Re Abram (Deceased)
| Jurisdiction | England & Wales |
| Judgment Date | 1996 |
| Date | 1996 |
| Year | 1996 |
| Court | Chancery Division |
HIS HONOUR JUDGE ROGER COOKE SITTING AS A JUDGE OF THE HIGH COURT
Family provision – adult son applying for reasonable provision from mother's estate – son working for mother in family business for many years for a very small wage – son leaving business – mother making will disinheriting son – after mother's death son claiming reasonable provision for son – whether award should be made – factors to be taken into account.
The testatrix was born in 1902 and died in 1985 aged 83. She came of a family who were noted warehousemen and by 1960 had acquired sole control of the business. She had married in the early 1940s and in 1944 the plaintiff, who was the only child of the testatrix, was born. The testatrix and her husband separated in 1972 and he died in 1981.
When he was 17 the testatrix took her son, the plaintiff, into the family business. He lived at home and worked long hours for small wages. In 1969 the plaintiff married his first wife and left home though he continued to work for the family business, still at a very small wage.
In 1972 the testatrix made a will effectively leaving the whole of the estate to the plaintiff. In 1978 the plaintiff left the family business and went into partnership with another man as a haulier. The testatrix then made a new will disinheriting the plaintiff and leaving the bulk of her estate to charities.
The plaintiff's first marriage ended in divorce in 1977. In 1979 he remarried. In 1980 the plaintiff parted from his commercial partner and he and the testatrix were reconciled. The relations remained good until the death of the testatrix in 1985. The testatrix had never revoked her 1978 will though there was evidence that she intended to do so and thought it had been destroyed.
After the death of the testatrix the plaintiff attempted to keep the family business going but it had been declining for some years and soon after the testatrix's death the company was wound up as insolvent. The sole asset of the testatrix's estate was the family home.
There was a long delay and it was not until 1990 that the Public Trustee obtained a grant of letters of administration with the 1978 will annexed. The plaintiff then made a claim under the Inheritance (Provision for Family and Dependants) Act 1975 for reasonable provision out of his mother's estate.
In the years after the death of the testatrix the plaintiff's personal circumstances had declined; his business as a haulier failed and in 1992 he entered into an individual voluntary arrangement ("IVA") under Part VIII of the Insolvency Act 1986. It was a term of that arrangement that any money received from the action under the 1975 Act should be paid
to his creditors. Furthermore, his home was sold by the bank to whom it was mortgaged and all that remained out of the proceeds of sale was a few thousand pounds which represented his wife's equity in the property. The plaintiff was unemployed.
In 1993 the Public Trustee sold the family home for £620,000.
In those circumstances the court had to carry out the two stage process of answering the questions: (i) whether the testatrix by her will failed to make reasonable provision for the plaintiff; and (ii) if so, what award if any ought to be made.
Held – (1) In deciding whether a testator had failed to make reasonable provision for a claimant who was an adult child the claimant must do more than establish a special relationship and necessity: he must establish special circumstances which showed that the testator was unreasonable. A moral obligation was the most obvious special circumstance, but not the only one. The test was not whether reasonable provision had been made but whether the failure to make provision was unreasonable. The facts in the present case indicated that it was unlikely that by early 1981 the testatrix's intentions were to cut the son out totally and this factor suggested that there was no reason to counterbalance any special circumstances operating in the plaintiff's favour. In this case the plaintiff had worked in the family company for many years at a very low wage in the expectation that he would ultimately take the company over. He had been forced by reasonable circumstances to leave the company. The position would have been different if he had left as the result of caprice and not, as was the case, by force majeure. In all the circumstances the plaintiff has shown that there were special circumstances indicating that the testatrix was unreasonable.
(2) As to what award, if any, ought to be made, s 1(2)(b) of the 1975 Act provided that a non-spouse applicant such as the plaintiff could only obtain "such financial provision as it would be reasonable in all the circumstances of the case for the applicant to receive for his maintenance". In this case an order for a capital sum was inappropriate because any such sum would be applied under the IVA to pay the plaintiff's debts and not by way of maintenance. The payment off of debts could only be justified in so far as this would enable an applicant to establish himself in business. Under the terms of the IVA, if the plaintiff asked for anything else he would break the terms of that arrangement and a bankruptcy petition under s 276 of the Insolvency Act 1986 would be the likely outcome. However, this did not mean that the court could not make such order as it thought right. There was no doubt that the plaintiff needed to be maintained. Accordingly, the court would direct a settlement to be effected under s 2(1)(d) of the 1975 Act whereby 50 per cent of the estate would be settled on the plaintiff for life on protected trusts under s 33 of the Trustee Act 1925.
Statutory provisions referred to:Inheritance (Provision for Family and Dependants) Act 1975, ss 1(2)(b) and 2(1)(d). Insolvency Act 1986, Part VIII and s 276.
Trustee Act 1925, s 33.
Cases referred to in judgment:Christie deceased, Re; Christie v Keeble [1979] Ch 168; [1979] 2 WLR 105; [1979] 1 All ER 546.
Coventry, deceased, Re; Coventry v Coventry [1980] Ch 461; [1979] 3 WLR 802; [1979] 3 All ER 815.
Dennis, deceased, Re; Dennis v Lloyds Bank Ltd [1981] 2 All ER 140.
Jennings, deceased, Re[1995] 1 FCR 257; [1994] Ch 286; [1994] 3 WLR 67; [1994] 3 All ER 27.
Leach, deceased, Re; Leach v Lindeman and Others [1986] Ch 226; [1985] 3 WLR
413; [198512 All ER 754.
Williams v Johns [1988] 2 FLR 475.
Matthew Caswell for the plaintiff.
Guy Newey for the defendant
JUDGE ROGER COOKE.The plaintiff, Mr Michael Abram, claims under the Inheritance (Provision for Family and Dependants) Act 1975 reasonable provision for him out of the estate of his mother, Irene Abram, who died on 4 July 1985. The defendant, the Public Trustee, is the sole personal representative of the testatrix having proved on 10 July 1990 (by way of letters of administration with the will annexed) what turned out to be the last will of the testatrix dated 22 November 1978.
The testatrix was born on 4 February 1902 and therefore was 83 at the time of her death. She came of a family well known in commerce in Hull, the Spear family; they were noted warehousemen down several generations. The Spear family home was the Old Hall, Bilton near Hull. This was a substantial house built probably in the seventeenth century which had with it about 12 acres of land. It had been in the Spear family since the 1870s and it would seem that in the 1920s following the death of their father the testatrix bought one or more of her sisters out and acquired the family home entirely for herself.
Probably in the early 1940s, when she was 40 or so, the testatrix married one Harold Abram. Harold Abram was a schoolmaster. Their characters contrasted. She, as later events would show, had inherited the business instincts of her forebears. He, however, was a gentle and unworldly schoolmaster. For part of the early period of the marriage he appears to have been away serving with the RAF On 5 February 1944 the plaintiff was born. He was to be his mother's only child.
Prior to 1960 the family business had been the joint enterprise of the Spear family and the Houffe family. But in 1960 the testatrix bought out the Houffes. It was shortly after this that the plaintiff aged 17 left school and was taken into the business. The testatrix who by then appears to have had sole control of the capital divided it up so that she had 50 per cent and the plaintiff 40 per cent (who had the other 10 per cent is unclear). The object was, says the plaintiff, to set him up in business and to continue through him as the next generation the business started by the testatrix's father. Thereafter said the plaintiff:
"... she became engrossed in the business and in me to the detriment even of her relationship with my father. I worked with her in the business long hours. I was still living at home. I received very little by way of wages. My mother became almost fanatical about the business."
The plaintiff was asked in the course of his evidence what his wages were. He started in 1960 (aged 17) on £1.17s.6d a week (£1.87). When he left the business in 1978 aged 34 he was earning at most £20 a week. Translating those annual figures they come out at £97.24 a year and £1,040 a year respectively. Applying multipliers to give some idea of modern equivalents the 1960 figure might come
out at £2,000 and the 1978 figure (which is post the high inflation years of the mid–1970s) as £5,000–£6,000 – all of this is of course very rough. In evaluating them one has of course to take into account the fact that prior to the plaintiff's marriage in 1969 he was living with his mother and therefore I infer (though there was no direct evidence) that he would have received his board and lodging from her.
The company employed two outside managers. The plaintiff on his evidence was, however, the lowest paid. The others were paid respectable salaries and had the opportunity for overtime which the plaintiff did not have. At some stage the plaintiff became a director of...
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