HHJ Jarman QC sitting in the High Court has given judgment on a claim for reasonable financial provision under the Inheritance (Provision for Family and Dependants) Act 1975 (“IPFDA”) on a claim brought by the deceased’s cohabitee: Thompson v Ragget & Ors  EWHC 688 (Ch)
The decision is of particular interest as HHJ Jarman considered that the provision made for the claimant’s housing should be made by way of an outright award of capital, notwithstanding the fact that she was 79 years old at the date of trial and departing from the view of the Supreme Court in Ilott v Mitson that provision for housing should usually be on a life interest basis.
I am thinking that I will need to rename this blog the law of farming disputes, as this features yet another farm.
Joan Thompson and Wynford Hodge had lived together for 42 years at the date of his death. Mr Hodge made no provision whatsoever for Ms Thompson from his estate, which had a net value of c. £1.5 million. He left the lot to his two tenants, Ms Evans and Mr Berisha, who had rented one of the farm properties on an assured shorthold tenancy since 2015.
Mr Hodge left a letter of wishes setting out his reasons for making no provision for Ms Thompson as follows:
Both Ms Thompson and Mr Hodge suffered from poor health in their later years and each had cared for the other, although Ms Thompson, who had suffered a stroke and successive heart attacks, required more care than Mr Hodge did. Following a fall in 2015, she had gone to live in a nursing home for a time, as conditions at the farmhouse were not suitable for her. However, she returned to the farm to live in a caravan with Mr Hodge.
In 2016, Mr Hodge purchased a property, Elidyr Cottage (valued at £225,000) for the couple to live in. Due to complications from his prostate cancer, that eventually led to his death, the couple never moved in to the cottage.
After Mr Hodge’s death, Ms Thompson had returned to the nursing home. She was still residing there at the date of trial, although she was very keen to return to the farm.
Analysis of Section 3 factors
- Financial needs and resources of the applicant: Ms Thompson had only very modest savings amounting to some £2,500 at the date of trial. Her only income consisted of state benefits and disability living allowance totalling £1,114 per month.
- Financial needs and resources of the beneficiaries: Ms Evans and Mr Berisha were occupying a house on the estate on an assured shorthold tenancy and the surrounding 23 acres of land under a tenancy or licence. They were described as leading a ‘subsistence lifestyle’ on the land. Ms Evans worked part-time in a market garden business and cleaned, and Mr Berisha worked on the caravan site for a wage and grew flowers and vegetables. Even after deducting the provision that was sought for Ms Thompson, however, they would be very well provided for.
- Obligations the deceased had towards any applicant or beneficiary: HHJ Jarman considered that there was a wide disparity between the obligations that Mr Hodge had towards Ms Tompson and those he had, if any, towards Ms Evans and Mr Berisha. He had made a number of earlier Wills in which he had acknowledged his financial obligations towards Ms Thompson and had made provision for her. His change of testamentary intentions had been motivated by preventing his assets from falling into the hands of Ms Thompson’s children. He had acknowledged in his letter of wishes that one of his main responsibilities was as her carer. Whilst he was justified in saying she would not be able to live independently, he did not appear to have considered that she would have been able to live in her own home with an appropriate care package. His assertion that she was financially comfortable was not a fair reflection of her financial circumstances. The savings that she had then and now did not justify the lack of provision. His views towards her children were further an insufficient reason for leaving her without any provision. He had assumed little if any responsibility to Ms Evans and Mr Berisha, in comparison. They had assisted with works to the property they lived in and to Elidyr Cottage and Mr Berisha had begun working in the caravan part. Their relationship with Mr Hodge was described by Ms Evans as being ‘of mutual benefit’. If there was any assumption of responsibility towards them, it was very small.
- Size and nature of the estate: The estate was sizeable and comprised a number of properties, including Penffordd occupied by Ms Evans and Mr Berisha and Elidyr Cottage.
- Disability of any applicant or beneficiary: Ms Thompson had significant health and care needs, which were the subject of expert evidence. The expert considered that Ms Thompson could return to Elidyr Cottage, with care from her son, Dean, and his wife, or professional carers. There was evidence from Ms Thompson’s GP that it would be beneficial for her to leave residential care and to live in private accommodation with an appropriate social care package, to avoid becoming ‘institutionalised’.
- Any other relevant matters, including conduct: The only issue under this head was the letter of wishes, which in HHJ Jarman did not consider offered sufficient reason for leaving Ms Thompson without provision.
- Age of the applicant, length of cohabitation and contributions made by the applicant to the family: Ms Thompson was 79 years of age at the date of trial and this had been a lengthy cohabitation of 42 years’ duration. In the course of the relationship, Ms Thompson had worked on the farm and associated caravan site business without pay. She had cared for Mr Hodge’s mother in her final years of her life. Her contributions were described as ‘substantial’.
- Dependancy: Since Ms Thompson had a claim as a dependant of Mr Hodge, HHJ Jarman also had regard to the length of time for which and basis on which Mr Hodge maintained ther, and to the extent of his contribution made by way of maintenance and the extent to which Mr Hodge had assumed responsibility for her maintenance.
Reasonable financial provision
There was no dispute that the Will failed to make reasonable financial provision for Ms Thompson.
It was argued for Ms Thompson that it would be reasonable to transfer Elidyr Cottage to her to live in and that an additional monetary award should be made to cover the capital costs of making the cottage suitable for Ms Thompson, the annual costs of maintaining the cottage, general outgoings and the costs of a suitable care package.
HHJ Jarman concluded that Ms Thompson’s accomodation needs should be met by Elidyr Cottage, given that it was purchased for that purpose and further that Ms Tompson had friends living on the caravan park and nearby.
As to the question of whether or not Elidyr Cottage should be transferred to her outright, or merely on a life interest basis with a power to advance capital if required, HHJ Jarman concluded:
“36. The issue then arises as to whether Elidyr Cottage should be transferred to her outright, or by virtue of a life interest with power of advancement. In Illot v The Blue Cross and others  UKSC 17  2 WLR 979, the Supreme Court dealt with a claim under the Act by an adult child in which it emphasised that the statutory power is to provide maintenance, not to confer capital. Lord Hughes, with whom the other Justices agreed, referred at paragraph 15 to a decision of Munby J, as he then was, in In re Myers  WTLR 851, which concerned a similar claim by an adult child. The award was not of an outright capital sum but of a life interest together with power of advancement designed to cater for the possibility of care expenses in advanced old age. Lord Hughes observed that “If housing is provided by way of maintenance, it is to be provided by way of maintenance, it is likely more often to be provided by such a life interest rather than by a capital sum.”
37. All cases are fact sensitive and in the present case that possibility is a reality. Mrs Thompson is elderly and in need of care. There is detailed evidence as to such need. Moreover, in her case, as a cohabitee and dependent the matters referred to in paragraphs 33 and 34 above must be considered.
38. Mr Troup referred me to cases where cohabitees have been awarded an outright transfer of property to cater for accommodation needs. In Negus v Bahouse  EWHC 2628 (Ch) His Honour Judge Roger Kaye QC sitting as a judge of the High Court, awarded a flat to the cohabitee of the deceased on the basis that a clean break was needed from an antagonistic situation with the deceased’s family. His Honour Judge Behrens QC, also sitting as a judge of the High Court, took a similar approach for similar reasons in Webster v Webster  1FLR 1240,  EWHC 31 (Ch). At paragraph 41, the judge also relied upon the long period of cohabitation, the problems which might arise with improvements and repairs if only a life interest were granted, and the possibility of the cohabitee wishing to raise money on the property. Such an approach was approved by the Court of Appeal in another case, Musa v Holliday  EWCA Civ 1268. Unsurprisingly, it was not thought necessary to cite these authorities to the Supreme Court in Illot.
39. There is not the same degree of antagonism in this case, certainly not between Ms Evans and Mr Berisha on the one hand and Mrs Thompson on the other, although it is likely that this litigation has had an adverse effect on the relationship. It was Mr Hodge who mostly had dealings with the former. However, it is evident from the witness statements of Ms Evans and Mr Berisha that they have adopted Mr Hodge’s aversion to Dean receiving anything from the estate. This is reflected in the offer made, which was expressly on the basis that neither Mrs Thompson or her family should have anything to do with the estate.
40. Given the very long period of cohabitation, and given that that it is Dean and his wife who will be providing the care for his mother at the cottage, in my judgment it is reasonable to provide for her maintenance accommodation in which Ms Evans and Mr Berisha have no interest. They will still be neighbours, but that is a different matter. Such an approach is likely to facilitate all concerned moving on from this litigation. Mrs Thompson will be able take decisions relating to her home, such as making structural alterations or raising money without the need to seek permission.”
In addition to awarding the cottage to Ms Thompson outright, HHJ Jarman further considered that she had a need for a capital lump sum of £28,844.68, to pay for adaptations to make the property suitable for her needs, and an additional lump sum of £160,000 by way of a Duxbury award to provide her an estimated annual income of c. £23,000 per annum for the remainder of her life.
HHJ Jarman commented as follows on the result of his award:
“48. That will leave Ms Evans and Mr Berisha with by far the major part of a substantial estate. Whilst the wishes of Mr Hodge that Mrs Thompson’s family should not benefit from any provision for her should be given appropriate weight, those wishes should not hinder the reasonable provision for her maintenance. That is the mistake that he made in his letters of wishes which led to no provision at all being made.”
Learning points for practitioners:
- The outcome in this case indicates that there will still be cases where it will be appropriate for an applicant entitled to reasonable financial provision on the maintenance standard (as opposed to the spousal standard) to receive housing provision by way of an outright provision of capital or transfer of a property, rather than merely a life interest.
- In some respects, I find the decision to transfer the cottage to Ms Thompson outright to be somewhat surprising given her age and life expectancy. A life interest, combined with the ability to advance capital to her if her care needs so required (as was ordered in Re Myers), plus a Duxbury award for her income needs, might be thought to have achieved the objective of meeting Ms Thompson’s needs whilst also respecting Mr Hodge’s wish not to benefit her children.
- This is most likely to be a case that turns on its own facts. The fact that this was a sizeable estate, the length of the cohabitation, that Elidyr Cottage had been specifically acquired as a home for Mr Hodge and Ms Thompson, that he had made earlier Wills that made more generous provision for her, the lack of any real assumption of responsibility for Ms Evans and Mr Berisha and the fact that they were going to receive, even with the provision for Ms Thompson, wealth beyond their expectations, were all factors that resulted in a more generous award to Ms Thompson than might otherwise have been achieved.