Powell v Osbourne
| Jurisdiction | England & Wales |
| Judge | LORD JUSTICE DILLON,LORD JUSTICE SIMON BROWN |
| Judgment Date | 03 December 1992 |
| Judgment citation (vLex) | [1992] EWCA Civ J1116-4 |
| Court | Court of Appeal (Civil Division) |
| Docket Number | 92/1102 |
| Date | 03 December 1992 |
[1992] EWCA Civ J1116-4
IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE EDMONTON COUNTY COURT
(MR RECORDER J.R.PLATT)
Royal Courts of Justice
Lord Justice Dillon
Lord Justice Simon Brown
92/1102
MR NOAH WEINIGER, instructed by Messrs Coldham Shield & Mace, appeared for the Appellant (Plaintiff).
MR ANTHONY BRADLEY, instructed by Messrs Edward Fail Bradshaw Waterson, appeared for the Respondent (Defendant).
The court has before it an appeal by the applicant in these proceedings, Mrs Patricia Powell, against an order made by Mr Recorder Platt in the Edmonton County Court on 6th September 1991 on the trial of the proceedings, whereby it was ordered that the respondent, Mrs Mary Osbourne, pay the applicant a sum of £5750 in respect of the net estate of the applicant's former husband, Peter Powell. The applicant by her appeal, which is brought pursuant to leave granted by the Recorder, asks that the sum should be increased to £15,000. The matter concerns in particular section 9 of the Inheritance (Provision for Family and Dependants) Act 1975 and it raises a very neat problem.
The deceased, Peter Powell, died on 7th October 1988. The applicant, Mrs Powell, is his widow. She had married him in November 1983—the dates do not greatly matter—and they had been separated in July 1985. A decree nisi had been pronounced in divorce proceedings, but it had not been made absolute by the time he died. Therefore she is a dependant within the meaning of the Act.
After Peter Powell and the applicant separated, he appears to have either set up, or contemplated setting up, with two other women. But in or about October 1986 he and the respondent, Mrs Osbourne, began living together. They were never married; they could not be because of the uncompleted divorce proceedings. He was employed by brewers as the manager of a public house and he and Mrs Osbourne in August 1988 purchased jointly a property, No.88 Brantwood Road, Tottenham, London N17. They were duly registered as the proprietors with absolute title at the Land Registry.
It is common ground that they purchased as beneficial joint tenants both at law and in equity. The purchase price was £91,000 but of that £85,000 was provided by a joint mortgage of the property in favour of the Nationwide Anglia Building Society. The mortgage was supported by a life policy on the joint lives of Mr Peter Powell and Mrs Osbourne issued by the Scottish Amicable Assurance Company. The terms of that policy were that the lives to be assured were:
"Peter Francis Powell (born 1st September 1929) and Mary Osbourne (born 21st April 1939)."
The benefit was to be:
"£47175.00 (increased by bonuses) payable on the death of the first to die of the lives assured or on survival of both lives to the end of 15 years, but subject to a minimum of £85000.00 on death."
There were certain premiums and there were surrender value statements which showed a surrender value of £2560 at the end of one year, rising to £18,233 at the end of five years. The policy was issued on 18th August 1988 and it does not need much in the way of mathematics to realise that Peter Powell died before a year had elapsed.
The applicant duly started proceedings as his widow under the Inheritance (Provision for Family and Dependants) Act 1975. Indeed, she also obtained a grant of administration to his estate, but his own assets were entirely consumed in meeting his liabilities and so there is no source of provision for her out of them. She accordingly by virtue of section 9 claimed provision out of the house, that is to say 88 Brantwood Road, which was not available for payment of Peter Powell's liabilities.
The judge considered the position on the basis, on the one hand, that the house was to be regarded as an asset subject to the mortgage in favour of the building society, and on that basis he awarded Mrs Powell the sum of £5750 as representing by far and away the greater part of an assumed equity of redemption in the house of £6000. But he indicated that, if he were to regard the house as free of mortgage, then he would consider the figure of £15,000 to be the appropriate figure for provision for—Mrs Powell. That is why in the notice of appeal she asks that the sum of £15,000 be substituted for the sum of the £5750. No other sum has been canvassed before us in argument as a possible alternative sum.
There are two ways by which you can arrive at the position that the property, the house, is to be regarded as free of the mortgage. One is that you simply look at the bricks and mortar of the property and you value that and that alone. The other is that you bring into account the joint policy as well as the bricks and mortar and the value of the policy at almost the full amount of £85,000 and thus arrive at a situation that the mortgage is to be deducted once only, and the deceased is left either with half the property subject to half the mortgage, but with the benefit of half the policy moneys, or with the benefit of half the house on the footing that half the policy moneys have paid half the mortgage.
Section 9 of of the Inheritance Act is one of a number of sections which deal with matters which would not ordinarily be regarded as part of the net estate of the deceased but which are in certain circumstances to be so regarded. The scheme of the Act is that by section 2 it is provided that:
"…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…"
one of which is periodical payments and another of which is a lump sum.
Section 3 is then concerned with the matters to which the court is to have regard in exercising its powers under section 2. It provides that:
"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 matters…"
and then there are listed matters (a) to (g), (e) of which is "the size and nature of the net estate of the deceased"....
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