Lim (an Infant) v Walia
| Jurisdiction | England & Wales |
| Judge | Lord Justice McCombe,Lady Justice Arden,Lord Justice McFarlane |
| Judgment Date | 29 July 2014 |
| Neutral Citation | [2014] EWCA Civ 1076 |
| Court | Court of Appeal (Civil Division) |
| Docket Number | Case No: A3/2013/0452 |
| Date | 29 July 2014 |
[2014] EWCA Civ 1076
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM The High Court of Justice, Chancery Division, Manchester District Registry.
His Honour Judge Hodge QC
1BC90002, 1BC90003, PR190103
Royal Courts of Justice
Strand, London, WC2A 2LL
Lady Justice Arden
Lord Justice McFarlane
and
Lord Justice McCombe
Case No: A3/2013/0452
Neil Vickery (instructed by Bar Pro Bono Unit) for the Defendant/ Appellant
Simon Charles (instructed by Roland Robinsons & Fentons) for the Claimant/Respondent
Hearing date: 1 May 2014
(A) Introduction
This is an appeal by Mr Navpreet Walia, from the order of 26 September 2012 of His Honour Judge Hodge QC (sitting as a Judge of High Court), in proceedings under the Inheritance (Provision for Family and Dependents) Act 1975, whereby the judge ordered that the following preliminary issue be determined in favour of the Claimant, Philip Lim ("Philip"), the son of the late Jocelyn Walia ("the Deceased"), who died on 15 March 2011 at the age of 38:
"Was the Deceased, immediately before her death, beneficially entitled to a joint tenancy of the right under the policy to benefit from her death before the death of the Defendant and/or was the Deceased, immediately before her death, beneficially entitled to a joint tenancy of the right under the policy to benefit from her (assumed) terminal illness before her death."
The judge ordered that the issue was determined on the basis that,
"…immediately before her death, the Deceased was beneficially entitled to a joint tenancy under the policy to benefit from her (assumed) terminal illness before her death."
The Deceased had married Mr Walia on 18 July 2003. On 21 May 2002 they had taken out a policy of fixed-term life insurance with Direct Line Life Insurance Company Limited. They lived together at a property at Thornton—Cleveleys in Lancashire. As the judge found, that property was purchased about a year after the policy was effected. There was one child of the marriage, a girl called Emma-Kaur, who was born on 8 November 2004. The Deceased and Mr Walia separated when the Deceased went to live in the Philippines, where she formed a relationship with a Mr Felipe Lim by whom she gave birth to a son, the Claimant who was born on 20 July 2009. At about the end of February 2011, the Deceased was diagnosed as having a cancer in a fatal form and (as I have said) she died in the following month. She died intestate and, given the size of her estate, her sole effective next of kin is Mr Walia, although at the time of the death he had begun divorce proceedings. A grant of Letters of Administration to the Deceased's estate was made to Mr Walia out of the District Probate Registry at Winchester on 1 April 2011. On 19 May 2011 Mr Walia received the sum of £113,000 under the policy.
Three separate applications under the 1975 Act for, provision out of the Deceased's estate, were issued. The present claim on behalf of Philip was issued on 21 September 2011. Proceedings were issued in the same month by Mr Felipe Lim and on behalf of Emma-Kaur. All three claims have been handled together in the Manchester District Registry and the issue decided by the judge (slightly differently formulated) was directed for trial by order of District Judge Richmond of 23 May 2012.
The judge gave permission to Mr Walia to appeal, but he failed to file his Appellant's Notice in time. However, he was granted further permission to appeal, out of time, by Lord Justice Davis on 5 December 2013.
(B) The Policy
The policy provided for an obligation on the part of the insurer as follows:
"We will pay the sum insured on the first death to occur of the two lives insured named in the insurance schedule."
Those named were the Deceased and Mr Walia. The policy further provided this:
"On proof to the Company's satisfaction that the life insured is suffering from a terminal illness we will bring forward the payment of the sum insured.
For joint lives first death policies the payment will be brought forward on proof to the company's satisfaction that one of the lives insured is suffering from a terminal illness. No benefit will be paid on any subsequent occurrence.
No death benefit will be payable if a claim has been paid."
With regard to terminal illness claims, there was this provision:
"Terminal illness claims should be notified to the Company within three months of the occurrence of the insured event and at least 18 months before the policy expires. When making a claim for terminal illness benefits you must provide us with certificates from one or more medical practitioners, one of which must be the life insured's hospital consultant confirming the terminal illness."
Then, with regard to claims generally, there was this:
"A maximum of one claim under each policy will be paid. You or your legal representatives will be required to confirm the details of any claim by completing a claim form."
It was common ground that these were the only material policy terms for present purposes.
(C) Judge's decision and the grounds of appeal
The crux of the leaned judge's decision can be found in paragraph 45 of his judgment in the following short passage:
"45……..one is looking not at the position after the death, when we know that the claim that was made was one on death, but one is looking at the value of a chose in action immediately before the deceased's death. The question I have to consider is whether, immediately before her death, the deceased was beneficially entitled to a joint tenancy of the right under the policy to benefit from her assumed terminal illness. It seems to me that, immediately before her death, the deceased was so entitled. She had an accrued claim with the defendant for a terminal illness benefit, on the assumed facts of the case. The fact that she could only pursue that claim jointly with the defendant does not seem to me to affect the nature and quality of the claim which she there had, jointly with the defendant."
On the appeal, Mr Vickery for Mr Walia argues that the judge's conclusion was wrong and that he should have decided that, on the true construction of the policy,
"(1) the benefit of the Policy would be paid out on the first death of one of the lives insured unless it had previously been paid on acceptance of a terminal illness claim;
(2) the benefit would only be paid out on a terminal illness claim if the insured suffering from the terminal illness was alive;
(3) Accordingly at the moment before the death of the deceased, and having regard to the imminent death as required by Powell v Osbourne [1993] 1 FLR 1001, the deceased was not beneficially entitled to a right under the Policy to benefit from her terminal illness: her death would cause the benefit to be payable by reason of her death and extinguish any prospect of the benefit being paid on account of her terminal illness;
(4) Alternatively, if the deceased was beneficially entitled at the moment before her death to a right under the Policy to benefit from her terminal illness then that right was valueless, because on her death the benefit would become payable by reason of her death."
Alternatively, it is submitted the judge should have held that the benefit of the policy would be paid out on the first death unless, at the very least, a terminal illness claim had been made. In fact no such claim had been made and the benefit was, therefore, paid on account of the Deceased's death. Immediately before the death no claim was going to be made or could be made. Therefore, the deceased at that stage had no relevant beneficial entitlement.
Further, it is said that Mr Walia's entitlement on the death precluded any entitlement to benefit by reason of terminal illness. Any accrued claim immediately before death was valueless in view of the imminence of death. The assumed terminal illness was not a sufficient ground upon which to distinguish the decision in Murphy v Holland [2004] 1 FCR 1 (see below).
These grounds of appeal were supplemented by the carefully presented oral and written arguments of Mr Vickery and were opposed by an equally attractive presentation of the Claimant's case by Mr Charles.
(D) The 1975 Act
Section 1 of the Act provides that where a person dies and is survived by any of a defined class of family members or dependants, a relevant person may apply to the court for an order under section 2:
"….on the ground 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."
Section 2(1) goes on to provide:
"…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;
(c) an order for the transfer to the applicant of such property comprised in that estate as may be so specified;
(d) an order for the settlement for the benefit of the applicant of such property comprised in that estate as may be...
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