D. Miscarriage of the discretion
20. The Acting Master's exercise of the discretion under ss.7 and 9 of the FPA miscarried and was plainly wrong in that:
(a) he failed to carry out, properly or at all, the two stage-process in exercising the discretion;
(b) he failed to take into account, adequately or at all, the generous provision made by the deceased during his lifetime;
(c) he failed to take into account, properly or at all, the needs of the Respondent for her proper maintenance, education and advancement in life;
(d) he failed to take into account, adequately or at all, the Respondent's ability to provide for herself for her future needs;
(e) he failed to take into account, properly or at all, that the Appellants were bound to continue to comply with the Deed and had given evidence that they would continue to do so [T34.5 & T34.10 & T50];
(f) he failed to hold that the Deed and the will provided adequately for the Respondent's future needs by ensuring that she was secure in the matrimonial home, by ensuring that her medical expenses were met, by ensuring that she had sufficient income to permit her to continue to live in the style to which she had become accustomed and by ensuring that she had sufficient funds to meet any unforeseen circumstances;
(g) in deciding to be unduly generous to the Respondent the Acting Master took into account irrelevant considerations and gave undue weight to the size of the deceased's estate - Annason v Phillips (unreported Young J 4 March 1988);
(h) he failed to hold that all that was required in the circumstances, in addition to the provision made under the will and the Deed was a legacy of $200,000 and an advance of $20,000 per annum, which in light of her age, life expectancy and existing provision was more than sufficient to free her mind from any reasonable fear of any insufficiency as she grows older - Permanent Trustee Co Ltd v Fraser (1995) 36 NSWLR 24, Luciano v Rosenbloom (1985) 2 NSWLR 2, Straney v Lee (unreported Cohen J 29 August 1988) and McGrath v McGrath (unreported Master Macready 25 February 1999);
(i) in light of the Respondent's age and life expectancy he should not have given her the premises and a large capital sum, because doing so, in the event of her early death, would result in a substantial benefit to her relatives, including her daughters from previous marriages (both of whom live in the USA), contrary to the wishes of the deceased - White v Barron (1980) 144 CLR 431 at p 444 and p 457;
(j) in the alternative, he failed to hold that in the circumstances of the Deed an order in the nature of the order made in Crisp v Burns Philp Trustee Co Ltd (unreported, Holland J 18 December 1979) was appropriate.
13 In oral submissions before us, Mr Officer QC, for the appellants, elaborated on what he submitted were appealable errors made by the Acting Master. Mr Officer submitted that the deed and the will of 1999 were central to the case, as regards the circumstances in which they are entered into, proper appreciation of the provisions in the deed, and the deed's continuing efficacy; and his broad submission was that these matters were not properly dealt with in the judgment.
14 As regards the circumstances in which the deed was entered into, Mr Officer submitted that they were as follows. In 1999 the respondent was aware that the deceased's will, as it then existed, gave her the right to live in the matrimonial home for life, plus a cash legacy of $400,000. She became concerned not about the right to reside in the unit, but about the amount of cash. This led to negotiations with the aid of the accountant for the deceased and the respondent, in which the respondent had the advice of her solicitor. It was those negotiations which produced the deed, which the respondent then understood and was satisfied with.
15 Mr Officer submitted that there was no suggestion of any change of financial circumstances of the respondent between the time of the making of the deed and the death of the deceased, or indeed the trial. The deed itself, Mr Officer submitted, provided for extensive benefits in addition to the payment of $1 million, which I have already outlined. He submitted that its provision for payment of outgoings of the unit would prevail over the terms of the will which purported to require the respondent to pay those outgoings. He submitted that the deed made comprehensive provision covering every reasonably foreseeable contingency. It did not, he accepted, cover a move to other accommodation apart from a retirement village or nursing home, but he submitted that in circumstances where the respondent had lived in the unit for many years and expressed a wish to stay there, and where the deed had provision for live-in assistance, the prospect of any other requirement for accommodation was remote.
16 Turning to the judgment of the Acting Master, Mr Officer submitted that it contained a wholly inadequate acknowledgment of the relevant circumstances of the negotiations and of the respondent's expressed satisfaction with the deed's terms and the involvement of advisers, and an inadequate acknowledgment of all the benefits of the deed.
17 The circumstance that the Acting Master gave inadequate weight to the benefits of the will and the deed, Mr Officer submitted, was shown by his statement that the respondent had "nothing in substance out of the estate". Mr Officer submitted the Acting Master also erred in apparently giving the provision less weight because it arose out of negotiations to increase what the Acting Master saw as a previously totally inadequate provision of $400,000.
18 Mr Officer submitted the Acting Master was in error in finding that the provisions of the deed were not workable. He pointed out that both appellants gave evidence that they intended to comply with the provisions of the deed, and Mr Officer submitted that in all respects up to the hearing, those provisions had been complied with. Insofar as the Acting Master relied on a refusal to provide the money for a vital call telephone system, he submitted that this was explained by the appellants on the basis that it did not fall within the terms of the deed, and in that respect, he submitted, the appellants were correct.
19 In those circumstances, he submitted, the Acting Master was in error in finding that the deed in some way left the respondent at the whim of the appellants, or in any other way was unworkable.
20 Dealing first with the written submissions, in my opinion the Acting Master's decision is not vitiated by the absence of an explicit conducting of a two stage process. The Acting Master asked the correct question in relation to the first stage of such a process, namely whether or not adequate provision had been made for the respondent (see judgment para[33], last sentence), plainly meaning adequate provision for her proper maintenance. His careful discussion of that question and the orders that he made leave no room for doubt that he concluded that adequate provision had not been made for her. The order that he made also made it plain that, on the basis of his careful discussion this was what he considered to be the provision that ought to be made out of the deceased's estate for the maintenance of the respondent, thus dealing with the second stage of the two stage process.
21 Turning to the question of whether the Acting Master's exercise of discretion miscarried, in my opinion the appellant's submissions do not make good any error of principle made by the Acting Master, any failing to take account of relevant considerations, or any taking into account of irrelevant considerations.
22 Mr Officer's first submission before us was to the effect that error was shown by inadequate acknowledgment of the circumstances of the negotiations and of the effect of the deed. In my opinion the lack of reference to participation of the respondent's legal adviser in the negotiations, or to the respondent's satisfaction with the arrangement at the time, does not indicate that the Acting Master disregarded these matters, nor does it amount to any inadequacy in his reasons.
23 In my opinion, his reference to the fact that the benefits of the deed including $1 million only came from negotiations was not a matter given significant weight by the Master, and at most was a comment which could have some slight bearing on the weight to be given to the reasons advanced by the deceased for the provision that he made.
24 Similarly in my opinion the circumstance that the Acting Master referred only briefly to the benefits of the deed other than the $1 million is not indicative of error. In the light of his full consideration of the $1 million and the right of residence, and his reference to other benefits of the deed, the statement about "nothing in substance" out of the estate is not in my opinion indicative of error.
25 The other main oral submission was that error was shown in the Acting Master's view that the deed was not workable. In my opinion it is clear that many of the requirements of the deed are qualified by a requirement of reasonableness or suitableness. As regards "other expenses" concerning the home unit, the requirement that they be reasonable is expressed. In relation to outgoings, repairs and maintenance, in my opinion there would be an implied requirement that these satisfy some test of reasonableness. Any retirement village or nursing home which the respondent wished to move into would have to be "suitable" if it was to be provided for under the deed. These expressions mean that there is a very substantial grey area as to what the deed does or does not require; and in my opinion a fair reading of the Acting Master's decision is that there was a substantial possibility that the appellants would take a narrow view of what was covered, prejudicially to the satisfactory operation of the deed.
26 In my opinion that view was well open to the Master, despite the evidence of the appellants that they would comply with the deed, in circumstances where that evidence had to be considered in the light of their refusal to pay $800 for a vital call telephone system, which could in my opinion fall within "reasonable expenses on the unit" within the deed, and also in the light of other evidence about the breakdown of the relationship between the respondent and the appellants.
27 In circumstances where in my opinion no appealable error of principle has been shown, the only remaining question is whether the result was such as to indicate that the exercise of discretion miscarried. In my opinion the result does not indicate this.
28 The legitimate claim of the respondent on the estate of the deceased was a very powerful one indeed. The marriage was one of nineteen years, over the last half of which the respondent cared for the deceased through years of deteriorating health. The legitimate claims of the appellants are of far less weight, particularly in circumstances where they have given no evidence of their own assets. Having regard to those matters and the size of the estate, it is open to the Court to take a liberal view of what is "adequate" and what is "proper", within s.9 of the Family Provision Act.
29 In my opinion it was well open to the Acting Master to find that the provision for the respondent's accommodation was not adequate. She had only a right of residence, with no right to substitute a different residence should the home unit become unsuitable for any reason. On the evidence the unit itself was in some need of repair; and the Acting Master concluded, as he was entitled to, that he could not be confident that the appellants would pay for the repairs which the respondent wanted. In circumstances where, at the date of the deceased's death, the relationship between the respondent and the appellants had broken down, it would be burdensome to leave the respondent dependent in any way on negotiations with or support from the appellants.
30 In these circumstances, it is impossible to say that a decision that full ownership of the home unit was required for adequate provision for the proper maintenance of the respondent was an erroneous decision. Anything less would leave her to some degree dependent on negotiations with the appellants in the event that some change in her accommodation was required.
31 As regards the lump sum provision, when one has regard to the circumstances that the respondent's annuity was shortly to run out, and that substantial expenditure was required on the home unit, and the circumstance that the respondent's expenditure could be considered likely to increase, whereas her income would not increase, even to keep pace with inflation, it cannot be said that the decision to give her $600,000 was beyond what could be considered the provision which ought to be made to ensure that she had adequate provision for her proper maintenance.
32 The estate was large enough to make a provision for the respondent which would leave her without financial worries, and still leave over $8 million to be divided between the two daughters. In my opinion it has not been shown that the Acting Master's discretion miscarried, so there is no occasion for this Court to make its own independent assessment of the matter.
33 For those reasons the appeal should be dismissed. The ordinary result would be that it be dismissed with costs, but if there any submission about costs that can be dealt with in a moment.
34 McCOLL JA: I agree with Hodgson J, and will just make some short remarks. In considering the Acting Master's judgment it is essential to bear in mind that s.9(2) of the Family Provision Act directs the Court to consider the issues of jurisdiction and the exercise of discretion at the time of the proceedings, not at the time the will, and in this case the deed, were made. In reaching his decision the Acting Master took into account community expectations. He referred to Young J's observations in Blackford v Salmon unreported, 27 July 1994, in which his Honour said:
It seems too that for a widow of a thirty year marriage who has lived in the house for some time and who continues to wish to live there, the expectation in the community would be that a wise and just testator would have left her the house in fee simple.
35 His Honour's judgment recognised the community expectation that a testator should make provision for a widow to ensure that she can lead an independent and dignified life. That prospect is diminished when the widow does not have the benefit of the fee simple, but rather, a right of occupation of her home with a provision for expenses associated with that right being left in the hands of the executors. In this case the situation was exacerbated where, regrettably, the previously affectionate relationship between the appellants and the respondent had, as Acting Master Berecry found, completely broken down following the execution of the deed. Thus the situation in which the deceased may well have contemplated he had left the respondent appeared to have altered.
36 As the respondent said at Black 18C, when asked what had changed in her personal circumstances since the entry into the deed, "It is my home and I want my home to be my home". In these difficult circumstances in my view Acting Master Berecry exercised his discretion soundly. The estate was a large one, and while as Hodgson JA has said, the appellants had a legitimate claim on it, they elicited no evidence of their assets and the Acting Master was entitled therefore to conclude that there were no competing claims. While Acting Master Berecry made generous additional provision for the respondent, he also decided that she should relinquish all her rights under the deed-rights, which as Mr Officer of Queens Counsel submitted, were substantial.
37 In my view the appellants have not demonstrated that Acting Master Berecry fell into appellable error. I agree with the orders Hodgson JA proposes.