Murphy and another v Murphy and Others
| Jurisdiction | England & Wales |
| Judgment Date | 2004 |
| Year | 2004 |
| Date | 2004 |
| Court | Court of Appeal (Civil Division) |
Family provision – Life insurance policy – Application by claimant daughter – Insurance policy not forming part of deceased’s estate – Whether deceased entitled, immediately prior to his death, to a joint tenancy of benefit payable if death occurred before daughter’s death – Inheritance (Provision for Family and Dependants) Act 1975, s 9.
The deceased and his former wife effected a policy of life insurance. They were named as the policy holders and as the lives insured. The policy was of a temporary fixed term to run for 25 years, and provided for the benefit to be paid either on the death of the first of the lives insured or on the acceptance by the insurer of a claim for terminal illness by one of the lives insured. The parties divorced but payment of the premium under the policy continued. Shortly after the divorce the deceased began living with the first defendant, and they lived together for nearly a year until the deceased’s death. The claimant was born to the first defendant a few days after the death. The deceased had made no provision for the claimant. The claimant commenced proceedings under the Inheritance (Provision for Family and Dependants) Act 1975 against the first defendant, who had been granted probate, and against the second defendant, the child of the marriage, and the deceased’s brother and sister, who were named as executors in the will but who had refused to take up grant of probate. The sole asset in respect of which the claim was made was the insurance policy. The claimant claimed that she was a child of the deceased within the meaning of s 1(1)(c) of the Act, and applied under s 2 for the court, in its discretion, to make reasonable financial provision for the claimant. The claimant asserted that provision could be made from the proceeds of the policy because it fell within s 9(1), which provided that where a deceased person was immediately before his death beneficially entitled to a joint tenancy of any property , the court could order that the deceased’s severable share of that property, at the value thereof immediately before his death, should be treated as part of the net estate of the deceased. A trial was ordered of the following preliminary issue: ‘Whether the joint life policy … is joint property within the meaning of s 9.’ The judge held that the policy fell within s 9, because immediately before the deceased’s death the benefit of the policy was jointly held and the benefit of severance was built into it, so that the joint interest could be severed by notice of severance. The second defendant appealed. On appeal, it was accepted that the preliminary issue should have been framed as follows: ‘Was the deceased, immediately before his death, beneficially entitled to a joint tenancy of the right under the policy to benefit from his death before the death of [the second defendant]?’
The sole issue on the appeal was whether, as a matter construction of the life policy, the right to the death benefit under the policy was a jointly held right in which the interests could be severed by a notice of severance or whether the deceased and the second defendant held separate rights to the death benefit.
Held – (Chadwick LJ dissenting) In the instant case, the deceased was not entitled, immediately prior to his death, to a joint tenancy of the benefit payable if his death occurred first. Although there was no evidence in relation to the circumstances surrounding the policy, the plain inference to be drawn was that the death benefit was intended by the parties to be payable to the survivor of the two policy holders; it was to be for the exclusive benefit of the survivor to enable the survivor to deal with the financial consequences of the death of one of them. The ordinary inference would therefore be that each had a separate interest. They could not have intended that the right to the benefit was to be defeasible by a notice of severance; it was to be a right to which each was entitled. Accordingly, the appeal would be allowed.
Cases referred to in judgmentsBranford v Saunders (1877) 25 WR 650.
General Accident Fire and Life Assurance Corp Ltd v Midland Bank Ltd [1940] 3 All ER 252, [1940] 2 KB 388, CA.
Griffiths v Fleming [1909] 1 KB 805, [1908–10] All ER Rep 760, CA.
Lea v Hinton (1854) 5 De GM & G 823, 43 ER 1090.
McKerrell, Re [1912] 2 Ch 648.
Powell v Osbourne[1993] 1 FCR 797, [1993] 1 FLR 1001, CA.
Reed v Royal Exchange Assurance Co (1795) Peake (Add Cas) 70, 170 ER 198.
S (decd), Re[1996] 3 FCR 357, [1996] 1 WLR 235, [1996] 1 FLR 910.
AppealThe appellants appealed from the decision of Judge Mosely QC whereby he held that the life policy in the instant case fell within s 9 of the Inheritance (Provision for Family and Dependants) Act 1975, as asserted by the claimant. The facts are set out in the judgment of Thomas LJ.
Peter Hamilton (instructed by Woolliscrofts) for the appellants.
Graham Walters (instructed by Cassam & Battrick) for the respondents.
Cur adv vult
19 December 2003. The following judgments were delivered.
THOMAS LJ. THE AGREED FACTS[1] On 4 November 1996 Mr Anthony James Murphy (Mr Murphy) and his then wife, Mrs Lisa Murphy, the second defendant and the appellant, effected a policy of life insurance with Royal Life Insurance Ltd (Royal Insurance).
Mr and Mrs Murphy were named as the policyholders and as the lives insured. The policy was a temporary fixed term policy to run for 25 years; it provided for the benefit to be paid either on the death of the first of the lives insured or on the acceptance by the Royal of a claim for terminal illness by one of the lives insured; there was no endowment element. There was no evidence as to the circumstances in which or the purposes for which the policy was effected.
[2] In July 2000 Mr and Mrs Murphy were divorced but payment of the premium continued under the policy.
[3] By August 2000 Mr Murphy had commenced living with the first defendant and second respondent to this appeal, Nicola Holland; they continued to live together until Mr Murphy died on 10 June 2001. On 16 June 2001 the claimant and first respondent was born to Nicola Holland; no provision was made for her by Mr Murphy. On 17 December 2002 she began these proceedings against Nicola Holland (who was granted probate so that the claimant could bring proceedings under the Inheritance (Provision for Family and Dependants) Act 1975 and against Mrs Murphy, the child of the marriage and Mr Murphy’s brother and sister who were named as executors in the last will and testament of Mr Murphy but who had refused to take up grant of probate.
[4] The sole asset in respect of which the claim under the 1975 Act was made was the insurance policy with Royal Insurance.
[5] The claimant claimed that she was a child of Mr Murphy within the meaning of s 1(1)(c) of the 1975 Act and applied under s 2 of the 1975 Act for the court to make in its discretion reasonable financial provision for the claimant.
[6] It was asserted on behalf of the claimant that provision could be made from the proceeds of the policy because it fell within s 9(1) of the 1975 Act. That section provides as follows:
‘Where a deceased person was immediately before his death beneficially entitled to a joint tenancy of any property, then, if, before the end of the period of six months from the date on which representation with respect to the estate of the deceased was first taken out, an application is made for an order under section 2 of this Act, the court for the purpose of facilitating the making of financial provision for the applicant under this Act may order that the deceased’s severable share of that property, at the value thereof immediately before his death, shall, to such extent as appears to the court to be just in all the circumstances of the case, be treated for the purposes of this Act as part of the net estate of the deceased.’
[7] By reason of the provisions of s 9(4) and s 25(1) of the 1975 Act, it was common ground that there could be a joint tenancy of the life policy.
THE TRIAL OF THE ISSUE[8] On 30 January 2003 an order was made for trial of the following preliminary issue on agreed facts which I have summarised in the preceding paragraphs:
‘Whether the joint life policy effected with Royal Insurance and numbered … is joint property within the meaning of s 9 of the [1975 Act].’
[9] The judge in a careful judgment given on 10 April 2003 held that immediately before the death of Mr Murphy the benefit of the policy was jointly held and that the benefit of severance was built into it and therefore the joint interest could be severed by notice of severance. The policy therefore fell within the ambit of s 9 of the 1975 Act. He reached that conclusion on the basis that it was right to apply the presumption that where there was co-ownership, the co-owners were presumed to hold the property jointly unless there was an intention that they held it separately. As in his view, there were two co-owners of the benefits under the policy, there was a presumption that they were joint tenants, unless the contrary was proved. He held the contrary was not proved:
‘In my view, the conclusion which Mr Hamilton reaches is one of two possible conclusions. The first is that each of the policyholders has a separate interest and that therefore this is not a policy held upon a joint tenancy. The second is an equally valid conclusion—an equally possible conclusion—namely that this was jointly held property, severable, therefore, before death.
The presumption in favour of a joint tenancy applies. That presumption is rebuttable, but the burden of proving that the presumption has been rebutted has not been satisfied.’
Accordingly he decided the preliminary issue in favour of the claimant. The judge gave leave to appeal.
[10] By framing the issue in the terms set out at [8] above, the wrong question was asked of the judge. The terms of the preliminary issue asserted that the policy was a joint policy; from that assertion the...
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