‘Inheritance Act’ claims – moving quickly and preparation

Recent years have seen a growth in the number of ‘Inheritance Act’ claims. These are claims where it is said that a person’s Will (or intestacy) failed to make reasonable financial provision for the applicant (who must bring themselves within one of the specified categories of applicants). These claims are brought under the provisions contained in the snappily named statute ‘The Inheritance (Provision for Family and Dependants) Act 1975’ (‘the 1975 Act’).

The 1975 Act makes it clear that claims need to be commenced within six months of the grant of probate. Section 4 stipulates that an application shall not be made after the end of this six month period ‘except with the permission of the court’.

Almost 44 years after the 1975 Act was introduced, this particular provision has been the subject of close attention in two reported cases, one heard by Mr Justice Mostyn and the other by Chief Master Marsh. In the former case (Cowan v Foreman & Ors) permission to bring a claim nearly 17 months out of time was refused but in the latter (Bhusate v Patel & Ors) permission was granted even though it was sought 25 years and 9 months after the deadline had expired.

Mr Justice Mostyn and Chief Master Marsh appear to have approached their task in slightly, but significantly, different ways. Mostyn J considered that rather than exercise a discretion he was being invited to make ‘a qualitative decision or a value judgment’. He thought that the applicant needed to show (a) good reasons justifying the delay and (b) that she had a claim of sufficient merit to be allowed to proceed to trial. He also opined that there should be a ‘robust’ application of the extension power in Section 4 as this would be consistent with the overriding objective to deal with cases expeditiously, to allot a case an appropriate share of the court’s resources and to ensure compliance with the court rules.

Chief Master Marsh who was referred to Mostyn J’s judgment stated that, for his part, he did not consider it was right when considering the exercise of discretion under Section 4 to have regard to the overriding objective. He considered that the court’s discretion was unfettered but must be exercised judicially in accordance with what was right and proper. The onus was on the applicant to show sufficient grounds for granting of permission.

Yet again therefore practitioners and their clients are faced with contradictory guidance from the court.

There may well be instances where it is simply not possible to accumulate the necessary evidence and commence proceedings within six months of the date of the grant of probate but in the light of the uncertainty surrounding these two decisions, the prudent course of action is to start proceedings within the six month period and if necessary, seek a stay of those proceedings to allow negotiations to take place. If the deadline is missed the sensible thing to do is not to delay but to make an application for permission as expeditiously as possible. In addition, when making such an application it is important to bear in mind the factors that the court is likely to take into account when determining the application. An ill prepared application will be doomed to failure.

Both Mostyn J and Chief Master Marsh referred to a number of propositions adopted in an earlier case of Berger v Berger. The second of those propositions is that the onus is on the applicant to show sufficient grounds for the granting of permission to apply out of time. The final proposition is that the Applicant has an arguable case under the 1975 Act. Accordingly, any permission application needs to be prepared not just promptly but also carefully and thoroughly. The court will carefully scrutinise the reasons given for the delay and the strength of the overall application.

The applicants in these two cases were both second wives although their circumstances were very different. In his judgment Mostyn J made a number of interesting comments about the claim brought by Mrs Cowan. Not only was he not impressed by the delay in bringing the claim, he was not persuaded that she had an arguable case for substantive relief.

It seems the late Mr Cowan had made provision for his second wife by means of two trusts, coupled with a Letter of Wishes which made it clear that he intended her to be well provided for. In particular she had a revocable life interest in the residuary estate. The point taken by her counsel was that Mrs Cowan did not have outright ownership of assets or absolute control over them and was, as she put it, at the ‘mercy of the trustees’. She therefore lacked security. Mostyn J stated that he completely disagreed with this argument, pointing out that it was tantamount to saying that every widow has an entitlement to outright testamentary provision from her husband. He did not agree with that as it would, in effect, introduce a form of forced spousal heirship unknown to English law. Plainly, in his view, that could not be right. In his opinion it must be possible for a testator to provide for his widow by a generous trust arrangement such as this, without fear that it would be interfered with in proceedings under the 1975 Act.

At the time of his death Mr and Mrs Cowan had only been married for a matter of months but they had lived together for over 20 years. Notwithstanding this, Mostyn J was clear that, had the marriage ended in divorce rather than death, he could confidently say that her claim would have been dealt with by reference to her needs rather than the principle of sharing the point being that her needs could be met without her sharing in wealth built up by Mr Cowan prior to the marriage…

It will be interesting to see whether or not Mrs Cowan successfully appeals the decision of Mostyn J and, if she does, what the eventual outcome of that litigation is. Will a different tribunal be more sympathetic to her plight and not only grant her the necessary permission but also interfere with Mr Cowan’s carefully laid plans?