 The Patersons had two children, Grace (born in 1904) and Hugh (born in 1906).Paterson had been previously engaged to Sarah Riley for eight years, but this was abruptly called off in 1895 following a visit to her at Dagworth Station in Queensland where she was visiting the Macpherson family.It was here that Paterson met his fiancée's best friend from school days, Christina Macpherson, who composed the music for which he then wrote the lyrics of the famous "Waltzing Matilda".