The Inheritance (Provision for Family and Dependants) Act 1975 is, to many people, a controversial piece of legislation. That is so even now, all these years after it was passed. The controversy arises from the fact that the Act allows certain people to seek financial provision from the estate of a deceased person, even if that were to be contrary to the wishes of the deceased. Surely, some would say, a person has the right to decide who should get their estate?
Well, no. Parliament decided that claims can be made against an estate by people who have been left nothing, or with insufficient provision, by the deceased. But only in certain specified and limited circumstances. One of the limitations upon seeking provision under the Act is that any claim should usually be made within a certain time limit, the rationale being that the administration of an estate should not be unduly delayed by late claims.
The time limit is six months from the grant of probate. The grant of probate is usually required before the estate can be distributed between the beneficiaries. Any claim made after that time limit has expired can only proceed with the permission of the court.
In the recent case Cowan v Foreman & Others the claim was made, by the widow of the deceased, nearly 17 months after the six-month period had expired. The widow sought the permission of the court to proceed with her application, but this was refused by Mr Justice Mostyn. The widow then appealed, to the Court of Appeal.
I don’t need to go into any great detail as to the background of the case. The deceased and the widow began their relationship in 1991 but were not married until February 2016, shortly after the deceased was diagnosed with cancer. The deceased died in April 2016, leaving an estate of some £29 million. He had made a will in March 2016, under which the widow was to be the principal beneficiary of two discretionary trusts. The grant of probate was taken out in December 2016.
The widow had been under the impression that she was going to receive outright provision from the estate, rather than for her to be the beneficiary of two trusts. This left her with no real security, and there was a concern that she was not being provided with enough funds to live on. In the circumstances, she was advised that she was entitled to make a claim under the Inheritance Act. She did not however make the claim immediately, instead trying to work with the trustees to come to a satisfactory arrangement. Eventually negotiations between the widow and the trustees broke down, and the widow issued her claim, in November 2018.
In February 2019 Mr Justice Mostyn refused the widow permission to proceed with her claim out of time. He found that the claim had no real prospect of success, and that the widow had not demonstrated any good reasons for what he described as the “very substantial delay”.
Giving the leading judgment of the Court of Appeal Lady Justice Asplin found that the claim did have a real prospect of success having regard, amongst other things, to the length of the relationship, and the size and nature of the estate. As to the delay, she found that there were good reasons for this, for example it was not until payments began from the trusts in April 2017 that the reality of the widow’s situation became clear. Thereafter negotiations were taking place, and the claim was only issued when they broke down. There was also a four month period during which the parties had agreed to a ‘moratorium’ for the purpose of negotiation – i.e. the trustees would not take a point on the six month deadline having passed. Unlike Mr Justice Mostyn, Lady Justice Asplin indicated that such moratoria should be encouraged.
In the circumstances the appeal was allowed. Rather than remit the case back to the court below to decide whether permission should be given, the Court of Appeal considered the matter and decided that, in the circumstances of the case, it was appropriate to give permission to commence proceedings out of time. Lady Justice Asplin said that the claim had a good prospect of success, the entire 17 month period could be properly explained, and this was not a case in which the widow had merely changed her mind, a considerable time after having acquiesced in the workings of the trusts.
The full judgment is here.
