13th March 2017
Appeal by separated wife against an award under the Inheritance (Provision for Family and Dependants) Act 1975 in favour of the deceased’s cohabitant
- The appellant was the wife of the deceased, Mr Martin, but the parties were separated. His will, written in 1986, left the entirety of his estate to her.
- The respondent lived with Mr Martin as his wife at 20 Coburg Road. They owned this house as tenants in common with shares of 50% each.
- When Mr Martin died, his interest passed by virtue of the will to the appellant. In 2014, the respondent commenced proceedings under the Inheritance (Provision for Dependants) Act 1975 for reasonable financial provision out of his estate.
- HHJ Gerald provided that the respondent was a person falling within section 1(1)(ba) of the 1975 Act, and as such was entitled to an order under section 2. Section 1(1)(e) was not considered, but it was indicated that she would have fallen under this section.
- He was satisfied that the disposition made by the will did not make reasonable financial provision for the respondent.
- The trial judge held that reasonable financial provision included the transfer of Mr Martin’s interest in 20 Coburg Road to the respondent.
- Permission to appeal was granted on the following grounds:
- The conclusions reached as to the respondent’s financial needs were unsupported by proper/admissible evidence or were contradicted by her own evidence;
- The relief granted was substantially in excess of what was necessary to meet her needs;
- The respondent’s interest in another property, 60 Slade Road, had been wrongly disregarded and was an asset available to meet her needs;
- The appellant’s evidence had been wrongly dismissed as her evidence had not been challenged during cross examination.
- Both parties requested Marcus Smith J to re-visit the exercise of discretion himself if necessary as a re-trial would be disproportionately expensive.
- The question of whether the deceased’s estate made reasonable financial provision for maintenance is a binary value judgment.
- Discretion is then applied when considering what financial provision should be made.
- After Mr Martin died, his accounts vested in the appellant alone and therefore payments made to the respondent ceased. The judge was entitled to infer a contribution by Mr Martin to the respondent’s household and review her figures in that light. Therefore, he was entitled to reach his conclusions as to the respondent’s financial needs.
- 60 Slade Road was a significant financial resource available to the respondent, as she could exercise a power of sale as a matter of law, and there was no good reason to leave the property entirely out of account. Her interest was worth £135,000 and the evidence on which it was disregarded was flimsy. Although the court had the power to disregard the asset, it should not have done so simply because sale would have evicted the respondent’s sister in circumstances where the asset was so valuable.
- HHJ Gerald was wrong to disregard the appellant’s evidence where it was not challenged during cross-examination.
- Because HHJ Gerald understated the respondent’s position and overstated the appellant’s, the relief he granted was excessive. Further, he failed to follow the approach laid down in the 1965 Act.
- The judge failed to consider the appropriate test for determining what “reasonable financial provision” would be for the respondent.
- The judge applied the wrong test in relation to the appellant; he had to assure himself that as the sole beneficiary of the will, she would have reasonable financial provision when considering her financial resources and needs.
- Having ascertained what would be “reasonable financial provision” for both parties, the judge should have considered whether these interests could both be satisfied by the estate.
- The conclusion that reasonable financial provision had not be made was still valid on the facts.
- Marcus Smith J held that the respondent should be entitled to a life interest in 20 Coburg Road, reverting to the appellant on her death.