Cunliffe v Fielden and Others
| Jurisdiction | England & Wales |
| Judge | Lord Justice Wall,Lord Justice Mummery,Lord Justice Moore-Bick |
| Judgment Date | 06 December 2005 |
| Neutral Citation | [2005] EWCA Civ 1508 |
| Docket Number | Case No: B4/2005/0431 |
| Court | Court of Appeal (Civil Division) |
| Date | 06 December 2005 |
[2005] EWCA Civ 1508
Lord Justice Mummery
Lord Justice Wall and
Lord Justice Moore-Bick
Case No: B4/2005/0431
IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM
HIS HONOUR JUDGE HOWARTH
CHANCERY DIVISION
MANCHESTER DISTRICT REGISTRY
Royal Courts of Justice
Strand, London, WC2A 2LL
Miss Penelope Reed (instructed by Messrs. Cobbetts—Solicitors) for the Appellant
Miss Judith Bryant (instructed by Messrs Aughton Ainsworth—Solicitors) for the Respondent
Mr. John Fielden and Ms. Kathryn Graham are the executors of the will of John Derick Cunliffe deceased (hereinafter called "the deceased"). They appeal against an order made by His Honour Judge Howarth, sitting as a judge of the Chancery Division in Manchester on 15 February 2005 in proceedings instituted by the deceased's widow, Monika Cunliffe under section 1(1)(a) of the Inheritance (Provision for Family and Dependants) Act 1975 (the 1975 Act). The order was that Mrs. Cunliffe be paid a lump sum of £800,000 out of the deceased's estate in place of her interest as an object of the discretionary trust created by the deceased's will. The lump sum was to be paid as to £200,000 within 28 days, but the order is silent as to the payment of the balance. The £200,000 has been paid. There are other ancillary orders, which are not material to this appeal.
The judge refused the executors permission to appeal. The appellants' notice was filed one day out of time on 2 March 2005, and on 26 April 2005, Thorpe LJ, on the papers, directed that the appellants' application for permission to appeal should be listed for oral hearing on notice to Mrs. Cunliffe, with the appeal to follow immediately if permission was granted.
At the outset of the hearing before us on 25 October 2005, we extended time for the filing of the appellants' notice and gave permission to appeal. Having heard full argument, we reserved our decision.
The deceased's will
The deceased died, domiciled in England and Wales, on 11 November 2002 at the age of 66. Probate was granted out of the District Probate Registry of the High Court of Justice at Manchester on 11 June 2003. The estate was valued for probate purposes at £1,399,543.
The deceased's will was executed on 25 October 2001 (the will). It is expressed to have been made in contemplation of his marriage to Mrs. Cunliffe, which took place four days later on 29 October 2001. By his will, the deceased left his residuary estate on discretionary trusts for a class of beneficiaries which included; (1) his wife; (2) the children and remoter issue of his brother Bernard Cunliffe who had died on 6 August 2001 (this class including Bernard's son Victor Cunliffe, who in turn has three infant children); (3) his gardener, George Isherwood; (4) a friend, Caroline Perry; (5) Diana Cunliffe, Bernard's widow; (6) the employees of Worsley Hall Nurseries and Garden Centre, which was the family business; and (7) such additional beneficiaries as his trustees should appoint.
The figure which the judge took as the net value of the estate for the purposes of the proceedings before him was £1.4 million. Shortly before the hearing, the executors made an open offer to Mrs Cunliffe to appoint a lump sum of £200,000 under the terms of the deceased's will settlement. That was rejected by Mrs. Cunliffe, but the fact that it was made demonstrates the executors' acceptance, both at trial and before us, that the deceased had not made reasonable financial provision for his widow by making her one of a discretionary class of beneficiaries. The question, accordingly, was how much she should receive from the deceased's estate.
The facts
These are within a relatively narrow compass, although some time appears to have been taken up before the judge investigating Mrs. Cunliffe's relationship with and conduct towards the deceased. In the event the judge, whilst finding that Mrs Cunliffe had been "at cross purposes" with the other beneficiaries of the deceased's will, came to the conclusion that conduct on all sides was irrelevant. There is no appeal against that finding, or indeed against any of the judge's findings of fact.
Mrs. Cunliffe is now 52. She was born on 19 September 1953. She is German by origin, but has lived and worked in this country for more than 20 years. She has the advantage of being bilingual in German and English. A copy of her curriculum vitae is in our papers. This shows that she has undertaken a wide variety of different employments over the years, including caring for three different elderly people between March and October 1998.
The circumstances in which Mrs. Cunliffe and the deceased met are set out in her first witness statement. In March 2001, Mrs Cunliffe saw an advertisement in the Lady magazine placed by the deceased, who was advertising for a housekeeper. She was interviewed by the deceased on 1 April 2001. Because Mrs. Cunliffe had had to travel from the South of England, the deceased put her up overnight, and asked her to start working for him immediately. She says she began work on 4 April 2001, and remained the deceased's housekeeper until June of that year, when the deceased booked a holiday for them both and they began to cohabit as man and wife.
As I have already related, Mrs. Cunliffe and the deceased were married on 29 October 2001. She was then 48, and recently divorced. The deceased was a bachelor, then aged 65. It will be immediately apparent that the marriage was of short duration, lasting only some 12 months from its celebration to the date of the deceased's death.
Mrs. Cunliffe's circumstances were modest when she married the deceased. She owned a small property near Brecon, which she sold. The proceeds were some £22,600. Of that sum £20,000 was paid into accounts in joint names. This apart, she does not appear to have had any assets of substance, nor any independent income. She became financially dependent on the deceased, initially as housekeeper, and then as wife.
By contrast, the deceased was a moderately wealthy man. He had been born on 22 January 1936. He suffered from a physical disability which it seems had been caused during his birth or perhaps childhood. He appears to have spent his working life in the family business, Worsley Hall Nurseries and Garden Centre (the Garden Centre). The family home was Chaddock Hall at Boothstown, Worsley, near Manchester. The deceased lived there with his parents until his mother died in 1988. Thereafter he lived with his father, who died on 20 May 1999.
The deceased's father, John Cunliffe, left Chaddock Hall to the deceased and after certain pecuniary legacies left the residue of his estate on discretionary trusts for a class including his sons, remoter issue and Wayne Broadbent, an employee at that time of the Garden Centre. One half of John Cunliffe's partnership interest in the family business was appointed out to Mr. Broadbent, who became a partner in it. Thereafter, one half of John Cunliffe's residuary estate was appointed out to the deceased, and the other half was held on trust for Bernard Cunliffe and his family.
An unusual aspect of the family is that Bernard Cunliffe was deaf and dumb as are his wife, Diana, their son Victor, as well as one of Victor's three children. This plainly has a relevance when section 3(1)(c) and (d) of the 1975 Act come to be considered.
The value of the estate
As I have already stated, the figure taken by the judge for the value of the net estate of the deceased was £1,400,000. The costs of the proceedings amounted to approximately £250,000. The judge was rightly critical of this figure which, he said, would have horrified the deceased "more than anything else". The Inheritance Tax (IHT) payable on the estate as it stood had been calculated at £352,822, although it was again common ground that any lump sum payable to Mrs. Cunliffe would attract the surviving spouse's exemption, and thus reduce the IHT burden.
The principal assets in the estate comprised investments of various kinds, Chaddock Hall, valued at some £325,000 and the deceased's share in the family business, which was in the process of being sold to Mr. Broadbent. It is valued in the latest accounts shown to us as a debt of £337,016, being paid by instalments. No point was taken at the hearing about liquidity, and it was clear that the estate could afford to meet any reasonable order for a lump sum payment without difficulty.
Money accruing to Mrs. Cunliffe on survivorship
It was also common ground that Mrs. Cunliffe had benefited by survivorship in relation to a number of funds and policies in the joint names of herself and the deceased. The judge assessed this sum at £226,000, which did not form part of the estate. He also recognised that Mrs. Cunliffe had been obliged to spend some of this money on costs and living expenses. That apart, however, she did not have any assets of substance, nor any income. It was common ground that she had an earning capacity, the extent and relevance of which I will discuss in due course
The statutory provisions
I set out the provisions of the 1975 Act only in so far as they apply to the instant case, and as they stood prior to their amendment by the provisions of the Civil Partnership Act 2004.
" 1.- Application for financial provision from deceased's estate
(1) Where after the commencement of this Act a person dies domiciled in England and Wales and is survived by any of the following persons—
(a)...
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