Re Pearce (Deceased)
| Jurisdiction | England & Wales |
| Judge | LORD JUSTICE NOURSE,LORD JUSTICE PETER GIBSON,LORD JUSTICE BUXTON |
| Judgment Date | 25 June 1998 |
| Judgment citation (vLex) | [1998] EWCA Civ J0625-13 |
| Court | Court of Appeal (Civil Division) |
| Docket Number | CHANF 96/1731/3 |
| Date | 25 June 1998 |
[1998] EWCA Civ J0625-13
IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT OF JUSTICE
CHANCERY DIVISION (MANCHESTER DISTRICT REGISTRY)
(His Honour Judge Behrens)
Royal Courts of Justice
Strand, London WC2
Lord Justice Nourse
Lord Justice Peter Gibson and
Lord Justice Buxton
CHANF 96/1731/3
MR A ELLERAY QC and MR J FRYER-SPEDDING (Miss L Davies 25.6.98) (instructed by Messrs Abson Hall, Stockport) appeared on behalf of the Appellant Defendant.
MR G TATTERSALL QC and MR C SCORAH (instructed by Messrs Butcher & Barlow, Northwich) appeared on behalf of the Respondent Plaintiff.
Thursday, 25th June 1998
This is an appeal against an order made on 15th November 1996 by His Honour Judge Behrens, sitting as a judge of the Chancery Division in Manchester, on an application brought under the Inheritance (Provision for Family and Dependants) Act 1975 by an adult son of the deceased; cf Re Coventry, decd. [1980] Ch 461 and Re Jennings, decd. [1994] Ch 286.
The deceased was Kenneth Pearce, who died on 18th February 1992 aged 59. He was married to Constance Ann Pearce (now Mrs Reith). The deceased was a metallurgist and for most of his working life a lecturer at the University of Manchester Institute of Science and Technology. His wife taught at an infant school for some 31 years. They had one child only, Edward Pearce, who was born on 1st February 1962 and is the plaintiff in these proceedings. At the time of his birth the family lived at Holts Nook Cottage, Long Lane, Chapel-en-le-Frith, a property which the plaintiff has said was given to them by Mrs Reith's father.
In 1968 the deceased and his wife purchased Meadow Farm, Beech Lane, Dove Holes, Buxton, a small dilapidated farmhouse with a detached shippon at the rear and 78 acres of hill land. At that time the plaintiff was six years old. He lived with his parents until 1978, when he left home. During those ten years the deceased, whilst remaining in full-time employment as a lecturer, carried out improvements and extensions to the farmhouse, erected farm buildings and improved the farm land. It was the plaintiff's case before the judge, which was accepted, that he made a substantial contribution to the improvements that were carried out. In giving judgment, the judge referred at length to the plaintiff's affidavit and oral evidence, supported by that of Mrs Reith, as to the part which he had played. The judge also referred to the plaintiff's further evidence, which was also accepted, as to the farming duties he carried out, including the feeding of the animals through the winter and in implement work, haymaking, dipping and dosing sheep in the summer. The judge said that the effect of theplaintiff's evidence was that if the deceased gave him a task, he had to do it.
Then follows this important passage:
"And so I am satisfied, therefore, that between 1968 and 1978 the plaintiff did very substantial work on the farm. I am also satisfied that on a number of occasions the plaintiff's father said to the plaintiff words to the effect that the plaintiff would be inheriting the farm. The evidence as to precisely when those conversations took place was vague. It may have been that it was said when the plaintiff's father, who as I have indicated was a hard taskmaster, thought that the plaintiff was not pulling his weight, on one occasion it was said to him in order to get him to get on with the work: "It will be yours one day, now you've got to earn it." I am satisfied that words to that effect were used on approximately half a dozen times over the period, probably more towards the latter end of the period when the plaintiff was at home."
In 1978, having finished school at the age of 16, the plaintiff left home. The deceased had made it clear to him that there was no possibility of paying him to work on the farm. So he got himself a job as an apprentice diesel fitter in a nearby quarry and took lodgings in Buxton. The judge said that at that time the relationship between the deceased and the plaintiff was perhaps somewhat strained. He also expressed the view that the plaintiff's decision to leave home, even though it may have upset the deceased, was a perfectly reasonable decision for him to have taken at that time. Of the period after 1978 the judge said:
"After the plaintiff left home, he did not abandon his parents. He visited them twice a week on his mother's evidence, and he continued to help on the farm. Of course his help was less. In part it was less because the farming activities were being run down, but he was no longer there to help with the animals at night or in the morning. He helped with haymaking and he also helped with other jobs. He says: "I came back for major jobs after 1978, such as dipping and injecting. This would be at the weekend." I accept the plaintiff's evidence in that regard. Again he was not paid a penny for any of the work that he did."
In 1981 the deceased and his wife separated, she moving into Buxton, at 35 Bennett Street, where the plaintiff went to live with her. The deceased remained at Meadow Farm. In 1982 he started divorce proceedings, which the plaintiff described as a long and bitter affair, particularly with regard to the financial arrangements. Thereafter the plaintiff had little contact with the deceased. In November1982 the deceased met the defendant, then Enid Davis, who had been widowed in 1981. By early 1983 they had started a relationship together. She was a senior nursing officer with Blackburn Health Authority. In September 1983 she moved to Buxton from Darwen and took up employment with the North Derbyshire Health Authority.
In 1985 the divorce proceedings were concluded. The deceased became the sole owner of Meadow Farm, subject to a mortgage for £43,000 raised in order to pay Mrs Reith the £33,000 to which she became entitled on the settlement. On 20th November 1985 the defendant moved into Meadow Farm and began to live with the deceased as his wife. Her daughter moved in with her. The defendant changed her name to Davis Pearce. Meadow Farm was put into the joint names of the deceased and the defendant, subject to the mortgage. She lent him £12,500 to assist in his divorce settlement, a loan which was repaid by 1987. The defendant said that the deceased also persuaded her to invest some £12,500 in a speculative venture in Holland, all of which was lost.
On 18th April 1986 the deceased made his last will. He appointed the defendant to be the sole executrix and gave all his property to her with a gift over, in the event of her predeceasing him, to Robert Francis Birtwistle, an old friend of his. The defendant said that in 1987 the deceased's health started to deteriorate. In June 1989, a little more than three and a half years after she had moved in, the defendant moved out of Meadow Farm at the request of the deceased and purchased a home of her own in Buxton. She maintained at the trial that she remained on good terms with the deceased, spending workdays and holidays with him and in particular the 1991 Christmas and New Year. At or around the time she moved out, Meadow Farm was revested in the sole name of the deceased and the defendant's
liability under the mortgage was brought to an end. The deceased did not, however, alter his will.
Meanwhile, in 1984, the plaintiff had joined the army. In 1988 his mother remarried and the plaintiff purchased 35 Bennett Street from her. In the same year he himself was married. Thedeceased did not attend the wedding. In November 1989 the deceased had a heart attack and the plaintiff got compassionate leave from the army to visit him. In 1990 he left the army and returned to civilian life. In 1990 or 1991 the deceased sold the farm buildings and most of the land at auction, the net proceeds amounting to about £224,000. He retained the farmhouse and a portion of the land. The judge found that the plaintiff assisted in the sale by stripping a field at the request of the deceased, who bought him a meal in return. Mr Birtwistle said in evidence that the plaintiff was disappointed at the sale.
As I have said, the deceased died on 18th February 1992. Probate of his will was granted to the defendant on 25th June 1992, the estate being sworn at £437,130 gross and £403,145 net. From interim estate accounts prepared as at 28th February 1993 it appears that the principal assets of the estate were the following:
| £ | £ | |
| House and remaining land at Meadow Farm | 125,000 | |
| (probate valuation) less mortgage | 29,100 | 95,900 |
| Cash with building societies and at bank | 69,026 | |
| Insurance policies (cash received) | 32,009 | |
| Unit trusts (cash realised) | 76,692 | |
| PEPs (cash realised) | 12,402 | |
| Securities (cash realised) | 79,387 | |
| Securities retained (probate valuation) | 36,960 | |
| Household and personal chattels (estimate) | 20,000 | |
| Total £422,376 |
If the values of £95,900 and £20,000 assigned to Meadow Farm and the chattels respectively are deducted from the total of £422,376, a figure of £306,476 is left for cash and retained securities. It appears from the interim estate accounts that there was a liability for inheritance tax of just over £105,000, leaving a balance for cash and retained securities of just over £200,000, subject to debts and administration expenses. Two further sets of accounts were put in, but they were only in draft and no adequate evidence as to the net estate of the deceased as defined in section 25(1) of the 1975 Act was placed before the judge. I regard that as...
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