Harlow v National Westminster Bank Plc and Others
| Jurisdiction | England & Wales |
| Judge | LORD JUSTICE NOURSE,LORD JUSTICE HENRY,SIR JOHN MAY |
| Judgment Date | 13 December 1994 |
| Judgment citation (vLex) | [1993] EWCA Civ J1213-4 |
| Docket Number | FAFMF 93/0780/F |
| Court | Court of Appeal (Civil Division) |
| Date | 13 December 1994 |
[1993] EWCA Civ J1213-4
(Mr. Justice Wall)
Before: Lord Justice Nourse Lord Justice Henry and Sir John May
FAFMF 93/0780/F
IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT OF JUSTICE
(FAMILY DIVISION)
MR. B. BLAIR QC and Mr. P. TEVERSON (instructed by Taylor Joynson Garret of London EC4) appeared on behalf of the Appellants
MR. I. LEEMING QC and MR. N. BIRD (instructed by Tickle Cross Hall of St. Helens, Merseyside WA10 1EE) appeared on behalf of the Respondent
The main question here is whether, on an application by an adult child of the deceased for reasonable financial provision under the Inheritance (Provision for Family and Dependants) Act 1975, the obligations and responsibilities to which the court must have regard pursuant to section 3(1)(d) can, as Mr. Justice Wall has held, include obligations and responsibilities which the deceased failed to discharge during the child's minority, in this case many years beforehand.
The deceased was Derrick Wilfred Charles Jennings, who was born on 17 October 1917. He was an electrician by trade. On 7 February 1942 he was married to Peggy Olga Dean. They had one child, the plaintiff David Robert Derrick Jennings (now Harlow), who was born on 20 October 1943 and is 50 years old. In June 1945 the deceased and his wife separated and she and the plaintiff went to live with her parents. In 1947 the deceased and his wife were divorced. She remarried in 1948, becoming Mrs. Harlow, and in September 1949 she changed the plaintiff's surname from Jennings to Harlow by deed poll.
Between the separation in June 1945 and July 1947, when the decree nisi was granted, the deceased visited Mrs. Harlow and the plaintiff on about three or four occasions. He never made any financial provision for her. Although she asked for financial provision to be made for the plaintiff, the only thing the deceased ever did for him was to send him ten shillings in a birthday card on his second birthday. Mrs. Harlow never saw the deceased again after July 1947. He had no contact of any kind with the plaintiff who, from the age of 4, was brought up by his mother and stepfather. They themselves had one child, a son born in 1952. Mr. Harlow died in 1975, leaving only a modest estate.
The judge found as a fact that there had been no good reason for the deceased's failure to support the plaintiff or seek contact with him, and that as a consequence the deceased failed to honour his moral and financial obligations towards the plaintiff during the latter's minority. That is a finding of great importance in the case.
The further facts, which I take mainly from the judgment of the judge, can be stated rather more briefly than was necessary in the court below. In about 1988 the plaintiff began to make efforts to find the deceased, but it was not until the end of August 1990 that he reached a point where the Department of Social Security had made an offer to forward a letter to the deceased. The plaintiff duly wrote him a letter dated 4 September, which was forwarded by the Department on 10 September. By what the judge described as an unhappy irony, the deceased died on 5 September 1990 without having received the letter. He was 72 years of age. He had never married again. There had been a lady with whom he had lived for many years, but she had predeceased him. Apart from the plaintiff, there was nobody who had the necessary status to make an application under the 1975 Act.
By his last will dated 18 January 1989 the deceased, having appointed National Westminster Bank PLC ("the Bank") to be the executor and trustee thereof, bequeathed 15 pecuniary legacies amounting in the aggregate to £170,000 and, subject thereto, gave his net residuary real and personal estate to the Blue Cross Animal Hospital, the Guide Dogs for the Blind Association and Age Concern England (National Old People's Welfare Council) in equal shares. The pecuniary legacies, of which the two largest were of £40,000 each and the six smallest of £500 each, were given either to remote relations by marriage or to friends of varying degrees of closeness to the deceased. The circumstances of most of the pecuniary legatees were examined by the judge, who summarised the position by saying that there was no evidence that any of the beneficiaries (whether pecuniary or residuary legatees) had a particular claim on the bounty of the deceased. It is not suggested that that was not a fair assessment of the position.
The deceased's will was proved in the Brighton District Probate Registry on 26 April 1991, the net value of his estate being stated for that purpose to amount to £255,859. The estate consisted almost entirely of quoted securities then worth about £250,250, which subsequently increased in value. At the hearing before the judge the estate was taken to be worth about £300,000 after payment of inheritance tax (excluding further tax payable as a consequence of any order made in favour of the plaintiff).
Finally, in dealing with the facts, I turn to the plaintiff and his circumstances. Having been brought up by his mother and stepfather in what the judge described as modest circumstances in London, he left school in 1959 at the age of 15, after which he had a number of low paid clerical employments until he moved to the north of England in 1964. In April 1965 he was married. He and his wife have two daughters, now aged about 25 and 21 respectively.
In his judgment the judge described the plaintiff's business activities from 1966 onwards. Since 1990 he has had two companies, Harlow Hire Ltd., which is engaged in the business of plant hire to the building industry, and Harlow Marquees Ltd., which is engaged in the business of hiring marquees. The judge said:
"I have seen accounts of both companies, which provide the Plaintiff's means of livelihood. Both have survived the recession and both are moderately successful. The Plaintiff is a 60% shareholder in each: the remaining shares are held by his wife. In 1989 Harlow Hire Limited was able to declare a dividend of £84,000 on a turnover of just under £600,000 and a profit after tax of £101,867, in addition to directors' renumeration and other costs including pension of £34,182: in the year end September 1992 the turnover had shrunk to £376,314 and the profit on ordinary activities after taxation to £19,735. No dividend was declared and the Plaintiff's renumeration reduced to £24,000. However, the company was able to build and thus acquire a store for use by Harlow Marquee Hire Limited at a cost of £43,654 but which is worth, in fact, in the order of £80,000.
The Plaintiff told me that of the two companies, Harlow Marquee Hire Limited had in fact fared better during the recession. The accounts show an improvement from a net loss of £27,688 for that year ended to a modest profit £2,167 for the year ended 31st March 1991, although the balance sheet remains in deficit."
Having made further reference to the two companies and their balance sheets, the judge continued:
"Suffice it to say for present purposes that due, I have no doubt largely if not entirely to the Plaintiff's efforts, the two companies provide the Plaintiff and his family with a comfortable standard of living. Furthermore, there is no evidence that the Plaintiff is likely to encounter financial difficulties in the future providing he maintains his health and his capacity to work."
The plaintiff and his wife are the joint owners of their own house at Mere in Cheshire. It has four bedrooms, an outdoor swimming pool and some three and a half acres of land which are rented to a local farmer for grazing. The property was acquired in 1986 for £125,000. In an affidavit sworn in August 1991 the plaintiff valued it at £400,000 to £450,000, but in another sworn in April 1993 he said that it had probably reduced in value somewhat from that figure. The property is subject to an instalment mortgage, originally for £50,000, in favour of Barclays Bank repayable over a period of 20 years from 1986, in respect of which the monthly repayments were approximately £475 at the time of the hearing before the judge. The principal sum then outstanding was about £43,400. Those figures were not available at the hearing below. The property is also subject to a second charge to secure an overdraft facility of £90,000 in favour of the marquee company. No demand has been made on the plaintiff in respect of that contingent liability.
It is a somewhat unusual feature of the case that the plaintiff has not itemised his outgoings and set them against his income. When asked in cross-examination what he did with his income, he said that he paid his mortgage and that the rest went on general living expenses, including some provision for his daughters who were both living at home. He said that he and his wife took foreign holidays, possibly two a year, if the business was successful enough to allow them to do so. The judge said that the plaintiff's standard of living did not strike him as in any way extravagant or unreasonable. He pointed out, however, that the plaintiff had not to date made any substantial provision for his retirement. He had only one...
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