Analysis
A died on 6 May 2014. A reconstituted will admitted to probate left A’s only child (L) her entire estate comprising principally of her home (the property). A had lived in the property with her partner (S) for almost 20 years. S continued to live there after A died.
L, as executrix of A’s estate, issued a claim for possession of the property, damages for trespass and mesne profits against S. S issued an application under the Inheritance (Provision for Family and Dependants) Act 1975. Both claims were heard before Recorder Christopher Gardner QC.
There was no real dispute as to the relevant facts. A and S had lived together as husband and wife. There was never any understanding that he would have any interest in A’s estate, nor did he claim any. Nor was there any understanding that he would be able to stay in the house or able to purchase it in the event of A’s death. S accepted that he had the means to buy the house or alternative accommodation if necessary. S and A shared the household expenses and he paid for the oil which was their largest outgoing. L and her husband had asked S to sign a declaration that he did not wish to make any claim for the house, which he signed. He also signed a replacement when the first version was lost. S said that he would be very stressed to move from the house where he had lived for 20 years and had a doctor as a neighbour. He had some medical issues.
L’s views regarding the property varied from time to time. L’s husband had offered for S to purchase the property for £425,000 which was rejected as an overvalue. L wanted the property to be sold on the open market for full market value. She said she was wiling to sell the property to the highest bidder, including S, if he was that person.
The recorder ordered that S should be given an option to have the property transferred to him for £385,000. L was to transfer the property to S within 28 days of payment. L to pay S’ costs. L appealed.
The grounds of appeal were:
- (a) the Recorder failed to apply the law applicable to S’s claim under the Act in accordance with either judicial guidance or the facts, and consequently came to the utterly wrong conclusions in respect of the merits. In particular, L argued that the Recorder failed to appreciate that an Act whose purpose is to enable qualifying applicants to ask for ‘reasonable financial provision’ to be made at the expense of an estate necessarily imposed as a practical requirement an obligation on S to satisfy the Court that he had financial needs which, unreasonably, were not met by A’s will. S had no financial need to continue to live in the property and the fact he wished to do so to avoid stress of moving did not render it unreasonable that no provision was made for him to remain there.
- (b) the Recorder fell into error by treating S’s claim as a claim under s1(1)(e) of the Act, finding merit in that he was maintained by A without paying sufficient heed to the evidence or considering the necessary balancing exercise;
- (c) the Recorder exceeded his powers by making an order which he had no power to make. L argued that (i) the Court cannot use its powers under s2 to order an estate asset be transferred at full market value and (ii) that if L was to be obliged to transfer the property to S, the Recorder should have ordered S to pay for his occupation to the date of transfer.
Held:
- 1) Regarding (b), it seemed clear in the context that the recorder did not treat S’s claim as having applied under s1(1)(e), he was essentially making the point that, in his view, the fact that the will did not contain anything to allow S to remain at the property meant that it failed to make reasonable financial provision for his maintenance.
- 2) Regarding (a), this raised questions including: will someone who is financial well off necessarily be ineligible for ‘financial provision’ for his ‘maintenance’? The word ‘maintenance’ suggests the provision of assistance to enable a person to meet the requirements of his daily life. In principle, however, ‘maintenance’ is not necessarily confined to support with a person’s ‘costs of … daily living’ (Re Dennis (Deceased) [1981] 2 All ER 140 referred to). It is capable of referring to other forms of assistance with the requirements of daily life. A person can potentially (albeit only very rarely) be in need of ‘financial provision’ for his ‘maintenance’ without being in any way short of money: his money may not be able to secure him what he requires. There appears to be no absolute bar on the provision of something for full consideration representing ‘financial provision’ for a person’s ‘maintenance’. The Recorder did not make an error of principle or otherwise arrive at an impermissible conclusion in this regard. His decision was one he was entitled to reach.
- 3) Regarding (c)(i), as the recorder was entitled to decide that, S’s financial means notwithstanding, A’s will failed to make reasonable financial provision for him, it must have been open to the recorder to give effect to his view by exercising powers under s2 to compel the transfer from L to S.
- 4) Regarding c(ii), the Recorder dealt with this request in a supplemental judgment principally concerned with costs. Whilst judgment on this point did not contain detailed explanation of the Recorder’s thinking, the sums at stake were modest and several matters can be said to have made it inappropriate or unnecessary for any provision to be made in respect of the period up to the transfer. The price of £385,000 was generous, being more than the value attributed by a jointly-appointed expert. Thus it was understandable that the recorder saw no need to compensate L further.
- 5) The recorder was entitled to exercise his discretion in the way that he did.
- 6) Appeal dismissed.
- 7) The challenge to the Recorder’s costs order to be considered after this judgment is handed down.
Continue reading "Lewis v Warner [2016] EWHC 1787 (Ch)"