GALLAHAR v SMITH SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL MAHONEY, PRIESTLY and MEAGHER JJA 6 March 1990, 6 March 1990 [1990] NSWCA 64 Share of daughter increased and of son reduced — Within discretion of Master — No question of principle. Mahoney JA The deceased, Mrs Vera Rose Gallahar, died on 12 August 1985. By her will she appointed as her legal personal representatives the defendants in this proceeding. She disposed of her estate by giving it to her personal representatives upon trust to sell, call in and convert the estate into money to pay all her debts, funeral and testamentary expenses and duties and other charges and then to hold the balance upon the following trust: "(a) UPON TRUST to pay the sum of TEN THOUSAND DOLLARS ($10,000.00) UNTO my daughter the said VALMA ROSE PRETTY (b) UPON TRUST to pay the sum of TEN THOUSAND DOLLARS ($10,000.00) UNTO my daughter SHIRLEY MERYLE SMITH of 10 Pritchard Place Peakhurst (c) UPON TRUST to pay the sum of TEN THOUSAND DOLLARS ($10,000.00) UNTO my daughter MARLENE ELIZABETH LEE of Birdsell Avenue Condell Park (d) UPON TRUST to pay the sum of FIVE THOUSAND DOLLARS ($5,000.00) UNTO my daughter VERA OLIVIA HANNIGAN of 5 Collins Street Kyogle and (e) UPON TRUST to pay the balance thereafter UNTO my son the said SIDNEY ALFRED GALLAHAR." An application was made to the court by Mrs Smith, one of the daughters of the deceased under the Family Provision Act. An application by another daughter Mrs Vera Hannigan was made and was dismissed by the Master. The claim of the daughter Mrs Vera Hannigan, therefore need not be directly considered in the proceeding. The Master found that the deceased owed the relevant moral duty to each of her children - I use the term moral duty in the sense in which it has been used in the authorities. Having considered the circumstances he varied the disposition made by the late Mrs Gallahar, by increasing the share of the estate to which Mrs Smith was to be entitled from $10,000 to, as it was described, one-fifth of the estate. I take the Master to have meant by this one-fifth of the net estate after payment of the debt, funeral and testamentary expenses and other matters referred to in the will. The legal personal representatives of the deceased have appealed to this Court against that order. The facts are not significantly in contest. The estate consists essentially of the house in which the deceased lived. The matter has been conducted upon the basis that after payment of expenses and the cost of administration, the net value of the estate will be of the order of $84,000. On this basis and making the calculations 2 UNREPORTED JUDGMENTS on the broadest of bases, Mr Gallahar would, under the will, have been entitled to an amount of approximately $49,000. Each of the daughters would have been entitled to the particular amounts there specified totalling $35,000. The effect of the order is to increase Mrs Smith's benefit from $10,000 to approximately $16,800. It is this increase, an amount of some $6,800, which is here in question. The Master summarised the evidence in relation to Mrs Smith's position. She had in the sense to which I have referred a moral claim upon the deceased, in the sense that she was entitled to have her position considered by the deceased in the discharge of the moral duty which in accordance with the legislation the testatrix had. She has been, as the Master described her - and I use the phrase again in the legal sense - a dutiful daughter. She has been, as the Master said, "a most dutiful daughter." He did not, of course, mean to suggest that the other children had been otherwise, but that is the phraseology which conventionally is used in considering the entitlement of an applicant in this branch of the law. Mrs Smith's husband had, in 1976, a heart attack. In 1984 she herself had a heart attack. She was at the time of the application some 53 years of age. The income of herself and her husband is stated in the Master's judgment to be $170.30 per fortnight each. Her assets were, as the Master said, negligible, consisting of an old car and minor items and she had the usual outgoings. The net result is that the income of herself and her husband was, as at that time, of the order of $170.30 per week. Mr Gallahar's position was, as the Master stated, somewhat different although the net result may not have been greatly different. The Master stated the position in the following terms: "Sidney Gallahar, 52 years of age, a son and co-executor of the estate deposes that he built the home at Shoalhaven Heads and that he also built the home in Penshurst where his mother later went to live. He hasn't practised as a builder since 1976 because he has a bad back and suffers from a nervous condition. He is currently employed as a foreman for a building contractor and earns $510.85 net per week." The Master referred in his judgment to the position of the other children. Their position is not of course irrelevant but in the circumstances of this case I do not think it is necessary to take time by detailing it. The position therefore was, in my opinion, that both of the children of the deceased, Mr Gallahar and Mrs Smith, were at the relevant times in need. The deceased had the relevant moral duty to them. The question was, what was to be done to discharge that duty? As I have said, under the will the result was that Mr Gallahar would have received something of the order of $49,000 and Mrs Smith $10,000. The effect of the order was that Mr Gallahar was to receive some $42,200 and Mrs Smith some $16,800. Mr Hewitt has put the case for Mr Gallahar effectively and no less effectively because briefly. He has not seriously contested the quantum of the order made. His point essentially has been, and I think he has gone to the heart of the matter in this, that in the circumstances of the case no order should have been made at all. He submits that the son had a significant claim, in addition to his ordinary claim as a son of the deceased, because of his contribution to the building up of the estate. The evidence was that he had used his skill in building to build the relevant house for the deceased. It appears, at least it is suggested in the material before the court, that he was substantially reimbursed for the materials used but not for his skill and labour in the erection of the house. However that be, he had an additional claim because of what he had done. URJ GALLAHAR v SMITH (Meagher JA) 3 The substance of the claim, as I take it from Mr Hewitt's submissions, is that, because he had that additional claim and the deceased recognised it, it was not an appropriate exercise of the discretion of the Master to interfere with the provisions made in the will. In my opinion, the order made by the Master should not be interfered with. If I were considering the matter myself I would have made an order no less than the order made in favour of Mrs Smith. Her position as outlined by the Master, and I have summarised it in the judgment, is one of considerable difficulty. Both she and her husband have, it would appear, a physical disability. They are both living on a pension and the amount of it is by no means great. Mr Gallahar also has physical difficulties to which reference has been made in the Master's judgment. However, he is in a position of being able at least from time to time to earn and the income which he is earning is of the order of $500 per week or more: I take for this purpose the figures that are referred to in the judgment. Reference was made in the judgment to the financial position of Mr Gallahar and details of his assets and liabilities were set forth. He has, as the Master indicated, a house and a car, the total value of which was given at $81,800. He has, however, mortgages and other liabilities approximating roughly that particular amount. The Master noted that he had not lodged an income tax return for five years and had not produced any financial records in answer to the subpoena which had been issued for that purpose. Iam conscious of the claim which he had upon the deceased because of what he had done in building the house for her. I am conscious also that she may have taken that into account in drawing her will as she did. But I would not see those matters precluding the making of a small extra provision in favour of Mrs Smith. Comparing his position with that of Mrs Smith I would myself, had I been exercising the jurisdiction, have made an order conferring an additional benefit upon Mrs Smith. However, in addition and quite apart from that, the question whether in the light of all of the circumstances which this Court must take into account, a further amount should be given to Mrs Smith was a matter which fell within the discretion of the Master, as discretion is understood in this branch of the law. In my opinion he has not erred in fact or in principle in a way which would justify this Court interfering with the exercise of the discretion. For these reasons - which I have stated with, I trust, a brevity appropriate to the size of the matter - I am of the opinion that the appeal should be dismissed. Counsel will have the opportunity in a moment to make submissions as to the order for costs which should be made. Priestly JA The way in which the Master dealt with the application before him has been fully explained by Mahoney JA. I do not think that in the appeal against the Master's order any material error of principle or fact by him has been shown. It follows because of the nature of the appeals from such orders that the appeal must fail. Meagher JA I agree with Mahoney JA. The order the Court makes is that the appeal is dismissed with costs. Counsel for the Appellant: Mr A Hewitt Solicitors for the Appellant: Hancock Alldis and Co 4 UNREPORTED JUDGMENTS Counsel for the Respondent: MR M Oakes Solicitors for the Respondent: Mr RJ Walsh, Hurstville