Law and procedure and the judgment of Mr Justice Peel in Kaur v Estate of Karnail Singh & Ors [2023] EWHC 304 (Fam)
It was, Mr Justice Peel concluded, “the clearest possible case” for reasonable financial provision from a deceased’s estate under section 1 (1) (a) of the Inheritance (Provision for Family and Dependants) Act 1975 (IA 1975).
Although an undefended Part 8 claim determined summarily (albeit a decision which caused “careful and anxious consideration” on the part of the learned Judge (para 27 of the judgment)), Kaur v (1) The Estate of Karnail Singh (Deceased) & Ors [2023] EWHC 304 (Fam) provides an instructive judgment.
For financial remedy practitioners, the judgment usefully sets out the procedural framework and the proper route that any Inheritance Act application brought by spouses and former spouses should take and the rules that apply. The judgment also provides a potted distillation of the legal principles that underpin those claims: namely, they are those set out by the Supreme Court in Ilott v Mitson [2017] UKSC 17 and sections 1 – 3 of the IA 1975 with the “divorce cross-check” of section 3(2) of the IA 1975. For the lay client, stark as the facts may have been, in determining that the claimant should be awarded significant provision from the estate of her husband despite the clear provisions to the contrary in the Husband’s will, the decision nonetheless provides a good example of the limits on testamentary freedom in a matrimonial context.
And the facts are stark. The claimant and the deceased had married in 1955. The deceased, her husband, had died in August 2021. This was, therefore, in the parlance of matrimonial finance, a 66-year marriage. They had seven children together, six of whom survive: two sons and four daughters. Now 83 years old, her income of state benefits less than £12,000 pa and with very modest capital assets, the claimant is disabled, has a number of medical conditions, and lives with one of her daughters. She had moved out of the family home because another of the children (the third defendant) had moved in. During the marriage, the claimant had been financially dependent on her husband. The family had previously run a clothing business which the claimant had worked for but had received no salary and had held no interest. She had played a full role as wife and mother. She was, said Peel J, “a wife who [had] made a full and equal contribution to the marriage in accordance with the seminal case of White v White [2000] UKHL 54” (para 9).
The entirety of the family wealth had been built up during the very long marriage. The claimant estimated the estate (before tax and costs) as being approximately £1.9 million. The second defendant, one of the claimant’s sons, thought the total assets were a more modest £1.2 million but unequivocally did not oppose the claim. Whether £1.2 or 1.9 million, the assets consisted of a FMH, four residential properties that were let out, a commercial property and land and property in India. Whether this couple would have ever divorced is a moot point but the likely level of award that the claimant would have received as an applicant wife under an exercise carried out under section 25 of the Matrimonial Causes Act 1973 is not hard to imagine.
But it was death not divorce that put the “matrimonial assets” before the court and, specifically, the deceased’s will of 25th June 2005. That will indubitably left the estate to two of their children in equal shares. They were the two sons. They were the named executors and now the second and third defendants (whilst the second defendant attended in person but did not oppose the application, the court had proceeded in the absence of the third defendant). There was no ambiguity in the deceased’s reasoning and the exclusion of his wife and daughters from the will. He had wished to leave his estate solely down the male line. And so, the claimant, his wife, stood to receive no provision at all under the will. Accordingly, she made an application under section 1 (1) (a) of the Inheritance Act 1975.
Sections 1 – 3 of the Inheritance Act 1975 (IA 1975) form the statutory basis for applications for financial provision from a deceased’s estate. By section 1 (1) (a), a spouse can apply to the court under section 2 of the IA 1975 “on the ground 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”.
Section 2 sets out the powers of the court. Its powers are familiar ones (although do not map on to those set out at section 23 (1) (a) – (f) of MCA 1973). The court’s powers under section 2 of the IA 1975 include those at s. 2 (1) (a) – (f) which reads,
(1)Subject to the provisions of this Act, 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:—
(a)an order for the making to the applicant out of the net estate of the deceased of such periodical payments and for such term as may be specified in the order;
(b)an order for the payment to the applicant out of that estate of a lump sum of such amount as may be so specified;
(c)an order for the transfer to the applicant of such property comprised in that estate as may be so specified;
(d)an order for the settlement for the benefit of the applicant of such property comprised in that estate as may be so specified;
(e)an order for the acquisition out of property comprised in that estate of such property as may be so specified and for the transfer of the property so acquired to the applicant or for the settlement thereof for his benefit;
(f)an order varying any ante-nuptial or post-nuptial settlement (including such a settlement made by will) made on the parties to a marriage to which the deceased was one of the parties, the variation being for the benefit of the surviving party to that marriage, or any child of that marriage, or any person who was treated by the deceased as a child of the family in relation to that marriage.
In exercising its powers, the court must have regard to section 3 (1) (a) – (g). Section 3 (1) reads,
(1)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, that is to say—
(a)the financial resources and financial needs which the applicant has or is likely to have in the foreseeable future;
(b)the financial resources and financial needs which any other applicant for an order under section 2 of this Act has or is likely to have in the foreseeable future;
(c)the financial resources and financial needs which any beneficiary of the estate of the deceased has or is likely to have in the foreseeable future;
(d)any obligations and responsibilities which the deceased had towards any applicant for an order under the said section 2 or towards any beneficiary of the estate of the deceased;
(e)the size and nature of the net estate of the deceased;
(f)any physical or mental disability of any applicant for an order under the said section 2 or any beneficiary of the estate of the deceased;
(g)any other matter, including the conduct of the applicant or any other person, which in the circumstances of the case the court may consider relevant.
In addition, for applications brought by spouses/civil partners and ex-spouses/civil partners, by section 3 (2) (a) – (b), the court must also have regard to:
(a)the age of the applicant and the length of the period during which the applicant lived in the same household as the deceased as if the applicant and the deceased were a married couple or civil partners;
(b)the contribution made by the applicant to the welfare of the family of the deceased, including any contribution made by looking after the home or caring for the family.
In Ilott v Mitson [2017] UKSC 17, the Supreme Court definitively addressed reasonable provision and section 23 of that judgment reads,
“It has become conventional to treat the consideration of a claim under the 1975 Act as a two-stage process, viz (1) has there been a failure to make reasonable financial provision and if so (2) what order ought to be made? That approach is founded to an extent on the terms of the Act, for it addresses the two questions successively in, first, section 1(1) and 1(2) and, second, section 2. In In re Coventry at 487 Goff LJ referred to these as distinct questions, and indeed described the first as one of value judgment and the second as one of discretion. However, there is in most cases a very large degree of overlap between the two stages. Although section 2 does not in terms enjoin the court, if it has determined that the will or intestacy does not make reasonable financial provision for the claimant, to tailor its order to what is in all the circumstances reasonable, this is clearly the objective. Section 3(1) of the Act, in introducing the factors to be considered by the court, makes them applicable equally to both stages. Thus the two questions will usually become: (1) did the will/intestacy make reasonable financial provision for the claimant and (2) if not, what reasonable financial provision ought now to be made for him?”
In Kaur, Peel J summarised as follows: “Sections 1 to 3 of the 1975 Act require the court to ask itself two overlapping questions (para 23 of Ilott v Mitson [2017] UKSC 17: a) Does the will fail to make reasonable provision for C? b) If so, what should the financial provision be? In so doing, it must have regard to the matters set out at section 3 (1) (a) to (g)…[and] section 3 (2)…where an application is made under s 1 (1) (a) or (b) of the Act by a spouse/civil partner or former spouse” (paras 21 to 23).
Section 3 (2) is, Peel J continues, “sometimes referred to as the “divorce cross check”. The surviving spouse should not ordinarily be worse off as a widow than as a hypothetical divorcee, as explained at para 13 of Ilott” (para 24).
Applying those principles to the facts of the case before him, Peel J held,
“Weighing up all the factors in s3, it seems to me that this is the clearest possible case entitling me to conclude that reasonable provision has not been made for C. It is hard to see how any other conclusion can be reached. After a marriage of 66 years, to which she made a full and equal contribution, and during which all the assets accrued, she is left with next to nothing. The divorce cross check points unerringly towards an equal division of the assets. C expressly avers that such a division would meet her needs; she does not pursue a case, sometimes advanced in financial remedies proceedings, that she should receive a greater share than 50% in order to meet her needs. Her intention is to purchase a modest property near her daughter. Her income requirements are modest, and C accepts that all her capital and budgetary needs can comfortably be met within the sums available if she receives an equal share, whether her half share is of a gross estate value at £1.99m, or a gross estate value at £1.2m.”
He concluded that (a) the deceased’s estate did not make reasonable provision for C, (b) the claimant should receive 50% of the net value of the estate, and the disposition of the estate effected by the will should be varied to that effect, (c) the sum of £20,000 shall be forthwith paid to the claimant from the estate by way of monies on account of final distribution to her and the claimant’s legal costs should be paid out of the estate, and shall be deducted from the gross value of the estate before the equal division for which I am providing (para 29). The second defendant was formally appointed as personal representative of the estate.
In sum, an inescapable conclusion on the clearest possible of facts and a fine illustration too of an ordinary application of well-established statute providing social corrective.
Peel J also observed the distinction between making a decision summarily and summary judgment under CPR Part 24. The court’s wider powers of case management allow a court to determine a claim by an overall evaluation of the evidence in an abbreviated fashion. It seemed to Peel J that Part 24 (with its test of “no real prospect of successfully defending the claim or issue”) provides a higher threshold than an abbreviated overall evaluation. It so happened that the present case (and an application for summary judgment had been made in the alternative) would have been the sort of case where a summary judgment could safely and properly have been made but there was no need to venture into summary judgment territory here (para 28).
Procedure
Like TOLATA 1996 claims, IA 1975 claims straddle family and civil jurisdictions (and not always comfortably so). Peel J usefully summarises the procedural framework for IA 1975 claims at paras 2 – 7 of the judgment. For applications made by a spouse or ex-spouse for reasonable financial provision out of the estate of their deceased spouse or ex-spouse, the following apply:
- IA 1975 claims must be issued in the Chancery or Family Division (CPR 57.15(1)) or in the County Court where there is a Chancery District Registry (CPR PD57.2).
- IA 1975 claims by a spouse will usually be suitable for transfer to the Family Division (para 3).
- The CPR rather than the FPR applies even if the application is issued in or transferred to the Family Division (CPR 57.15 (2)) (para 4).
- However, for claims issued in or transferred to the Family Division, where it comes to bundles and preliminary documents, PD27A of the FPR 2010 does apply (para 5).
- The general rule that hearings take place in public (CPR 39.2(1)) applies even to those claims issued in or transferred to the Family Division.
- The Family Court has no jurisdiction to hear Inheritance Act claims. In a family law context, only the Family Division may hear an Inheritance Act claim (para 7).
- It follows that an application must be before a Judge of High Court level. This is the case whatever the value of the estate. The general rule for assets not less than £15 million be allocated to a High Court Judge that applies in financial remedies does not apply to IA 1975 claims (para 7).
