December 1993 the Lino Vigolo Family Trust ("Vigolo Family Trust") was established. It was a discretionary trust and the testator was at all material times (until his death) the trustee. The testators' children, including Virginio, are the primary beneficiaries of the Vigolo Family Trust.

45 Pursuant to the Deed of Settlement the following transactions were effected:

(i) the Old Coach Road farm was transferred from the testator and Rosaria to Virginio and Susan as trustees of the VSV Family Trust. The testator's share in the Old Coach Road farm was sold for $571,760 and Rosaria's share in the farm (valued at $228,240) was gifted to Virginio and Susan as trustees of the VSV Family Trust;

(ii) Virginio's one-third interest in the Albany Highway farm was transferred to the testator as trustee for the Vigolo Family Trust for an amount of $183,333;

(iii) the 50 per cent share owned by Virginio and Susan in the three properties in the L R V and S Vigolo Partnership (Roberts Road, Albany, Chokerup Siding farm and the Middleton Road Service Station) was transferred to the testator as trustee for the Vigolo Family Trust for $312,500;

(iv) Virginio's share in the Company was transferred to the testator as trustee for the Vigolo Family Trust for $91,786;

(v) the Company sold some livestock and plant and equipment to Virginio for $212,454 and sold all the wool to the Lana Trading Trust.

46 The purchase price of all the property sold to Virginio and Susan (as trustees) pursuant to the Deed of Settlement totalled $1,012,454. After setting off the amount owed to Virginio (and Susan) by the testator as trustee of the Vigolo Family Trust for the purchase of their interest in the relevant properties and having regard to the value of Rosaria's gift, the cash balance payable on settlement by Virginio and Susan was $251,737. That amount together with a sum for working capital was borrowed by Virginio and Susan from a bank.

47 It was not in dispute that the dissolution was effected on an arm's length basis based on the market value of the properties.

48 All the assets owned by the L R and V Partnership were retained in that partnership.

49 The transfers of the various properties were registered in April 1994. The pre and post dissolution ownership of the various properties is as follows:

Testator, Rosaria, Virginio and Susan as tenants in common in equal shares

1/2 share held by testator as trustee for the Vigolo Family Trust; 1/4 share held by Rosaria; 1/4 by testator.

Testator & Rosaria (as joint tenants of one undivided half share) and Virginio and Susan (as joint tenants of the other undivided half share) as tenants in common

1/2 share held by testator as trustee for the Vigolo Family Trust; 1/4 share held by Rosaria; 1/4 by testator.

Testator, Rosaria, Virginio & Susan as tenants in common in equal shares

1/2 share held by testator as trustee for the Vigolo Family Trust; 1/4 share held by Rosaria; 1/4 by testator.

Testator, Rosaria & Virginio as tenants in common in equal shares

Testator, Rosaria and Virginio Vigolo as tenants in common in equal shares

70% share held by testator, Rosario & Virginio as tenants in common in equal shares; 30% share held by Vigolo Family Superannuation Fund

50 During 1994 the L R Vigolo and Vigolo Family Trust partnership was established to distribute the income from investment properties held jointly in the names of the testator, Rosaria and the testator as trustee for the Vigolo Family Trust. The distribution of profit to the partners was in the ratio of 25 per cent to each of the testator and Rosaria and 50 per cent to the testator as trustee for the Vigolo Family Trust.

51 On 30 November 1994, the testator made his will which contained no provision for either Rosaria or Virginio. The testator left all his real and personal property on trust for Nancy, Wanda, Sandra and Leopoldo in equal shares and also appointed them the guardians and appointers of the Vigolo Family Trust.

52 The testator died on 3 June 1997 aged 69. In June 1998, Virginio and Susan sold the Old Coach Road farm for $1,680,000. They had purchased the farm under the Deed of Settlement approximately four years earlier for $800,000.

53 By the end of the hearing, it was not in dispute that the net value of the estate at the date of the testator's death was $1,913,144. That amount includes a loan owing to the testator from the Vigolo Family Trust in the sum of $571,760. That amount corresponds with the purchase price of the testator's interest in the Old Coach Road farm, which amount was lent by the testator to the Vigolo Family Trust for the purchase of the property acquired by the trust pursuant to the Deed of Settlement.

54 At the commencement of the hearing the executors of the estate had not satisfied themselves that the debt remained due and owing at the time of the testator's death. As the existence of the debt was an issue in the action, I ordered that the new trustees of the Vigolo Family Trust (Nancy, Wanda, Sandra and Leopoldo) be joined as sixth defendant in their capacities as trustees of that trust. The trustees were separately legally advised and represented at the hearing. Their counsel advised the Court that the trustees did not dispute that the moneys were owed by the Vigolo Family Trust to the estate.

55 The estate includes, inter alia, cash, shares and interests in real property, in particular, the Albany Highway farm, the Chokerup farm, the Mira Mar Service Station, Roberts Road and the King Sound Service Station.

56 There was other property over which the testator had control up to the time of his death which does not form part of his estate. That includes the Vigolo Family Superannuation Fund valued at $149,000, the Lino Vigolo Superannuation Fund death benefit now valued at approximately $37,250 and property belonging to the Vigolo Family Trust. The property interests of the Vigolo Family Trust and the agreed current value of the interests are as follows:

57 The defendants point out that capital gains tax will be payable on the sale of the properties and thus valued the Vigolo Family Trust property at $145,000.

58 Much time was devoted at the hearing to the identification and valuation of the financial benefits received by each member of the family from the Vigolo family group assets, meaning the partnerships, trusts and companies in which the testator (with Rosaria and Virginio) conducted his farming and investment activities up to the date of his death. The entities are:

• L and V Vigolo as trustees as the Lana Trading Trust

• L Vigolo as trustee for the L Vigolo Family Trust

• The Company as trustee for the Vigolo Superannuation Fund

59 Helen Goldfinch gave evidence on behalf of the plaintiff and Jeffrey Herbert gave evidence on behalf of the defendants. Both are qualified accountants. By the time the matter came on for hearing the experts had significantly narrowed the areas of disagreement between them.

60 In a report dated March 2001 Mr Herbert identified the income benefits received by family members over the period 1981 to 1999, the capital benefits received (which includes realised and unrealised capital growth) and the total benefits. Ms Goldfinch undertook her own analysis with different results. The major differences between the accountants are:

(i) Ms Goldfinch shows the gift of Rosaria's share of the Old Coach Road farm to Virginio and Susan as a benefit to Rosaria and Mr Herbert shows it as a benefit to Virginio;

(ii) Mr Herbert shows a capital profit of $880,000 said to have been realised by Virginio and Susan on the sale of the Old Coach Road farm. Ms Goldfinch excludes that figure from her calculations;

(iii) there are significant differences of classification between income benefits and capital benefits (although the differences disappear when the calculation of the total benefits is considered).

61 In the result, Ms Goldfinch concluded that the total of capital and income received by family members (albeit from 1979 onwards) was $5,961,417, being approximately $667,000 less than Mr Herbert's calculation of $6,628,318. Following consideration of Ms Goldfinch's report, Mr Herbert adjusted his figures which resulted in a slight increase in his total (and thus an increase in the difference between the two experts). Mr Herbert's final figures and those of Ms Goldfinch are as follows:

62 In this exercise there has been no attempt by the accountants to estimate the value of the labour and other services provided by Virginio (or other family members) for which he claims some of the benefits received by him were paid. Further, Mr Herbert has not taken into account the cost of improvements to the Old Coach Road farm incurred by the VSV Family Trust between 1994 and the sale of the property in 1988. The value of repairs and improvements is said by Virginio to total $132,196.

63 The only significant areas of dispute in relation to the benefits received by Virginio are Mr Herbert's treatment of Rosaria's gift as an income benefit to Virginio (which Ms Goldfinch includes as a capital benefit for Rosaria) and Mr Herbert's inclusion of the capital gain from the sale of the Old Coach Road farm.

64 Before dealing with the position of the parties to the action, mention must be made of Rosaria. She is not a party and makes no claim against the estate. During the course of the hearing I ordered that Rosaria be notified of the action and matters arising (including the issue of the indebtedness of the Vigolo Family Trust to the estate). The notice to Rosaria informed her that she had 21 days within which to make any relevant application to the Court. No application was received.

65 It appears from the evidence that Rosaria's net assets as at the date of the death of the testator exceeded $1,000,000. Her assets included:

(i) King Sound Service Station (1/3 share of 70 per cent);

66 Since the testator's death, lots 65 and 12 Albany Highway and the Great Southern Produce Markets have been sold, Rosaria's one third share of the sale proceeds being $225,408.

67 It was undisputed that Rosaria worked hard on the farm as well as being responsible for the children and the domestic chores.

68 Virginio was born on 20 October 1957 and is aged 44. He left school in 1973 aged 16 and commenced working full-time on the Old Coach Road farm with his father and mother.

69 As a result of a slump in farming in 1976, Virginio worked part-time on the farm as well as obtaining employment elsewhere (as a slaughter man, a cleaner and labourer at the local newspaper and shooting and selling kangaroos for pet food).

70 In 1978, when he was 21, he had managed to save some money and informed his father he wanted to buy his own farm. According to Virginio, his father suggested they buy a farm together "because as the end of the day when he died, it would all be mine".

71 Virginio put all his personal savings from his off-farm work into the purchase of the Albany Highway farm. The accounting records show that he made a cash contribution of $10,000 towards the purchase of his interest in the Albany Highway farm.

72 Virginio was paid $40 per month in wages from the time he commenced work on the farm in 1973 until he married Susan in 1984 when his wages were increased to $100 per week. Susan also worked. However, it was not in dispute that the farming business covered their accommodation and most of their living expenses. Further, it appears that from 1976 (until at least 1979) Virginio continued to do off farm work earning money for himself as well as performing farm duties.

73 In 1980 Virginio purchased a house on Albany Highway with funds borrowed from a bank and with a contribution from Susan. The loan was paid off within three to four years.

74 Virginio's first (and to date only) child was born in June 1988. At this time he requested an increase in his wages and instead was provided by his father with a Company chequebook. He was only permitted by his father to give his wife an allowance of $50 per week. After vigorously complaining about the size of the allowance in the early 1990s the testator increased it to $70 per week.

75 In the early 1990s, Virginio purchased a shop in Mount Barker from which his wife conducted a hairdressing business. Shortly thereafter (in 1991) Virginio and his wife purchased a 275 acre farming property on Albany Highway, Narrikup. These properties are in addition to the investment properties purchased with his mother and father referred to earlier.

76 According to Virginio, and I accept, it was his accumulation of personal assets, about which the testator complained bitterly, that resulted in the deterioration of his relationship with the testator leading to the Deed of Settlement.

77 Virginio's evidence was that on a number of occasions from the time it was decided to buy the Albany Highway farm, the testator had said that at the end of the day when the testator died "it would all be yours". On another occasion when Virginio raised the question of his wages with his father, he was told he was only being paid a small amount because when his father died Virginio would inherit the family farm (which is a reference to the Old Coach Road farm) and Leopoldo would inherit the Albany Highway farm.

78 The defendants agree that they heard their mother on a number of occasions say that the Old Coach Road farm would be Virginio's some day. However, the defendants did not hear their father make any similar statement.

79 The basis for the Virginio's claim is contained in his affidavit sworn on 11 December 1997 in the following terms:

"I believe that by reason of the promises made to me by my father which encouraged and persuaded me to live and work on the family farm and the other farming properties for very meagre 'wages', my contribution of my own savings to the purchase of the Albany Highway farm, my commitment to my father all my life until we dissolved our partnership in 1994, that I had to buy what my father had always told me would be my inheritance and the significant personal contribution I made over my lifetime towards 1994 to building up my father's estate, that I have a substantial claim to share in my father's estate at least equally with each of my brother and my sisters such that adequate provision has not been made for me in my father's will."

80 It is convenient at this juncture to deal with what can be described as the "moral" aspect of Virginio's claim.

81 Virginio and the defendants each start from extreme positions which cannot be sustained on the evidence. I begin with Virginio's position. I have no reason to doubt Virginio's evidence and I find that his father had on a number of occasions said to him words to the effect that he [Virginio] would inherit the Old Coach Road farm. However, this is not an estoppel action and if it was, no doubt it would have been necessary to explore whether the statements were based on any known assumptions (such as that the partnership would continue or that the members of the partnership would work together to build a family asset base).

82 The evidence supports a finding, and I am satisfied, that the testator worked himself (and his family) hard with minimal discretionary expenditure for the purpose of building a significant family asset base and expected Virginio to follow in that tradition. It is in that context that the testator's disapproval of Virginio's accumulation of personal assets is to be understood. However, I make no findings about any assumptions underlying the testator's statements concerning Virginio's inheritance. It is unnecessary to do so because of the nature of the claim and because the issue of Virginio's inheritance is linked with his allegations of meagre wages (suggesting reliance, detriment and enhancement of the testator's estate).

83 The evidence establishes and I find that Virginio was adequately compensated for the considerable effort, energy and expertise he devoted to the farming business. It is erroneous to focus solely on Virginio's actual drawings from the partnership when it was the case that other moneys generated by the farming business were prudently directed (via the partners' loan accounts) into investments which were also significantly successful.

84 While his drawings may have been meagre, his income and capital benefits from the partnership business and investments cannot be so described. On his own expert's figures, from 1979 to 1993 inclusive (15 years) he received income benefits of $580,298 and capital benefits of $838,533, totalling $1,418,831. Virginio received slightly more than one third of the total of the benefits received by the testator, Rosaria and Virginio.

85 If the period is extended to 1999 and the notion of benefit is extended to include the gift from Rosaria and the profit from the sale of the Old Coach Road farm, his benefits totalled approximately $2,512,000. However, I do not take these benefits into account in support of my finding that Virginio was adequately compensated for his contribution to the farming partnership. They are not sufficiently connected with the partnership and investments for that purpose. However, the benefits are reflected in Virginio's financial position at the relevant times (although as at the date of the testator's death, the capital benefit associated with the Old Coach Road farm had not been realised).

86 Looking at the benefits from the farming operations alone, in the period 1979 to December 1993 using Ms Goldfinch's figures (ann F2), Virginio received slightly more than one third of the total of the profits, salary and other income received by the testator, Rosaria and Virginio. This is not the case of a family member being inadequately remunerated in the induced expectation that the fruits of his or her labour will be received in the future in the form of inheritance of the farm.

87 Virginio repeated a number of times in his affidavit evidence that while he was being paid meagre wages, his father drew freely from the partnership and Company funds for the benefit of his parents and other members of the family. I do not accept Virginio's evidence concerning his father's drawings from the partnership. It is not borne out by Ms Goldfinch's figures and is contradicted by Wanda.

88 Virginio also refers to his significant contribution over his lifetime until 1994 to building up his father's estate. I am not satisfied on the evidence that Virginio's efforts added disproportionately to the value of his father's estate up to the Deed of Settlement. I find that the value of the contributions of each of the active partners, the testator, Rosaria and Virginio to be roughly equivalent which was reflected in the benefits received from the farming operations. However, I do accept that the success of the farming business was greater than the sum of its constituent parts. In that sense, each partner benefits from the joint efforts of the partners and more is achieved as a result of working in combination.

89 On the other extreme, the defendants in their affidavits refer to Virginio's receiving a financial benefit exceeding $500,000, excluding the gift from Rosaria, as a result of the Deed of Settlement. This is demonstrably wrong. It ignores the value of the interests of Virginio and Susan in the property the subject of the L R V and S partnership which value was set off against the amount owing by them at settlement.

90 In the course of cross-examination, particularly of Wanda, the characterisation of the benefit altered to that of Virginio being given the opportunity of becoming involved with the partnership and the Company and sharing in the benefits thereof. The position is accurately captured at par 35 of Wanda's affidavit of 17 May 1999 when she said:

"Virginio's personal financial security has been assured by the fact that my father involved him in the farming business and allowed him to accumulate assets personally from this involvement."

91 This statement reflects an understandable perception that notwithstanding admission to the partnership, the accumulation (or more accurately, access to and use) of funds generated by the farming business remained within the mandate and bounty of the testator. That is, what on paper reflected Virginio's right or entitlement was in reality within the control of the testator. That was certainly the experience of Nancy (who was a partner for at least six years) and Sandra (who was a partner for approximately three years). However, this case must be determined within the framework of Virginio's legal entitlements.

92 Even so, in the context of Virginio's acknowledged legal position the opportunity given to him by the testator (and his mother) to join and participate in the farming business and investment partnerships is shown by the evidence to be to his significant financial advantage. Virginio was given equal access with his parents to an established business on his parents' farm, the Old Coach Road farm, and the opportunity to participate in the purchase of the Albany Highway farm (which I find, would otherwise would have been beyond his means at the time) both of which farms were used to generate significant financial returns which in turn were used to purchase the investment properties. There is no evidence that Virginio had other opportunities which he had foregone and which would have put him in a better financial position. Further, Virginio's cash contribution of $10,000 and his assumption of one third of the liability for the Commonwealth Bank loans in 1978 relate to the acquisition of his one-third interest in the Albany Highway farm. No doubt Virginio's effort, energy and expertise contributed to the success of the farming business and the investments. He clearly made the most of the opportunity he was given and, as a result, was in a position in his mid-thirties to purchase the Old Coach Road farm valued at $800,000.

93 Although the evidence establishes (and I find) that all the children worked hard on the farm whilst still at school, only Virginio worked on the farm full-time for any significant period. However, I am not satisfied that Virginio's decision to leave school at 16 to work full-time on the farm or his entry into the partnership was inconsistent with his wishes or plans. I accept that Virginio sacrificed his independence by going into partnership with his father. The evidence establishes that the testator was the head of the family and exercised tight control on the finances of the partnership - with the result that Virginio's asset base grew significantly at the expense of drawings.

94 The events leading to, and the fact of, the dissolution of the partnership created a rift between father and son and Rosaria's gift to Virginio also created a rift between the testator and Rosaria. I accept Wanda's evidence that the testator deliberately omitted Virginio from his will because of the testator's perception that he had made more than adequate provision for Virginio during his lifetime and because of Rosaria's gift. However, it is for the court to decide whether adequate and proper provision has been made for Virginio.

95 I turn now to the evidence concerning Virginio's financial position as at the date of the testator's death and as at the date of the hearing.

96 The accounts and financial statements of the VSV Family Trust for the period ending 30 June 1997, which was shortly after the death of the testator, show the beneficiaries (Virginio and Susan) current accounts total $1,010,332. The assets of the VSV Family Trust (including the Old Coach Road farm) are shown in the accounts at cost.

97 In addition, Virginio had interests in other property valued as follows:

(iv) Shares in Commonwealth Bank of Australia and Wesfarmers Ltd

98 In 1998 Virginio and Susan (as trustees of the VSV Family Trust) sold the Old Coach Road farm for $1,680,000. The VSV accounts show a capital gain on that sale of $889,906.00. In addition, lots 65 and 12 Albany Highway (being part of the L R and V Vigolo partnership) were sold in 1998 and the Great Southern Produce Markets were sold in 1999.

99 The VSV Family Trust purchased the Lakelands property at Leeman in the financial year ending 30 June 1998 for $2,952,832.

100 As at 30 June 2000 the plaintiff and his wife's interest in the VSV Family Trust was shown in the accounts of approximately $1,869,753. That amount together with the value of Susan and Virginio's interests in the remaining assets referred to above exceeds $2,000,000.

101 It was made clear in written and oral submissions that Virginio's claim under the Act is not made on the basis of financial need.

102 I have already found that all of the testators' children worked hard on the farm during their school years. My findings concerning the personal and financial positions of the beneficiaries under the will are as follows.

103 Nancy, 42, is married with two dependent children aged 15 and 6. She lived on the farm with her parents until she married in 1982. Her net assets, jointly with her husband, total approximately $202,500.

104 She is employed as a receptionist/secretary with Activ Foundation and her husband is a motor mechanic.

105 The testator paid a deposit of approximately $10,000 for a business purchased by Nancy and her husband in 1997. The testator also gave Nancy the sum of $20,000 in 1990 to assist in the building of her home. However, Nancy was required to pay taxation on that sum of 48.5 cents in the dollar.

106 If the testator's will is not disturbed, based on a value of the estate of approximately $1.9 million, Nancy would receive a quarter share, being $475,000, bringing her and her husband's net assets to $677,000.

107 Wanda is 40, married and is employed as a real estate sales representative. Her husband is employed at the Albany Regional Hospital as an orderly. They have three dependent children aged 13, 11 and 5. She lived on the farm until she married in 1980.

108 Wanda's net assets, jointly owned with her husband, presently total approximately $270,833.

109 When the farming partnership dissolved, the testator deposited the sum of $100,000 in a bank account in Wanda's name which was used to set off the interest being paid by Wanda and her husband on their housing loan. Wanda made it clear to her father that the money was available to him at call. The money was repaid to the Company after the testator's death. The only other financial assistance received from the testator was the sum of $7,000 in 1987 to assist in the purchase of a car.

110 If Wanda were to receive the entire amount bequeathed to her, her and her husband's net assets would total $745,833.

111 Sandra was born on 19 June 1966. She lived on the farm with her parents until she married in 1986. Sandra, now aged 35 is married and employed as a bank officer. Her husband is employed as a boilermaker. They have two dependent children aged 6 and 5. Sandra and her husband have net assets of $215,929.

112 The testator provided financial assistance to Sandra during his lifetime of $21,000. If no deduction is made from the amount bequeathed to her by the testator, her and her husband's net assets would total $690,000.

113 Leopoldo was born on 29 May 1970 and is 31. He is unmarried with no dependants. He lives with Rosaria on the Albany Highway farm. He is a self-employed butcher and has net assets of $70,056.

114 If he were to receive the entitlements bequeathed to him under the will with no deduction, his net assets would total $545,000.

115 The facts of this case and the parties' submissions directly raise some of the controversial issues which have emerged in the authorities concerning the construction of s 6 of the Act (and its equivalents in other jurisdictions). The resolution of these issues by reference to the authorities is a difficult task. It is possible to extract support from the cases for a variety of propositions, many of which appear to be contradictory.

116 The construction issues that arise in this case are whether:

(a) the jurisdictional requirement is satisfied upon proof that no provision was made for the claimant from the testator's estate;

(b) "need" must be established before the jurisdiction is exercised;

(c) moral claim, duty or obligation has any, and if so what, relevance and at what stage of the process.

117 It is apparent from the formulation of the issues that they are interdependent. The first issue was addressed by Gaudron J in her dissenting judgment in Singer v Berghouse. She said (at 225):

"The question under s 9(2)(a) [of the New South Wales legislation] is whether 'the provision (if any) made ... by the deceased person ... is ... inadequate'. That is different from the question whether adequate provision has been made. If the latter were the question posed by s 9(2)(a), the fact that provision had not been made might well lead to the conclusion that it was not adequate."

118 However, even if, which seems to be the case, s 6 of the Act requires the Court to consider whether adequate provision has been made, the fact that no provision is made in the will is not determinative even on Gaudron J's approach. She acknowledges what is clearly supported by authority, here and elsewhere, which is that at the jurisdictional stage the question is answered by reference to all the circumstances, including the personal and financial position of the claimant at the date of the testator's death: Bondelmonte v Blanckensee at 307; Hughes v National Trustees Executors and Agency Co of Australia Ltd [1979] HCA 2; (1979) 143 CLR 134 at 147; Singer v Berghouse at 210.

119 The second issue reflects a position at the other end of the spectrum. Is proven need of the claimant a requirement to get beyond the first stage of the process? The claimant in this case (as with the claimant in Singer v Berghouse) expressly disavowed the existence of financial need, relying instead on what he describes as his moral claim.

120 I leave to one side for the moment what is meant by "need". There is abundant authority for the proposition that proven need is not essential for relief under s 6 of the Act at least when the claimant has a particular moral claim. The decision of the High Court in Hughes v National Trustees Executors and Agency Co of Australia Ltd [1979] HCA 2; (1979) 143 CLR 134 is relied on as authority for that proposition. The Court in that case was considering the position of a middle-aged impecunious son with no prospects whose conduct towards his deceased mother (against whose estate the claim was made) was described as "unfilial". After citing with approval the judgment of Salmond J in Re Allen (concerning moral duty) Gibbs J said (at 147):

"It is well settled that these general principles apply to the case of an adult son as well as to other cases. The age of an applicant is however material and if a son is mature, able-bodied and capable of supporting himself he may in those circumstances be in no need of maintenance or support. In In re Sinnott Fullagar J said (27):

'No special principle is to be applied in the case of an adult son. But the approach of the Court must be different. In the case of a widow or an infant child, the Court is dealing with one who is prima facie dependent on the testator and prima facie has a claim to be maintained and supported. But an adult son is, I think, prima facie able to "maintain and support" himself, and some special need or some special claim must, generally speaking, be shown to justify intervention by the Court under the Act.'

... In some cases a special claim may be found to exist because the applicant has contributed to building up the testator's estate or has helped him in other ways. ... 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 them or not, and all the eventualities that might at that date reasonably have been foreseen by a testator who knew the facts."

121 Other authorities to the effect that the absence of need is not determinative (at least in the presence of a moral claim) include Talbot v Talbot, unreported; SCt of WA (Parker J); Library No 960092; Browne v Macaulay [1999] WASC 217; Re Elwell [1977] Qd R 141 at 144; Gorton v Parks (1989) 17 NSWLR per Bryson J at 6 - 7.

122 There are also authorities to the contrary: Collicoat v McMillan [1999] 3 VR 803; Niehoff v Niehoff [1995] VicRp 61; [1995] 2 VR 356; In re Anderson [1975] 11 SASR 276. Ormiston J in Collicoat v McMillan after trenchantly criticising the obiter dictum of the High Court in Singer v Berghouse concerning moral duty or obligation, said (at 820) that need must be demonstrated before the jurisdiction under the Victorian equivalent of s 6 of the Act is exercised. In this regard Ormiston J noted what is uncontroversial which is that when considering need, the Court must take into account contingencies and eventualities that might at the date of death reasonably have been foreseen by a testator who knew all the relevant facts.

123 Ormiston J relies on the majority judgment in Singer v Berghouse in support of the proposition that need must be established before the jurisdiction to grant relief arises. In Singer v Berghouse the Master dismissed the claimant's application because of his finding that "no need had been shown for anything now or likely to be required in the future which could not easily [be] covered by [her] own resources". The claimant was in her late fifties when she married the testator who was in his mid-sixties. The whole of the testator's estate (valued at nearly half a million dollars) passed to his son who had no assets, no settled occupation and earned a modest income as a salesman. The majority said that the principles governing appellate review of discretionary decisions apply to the first stage of the process and that it had not been established by the claimant that the Master had made "an entirely erroneous estimate of what was adequate and proper in the circumstances". It might be concluded from this statement that the majority was mistakenly addressing the second stage of the process rather than the jurisdictional stage. Not so. The majority said (at 210) that at the first stage of the process the Court may need to arrive at an assessment of what is the "proper" level of maintenance etc and what is adequate provision, in which case if it is necessary to embark on the second stage, that assessment will largely determine the order to be made. Further, the majority agreed with the reasons given by Sheller JA in the NSW Court of Appeal in the following terms:

" ... I must say that I find it extraordinary that the appellant presented scant or no evidence as to her present income and outgoings or as to her intentions or needs for the future or as to what lump-sum provision applying appropriate discount tables would be required to meet these claims or needs, if they existed. In my opinion, in the circumstances of this case, for the Court, in the absence of any such evidence, to make an order for the payment to the appellant of a lump sum is to do no more than act on speculation and, contrary to the prohibition contained in section 9(2) of the Act, to alter the deceased's disposition of his property in the absence of proof that he has inadequately provided for the appellant."

124 It is in this factual context that the majority of the High Court made their observations concerning the focus on moral duty or moral obligation. It may be the High Court is saying no more than that the focus on moral duty has the capacity to divert attention from the central questions of what is "adequate" and "proper".

125 However, the Full Court decisions in this jurisdiction, particularly Kitson v Franks, make it clear that the Salmond J test of moral duty continues to apply.

126 Kennedy J made a number of observations in Nelson v Nelson of particular relevance to this case. He cited with approval from Windeyer J's reasons in Blore v Lang (at 137) to the effect that the jurisdiction under the Act is to provide for deserving persons according to their requirements, not to reward past services and that the central issues relate to the present and probable future requirements of the applicant. Yet he also cited with approval from Gibbs J's reasons in Goodman v Windeyer [1980] HCA 31; (1980) 144 CLR 490 at 498 to the effect that past conduct and services are not to be ignored when determining what is "proper" provision in all the circumstances of a particular case. Kennedy J specifically addressed the question of need. He said at page 6:

"A test of 'need' should not be substituted for the words of the section. To do so is to overemphasise 'adequacy' as against 'proper' in section 6(1) of the Act."

127 The use of the word "need" is unfortunate because it carries the connotation that the purpose of the section is to provide a minimum financial safety net. That is clearly not so, as an examination of the facts of Bosch pointedly reveals. An illuminating discussion of the varying approaches taken by different courts in different times to what may amount to "need" is contained in Bryson J's reasons in Gorton v Parks. On any view it is relative and goes beyond the bare necessities of life. Just where it stops in terms of a ceiling is unclear. It is in this context that the authorities relating to provision for adult claimants are to be understood. In this jurisdiction (unlike Victoria) an adult does not have to establish "special" need: Bondelmonte v Blanckensee per Malcolm CJ at 309 relying on Gibbs J's reasons in Hughes. Further, "advancement" is a word of wide import and no age limitation is to be implied when considering what is proper provision for a person's advancement in life: McCosker v McCosker at page 575.

128 However, it is the case that the focus must be on whether the claimant has adequate provision for his proper maintenance, support, education or advancement in life, taking into account reasonably foreseeable contingencies. The claimant's conduct prior to the testator's death may be relevant to that question, in particular in relation to what is "proper". Further, in many cases where prior deserving conduct is relevant it will have what most would characterise as a moral dimension which may be described as a moral claim giving rise to a correlative moral duty on the testator. I do not understand the majority in Singer v Berghouse to be saying that a moral claim or a moral duty of this nature is inevitably an irrelevant consideration in the value judgment process. However, whether or not it is relevant in a particular case is to be determined by reference to the statutory test.

129 Indeed, the statutory provision is predicated on the existence of a moral duty. Dixon CJ and Williams J in McCosker v McCosker [1957] HCA 82; (1957) 97 CLR 566 (at 572) put it this way:

"If the court considers that there has been a breach by a testator of his duty as a wise and just husband or father to make adequate provision for the proper maintenance, education or advancement in life of the applicant, having regard to all these circumstances, the court has jurisdiction to remedy the breach and for that purpose to modify the testator's testamentary dispositions to the necessary extent."

130 What this extract reveals is that pursuant to the statute the relevant relationship (in this case that of father and child) gives rise to the existence and content (by reference to the statutory language) of the moral duty. Whether the conduct of the claimant during the testator's lifetime can or should affect the outcome is a separate and distinct question. Insofar as disqualifying conduct is concerned, that is covered by s 6(3) of the Act. Otherwise relevance is determined by reference to the statutory formula. There is quite properly no suggestion in this case that Virginio has by his conduct disqualified himself from receiving what would otherwise have been the testator's duty to provide.

131 Virginio does not base his claim on financial need. As a result, the focus of the case and the evidence has not been directed to his particular financial requirements or to any reasonably foreseeable contingencies for which provision should be made. Although Virginio said the reality of farming was that things could change overnight and he could be worth nothing (referring to the foot and mouth outbreak in England and the seasonal nature of the industry), I do not regard that unsupported statement of theoretical possibility as one which justifies provision being made for. In the circumstances, and having regard to Virginio's net asset position at the date of the testator's death, I am not satisfied that Virginio had needs or requirements at the date of the testator's death or which were reasonably foreseeable at that time, for which he was unable to provide from his own resources.

132 Virginio was content to rest his application on a moral claim. I have found that Virginio was adequately and proportionately compensated for his contributions to the farming business and that it was to Virginio's significant financial advantage, which he no doubt made the most of, to be given the opportunity to be an active partner in his parents' business. Accordingly, I do not regard the period between 1978 and 1993 when he was working full-time in the farming business with his father and mother as giving him a moral claim which would otherwise justify making provision for him.

133 On one view it may be said the estate is large enough for an order to be made in favour of Virginio without very significant prejudice to the defendants. In particular, if Virginio is successful in his claim, which is capped at equality, the defendants' share of the estate would drop from $475,000 to $380,000. However, the defendants' financial circumstances are modest and their capacity to acquire substantial assets in the future from their own resources appear to be limited. Virginio's asset position is very substantially superior to that of the defendants. It appears Virginio has continued in the tradition of his father in channelling his financial resources into the accumulation of assets.

134 Further, it is not the role of this Court to rewrite a testator's will beyond what is required in accordance with s 6 of the Act. Virginio is an adult of significant means, due in part to the opportunity given to him by the testator (and his mother) to participate in the farming business and the consequences of his participation and who has no proven requirements (present or contingent). For these reasons I am not satisfied that the testator, as at the date of his death failed to make adequate provision for Virginio's proper maintenance, education or advancement in life. The jurisdictional question having been answered in the negative, it is unnecessary to go to the next stage of the process. In the circumstances it is unnecessary to address the question whether the Court has the power to order that Virginio be added as a guardian and appointer of the Family Trust. Accordingly, the application will be dismissed.