Analysis
This was a claim for reasonable financial provision under the Inheritance (Provision for Family and Dependants) Act 1975 by the widow of Nirupam Goenka (the deceased). The deceased was a member of a statutory pension scheme for NHS employees. The deceased and the claimant had been married for 15 years and together had three sons, aged between 11 and 16, who were represented in these proceedings by their litigation friend, the Official Solicitor. The claimant and the deceased entered into divorce proceedings and a decree nisi of divorce was made on 15 August 2012. On 7 September 2012 the deceased made his last will. On 17 September 2012 he committed suicide.
The 7 September 2012 will appointed the first and second defendants as the deceased’s executors. The claimant received the personal chattels absolutely, as well as a property subject to a mortgage. The deceased gave to his executors and trustees the proceeds of a Clerical Medical flexible mortgage plan on trust to apply the same in redemption of the mortgage. Although this was not effective, the effect of the will was that the claimant received the former matrimonial home free of mortgage. He made two pecuniary legacies to charities of £1,000 each. The residue of the estate was a flexible discretionary trust in favour of the claimant and the deceased’s descendants, with overriding powers of appointment. He left a detailed formal letter of wishes, indicating a desire that, subject to various qualifications, £60,000 should be held for his widow to provide her with an income and, subject to that, to divide the capital, and pass it to the three children when they reached 25. However, the trustees had complete discretion to pay her a lesser sum.
The first defendant was the father of the deceased. He was nominated by the deceased to receive payment of a death in service benefit of £201,000 under the National Health Service Pension Scheme Regulations 1995. The claimant asserted that the death in service benefit was to be treated, for the purposes of the 1975 Act, as part of the deceased’s net estate, by virtue of s8(1) of the 1975 Act. This provides that ‘where a deceased person has in accordance with the provisions of any enactment nominated any person to receive any sum of money or other property on his death and that nomination is in force at the time of his death, that sum of money… or that other property, to the extent of the value thereof at the date of the death of the deceased… shall be treated for the purposes of this Act as part of the net estate of the deceased’ subject to deductions of tax.
Held
-
- 1) The word ‘enactment’ in s8(1) included secondary legislation as well as primary legislation. There was no good reason for limiting the meaning of the phrase in that way.
- 2) Therefore the nomination, which was made pursuant to a rule made by way of statutory instrument made under a power conferred by a statute, was within the meaning of s8(1) as it was made ‘in accordance with the provisions of any enactment’. The lump sum death in service payment fell to be treated as part of the net estate.
- 3) Taking into account the death in service payment, the net estate was slightly over £700,000. In the circumstances of the case, including the 15-year duration of the marriage, the claimant’s age and contributions to the welfare of the family, and her earning capacity, an award of a lump sum of £67,670 was appropriate, reflecting the value of the deceased’s savings. It was not appropriate that receipt of this sum should be the subject of the trustees’ discretion. This award should come out of the death in service payment.
4) The costs of the claimant should be assessed on the standard basis and should be paid out of the death in service payment sum. The order of payment should be (1) the award to the claimant, (2) the costs of the estate properly incurred, (3) the costs of the Official Solicitor on the indemnity basis, and then (4) the costs of the claimant on the standard basis. Insofar as the death in service payment was insufficient to meet any of those costs, then the balance should be borne out of the estate generally.
HHJ HODGE QC: [1] Yesterday, from about 10.30am until about 4.40pm, I heard the trial of a claim under the Inheritance (Provision for Family and Dependants) Act 1975. This is my extemporary judgment. [2] The claim raises an interesting, and apparently novel, point as to the true scope of s8(1) of the 1975 Act: is …Continue reading "Goenka v Goenka [2014] EWHC 2966 (Ch)"