Margaret Rose Kerr (ap) Against Paul Mangan And Others
| Jurisdiction | Scotland |
| Judge | Lady Smith,Lord Drummond Young,Lord McGhie |
| Judgment Date | 25 July 2014 |
| Neutral Citation | [2014] CSIH 69 |
| Docket Number | XA77/13 |
| Published date | 25 July 2014 |
| Court | Court of Session |
| Date | 25 July 2014 |
| EXTRA DIVISION, INNER HOUSE, COURT OF SESSION
| |
|
| [2014] CSIH 69 |
| Lady Smith Lord Drummond Young Lord McGhie
| XA77/13
OPINION OF LADY SMITH
in the cause
by
MARGARET ROSE KERR (AP) Pursuer and Appellant;
against
(FIRST) PAUL MANGAN, (SECOND) CHARLES MANGAN, (THIRD) ANTHONYJOSEPH MANGAN, (FOURTH) MARY THERESA MANGAN and (FIFTH)ELIZABETH GALLACHER Defenders and Respondents:
_______________
|
Act: MacColl; Anderson Strathern LLP
Alt: Leighton; Russel + Aitken LLP (Second Defender and Respondent)
25 July 2014
Introduction
[1] Anthony Mangan cohabited with Margaret Kerr for twenty–two years before he died on 10 August 2007 but did not marry her. He did not make a will. However, the law had changed before he died and Ms Kerr was able to apply to the court for an order for money to be paid to her out of the net intestate estate of the deceased[1], even although she was not a surviving spouse. The sheriff awarded her the sum of £5,502 but the sheriff principal, on appeal, decided that a house and land in Ireland which was owned by the deceased was not part of the net intestate estate. The result was that the award was reduced to nil. Ms Kerr now appeals to this court.
The Issue
[2] Does “net intestate estate”, in terms of section 29 of the Family Law (Scotland) Act 2006 (“the 2006 Act”), include heritable property outside this jurisdiction? If it does not, the sheriff principal was correct to reduce the award to nil. If, on the other hand, it does include such property, then the appellant’s claim will have to be remitted to the sheriff to consider, of new, what award, if any, to make. I am persuaded, for the reasons explained below, that the deceased’s net intestate estate did not include his Irish property and that the result is, therefore, that no money is payable to the appellant.
Background facts
[3] The facts were not disputed.
[4] The deceased was domiciled in Scotland and lived in Scotland. He died intestate. The first to fourth defenders are the deceased’s children and are his nearest surviving relatives. There was no surviving spouse; he was a widower. The requirements of section 29(1) of the 2006 Act were, accordingly, met and so the court had power to make an order to the appellant for payment of a sum of money, or for transfer of property, out of the net intestate estate of the deceased. It is self-evident that the court could not do so if there was in fact no net intestate estate.
[5] The estate belonging to the deceased at the time of his death was:
- An account with the Royal Bank of Scotland with a credit balance of £8,592.05;
- An account with the Ulster Bank with a credit balance of 4,708.16 euros; and
- Four small plots of land and a bungalow in Roybingham, County Mayo, together worth not less than 200,000 euros in January 2009.
Debts due by the estate were:
- Funeral expenses of £6,052.23;
- Capital Acquisition Tax (an Irish tax) of 23,067.23 euros;
- Interest on a further Irish tax liability amounting to 9,899 euros;
- An account for agricultural services in the sum of 272.05 euros; and
- Fees for the administration of the deceased’s estate in Ireland amounting to 5,383.42 euros.
If the Irish land and buildings are excluded from the calculation of the net intestate estate, the debts would exhaust the moveable property and there would no assets from which an order under section 29 of the 2006 Act could be made.
The Family Law (Scotland) Act 2006: provision for surviving cohabitants
[6] The answer to the issue in this case depends on the meaning of section 29. Before examining its precise wording, however, it is important to understand the broad context of the legislation. Before the 2006 Act came into force, a deceased’s cohabitant had no right to claim on an intestate estate. Likewise, neither cohabitant could seek any form of financial provision from the other if their relationship came to an end during lifetime. The provisions of the 2006 Act enabling such claims to be made have, accordingly, been referred to as being novel[2]. They are.
[7] The long title of the 2006 Act states that it is “to make provision conferring rights in relation to property, succession and claims in damages for persons living, or having lived together as if husband and wife or civil partners”.
[8] As regards “persons living”, section 28 of the 2006 Act entitles a cohabitant to apply to the court for payment of a sum of money by his or her partner where their relationship has come to an end other than by death. When considering what award to make, the court has to take fair account of the economic advantage derived by either party from the contributions by the other and the economic disadvantage suffered by either party in the interests of the other; those provisions are instantly recognisable as reflecting one of the five principles that apply to the determination of a claim for financial provision on divorce[3]. The court has to approach the task set for it by section 28 in the manner explained by the Supreme Court in the case of Gow v Grant 2013 UKSC 29, that is, looking at matters broadly and applying an underlying principle of fairness.
[9] Section 29 of the 2006 Act is different. It provides for what may happen where one of two cohabitants dies intestate:
“29 Application to court by survivor for provision on intestacy
(1) This section applies where¾
(a) a cohabitant (the ‘deceased’) dies intestate; and
(b) immediately before the death the deceased was¾
(i) domiciled in Scotland; and
(ii) cohabiting with another cohabitant (the ‘survivor’).
(2) Subject to subsection (4), on the application of the survivor, the court may−
(a) after having regard to the matters mentioned in subsection (3), make an order¾
(i) for payment to the survivor out of the deceased’s net intestate estate of a capital sum of such amount as may be specified in the order;
(ii) for transfer to the survivor of such property (whether heritable or moveable from that estate as may be so specified;
(b) make such interim order as it thinks fit.
(3) Those matters are¾
(a) the size and nature of the deceased’s net intestate estate;
(b) any benefit received, or to be received, by the survivor¾
(i) on, or in consequence of, the deceased’s death; and
(ii) from somewhere other than the deceased’s net intestate estate;
(c) the nature and extent of any other rights against, or claims on, the deceased’s net intestate estate; and
(d) any other matter the court considers appropriate.
(4) An order or interim order under subsection (2) shall not have the effect of awarding to the survivor an amount which would exceed the amount to which the survivor would have been entitled had the survivor been the spouse or civil partner of the deceased.
(5) An application under this section may be made to¾
(a) the Court of Session;
(b) a sheriff in the sheriffdom in which the deceased was habitually resident at the date of death;
(c) if at the date of death it is uncertain in which sheriffdom the deceased was habitually resident, the sheriff at Edinburgh.
(6) [ Subject to section 29A, any ] application under this section shall be made before the expiry of the period of 6 months beginning with the day on which the deceased died.
(7) In making an order under paragraph (a)(i) of subsection (2), the court may specify that the capital sum shall be payable¾
(a) on such date as may be specified;
(b) in instalments.
(8) In making an order under paragraph (a)(ii) of subsection (2), the court may specify that the transfer shall be effective on such date as may be specified.
(9) If the court makes an order in accordance with subsection (7), it may, on an application by any party having an interest, vary the date or method of payment of the capital sum.
(10) In this section¾
‘intestate’ shall be construed in accordance with section 36(1) of the Succession (Scotland) Act 1964 (c.41);
‘legal rights’ has the meaning given by section 36(1) of the Succession (Scotland) Act 1964 (c.41);
‘net intestate estate’ means so much of the intestate estate as remains after provision for the satisfaction of¾
(a) inheritance tax;
(b) other liabilities of the estate having priority over legal rights and the prior rights of a surviving spouse or surviving civil partner; and
(c) the legal rights, and the prior rights, of any surviving spouse or surviving civil partner; and
‘prior rights’ has the meaning given by section 36(1) of the Succession (Scotland) Act 1964 (c.41).
[10] It is significant that the court’s power is to order that payment be made to the applicant “out of” the deceased’s net intestate estate and/or by way of property being transferred “from that estate”. The mechanism envisaged is, accordingly, that the executor-dative will be directed by the court to make a monetary payment from the estate that is being administered or to transfer some part of that estate to the applicant. There is no restriction on what type of property can be transferred but it must be property which the executor- dative has power to transfer to the applicant. The wording is of sufficient width to permit the transfer of land as well as the transfer of moveable property.
[11] Turning - as section 29 directs one to do - to section 36(1) of the Succession (Scotland) Act 1964 (“the 1964 Act”), when construing “intestate”, “legal rights” and “prior rights”, the following can be identified:
- “intestate” is to be construed in accordance with the definition of “an intestate” which means a person who has died leaving undisposed of by testamentary disposition the whole or any part of his estate ;
- “legal rights” means jus relicti, jus relictae, and legitim;and
- “prior rights” in relation to a surviving spouse or civil partner means the rights contained in sections 8 and 9 of the 1964 Act to a dwelling house, furniture and financial provision(to the maximum values set from time to time by secondary legislation).
[12] ...
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