FRANKE v THE PUBLIC TRUSTEE [NO 2] SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL KIRBY P, CLARKE and MEAGHER JJA 16 April 1993, 16 April 1993 [1993] NSWCA 102 TESTATORS' FAMILY MAINTENANCE — Family Provision Act testator aged 79 leaves estate with nett value of approximately $67,000 — will leaves entire estate to second son — no provision for former wife (divorced) or oldest or youngest sons — former wife and oldest son now residing in Germany — claim under Act by former wife and oldest son dismissed by Master Windeyer — on appeal to Court of Appeal — held: (Clarke JA; Kirby P and Meagher JA concurring) (Dismissing the appeal): (1) In respect of the claim by the former wife, no error was shown in the Master's finding that no "factors warranted" the making of a provision under the Act having regard to (a) the break-up of the marriage and divorce from the testator; (b) The lack of a continuing relationship between the former wife and the testator; (c) the acceptance of a (probably consensual) property settlement following the divorce; (d) the relatively small size of the estate; and (e) the established interest in real property on the part of the former wife established by the evidence; (2) In respect of the Master's finding dismissing the claim by the eldest son, no error was shown of failing to take account of the relative claims of the sons - or by the reference to the fact that the appellant was an adult son. Hunter v Hunter (1987) 8 NSWLR 573 (CA) referred to. Family Provision Act 1982, s9(1). Kirby P I will ask Clarke JA to give the first judgment. Clarke JA This is an appeal by two disappointed claimants who brought claims under the Family Provision Act, 1982. They are the former wife and eldest child of the deceased who died on 26 February 1989, aged seventy-nine. The deceased left a will dated 2 July 1985 and probate of that will was granted to the Public Trustee on 5 May 1989. Under the will the deceased left the whole of his estate to his middle son Hans. The estate is a small one consisting of a property at 4/50-52 Earl Street, Cammeray, and about $3,000 in cash in a bank. The property was considered at the time of death to be worth about $140,000 and taking into account liabilities of $56,000, the value of the nett estate was approximately $87,000. The Master found that since that time the value of the property had decreased and he concluded that the nett value of the estate was, at the time of the hearing, $67,000. It is readily apparent that in an estate of that size there is an obvious factual burden imposed on claimants seeking to show that an order for some financial benefits should be made in their favour. The first claimant, who is also the first appellant, and the deceased were married on 12 August 1937. The second appellant Klaus was born on 2 December of that year. Hans was born on 20 May 1941 and Peter, the youngest son, was born on 30 May 1944. 2 UNREPORTED JUDGMENTS The family migrated to Australia in 1953 and the marriage continued apparently with periods of unhappiness until 1957 when it completely broke down. The first appellant and the deceased were divorced in Germany and on 16 August 1967 the German decree was declared valid in Australia. On 12 September 1967 this Court in its then Matrimonial Causes Jurisdiction made orders effecting a division of property between the deceased and the first appellant. Under that order the first appellant received $2,950 and that sum was in due course paid. Although there is some doubt whether the order was a consensual one, it would seem to me from the form of order in the papers that that was made by the Court after a hearing. Prior to this order being made the first appellant had returned to her native country Germany. That occurred in 1961 and she remained away somewhere in the order of a year. In 1962 she returned to this country and she remained here until 1984 when she returned permanently to Germany. The evidence makes it fairly plain that from the time of the separation there was little, if any, contact between the first appellant and the deceased. The second appellant Klaus also returned to Germany and he presently lives there. The same can be said about Peter, with the consequence that the only member of the family who has remained in Australia is the middle son Hans. His Honour was faced with a difficult situation. Both claimants before him lived in Germany and both relied upon evidence contained in affidavits sworn by them and supplemented to a degree by the evidence of a Mr Roelfe Spier in support of their claim. They were both living in Germany and neither of them came to Australia for the hearing. There is evidence in the papers which demonstrates that the first appellant was an elderly lady in ill-health and that it would have been difficult for her to come to this country at the critical time. There was also evidence that it did not suit the second appellant's employer for him to take time off work and come to Australia for the hearing. Notwithstanding, the Master offered the appellants an adjournment in order to enable at least the second appellant to come to Australia, but that offer was declined. Consequently, his Honour had to determine the claims upon the fairly sparse evidence that was tendered in support of each claim. In respect of the first appellant's claim his Honour thought that she did not get over the first hurdle, that is, that she had failed to establish that there were factors which warranted the making of the application. That conclusion is challenged on two main bases: first, it is said that in the property settlement the first appellant got no more than was her legal due and that the deceased continued to owe her a moral duty after the payment of the moneys ordered under the settlement. This submission was supplemented by reference to the fact that the deceased had had the use of the first appellant's half-share of the relevant property for some considerable time and accordingly the property settlement was less than adequate recompense for her contributions during the marriage. I do not think this submission can be accepted. In my opinion, this Court is bound to act on the premise that the settlement order by the Court was a proper one and that it is not now open to the first appellant in these proceedings to, in effect, challenge it. This conclusion I would reach as a matter of policy or principle, but it seems to me to accord with the decision of the learned President URJ FRANKE v THE PUBLIC TRUSTEE [NO 2] (Clarke JA) 3 in Dujkhuijs v Barclay (1988) 13 NSWLR 639. Where a recipient under a property settlement does not appeal from or otherwise challenge the order under which the moneys were paid it seems to me wrong in principle to enable that recipient to proceed in an application of the type which was considered by the learned Master upon the basis that in some way the courts failed to accord justice in making the settlement order. I do not think therefore that the first ground upon which reliance was placed has been made out. The second ground also concerns the proceedings in the Matrimonial Causes Jurisdiction. At the time the settlement order was made the Court reserved liberty to the first appellant to make an application for maintenance if she saw fit. At the time of the deceased's death no application for maintenance had been made. The first appellant said, and this is perfectly understandable, that she did not proceed with an application for maintenance as she was able-bodied and proud to be independent. She also said that she was earning money as a domestic and that the deceased had told her he was only earning a small amount from his farm which, I should mention, was sold after being a financial failure. The fact is that no claim was made and upon the evidence before the Court no one could confidently assert that if a claim had been made at the relevant time it would have led to an award in the first appellant's favour. She did say, however, that shortly prior to the death of the deceased she had decided to make an application for maintenance and that she had instructed Australian lawyers to execute her instructions and seek maintenance on her behalf. I do not know that that late application takes the matter any further, but in the particular circumstances of this case I would conclude that it added nothing to the strength of her claim. It is clear to me, as it was to the learned Master, that this application was to be made for the understandable purpose of boosting the first appellant's German pension. She said that she would be entitled to an additional pension if she was able to produce an order for maintenance, or a maintenance agreement made by or ratified by an Australian court; and for my part I do not think the fact that the Court simply reserved the question of maintenance back in 1967 adds anything to the first appellant's claim. The learned Master in reaching his conclusion said this: "Tn this case, however, where the break-up of the marriage was such a long time ago and there is no evidence of any such continued relationship, and in fact there was no such continued relationship, and where there was a property settlement, albeit that no maintenance was paid, it seems to me to be quite clear that there are no factors which warrant the making of the application. On that basis the Act requires that I refuse to proceed with the determination of the application and under our law, as it now is, this summons of the plaintiff Charlotte Franke must be dismissed. " The reasons which are there contained provide a compelling basis for the conclusion to which the learned Master came. There are in addition a number of other considerations to which the learned President referred during the hearing in the same direction. The estate is a very small one. The son Hans to whom the estate was left was the only member of the family to remain in Australia supporting his father and it is clear that he has given that support to his father sometimes in financial form. Finally, the first appellant has, in any event, an interest in a home unit in Sydney which would tell against the strength of any claim she might have. 4 UNREPORTED JUDGMENTS It is said, however, that in view of her poor financial state and her age and infirmity at the time of the hearing, the Court should have concluded that she had established the primary factor, that is that there were factors warranting the making of the application. There is no doubt that her condition at the time of hearing was a relevant consideration, but it was by no means determinative and in that respect I would refer to what Mahoney JA said in Dijkhuijs at 657-8, his Honour there said: "But, at the deceased's death, she (that is the former spouse) may have a financial need. In such circumstances, the fact that the plaintiff had established that she was a former spouse and has a financial need would not, as such, entitle her to an order. It would be necessary for her to establish that, in some way or because of circumstances within s9(3)(d), the deceased had a duty to her which involved that he should have provided for her financial need." In all the circumstances of this case, and paying full regard to the difficult present condition of the first appellant, I am unable to conclude that it has been shown that his Honour erred in any way. I turn then to the claim made by the elder son Klaus. The evidence containing his financial situation was quite sparse. The affidavit which he swore indicated that he had assets valued at about 167,000 DM which comprised a home unit, a motor vehicle and some cash. He was, however, burdened with a mortgage liability of 100,000 DM. He was employed as a catering manager with Kuwait Airlines earning 700 DM per week in 1988. He has two children who would have been aged thirteen and twenty-three at the date of trial. He was married, but he did not proffer any evidence as to his wife's financial situation, or even whether his wife was working. In particular, there was no indication that he was in any way financially disadvantaged and the Court was, as I have said, left in a position where it was very difficult to evaluate whether or not he had demonstrated any financial need. Counsel for the second appellant, however, said that where, as here, the son to whom the estate had been left was relatively well-off and the claimant for an order was in the financial situation that I have described, a prima facie case of the relevant moral duty was made out. Of course he did not mean to suggest by that submission that they were the only factors to be considered. He was putting the proposition that where other things were equal those apparent differences would justify the making of an order. Leaving aside the property owned by the son Hans, there would seem to be little difference between the two sons in financial terms. However, it is true that Hans does own some units in Sydney and he has probably been able to acquire these units as a consequence of the fact that his wife works and earns money. It may be, and we simply do not know, that Klaus was similarly placed. For my part I do not think that in the evidence that is before this Court it could be said that the learned Master erred in failing to place greater weight on the apparent financial situation of Hans Franke. What perhaps is more important is that the learned Master emphasised the difficulty of assessing the second appellant's position in the light of the evidence. He said that on the evidence he was not able to determine that Klaus was not well able to manage as he was. He thought that if there had been any difficulty in managing on what appeared to be a good salary, that difficulty would have been set out and he pointed to the fact that the claim appeared to be based on the fact that Klaus was entitled as a son to be considered in a similar way as Hans was considered by his father. URJ FRANKE v THE PUBLIC TRUSTEE [NO 2] (Clarke JA) 5 Having made those observations, the learned Master noted that there was no reason why an order should not be made in favour of an adult son in the appropriate circumstances. However, he expressed the view that the law required that that son show a need for provision to be made for him and he concluded that in all the circumstances of this case the claim had not been made out. It was said that in some way this demonstrated error. As I follow the submission it was to the effect that in referring to the fact that the son was required to show a need, the learned Master was placing adult sons in a special category and this was inconsistent with an established line of authorities. I do not need to consider whether that fact is inconsistent with the line of authorities for I think that that view is based upon a limited and incorrect understanding of the learned Master's judgment. In my opinion, the learned Master was simply saying that in most cases in which an adult self-supporting son made a claim he may need to demonstrate the existence of a particular need for provision in order to demonstrate that the testator owed him a moral duty. Of course one of the factors which must be considered in determining both a duty and the need for provision is the position of the claimant. Another factor is the size of the estate. Having regard to the smallness of the estate and the absence of evidence which demonstrates that the second appellant suffered any financial difficulties, I find it very difficult to conclude that the learned Master has erred. It was also submitted in support of the appeal that his Honour had made factual errors. He said that the deceased had not been asked to the wedding of the second defendant and he said that in effect there had been no real relationship between the two for many years. I do not think it can be said on the evidence that either of these errors was demonstrated. It may be that there is an ambivalence in the evidence concerning the wedding and it may be that his Honour was expressing a conclusion as to the relationship between the parties which may be stronger than might be thought to be reflected in the evidence. Notwithstanding, it would seem to me to be very clear, that there was not a particularly warm relationship between the parties and that there had been differences concerning financial matters. I, on my part, am not satisfied that any factual error has been demonstrated. Taking into account all the circumstances, I am unable to conclude that the learned Master erred in dismissing the claim. In my opinion, both appeals should be dismissed. I will not say anything at the moment about costs in case either party wishes to make submissions relating to that aspect. KIRBY P: I agree with the order that Clarke JA has proposed. I remain with the view which I expressed in Hunter v Hunter (1987) 8 NSWLR 573 (CA) concerning claims by adult sons and the former law in that regard. However, I do not agree that what the Master said at the close of his reasons evidences a return by him to the former law which, following, Hunter v Hunter, is no longer the law in this State. I merely take it to be a recognition by the Master of the fact that claims can be made by adult sons. The Master said: "There is no reason why an order should not be made in favour of an adult son in appropriate circumstances". 6 UNREPORTED JUDGMENTS Perhaps it would have been better if no reference at all had been made to this aspect of the status of Mr Klaus Franke. But I do not believe that it led the Master into error in circumstances such as would warrant this Court's disturbing the orders which he made. For the reasons that Clarke JA has given, I believe those orders are not shown to have been in error. I would sustain them. Meagher JA I agree with the comments made by Clarke JA. Kirby P: The order of the Court is: The appeal is dismissed. (The respondent sought costs of the appeal; not opposed) Appeal dismissed with costs. Appeal dismissed with costs. Counsel for the Appellants/Claimants: AJJ Thompson Instructed by: Hill Ryner and Co Counsel for the Respondents/Opponents: PT Taylor Instructed by: Stacks The Law Firm