ROBINSON v TAME

Court of Appeal (NSW)|1994-11-02|Before: Kirby P

KIRBY P, HANDLEY AND SHELLER JJA 2 November 1994, 9 December 1994

TESTATOR'S FAMILY MAINTENANCE - widow of second late marriage - five years relationship - home left to widow - remainder interest to invalid daughter

daughter fails to prove specific need

TESTATOR'S FAMILY MAINTENANCE - eligible persons - widow - adult invalid daughter - whether obligation to make provision for widow overstated - whether Act requires reconsideration of "moral duty" to spouses by reference to other "eligible persons".

TESTATOR'S FAMILY MAINTENANCE - Family Provision Act 1982 - claim by adult daughter left remainder of father's interest in family home - father leaves home to second wife after five years' de facto association, four months marriage - wife provides home-maker support and nursing care for husband - wife provides some funds for home repair and renovation of the home - daughter seeks advancement of her remainder interest - claims legacy of $100,000 00 to provide for immediate benefits to improve her poor financial and health conditions - Master McLaughlin rejects claim - holds that remainder left to daughter sufficiently discharged moral duty owed to her by her father

TESTATOR'S FAMILY MAINTENANCE - Family Provision Act claim - position of spouse (widow) - needs of invalid daughter and only-child - "moral duty" to each - contemporary circumstances - provisions of Act as to "eligible persons" - whether requirement to provide for widow of late second marriage overstated by Master by reference to requirement also to make adequate provision for adult invalid daughter

Held: Rejection of daughter's claim by Master upheld as discretionary.

Singer v Berghouse [No 2] (1994) 68 ALJR 653; 123 ALR 481 (HC) applied.

(1) To succeed, appeals against discretionary and evaluative orders under the Family Provision Act 1982 must show an error of principle, significant error of fact-finding or plainly erroneous order.

(2) No such error had been shown in the present case

Golosky v Golosky, Court of Appeal (NSW), unreported, 5 October 1993 [1993] NSWJB 108 referred to; (3) The reference to the provision ordinarily to be expected in the case of a surviving spouse may need to be reconsidered in the light of the entitlement of other "eligible persons" under the Family Provision Act 1992 and contemporary circumstances; but in the present case, no error of principle demonstrated was in the light of the evidence, the size of the estate and the failure of the daughter to establish any specific needs

Luciano v Rosenblum (1985) 2 NSWLR 65 (SC), considered;

(4) Observations on the necessity to prove the needs of claimants for provision under the Act;

Held: No such overstatement in the facts of the case. Family Provision Act 1982, s6, s7, s9. ORDERS Appeal dismissed with costs.

Kirby P Another appeal is before the Court concerning a claim under the Family Provision Act 1982 (the Act).

In the Equity Division of the Supreme Court, Master McLaughlin dismissed ie claim of Mrs Shirley Robinson (the appellant) She now appeals to this Court against that order.

LATE SECOND MARRIAGE - INVALID DAUGHTER The essential facts were not in doubt The proceedings arose by reason of the provisions of the will of the late Maximillian Tame (the deceased). He was born in 1919. He died on 3 November 1989. He was thus 70 years of age at the date of his death The deceased's last will was dated 6 July 1989 Probate of the will was granted to Mrs Betty Tame, the deceased's widow Mrs Tame is the respondent to this appeal By the will, she was named the sole beneficiary of the estate. This was valued at the trial at $210,000. It comprised a house property owed by the deceased at High Street, Carlton in which he had resided for many years (estimated value of $200,000) together with some cash, debentures and other small assets.

The respondent was the second wife of the deceased His first marriage, contracted in 1939, ended in divorce in 1950 The appellant was the sole child of that marriage and of the deceased.

The respondent, who had known the deceased years before, made contact with him as a result of a newspaper story. At the time, according to the evidence, the deceased was rather lonely The respondent eventually began living with the deceased in August 1985 The couple planned to marry. However, their marriage was delayed, apparently because of the deceased's ill health. Ultimately, on 6 July 1989, the deceased and the respondent were married. Four months later the deceased's ill health was to occasion his death. The respondent had been married twice before her marriage to the deceased. She has an adult son, born in 1948 from her first marriage. Thus the deceased and the respondent each had one child only.

At the time the deceased and the respondent decided to live together they had a conversation, which the Master accepted. They agreed that the respondent would sell her home unit at Penshurst and use the money thereby obtained to renovate the deceased's property which had been neglected. The couple agreed to pool their resources, to execute mutual wills and, in effect, to permit each other the use of the matrimonial home during their respective lives. The property was then to be divided after the death of the survivor of them and shared equally by the daughter of the deceased (the appellant) and the son of the respondent It was pursuant to this arrangement that the deceased made the will which has been the subject of complaint in these proceedings. The Court was informed that the respondent made a will in like terms and that she adheres to her commitment that her estate will be divided on her death between her son and the deceased's daughter.

The appellant was born in 1940. She was thus 49 years of age at the time of the death of her father. She was 51 years of age at the time of the Master's orders. She is now 54 years of age. She appears to have a stable marriage and has two children each now adults. Unfortunately, the appellant has not enjoyed good health The medical evidence read before the Master - substantially repeated in an affidavit read without objection before this Court - discloses that the appellant has coronary disease. She suffers from high blood pressure, a peptic ulcer, arthritis

and a disability of the foot which may require surgery. According to the evidence, the appellant takes a very large range of medications for her various disabilities Some of these involve unrecoverable expense. There was some evidence that the appellant's life expectancy had been diminished by her coronary disease, a conclusion not unexpected in the case of such a disability.

The sale of the respondent's home unit at Penshurst brought in only $48,000 From this she was obliged to pay a debt of $20,000 to her son The balance (ie $28,000) she expended on repairs and renovations to the deceased's home which also became her home. She purchased carpets and furnishings. She made the home more congenial for the deceased in his last years. She performed substantial home-maker functions for the deceased. She appears to have looked after him with devotion and attention during his last illness. Her relationship with and, then, marriage to the deceased was not of long duration But it comprised an important time in the deceased's life and it was only terminated by his death. The respondent was living in the matrimonial home at Carlton, in accordance with the will, both at the time of the proceedings before the Master and at the time of the hearing in this Court. Her income was limited to the aged pension She had virtually no available liquid capital. According to an affidavit, read without objection before this Court, the respondent is to be admitted to the Fairfield Hospital shortly for an operation for palliative surgery on her back.

The financial position of the appellant was similarly straightened. A supplementary affidavit, read before this Court elaborated the basic position disclosed before the Master. The appellant deposed to her receipt of a disability support pension of $270.80 per fortnight. Her husband was also not working. He was paid a "carer's pension" in the same sum. These figures represent a slight increase in the sums revealed by the evidence before the Master. As with the respondent, the appellant's bank balance was negligible. A small sum of capital she had at the time of the primary hearing was expended in costs of the trial One of the appellant's complaints at the hearing before the Master was about the difficulty of negotiating stairways in the townhouse in which she and her husband lived. This led to evidence that the appellant had elected to move from a single storey cottage leased from the Housing Commission. Her supplementary affidavit deposed to the fact that the Department of Housing had, on medical grounds, approved alternative housing for her to comprise a single storey residence. However, the Department was unable to indicate when this would be provided.

Apart from bringing the financial and health positions of the parties up to date, the fresh evidence did not materially alter the respective positions which had been disclosed in the evidence before the Master.

THE MASTER'S DECISION REJECTING THE DAUGHTER'S CLAIM

The appellant's case before the Master was, in effect, that the interest which she held in remainder in the home in which the respondent lived, should be advanced. She sought a legacy of $100,000, being her half-share of the value of her father's assets. To the suggestion that such advancement would effectively oblige the respondent to leave her home, find more modest alternative accommodation, disrupt her life again and breach the wishes of the deceased expressed in his will, the appellant pointed to her own urgent needs. She said that an eventual interest in remainder was of little use to her Despite the fact that the respondent was eleven years older than she, the possibility existed (because of their comparative states of health) that the respondent would out-live the appellant. Alternatively, any benefit received by the appellant from her father's estate would come when she was too old to take advantage of it. She lived, so it

was urged, in extremely modest circumstances Her quality of life would be greatly enhanced by advancement of her interest. Her father, so it was said, owed a moral duty to her, as well as to his second wife. In providing as he did, he had failed to take adequately into account the need to make proper provision for her, having regard to her financial predicament and health problems. Even if the provision of the legacy required the respondent to move out of the matrimonial home, this was not unreasonable Her marriage to the deceased had been comparatively brief. The home was the "family home" of the deceased and the appellant for many years more than it had been that of the respondent. If the respondent returned to a more modest home unit she would still be better off financially than she had been in the Penshurst unit And in this way, the moral duty both to the widow and to the invalid daughter could be adequately discharged, as it had not been by the will.

Master McLaughlin rejected this claim He recounted the facts set out above. He reviewed the evidence of the health conditions both of the appellant and of the respondent He examined the comparatively modest size of the estate and the respective means of each of the parties. He acknowledged the "moral duty" which was owed by the deceased both to his widow and to his daughter. He then concluded: "The courts have time and again emphasised that the moral duty which a testator owes to his widow is of a higher order than the moral duty which he owes to any other person. The courts have recognised that the very least which a testator owes to a widow is that she should have accommodation provided for her for the rest of her life time.

The nature of the application... is to require that the house property in which the widow has resided now for the past five years and upon which physical and material improvements to which and upon the furnishing of which the defendant had expended considerable amounts of money, should be sold, and that, in effect, the defendant should be put back into the situation in which she was before entering into her association with the deceased.

By so doing... the period of care and devotion which the defendant gave to the deceased, which has not in any way been contested or challenged, as a loving and dutiful wife who looked after her husband ten years her senior when he was in very ill health in the last years of his life would be totally disregarded. Further, that her contribution as a homemaker and her material contributions towards the house property and its contents should also be disregarded

The plaintiff herself is seeking an additional amount but not for any specific purpose. She is a person who is secure in her accommodation. She agreed in cross-examination that there was no threat to her security of tenure in the Housing Commission residence. She is living with her husband. She is being looked after by her husband who is being paid at taxpayer's expense to look after her. Her outgoings are more or less equivalent to her income. In addition, as I have already observed, capital sums totalling almost $40,000 have come into the household in the last ten years.

Everyone, I suppose, could do with more, especially where there is an estate involved. But I do not consider in the circumstances of the present case that the Court would be properly exercising the judicial discretion vested in it by s7 of the Family Provision Act were it in order to give a benefit to the plaintiff, to make an order that would have the practical effect of leaving the defendant widow without a house property to which I consider that she is properly entitled."

After referring to the entitlement of the appellant to receive half the proceeds of the house property (or whatever other property is owned by the respondent when the respondent dies) the Master expressed the view that this was a sufficient discharge of the "moral duty" which the deceased recognised that he owed to his only daughter. The Master dismissed the claim and ordered the appellant to pay the respondent's costs It is from that order of dismissal that the appeal comes.

The principles governing the performance by this Court of its appellate function in relation to the orders of the Master are not in doubt. The principles have been restated recently in the decision of the High Court of Australia in Singer v Berghouse [No 2] (1994) 68 ALJR 653; 123 ALR 481 (HC). The High Court there made it clear that decisions of the kind reached by the Master in this case are to be treated as equivalent to the exercise of a discretion. See ibid, 656f; 489. Accordingly, this Court must ask itself whether the appellant has shown that the Master made an error of principle in his decision; made significant mistakes of fact-finding which affected the decision; or reached a conclusion which was so apparently unreasonable as to indicate that an incorrect principle had been applied, the statute misunderstood or some other unidentified error had infected the result. See Eggler v Mitchelmore, Court of Appeal (NSW), unreported, 11 November 1992; [1992] NSWJB 114 In Singer (loc cit) the majority of the High Court cited with approval the following passage from my reasons in Golosky v Golosky, Court of Appeal (NSW), unreported, 5 October 1993; [1993] NSWJB 108: "Unless appellate courts show restraint in disturbing the evaluative determinations of primary decision-makers they will inevitably invite appeals to a different evaluation which objectively speaking may be no better than the first. Second opinions in such cases may be bought at the cost of diminishing the finality of litigation in a troublesome area and, sometimes at least, with a burden of costs upon the estate which should not be encouraged."

A further consideration, relevant to the instant case, is the frequently repeated warning that the Act is written against the well established feature of our system of law upholding general freedom of testamentary disposition. For this reason, the wishes of a testator should be respected to the full extent possible, consistently with the proper application of the Act. See Hunter v Hunter and Ors (1987) 8 NSWLR 573 (CA), 575. The purpose of the Act is not to salve wounded feelings or to right every feeling of injustice, slight or hurt pride. It is simply to permit the Court an exceptional jurisdiction in effect to alter the testamentary disposition made by the deceased where it is shown that the Court ought to repair the failure of the deceased, in respect of eligible persons, to make adequate and proper provision for their maintenance, education or advancement in life.

The foregoing principles impose a significant restraint upon this Court which was recognised by the appellant The restraint was no less significant in this case because the estate is comparatively small, the means of the parties likewise and the costs of the proceedings the more significant in comparison to the amounts at stake.

The appellant, in apparent recognition of these considerations, modified the stance which she had taken at trial Before this Court she urged that the Master ought (even if rejecting her claim of a legacy of $100,000) to have provided a legacy in a lesser sum (say $50,000). In this way, the Master would have ensured the advancement of the appellant's interest; protected the respondent's primary entitlement; and fulfilled the deceased's "moral obligation" which, effectively, the will had failed to do.

Because of this turn of events, the Court afforded the parties an opportunity to consider the revised claim of the appellant. Unfortunately, the discussions did not prove fruitful. It therefore falls to the Court to determine the matter in accordance with legal principle I say at once that this is a sad case. I agree with the Master that the deceased ought to have made proper provision for both the appellant and the respondent. In the provision which was made, I consider that it is arguable that, effectively, the appellant received no real provision at all. But that was the will which the deceased deliberately made in favour of his widow. Courts in this area of discourse have been traditionally most sympathetic to the needs of spouses and lately of the survivors of marriage-like relationships. The question for this Court is primarily not whether, if it was starting afresh, the Court would make some different provision from that favoured by the Master. It is whether, conformably with the principles so recently and affirmatively re-stated by the High Court in Singer, the Court has the authority to alter the evaluative decision which the Master expressed.

Provision for the widow: The first point made for the appellant was that the Master had overstated what the deceased was obliged to provide to his widow. It was suggested that the longstanding principles defensive of spouses, such as may be found in such cases as Luciano v Rosenblum (1985) 2 NSWLR 65 represent an appropriate rule of thumb for longstanding marriages but a rule insufficiently attentive to the claims of other "eligible persons" if applied mechanically to a spouse of a comparatively short second or later marriage or association. Cf In re Cunningham; Cunningham v Cunningham and Ors [1936] NZLR (supp) 69; [1936] NZGLR 419; Re Cutts (Dec'd) [1969] VR 254 (SC), 256. I have some sympathy for this point. It may represent another aspect of the caution of the High Court against the indiscriminate use of the language of "moral obligation" inherited from the Testators Family Maintenance Act 1916 with its provisions significantly different from those of the present Act. The differences have been noted by this Court See eg Benney v Jones (1991) 23 NSWLR 559 (CA) 569.

No specific submissions were addressed to the repeated use by the Master of the language of "moral obligation" which has been common in most cases of this kind, at least until the decision of the High Court in Singer. In some future case it may be necessary to review the application of the principle stated in Luciano and like decisions to cases involving the survivors of second or later marriages or associations. See Gould v Gould, Supreme Court (NSW) unreported, 21 May 1993, per Powell J, 33. However, in the present case there were particular facts which bore out the special consideration given to this widow She was appropriately settled in her own home unit when invited to sell it and to join the deceased. She did so and expended her own money in making their matrimonial home more congenial. She cared dutifully for the deceased as the Master found. She did so in sickness and until his death The probable consequence of an order of a legacy, even a small legacy, given the respondent's absence of other means, must be her ejection from her home. This would involve, yet again, disruption of her domestic arrangements at a time in life when it would be uncongenial and even disturbing.

Whatever may be the general force of the submission put for the appellant, I do not see any relevant error in the circumstances of this case. Although the relationship of the respondent and the deceased was comparatively short, it was an extremely important one for the deceased who made his wishes known by his will.

Daughter's health: It was then said that the Master had failed to give proper weight to the appellant's health Certainly, the Master referred to it at some length in his reasons. I do not consider that he overlooked this issue It was necessary to balance the competing evidence concerning the health of the respondent. Even if I were minded to give greater weight to the appellant's health, I cannot say that the Master's consideration of the issue portrays such an unreasonable departure from what might have been open in the evidence as to authorise the intervention of this Court.

Evidence of alternative accommodation: The appellant then attacked the Master's suggestion that he could not make an order requiring, in effect, the sale of the respondent's home without evidence that alternative accommodation would have been available to the respondent at a feasible cost The Master did not, in terms, decide that he could not make an order without the suggested evidence. He merely indicated that, in considering the order which the Court ought to make, it would have been relevant for the appellant to have established that alternative accommodation could have been purchased by the respondent with any residue from the sale of the matrimonial home. To the end of the proceedings, no such evidence was tendered. There are limits upon the extent to which judges can draw upon their own knowledge in such matters The sale of the Penshurst property formerly occupied by the respondent produced the comparatively modest sum of $48,000. That was prior to the rapid increase in property values at the end of the 1980s. Although this increase has probably tapered off, it would be pure speculation to guess what an equivalent home unit would cost. And the question remains why the respondent, as widow of the deceased, should be obliged to move back to such premises when she and the deceased agreed upon the arrangement reflected in their mutual wills.

Provision for the daughter: Next it was complained that the Master falsely assumed that the appellant was adequately provided for. It was said that he ought not to have referred to the modest amounts won by her husband in a raffle or to the fact that he was acting as her carer "at taxpayer's expense". With respect, I think it would have been better had the Master not made the last comment. But the Act enjoins the decision-maker to have regard to "any... matter which it considers relevant in the circumstances. "

The means of the claimant and their needs, their domestic circumstances and the alternative sources of provision are relevant circumstances for the Court to consider. I leave aside the larger question of whether social security entitlements, by statute, may be taken into account Upon this question there is conflicting authority It is not necessary to address the point in this case for the point was not specifically argued.

Comparative life expectancy: Then it was complained that the Master had failed to take into account, or adequately into account, the possibility that the respondent might outlive the appellant. The appellant is eleven years younger than the respondent. But she does suffer from coronary disease which would shorten her life expectancy somewhat. On the other hand, the respondent has back disabilities and suffers from insomnia. Although, when giving evidence, she appeared to my inexpert eyes to enjoy much better general health than the appellant presents, the fact remains that the probabilities of life expectancy cannot rule out the appellant's eventually taking the interest in possession which her father contracted for her to have, which she will receive under the respondent's will and which the respondent openly acknowledged before this Court It would need stronger evidence than was before the Master (or the

evidence later by consent read to this Court) to convince me that the Master had erred in failing to give strong weight to this consideration.

Postponed provision of remainder: Then it was said that, even if the appellant survived the widow, she would, on the probabilities, be so old that she would not enjoy the provision made for her by the widow's will. It is true that the Master did not give specific attention to this issue. Certainly, I think that it was a consideration relevant to the exercise of discretion. But I do not regard the omission as fatal, there being so many other considerations which supported the Master's conclusion.

CONCLUSION: NO ERROR SHOWN In the end, I have come to the view that the Court is not entitled to disturb Master McLaughlin's orders. This is not simply because of the strong reaffirmation of the rule of restraint in cases of this kind stated in Singer. I am very conscious of the injustices that can sometimes lurk in decisions which are discretionary or discretionary in character. In Pontifical Society for the Propagation of the Faith and St Charles Seminary, Perth v Scales (1962) 107 CLR 9 at 19, Dixon CJ observed: "Perhaps this court and other Courts of Appeal have attached too much significance to the discretionary aspects of orders under appeal and have accordingly allowed orders to stand which no member of the Court of Appeal would himself have made, had he sat at first instance."

Whether this remark survives Singer or not, I have a full sympathy for the predicament of the appellant Her life appears to be rather miserable, she is partly disabled and without the capital that could add considerably to the quality of the enjoyment of her life. She looks at the respondent living in the family home which she enjoyed for much longer and doubtless considers how much better off financially she would have been if, in the ordinary course, her father's estate had come to her as his sole child upon his death.

But the fact remains that to the end of the case the appellant could not point to any specific objective which she had in mind and which was needed to provide adequately for her welfare and advancement. A hint of the need of a motor vehicle was made from the bar table. But if this had been the true desire of the appellant, one would have thought that such evidence would have been given at some stage during this long litigation. Alternatively, one might have expected more substantial evidence concerning her real needs. It is a constant source of surprise to me in this, as in other cases under the Act, that so much attention is spent upon personal recrimination and insufficient attention is paid to the proof of precise financial means of the parties and the precise needs of the claimant. The Act is not about the righting of moral wrongs, as such, but about the making of adequate provision In short, the focus of the Act is upon property - dollars and cents; not emotion and ethical desserts.

What the appellant was asking, for unspecified needs, was that the Court should, by its order, in effect put the respondent widow out of her home. That would have a very significant, if not devastating, effect at this stage of the widow's life. It would be arguably unjust The respondent meanwhile has her own home arrangements. She can look to even better arrangements at some time in the future, according to the communication from the Housing Department.

Even a comparatively small legacy (say $40,000.00) would have carried significant costs of the proceedings, and possibly necessitated substantial costs of the sale of the present home of the respondent and the purchase of a new and more modest home for the respondent. I do not, in the end, believe that the appellant has demonstrated an error in the conclusions of the Master which

would authorise that course. Nor do I consider that it has been demonstrated that the Master ought to have made a different order. Orders In the result, the appeal must be dismissed with costs.

Handley JA In this appeal I have had the benefit of reading the reasons for judgment of Kirby P in draft form. I agree generally with his Honour's reasons but wish to add some further brief reasons of my own.

The respondent widow did not derive her interest in the estate merely from the bounty of the deceased. She had made a contract with him which involved her selling her home, coming to live in his home, and spending part of her net proceeds of sale on repairing and refurnishing his home. These were acts of part performance which would have enabled the Court to grant specific performance of the contract after his death. See Wakeham v Mackenzie (1968) 1 WLR 1175.

As part of this agreement the deceased agreed to make a will leaving his estate to the respondent. Since the agreement was capable of specific performance the respondent acquired the estate not only as beneficiary under the will but also beneficially under the contract. The Testator's Family Maintenance Act 1916 did not authorise the Court to make orders out of property which passed on death pursuant to such a contract. See Schaefer v Schuhmann [1972] AC 572.

The notional estate provisions of the Family Provision Act authorise the Court to make orders having the effect of overriding such contracts. See s22(4)(f) and s23(b)(iii). However the existence of such a contract, its performance by the survivor, and the benefits taken by the deceased under it remain relevant considerations for the Court in deciding whether to exercise its powers in respect of such notional estate. See s26(a) and s27.

The respondent did not rely on these matters before the Master or before this Court but chose merely to rely upon the making and performance of the agreement and the mutual wills of the parties as part of the general merits of her "moral" claim on the deceased. However, even on this restricted basis, these matters powerfully reinforced the respondent's already strong claim to retain the benefits she took under his will. I agree with Kirby P that the appeal should be dismissed with costs.

Solicitors for the appellant: Williams Palmer Noss Counsel for the respondent: AL Hill

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