BAKER v OSSWALD SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL MASON P, MEAGHER and HANDLEY JJA 14 October 1997, 14 October 1997 [1997] NSWCA 38 Family Provision Act — Master's exercise of discretion Mason P This appeal from the order of Master McLaughlin involves the estate of the late Werner Osswald, who died on 3 March 1994. In a will made in January of that year the whole estate was left to the deceased's son, Karl Osswald. The son was the child of an earlier marriage of the deceased. The Master made an order in favour of the respondent that she receive a legacy of $80,000 out of the estate. The respondent was the deceased's widow. She was thirty-nine years of age at the date of the hearing. She had been born in the Philippines, met the deceased in 1983, there was some contact between her and the deceased between the period 1983 to 1986, and she came to Australia as his fiancee. They married on | August 1986. At that time the respondent was twenty-nine and the deceased fifty-one years of age. The respondent had not previously been married but she had a son by a previous relationship, who was fifteen at the time of the hearing. The deceased had divorced his first wife in 1968. There was a daughter of that marriage, who resides in Germany, but the sole beneficiary was his son Karl. The size of the distributable estate was approximately $100,000. The-appellant's first challenge to the award was that it was affected by material errors of fact. Two errors were suggested. Firstly, that the Master had wrongly considered the nett value of the estate to be $142,404 and, secondly, that the Master had failed to have regard to the costs of the proceedings and their impact upon the size of the distributable estate. Iam not persuaded that the judgment is vitiated by either suggested error. The Master recorded early in his judgment that the completion of a sale of certain property at Goulburn belonging to the deceased realised nett proceeds of $142,404. That was a perfectly correct statement. Nowhere else in the judgment is there an analysis of the size of the estate, but there is no reason to infer that the Master overlooked the evidence which had been given without challenge in the executrix's affidavit to the effect that there were some deductions totalling approximately $14,000 of the nett sale proceeds before the costs of the proceedings were to be taken into account. It is also in my mind inconceivable that the Master would have overlooked the fact that costs would come out of the estate. After all, he awarded those costs and awarded them out of the estate. In those circumstances, the challenge to the award becomes essentially a challenge to a discretionary decision. Counsel for the appellant frankly acknowledged that the path before a party seeking to make such a challenge in such matters is a difficult one. I do not think it necessary to make reference to the authorities which he cited in support of that proper concession. The arguments which were then ventilated were that the Master had failed to give effect to the will, which showed on its face the intention of the deceased that his son should receive the entirety of the estate. Secondly, that he had failed to 2 UNREPORTED JUDGMENTS give weight to the competing claim of the son to the deceased's bounty. Thirdly, that he had failed to have regard to the matters particularly deposed to in paral0-paral2 of Karl Osswald's affidavit relating to the injury he suffered early in his working life, which would have been obvious to his father. I do not see these matters as vitiating the judgment of the Master and the balancing explicit in the reasoning that he gave. The Master obviously was aware of and referred to the effect of the will. The Master obviously took into account, and made it plain that he did so, the comparative positions of the respondent and the deceased's son. In support of that statement I would refer to the fact that he mentioned the relationship of the respondent and the deceased as husband and wife, its duration, the contribution that the respondent made to the building project at Goulburn, and the tenuous means of the respondent as a claimant on the deceased's bounty. The Master also referred to the means of the deceased's son and properly, in my view, took into account the fact that the son had a capacity which the respondent did not have to have long term accommodation and a cushion against life's vicissitudes. The Master, in the passage in his judgment at the bottom of p6 and the top of p7, made it plain that he distinguished the respondent's situation from that of a widow surviving a long marriage and clearly it was on the basis of that distinction that he departed from the very common provision made in favour of a widow; namely, that she would receive the whole of the estate if that was necessary to take proper provision for her continuing needs and if there were no clear competing claims by other eligible claimants. The position of the son Karl was that, together with the defendant executrix, they jointly owned a family residence at Eastwood where they reside with two small children. The value of that was said to be $270,000, subject to a $7,000 mortgage. In addition, the son owns an investment home unit at Stanmore with a value of $120,000, subject to a negatively-geared mortgage. There were additional assets, notably moneys in various bank accounts and the like. The Master in these circumstances has not been shown in the exercise of the task which is set by the legislation to have had failed to have regard to the size and nature of the estate, or the totality of the relationship between the respondent and the deceased, or to the relationship between the deceased and the beneficiary who was the object of the bounty under the will. It was suggested that the decision below was vitiated by the fact that there was no finding, indeed no evidence, as to the particular residence that the respondent might have in mind to acquire with any legacy provided from the estate. This was not a situation where there was a vast sum of money and the possibility of choosing effectively between a range of residences. The situation of the respondent, as it appeared at the time of the trial and had been throughout the duration of the marriage, was-that she had in effect no independent means. She was working, paying rent and providing for her own needs, but virtually having no capacity to accumulate any savings. It is clear that during the marriage the deceased had intended to provide, and had indeed provided, a home for her, initially in the Coogee area. There was a proposal to move to the Goulburn property, and indeed much time and effort was spent by the respondent to assist the deceased in making that a home. As it turned out, the failure of the marriage meant that that goal, although it had been worked for, was not realised. URJ BAKER v OSSWALD (Mason P) 3 I think it is quite unrealistic to expect a plaintiff in that situation to go to the expense or indeed bother to say, "I have in mind a unit or a home at X worth Y". It is quite clear to me that the $80,000 legacy that the Master provided for will, to use his own words, enable the respondent, "at least to pay a deposit upon a residence and would give her some additional funds not only to upgrade and improve her lifestyle but also to provide her with some fund to meet contingencies". It is equally clear to me that the $80,000 legacy has not been shown to be enough to acquire a particular home in a particular place. In those circumstances, I cannot see that any criticism could be laid upon the respondent or her legal advisers for not having provided further evidence in relation to that matter. This was a situation where the deceased's widow had the primary claim upon his bounty and that claim, having regard to her age and needs, and the capacity of the estate to meet it, taking into account the competing claim of any other eligible person, including the deceased's son, was that she be given a sufficient provision to enable her to acquire a residence. The sum that was to be provided will enable her to do that, but only by transferring the money she is spending on rent to spending on a mortgage. I would note that an attack made in the notice of appeal to the effect that a deed executed by the respondent whereby she abandoned any claim on the deceased's bounty was in any way determinative has been abandoned, and properly so, given that the deed was not submitted for the approval of the Family Court or the Supreme Court under the Family Provision Act. In my view, the judgment below has not been shown to be vitiated by any factual error and the discretion exercised by the Master has not been shown to be in error. I would propose that the appeal be dismissed with costs. Meagher JA I agree. Handley JA I also agree. Mason P The order of the court is the appeal is dismissed with costs. Appeal dismissed with costs Counsel for the appellant: I Wales Solicitors for the appellant: Clinch Neville Long Counsel for the respondent: P H Blackburn-Hart Solicitors for the respondent: Sean Wilkins & Co