Ilott v Mitson (1st Respondent) Michael Peter Lane (personal representatives of Melita Jackson Deceased) (2nd Respondent) The Blue Cross Animal Welfare Charity (3rd Respondent) Royal Society for The Protection of Birds (4th Respondent) Royal Society for The Prevention of Cruelty to Animals (5th Respondent)
| Jurisdiction | England & Wales |
| Judge | Lady Justice Arden,Lord Justice Ryder,Sir Colin Rimer |
| Judgment Date | 27 July 2015 |
| Neutral Citation | [2015] EWCA Civ 797 |
| Docket Number | Case No: B3/2014/2886 |
| Court | Court of Appeal (Civil Division) |
| Date | 27 July 2015 |
[2015] EWCA Civ 797
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT
FAMILY DIVISION
Mrs Justice Parker
FD06F00810
Royal Courts of Justice
Strand, London, WC2A 2LL
Lady Justice Arden
Lord Justice Ryder
and
Sir Colin Rimer
Case No: B3/2014/2886
Brie Stevens-Hoare QC and John Collins (instructed by Bar Pro Bono Unit) for the Appellant
Penelope Reed QC (instructed by Wilsons Solicitors) for the Third to Fifth Respondents
The First and Second Respondents did not appear and were not represented
Hearing date: 3 July 2015
OVERVIEW
This appeal is about the quantification of an award for maintenance pursuant to the Inheritance (Provision for Family and Dependants) Act 1975 ("the 1975 Act"). On 7 August 2007, DJ Million made an award of £50,000 in favour of the appellant, the adult child of the deceased. On 3 March 2014, Parker J ( [2014] EWHC 542 (Fam), [2015] 1 FLR 291) dismissed her appeal from that order. The issues on this appeal are whether the order of DJ Million should have been set aside for error, and, if so, and this court decides to re-exercise the discretion, whether reasonable financial provision can and should be made for the appellant's maintenance which relieves her everyday living expenses without affecting her state benefits. The latter is the crucial question of law, and I answer it in paragraphs 59 and 60 below.
The appellant's claim under the 1975 Act relates to the estate of her late Mother, Mrs Melita Jackson. She died on about 29 June 2004 leaving net estate valued at the date of the hearing before DJ Million at £486,000. Mrs Jackson left a will in which, subject to a legacy of £5,000 in favour of the BBC Benevolent Fund, she left her entire estate to be divided between The Blue Cross, the Royal Society for the Protection of Birds and the Royal Society for the Prevention of Cruelty to Animals ("the Charities"). The appellant was the only child of Mrs Jackson. She and her mother had been estranged for some 26 years and the appellant knew that Mrs Jackson intended not to leave her any of her estate in her will.
Under the 1975 Act, the court must, before proceeding to quantification, answer a threshold question, namely whether the will was not such as to make reasonable financial provision for the appellant. The judgment of DJ Million dated 7 August 2007 dealt with both the threshold point and quantification. He decided the threshold point in the appellant's favour. On appeal to the High Court, King J set aside his decision on that point but did not deal with the quantification issue. This court ( [2011] 2 FCR 1) (Sir Nicholas Wall P, Arden and Black LJJ) allowed an appeal against the order of King J, restored the order of DJ Million and remitted to the High Court an appeal against the decision of DJ Million on quantification. That was the appeal that was dismissed by Parker J.
The first two respondents are the executors of Mrs Jackson's will. They are not represented on this appeal. The Charities are also respondents to this appeal and are represented by Ms Penelope Reed QC.
In my judgment, for the reasons given below, the exercise of discretion by DJ Million was erroneous in law and should be set aside. Among other reasons, DJ Million assumed the consequential loss of state benefits. That assumption undermined the logic of his order since on this assumption (which was correct) she would lose in income terms a greater amount in state benefits that she would gain by the award made by his order.
I consider that reasonable financial provision can only be made for this appellant by providing her with the sum that she requires to buy her home. At the date of the hearing before the judge, the acquisition price was £186,000 but this has since been reduced to £143,000. I would order this sum and the amount of the reasonable costs of acquisition. I would additionally award her an option to take a further maximum capital sum of £20,000 to provide an immediate capital sum from which further income needs can be met. I have expressed the award in these terms in order to preserve her state benefits.
In this judgment, I shall
A. Set out the material provisions of the 1975 Act
B. Explain the history of the appellant's relationship with the deceased
C. Summarise the judgments of DJ Million and Parker J
D. Explain the award sought by the appellant
E. Set out the issues which require to be decided
F. Deal with Issue (1) (the error made by DJ Million) and conclude that the lump sum award of £50,000 must be set aside
G. Deal with Issue (2) (remit to High Court or re-exercise discretion) and conclude that this court should re-exercise the discretion as to quantification
H. Deal with Issue (3) (re-exercise of discretion) and conclude that the appellant should be awarded the cost of acquiring her home and the sum of £20,000
I. Restate my overall conclusion.
A. RELEVANT PROVISIONS OF THE 1975 ACT
Section 1 of the 1975 Act confers the right on, among others, a child of the deceased to apply for an order under section 2 of the 1975 Act if the will of the deceased or the intestacy rules do not make reasonable provision for her.
Section 1(2) of the 1975 Act provides that, in the case of a child, "reasonable financial provision" means:
such financial provision as it would be reasonable in all the circumstances of the case for the applicant to receive for his maintenance. (emphasis added)
This provision is, therefore, limited to awards of maintenance. By contrast awards under the 1975 Act for spouses or civil partners are not so limited. The 1975 Act does not define maintenance, but the parties did not seek to disagree with the DJ Million's ruling that any award had to meet income need and be "income-based". The Charities took us to the following passage in the judgment of Browne-Wilkinson J in Re Dennis dec'd [1981] 2 AER 140 at 145–6, which interprets the word "maintenance" in the 1975 Act and explains its relationship to standard of living:
It is now clearly established that claims under the Act by persons other than spouses are limited to maintenance. The applicant has to show that the will fails to make provision for his maintenance: see Re Coventry (deceased) [1979] 2 All ER 408, [1980] Ch 461; affd [1979] 3 All ER 815, [1980] Ch 461. In that case both Oliver J at first instance and Goff LJ in the Court of Appeal disapproved of the decision in Re Christie (deceased) [1979] 1 All ER 546, [1979] Ch 168, in which the judge had treated maintenance as being equivalent to providing for the well-being or benefit of the applicant. The word 'maintenance' is not as wide as that. The court has, up until now, declined to define the exact meaning of the word 'maintenance' and I am certainly not going to depart from that approach. But in my judgment the word 'maintenance' connotes only payments which, directly or indirectly, enable the applicant in the future to discharge the cost of his daily living at whatever standard of living is appropriate to him. The provision that is to be made is to meet recurring expenses, being expenses of living of an income nature. This does not mean that the provision need be by way of income payments. The provision can be by way of a lump sum, for example, to buy a house in which the applicant can be housed, thereby relieving him pro tanto of income expenditure. Nor am I suggesting that there may not be cases in which payment of existing debts may not be appropriate as a maintenance payment; for example, to pay the debts of an applicant in order to enable him to continue to carry on a profit-making business or profession may well be for his maintenance. (emphasis added)
Section 2 of the 1975 Act provides in material part:
2 (1) Subject to the provisions of this Act, where an application is made for an order under this section, the court may, if it is satisfied that the disposition of the deceased's estate effected by his will or the law relating to intestacy, or the combination of his will and that law, is not such as to make reasonable financial provision for the applicant, make any one or more of the following orders —
(a) an order for the making to the applicant out of the net estate of the deceased of such periodical payments and for such term as may be specified in the order;
(b) an order for the payment to the applicant out of that estate of a lump sum of such amount as may be so specified;….
When determining whether the will is not such as to make reasonable financial provision for the claimant, the court must have regard to the factors set out in section 3, which are the same factors as those to which it must have regard when determining whether the will makes adequate provision for the claimant. Section 3, so far as applicable, provides:
3 (1) Where an application is made for an order under section 2 of this Act, the court shall, in determining whether the disposition of the deceased's estate effected by his will or the law relating to intestacy, or the combination of his will and that law, is such as to make reasonable financial provision for the applicant and, if the court considers that reasonable financial provision has not been made, in determining whether and in what manner it shall exercise its powers under that section, have regard to the following...
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