Hilary Term [2017] UKSC 17 On appeal from: [2015] EWCA Civ 797

JUDGMENT
Ilott (Respondent) v The Blue Cross and others
(Appellants)
before
Lord Neuberger, President
Lady Hale, Deputy President
Lord Kerr
Lord Clarke
Lord Wilson
Lord Sumption
Lord Hughes
JUDGMENT GIVEN ON
15 March 2017
Heard on 12 December 2016
Appellants Respondent
Penelope Reed QC Brie Stevens
-Hoare QC
Hugh Cumber John Collins
Constance McDonnell
(Instructed by Wilsons
Solicitors LLP
)
(Instructed by Wright
Hassall
)
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LORD HUGHES: (with whom Lord Neuberger, Lady Hale, Lord Kerr, Lord
Clarke, Lord Wilson and Lord Sumption agree)
1. Unlike some other systems, English law recognises the freedom of
individuals to dispose of their assets by will after death in whatever manner they
wish. There are default succession rules in the event of intestacy, but by definition
those only come into play if the deceased left no will. Otherwise the law knows of
no rule of automatic succession or forced heirship. To this general rule, the statutory
system of family provision imposes a qualification. It has provided since 1938 for
the court to have power in defined circumstances to modify either the will or the
intestacy rules if satisfied that they do not make reasonable financial provision for a
limited class of persons. That power was first introduced by the Inheritance (Family
Provision) Act 1938 (“the 1938 Act”). The present statute is the Inheritance
(Provision for Family and Dependants) Act 1975 (“the 1975 Act”).
2. The key features of the operation of the 1975 Act are four. First, it stipulates
no automatic provision; rather the will (or the intestacy rules) apply unless a specific
application is made to, and acceded to by, the court and a specific order for provision
is made. Second, only a limited class of persons may make such an application; they
are confined to spouses and partners (civil or de facto), former spouses and partners,
children, and those who were actually being maintained by the deceased at the time
of death. Third, all but spouses and civil partners who were in that relationship at
the time of death can claim only what is needed for their maintenance; they cannot
make a claim on the general basis that it was unfair that they did not receive any, or
a larger, slice of the estate. Those three features are laid down expressly in the 1975
Act. The fourth feature is well established by case law both under this Act and its
predecessor of 1938. The test of reasonable financial provision is objective; it is not
simply whether the deceased behaved reasonably or otherwise in leaving the will he
did, or in choosing to leave none. Although the reasonableness of his decisions may
figure in the exercise, that is not the crucial test.
3. The present case concerns one kind of claimant, namely an adult child who
has lived quite independently of her parent, the deceased testator, for many years,
but who is in straitened financial circumstances. That is only one of the types of case
which may raise difficult individual questions under the 1975 Act, which have to be
resolved on a case-by-case basis. Applications by spouses may do so, whether living
with the deceased at the time of death or separated or divorced. Some cases involve
difficult balancing of competing claims by several persons upon limited estates. Yet
others involve assessing the circumstances in which the deceased was supporting
the claimant in some way up to the time of his death; those circumstances may give
rise to a claim that future maintenance is reasonably required, or they may
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demonstrate that support was given in circumstances in which there is no obligation
to continue it after death. Some of the factors inevitably dealt with in this judgment
may apply also to types of case other than those of adult children living separately
from the deceased, but there is no occasion for this court to attempt to meet every
difficulty to which claims for family provision may give rise.
The facts of the present case
4. The testator, Mrs Jackson, was widowed after only four years of marriage
and when expecting her only child, a daughter, now Mrs Ilott. In 1978, when Mrs
Ilott was 17, she left home secretly to live with her boyfriend, of whom Mrs Jackson
did not approve. There followed a lifelong estrangement between mother and
daughter which lasted 26 years until the former’s death in 2004 at the age of 70. Mrs
Ilott married the man she left home to live with, without telling her mother at the
time, although the latter learned of it afterwards. They are still together, and have
had five children. They have lived their entire married lives independent of any
financial connection whatever with Mrs Jackson, and for much the greatest part of
that time in complete isolation from her.
5. District Judge Million reviewed in some detail the evidence of the very
limited contacts which mother and daughter had over the extended intervening
years. Mrs Jackson had kept a diary and Mrs Ilott gave her own detailed account.
There had been three attempts at reconciliation, but all had foundered. The first, after
the birth of the first of Mrs Ilott’s children in Spring 1983, had lasted the longest. It
had been fostered by Mr Ilott’s mother, and had resulted in Mrs Jackson visiting the
new mother in hospital and in several subsequent telephone calls between them.
However, these had not in the main been amicable and they ended after an
unpleasant row between Mr Ilott and Mrs Jackson, as to which the District Judge
held that Mrs Ilott’s evidence about what her husband had said was deliberately
evasive. Later conversations between mother and daughter occurred many years
later in 1994 and 1999 after chance encounters in public places, but these were very
short lived and also failed to establish significant common ground. District Judge
Million went on to find that Mrs Jackson was capricious and unfair in many of the
criticisms of Mrs Ilott recorded in letters, and that her decision to exclude her
altogether from her estate was harsh and unreasonable. He found that the hurt felt
by Mrs Jackson at the original and sustained rupture of her family, and what she saw
as being deprived of her grandchildren, was so entrenched that little short of
rejection by Mrs Ilott of her husband would have satisfied her; a written apology
sent at one stage by Mrs Ilott did not meet her needs. Equally, he found that Mrs
Ilott and her husband contributed to some of the difficulties in sustaining a
reconciliation. It will be necessary later to refer to the limits to the relevance of these
findings.
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6. Whatever the rights and wrongs of the family feud may have been, there is
no doubt that it was sustained for a quarter of a century and was the reason why Mrs
Jackson decided not to make any provision for her daughter in her will. This was
not a decision taken in haste. She had made it at least as early as Spring 1984, when
she made a will and recorded a letter of wishes. This was at a time when there was
some contact between mother and daughter, during the first attempt at reconciliation
and about two months before the row which ended it. The side letter of wishes stated
her decision as follows, after referring to Mrs Ilott’s initial departure from home in
1978:
“She did not get in touch with me and I heard from her
husband’s parents that she had a baby boy. When I heard about
this, I visited her in hospital and took flowers and brought up
her perambulator and other presents. However, she made
herself very unpleasant and wished to have nothing to do with
me. Therefore she receives nothing from me at my death.”
There is no reason to think that Mrs Ilott was aware of this 1984 will at the time that
it was made, nor to suppose that it had anything to do with the breakdown of the
then fragile attempt at reconciliation. But the decision remained firm and Mrs
Jackson reiterated it in 2002 when she made her last will, and again left a side letter.
It similarly stated her settled conclusion that no provision should be made for Mrs
Ilott, saying that she felt no moral or financial obligation towards her in view of
what had happened, and it instructed her executors to resist any claim which Mrs
Ilott might make. Mrs Ilott’s evidence made clear that her mother told her of this
decision and the District Judge found that she and her family had managed their
lives for many years without any expectation of benefit from the estate. Apart from
a modest legacy to a benevolent association connected with her late husband’s
employment, Mrs Jackson’s will left her estate to charities with which she had had
no particular connection during her lifetime, but which represented her freely made
and considered choice of beneficiaries. The estate, of which the largest single
component was a house in the home counties, was worth in round figures £486,000.
7. Mrs Ilott’s financial circumstances were conservatively described by the
District Judge as modest. The family lived in a house rented from a Housing
Association. At the time of his decision, four of the children were living at home,
one of them, aged 20, in work. Mrs Ilott had elected since the birth of the first of
their children to remain at home and was not employed except as her husband’s
bookkeeper for £240 pa. Her husband had intermittent work as a supporting actor
and earned a little over £4,100 pa net after charging some expenses such as car costs
which brought some benefit in kind. Leaving aside any small contribution from the
20 year old son, the rest of the family income was in the form of child benefit
(£1,878) and working tax credits (£8,112). The family was also entitled to housing
benefit and council tax benefit, together worth about £5,100 pa. The District Judge
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assessed the net annual income, after including the limited benefit in kind, at
£20,387. He then allowed for some limited, and unspecified, earning capacity in Mrs
Ilott, at least in part time work, although in the past her decision to remain at home
for the children was perfectly understandable.
8. The family had lived on that or similar income for many years. Mrs Ilott was
not insolvent. The family had a small sum by way of savings (about £4,000). They
lived within their means. But the clear evidence was that she and her family were
distinctly limited in what they could do. The household equipment was all old and
much of it worn out, but they could not afford to replace it as necessary. The car had
cost £245 and kept breaking down. The carpets and decoration needed renewal but
they could not provide for this. They had never been able to afford a family holiday.
They could not contemplate, for example, music or sports lessons for the children.
9. Before both the Court of Appeal and this court it was common ground that
some of the benefits received by Mrs Ilott and her family were subject to a means
test based on available savings or capital. Both housing benefit and council tax
benefit are not payable if there are savings in excess of £16,000, other than in the
form of the capital value of the family home. Neither working tax credit nor child
benefit is similarly affected by capital. As will be seen, the incidence of benefits was
central to the re-evaluation of the claim which the Court of Appeal made.
10. Mrs Ilott was entitled to buy her present home at a concessionary price, as a
sitting tenant. The price at the time of the hearing before the District Judge was
£186,000, but by the time of the Court of Appeal judgment now under appeal it had
fallen to £143,000.
The statutory framework
11. The 1975 Act, as it stood at the time of Mrs Jackson’s death in 2004 and
omitting subsequent amendments to include civil partners as qualified claimants and
to give further definition to those whom the deceased was maintaining at the time
of death, provided as follows.
“1. Application for financial provision from deceased’s
estate
(1) Where after the commencement of this Act a
person dies domiciled in England and Wales and is
survived by any of the following persons –
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(a) the wife or husband of the deceased;
(b) a former wife or former husband of the
deceased who has not remarried;
(ba) any person (not being a person
included in paragraph (a) or (b) above) to
whom subsection (1A) below applies;
(c) a child of the deceased;
(d) any person (not being a child of the
deceased) who, in the case of any marriage to
which the deceased was at any time a party, was
treated by the deceased as a child of the family in
relation to that marriage;
(e) any person (not being a person included in
the foregoing paragraphs of this subsection) who
immediately before the death of the deceased was
being maintained, either wholly or partly, by the
deceased;
that person may apply to the court for an order under
section 2 of this Act 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.
(1A) This subsection applies to a person if the
deceased died on or after 1 January 1996 and, during the
whole of the period of two years ending immediately
before the date when the deceased died, the person was
living –
(a) in the same household as the deceased,
and
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(b) as the husband or wife of the deceased.
(2) In this Act ‘reasonable financial provision’ –
(a) in the case of an application made by
virtue of subsection (1)(a) above by the husband
or wife of the deceased (except where the
marriage with the deceased was the subject of a
decree of judicial separation and at the date of
death the decree was in force and the separation
was continuing), means such financial provision
as it would be reasonable in all the circumstances
of the case for a husband or wife to receive,
whether or not that provision is required for his
or her maintenance;
(b) in the case of any other application made
by virtue of subsection (1) above, means such
financial provision as it would be reasonable in
all the circumstances of the case for the applicant
to receive for his maintenance.
(3) [Supplemental provisions relating to persons treated as
being maintained by the deceased]
2. Powers of court to make orders
(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;
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(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 postnuptial 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;
(2) [supplemental provisions for the form of
periodical payments orders]
(3) [allows the court to order part of the estate to be
set aside to meet periodical payments orders]
(4) An order under this section may contain such
consequential and supplemental provisions as the court
thinks necessary or expedient for the purpose of giving
effect to the order or for the purpose of securing that the
order operates fairly as between one beneficiary of the
estate of the deceased and another and may, in
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particular, but without prejudice to the generality of this
subsection –
(a) order any person who holds any property
which forms part of the net estate of the deceased
to make such payment or transfer such property
as may be specified in the order;
(b) vary the disposition of the deceased’s
estate effected by the will or the law relating to
intestacy, or by both the will and the law relating
to intestacy, in such manner as the court thinks
fair and reasonable having regard to the
provisions of the order and all the circumstances
of the case;
(c) confer on the trustees of any property
which is the subject of an order under this section
such powers as appear to the court to be
necessary or expedient.
3. Matters to which court is to have regard in exercising
powers under section 2
(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
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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.
(2) Without prejudice to the generality of paragraph
(g) of subsection (1) above, where an application for an
order under section 2 of this Act is made by virtue of
section 1(1)(a) or 1(1)(b) of this Act, the court shall in
addition to the matters specifically mentioned in
paragraphs (a) to (f) of that subsection, have regard to –
(a) the age of the applicant and the duration
of the marriage;
(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;
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and, in the case of an application by the wife or
husband of the deceased, the court shall also,
unless at the date of death a decree of judicial
separation was in force and the separation was
continuing, have regard to the provision which
the applicant might reasonably have expected to
receive if on the day on which the deceased died
the marriage, instead of being terminated by
death, had been terminated by a decree of
divorce.
(2A) Without prejudice to the generality of paragraph
(g) of subsection (1) above, where an application for an
order under section 2 of this Act is made by virtue of
section 1(1)(ba) of this Act, the court shall, in addition
to the matters specifically mentioned in paragraphs (a)
to (f) of that subsection, have regard to –
(a) the age of the applicant and the length of
the period during which the applicant lived as the
husband or wife of the deceased and in the same
household as the deceased;
(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.
(3) Without prejudice to the generality of paragraph
(g) of subsection (1) above, where an application for an
order under section 2 of this Act is made by virtue of
section 1(1)(c) or 1(1)(d) of this Act, the court shall, in
addition to the matters specifically mentioned in
paragraphs (a) to (f) of that subsection, have regard to
the manner in which the applicant was being or in which
he might expect to be educated or trained, and where the
application is made by virtue of section 1(1)(d) the court
shall also have regard –
(a) to whether the deceased had assumed any
responsibility for the applicant’s maintenance
and, if so, to the extent to which and the basis
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upon which the deceased assumed that
responsibility and to the length of time for which
the deceased discharged that responsibility;
(b) to whether in assuming and discharging
that responsibility the deceased did so knowing
that the applicant was not his own child;
(c) to the liability of any other person to
maintain the applicant.
(4) [additional considerations applicable to
applications made under section 1(1)(e) by persons
being maintained by the deceased.]
(5) In considering the matters to which the court is
required to have regard under this section, the court shall
take into account the facts as known to the court at the
date of the hearing.
(6) In considering the financial resources of any person
for the purposes of this section the court shall take into
account his earning capacity and in considering the
financial needs of any person for the purposes of this
section the court shall take into account his financial
obligations and responsibilities.”
Maintenance
12. The concept of “reasonable financial provision” is thus, by the closing words
of section 1(1), made central to the jurisdiction to depart from the will or intestacy
rules, as the case may be. In the case of current spouses or civil partners, subsections
1(2)(a) and (aa) say that reasonable financial provision is what it would be
reasonable for the applicant to receive, whether or not required for maintenance. The
supplementary provisions of section 3(2) add for applicants in that limited class the
direction to the court to have regard to the provision that the spouse or civil partner
might have been expected to obtain in the event of divorce or dissolution, so that the
assessment of this kind of claim may well be an exercise similar to that undertaken
by the family court on an application for financial remedies after divorce or
dissolution with, of course, the difference that the other spouse or partner is now
dead. In the case of all other applicants, however, section 1(2)(b) makes clear that
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reasonable financial provision means such provision as it would be reasonable for
the applicant to receive for maintenance.
13. This limitation to maintenance provision represents a deliberate legislative
choice and is important. Historically, when family provision was first introduced by
the 1938 Act, all claims, including those of surviving unseparated spouses, were
thus limited. That demonstrates the significance attached by English law to
testamentary freedom. The change to the test in the case of surviving unseparated
spouses was made by the 1975 Act, following a consultation and reports by the Law
Commission: Law Com No 52 (22 May 1973) and Law Com No 61 (31 July 1974).
The latter report made it clear that the recommendation was designed not to
introduce, even in the case of surviving present spouses, a general power to re-write
the testator’s will, but rather to bring provision for such spouses into line with the
developing approach of the family court. That court had by then relatively recently
acquired expanded powers to make lump sum and property adjustment orders, which
were not limited to maintenance provision but increasingly recognised other factors
such as the length of the marriage, the contributions to the family and so on (see
section 25 Matrimonial Causes Act 1973). The mischief to which the change was
directed was the risk of a surviving spouse finding herself in a worse position than
if the marriage had ended by divorce rather than by death. For claims by persons
other than spouses the maintenance limitation was to remain, and has done so. See
in particular paras 14, 16, 19 and 24.
14. The concept of maintenance is no doubt broad, but the distinction made by
the differing paragraphs of section 1(2) shows that it cannot extend to any or every
thing which it would be desirable for the claimant to have. It must import provision
to meet the everyday expenses of living. In re Jennings, deceased [1994] Ch 286
was an example of a case where no need for maintenance existed. The claimant was
a married adult son living with his family in comfortable circumstances, on a good
income from two businesses. The proposition that it would be reasonable provision
for his maintenance to pay off his mortgage was, correctly, firmly rejected – see in
particular at 298F. The summary of Browne-Wilkinson J in In re Dennis, deceased
[1981] 2 All ER 140 at 145-146 is helpful and has often been cited with approval:
“The applicant has to show that the will fails to make provision
for his maintenance: see In re Coventry (deceased) … [1980]
Ch 461. In that case both Oliver J at first instance and Goff LJ
in the Court of Appeal disapproved of the decision in In re
Christie (deceased) … [1979] Ch 168, in which the judge had
treated maintenance as being equivalent to providing for the
well-being or benefit of the applicant. The word ‘maintenance’
is not as wide as that. The court has, up until now, declined to
define the exact meaning of the word ‘maintenance’ and I am
certainly not going to depart from that approach. But in my
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judgment the word ‘maintenance’ connotes only payments
which, directly or indirectly, enable the applicant in the future
to discharge the cost of his daily living at whatever standard of
living is appropriate to him. The provision that is to be made is
to meet recurring expenses, being expenses of living of an
income nature. This does not mean that the provision need be
by way of income payments. The provision can be by way of a
lump sum, for example, to buy a house in which the applicant
can be housed, thereby relieving him pro tanto of income
expenditure. Nor am I suggesting that there may not be cases
in which payment of existing debts may not be appropriate as
a maintenance payment; for example, to pay the debts of an
applicant in order to enable a him to continue to carry on a
profit-making business or profession may well be for his
maintenance.”
Thus in that case a claim against a large estate by an adult son failed when it was
put as a claim for a capital sum to meet the capital transfer tax payable on a sizeable
gift made to the claimant by the deceased during his lifetime, which gift the former
had wasted away. The judge made the assumption, perhaps generously to the
claimant, that bankruptcy would be likely if such a legacy were not directed, but that
did not make the suggested sum provision for maintenance; the claimant was well
able to work, despite a chequered history of drifting from occupation to occupation,
and even if bankrupt was well capable of maintaining himself.
15. The level at which maintenance may be provided for is clearly flexible and
falls to be assessed on the facts of each case. It is not limited to subsistence level.
Nor, although maintenance is by definition the provision of income rather than
capital, need it necessarily be provided for by way of periodical payments, for
example under a trust. It will very often be more appropriate, as well as cheaper and
more convenient for other beneficiaries and for executors, if income is provided by
way of a lump sum from which both income and capital can be drawn over the years,
for example on the Duxbury model familiar to family lawyers (see Duxbury v
Duxbury (Note) [1992] Fam 62). Lump sum orders are expressly provided for by
section 2(1)(b). There may be other cases appropriate for lump sums; the provision
of a vehicle to enable the claimant to get to work might be one example and, as will
be seen, the present case affords another. As Browne-Wilkinson J envisaged (obiter)
in In re Dennis (above) there is no reason why the provision of housing should not
be maintenance in some cases; families have for generations provided for the
maintenance of relatives, and indeed for others such as former employees, by
housing them. But it is necessary to remember that the statutory power is to provide
for maintenance, not to confer capital on the claimant. Munby J (as he then was)
rightly made this point clear in In re Myers [2004] EWHC 1944 (Fam); [2005]
WTLR 851 at paras 89-90 and 99-101. He ordered, from a very large estate,
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provision which included housing, but he did so by way not of an outright capital
sum but of a life interest in a trust fund together with power of advancement
designed to cater for the possibility of care expenses in advanced old age. If housing
is provided by way of maintenance, it is likely more often to be provided by such a
life interest rather than by a capital sum.
Reasonable financial provision
16. The condition for making an order under the 1975 Act is that the will, or the
intestacy regime, as the case may be, does not “make reasonable financial provision”
for the claimant (section 1(1)). Reasonable financial provision is, by section 1(2),
what it is “reasonable for [the claimant] to receive”, either for maintenance or
without that limitation according to the class of claimant. These are words of
objective standard of financial provision, to be determined by the court. The Act
does not say that the court may make an order when it judges that the deceased acted
unreasonably. That too would be an objective judgment, but it would not be the one
required by the Act.
17. Nevertheless, the reasonableness of the deceased’s decisions are undoubtedly
capable of being a factor for consideration within section 3(1)(g), and sometimes
section 3(1)(d). Moreover, there may not always be a significant difference in
outcome between applying the correct test contained in the Act, and asking the
wrong question whether the deceased acted reasonably. If the will does not make
reasonable financial provision for the claimant, it may often be because the deceased
acted unreasonably in failing to make it. For this reason it is very easy to slip into
the error of applying the wrong test. It is necessary for courts to be alert to the
danger, because the two tests will by no means invariably arrive at the same answer.
The deceased may have acted reasonably at the time that his will was made, but the
circumstances of the claimant may have altered, for example by supervening chronic
illness or incapacity, and the deceased may have been unaware of the full
circumstances, or unable to make a new will in time. In re Hancock, deceased [1998]
2 FLR 346 illustrates another possibility. The deceased had acted entirely reasonably
in leaving his business land to those of his children who were active in the business,
but after his death part of the land acquired a development value six times its probate
assessment, and, that being the case, there was a failure to make reasonable
provision for another daughter who was in straitened circumstances. Thus there can
be a failure to make reasonable financial provision when the deceased’s conduct
cannot be said to be unreasonable. The converse situation is still clearer. The
deceased may have acted unreasonably, indeed spitefully, towards a claimant, but it
may not follow that his dispositions fail to make reasonable financial provision for
that claimant, especially (but not only) if the latter is one whose potential claim is
limited to maintenance. In In re Jennings, for example, the deceased had
unreasonably failed, throughout the minority of his son, the claimant, to discharge
his maintenance obligations towards him. Many might say, as indeed the trial judge
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did, that this failure imposed an obligation on the deceased belatedly to provide for
his son. But by the time of his death many years later the son had made his own
successful way in the world and stood in no need of maintenance; his claim
accordingly failed, correctly, in the Court of Appeal.
18. The right test was well set out by Oliver J in In re Coventry [1980] Ch 461 at
474-475 in a passage which has often been cited with approval since:
“It is not the purpose of the Act to provide legacies or rewards
for meritorious conduct. Subject to the court’s powers under
the Act and to fiscal demands, an Englishman still remains at
liberty at his death to dispose of his own property in whatever
way he pleases or, if he chooses to do so, to leave that
disposition to be regulated by the laws of intestate succession.
In order to enable the court to interfere with and reform those
dispositions it must, in my judgment, be shown, not that the
deceased acted unreasonably, but that, looked at objectively,
his disposition or lack of disposition produces an unreasonable
result in that it does not make any or any greater provision for
the applicant – and that means, in the case of an applicant other
than a spouse for that applicant’s maintenance. It clearly cannot
be enough to say that the circumstances are such that if the
deceased had made a particular provision for the applicant, that
would not have been an unreasonable thing for him to do and
therefore it now ought to be done. The court has no carte
blanche to reform the deceased’s dispositions or those which
statute makes of his estate to accord with what the court itself
might have thought would be sensible if it had been in the
deceased’s position.”
19. Next, all cases which are limited to maintenance, and many others also, will
turn largely upon the asserted needs of the claimant. It is important to put the matter
of needs in its correct place. For current spouses and civil partners (section 1(2)(a)
and (aa)), need is not the measure of reasonable provision, but if it exists will clearly
be very relevant. For all other claimants, need (for maintenance rather than for
anything else, and judged not by subsistence levels but by the standard appropriate
to the circumstances) is a necessary but not a sufficient condition for an order. Need,
plus the relevant relationship to qualify the claimant, is not always enough. In In re
Coventry the passage cited above was followed almost immediately by another
much-cited observation of Oliver J:
“It cannot be enough to say ‘here is a son of the deceased; he is
in necessitous circumstances; there is property of the deceased
Page 17
which could be made available to assist him but which is not
available if the deceased’s dispositions stand; therefore those
dispositions do not make reasonable provision for the
applicant.’ There must, as it seems to me, be established some
sort of moral claim by the applicant to be maintained by the
deceased or at the expense of his estate beyond the mere fact of
a blood relationship, some reason why it can be said that, in the
circumstances, it is unreasonable that no or no greater provision
was in fact made.”
20. Oliver J’s reference to moral claim must be understood as explained by the
Court of Appeal in both In re Coventry itself and subsequently in In re Hancock,
where the judge had held that there was no moral claim on the part of the claimant
daughter. There is no requirement for a moral claim as a sine qua non for all
applications under the 1975 Act, and Oliver J did not impose one. He meant no more,
but no less, than that in the case of a claimant adult son well capable of living
independently, something more than the qualifying relationship is needed to found
a claim, and that in the case before him the additional something could only be a
moral claim. That will be true of a number of cases. Clearly, the presence or absence
of a moral claim will often be at the centre of the decision under the 1975 Act.
21. Oliver J’s reference to necessitous circumstances not by themselves always
being sufficient is illustrated by Cameron v Treasury Solicitor [1996] 2 FLR 716.
The claimant was the former wife of the deceased. She had been divorced from him
19 years before his death and their matrimonial finances had been settled by a lump
sum paid to her as a clean break. There had been no financial relationship between
them for the next 19 years, although they had remained in touch. The fact that she
was in necessitous circumstances was held not to create any obligation on him to
provide for her from his estate; that there was no other claimant and his small estate
passed as bona vacantia to the Crown did not alter the fact that their personal and
financial relationship was long in the past. Thus cases of long estrangement may,
according to the judge’s assessment of the particular facts, be an example of the
proposition that needs are not always enough to justify a claim under the Act. In
most cases of clean break matrimonial settlement, the family court order will these
days incorporate, as often as not by consent, a direction under section 15 that neither
spouse shall be entitled to make any claim under the 1975 Act from the estate of the
other.
22. Nor, if the conclusion is that reasonable financial provision has not been
made, are needs necessarily the measure of the order which ought to be made. It is
obvious that the competing claims of others may inhibit the practicability of wholly
meeting the needs of the claimant, however reasonable. It may be less obvious, but
is also true, that the circumstances of the relationship between the deceased and the
claimant may affect what is the just order to make. Sometimes the relationship will
Page 18
have been such that the only reasonable provision is the maximum which the estate
can afford; in other situations, the provision which it is reasonable to make will,
because of the distance of the relationship, or perhaps because of the conduct of one
or other of the parties, be to meet only part of the needs of the claimant.
23. 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?
24. There may be some cases in which it will be convenient to separate these
questions, particularly if there is an issue whether there was any occasion for the
deceased to make any provision for the claimant. But in many cases, exactly the
same conclusions will both answer the question whether reasonable financial
provision has been made for the claimant and identify what that financial provision
should be. In particular, questions arising from the relationship between the
deceased and the claimant, questions relating to the needs of the claimant, and issues
concerning the competing claims of others, are all equally applicable to both matters.
The Act plainly requires a broad brush approach from the judge to very variable
personal and family circumstances. There can be nothing wrong, in such cases, with
the judge simply setting out the facts as he finds them and then addressing both
questions arising under the Act without repeating them. Nor should there normally
be any occasion for a split hearing. Moreover, Goff LJ’s observations ought not to
be thought to mean that the approach of an appeal court should differ as between the
two parts of the process. Whether best described as a value judgment or as a
discretion (and the former is preferable), both stages of the process are highly
individual in every case. The order made by the judge ought to be upset only if he
has erred in principle or in law. An appellate court will be very slow to interfere and
should never do so simply on the grounds that its judge(s) would have been inclined,
if sitting at first instance, to have reached a different conclusion. The well-known
observations of Lord Hoffmann in Piglowska v Piglowski [1999] 1 WLR 1360 esp
at 1373-1374 are directly in point. It is to “kill the parties with kindness” to permit
marginal appeals in cases which are essentially individual value judgments such as
Page 19
those under the 1975 Act should be. The present case, as it happens, is an example
of much to be regretted prolongation, and presumably expensive prolongation, of
the forensic process.
25. Submissions were made in the present case as to the date at which the facts
fall to be assessed. The answer is given by section 3(5). Where a court has to assess
whether reasonable financial provision has been made, and/or what it should be, the
relevant date is the date of hearing. Of course, on an appeal, if the question is
whether the trial judge made an error of principle the facts and evidence must be
taken as they stood before him. And if it should fall to the appellate court to remake
the decision on the merits, as ordinarily it should not, any request to adduce further
evidence will have to be judged by ordinary Ladd v Marshall principles (see [1954]
1 WLR 1489).
The course of proceedings in the present case
26. District Judge Million found that the deceased’s will did not make reasonable
provision for Mrs Ilott. He awarded her £50,000. Mrs Ilott was dissatisfied with the
amount and appealed. Her claim has varied over time, but both before the District
Judge and on appeal from him she sought capital provision amounting to half or
more of the estate. The charitable beneficiaries, who had not appealed thus far, then
cross appealed challenging the conclusion that there had been any failure of
reasonable financial provision. The appeal and cross appeal came on before Eleanor
King J (as she then was) with a tight timetable. She was invited to deal first with the
cross appeal. She concluded that the District Judge had erred in law/principle in
asking himself whether the deceased had acted reasonably rather than whether there
had been a failure to make reasonable provision, and that he should have held that
there was no lack of reasonable provision. The cross appeal having thus been
allowed, Mrs Ilott’s appeal on quantum did not arise.
27. Mrs Ilott appealed to the Court of Appeal against King J’s decision. She
succeeded, because that court held that the District Judge had not made the error
claimed. He had perhaps at one stage been at risk of appearing to found his decision
upon his judgment about the reasonableness of the deceased’s decision to make no
provision for her daughter, going in some little detail into the rights and wrongs of
the failed attempts at reconciliation. But he had then gone on properly to confront
the section 3 factors and to pose the correct question as set out in In re Coventry,
which he cited, namely whether, objectively viewed, reasonable financial provision
for the claimant had been made. The court remitted back to the High Court Mrs
Ilott’s appeal as to the amount of the order. That appeal then came before Parker J,
who upheld the District Judge’s order.
Page 20
28. Mrs Ilott then appealed that decision also. The Court of Appeal, thus visiting
the case for a second time, held that the District Judge had fallen into two errors of
principle in arriving at his award of £50,000. It proceeded to make its own evaluation
of the claim. It awarded Mrs Ilott (1) £143,000 to buy the house she lived in and (2)
an option to receive a further £20,000 in one or more instalments. The present appeal
to this court is from that last order. Whether or not there have been avoidable delays
at various stages, in particular in mounting the first appeal to the Court of Appeal,
the whole process has taken an unconscionable time. The deceased died in July
2004. The appeal before this court was argued in December 2016.
The decision of the Court of Appeal now under appeal
29. The Court of Appeal [2016] 1 All ER 932 held that the District Judge had
fallen into two “fundamental” errors of principle. It was these which justified it in
re-evaluating the claim for itself. Those two errors were said to be:
i) he had held that the award should, in the light of the long estrangement
and Mrs Ilott’s independent life and lack of expectation of benefit, be limited,
but he had not identified what the award would have been without these
factors and thus the reduction attributable to them; and
ii) he had made his award of £50,000 without knowing what the effect of
it would be upon the benefits which Mrs Ilott and her family presently
received.
30. Having on these grounds set aside the order of the District Judge, the Court
of Appeal arrived at its own assessment of the proper award by the following route.
i) It held that in order to balance the claims on the estate fairly it was
necessary to treat a claimant who is in receipt of state benefits in the same
way as a claimant who is elderly or disabled, as having for that reason
increased needs for living expenses. The benefits, it held, “must be
preserved”.
ii) Accordingly it made an award of a capital sum sufficient to enable the
claimant to buy the house in which she lived. That was an award expressly
made on the basis that it would not affect benefits entitlement. The court
added that it would, if the claimant chose, enable her to augment her income
later by way of equity release.
Page 21
iii) It then added a further award of £20,000. This was expressed as an
option with provision for drawing in instalments at the election of the
claimant. Although that sum was said to be such as to provide a small
additional income, it too was expressly awarded in order to enable the
claimant to draw it down bit by bit in such a way as to avoid any impact on
benefit entitlement.
31. These principal conclusions were expressed by the court in the leading
judgment of Arden LJ as follows:
“60. In my judgment, what the court has to do is to balance
the claims on the estate fairly. There is no doubt that, if the
claimant for whom reasonable financial provision needs to be
made is elderly or disabled and has extra living costs,
consideration would have to be given to meeting those. In my
judgment, the same applies to the case where a party has extra
financial needs because she relies on state benefits, which must
be preserved. Ms Reed submits that the provision of housing
would not do this. I disagree. The provision of housing would
enable her both to receive a capitalised sum and to keep her tax
credits. If those benefits are not preserved then the result is that
achieved by DJ Million’s order in this case: there is little or no
financial provision for maintenance at all.
61. The claim of the appellant has to be balanced against
that of the Charities but since they do not rely on any competing
need they are not prejudiced by what may be a higher award
than the court would otherwise need to make.
62. In my judgment, the right course is to make an award of
the sum of £143,000, the cost of acquiring the Property, plus
the reasonable expenses of acquiring it. That would remove the
need to pay rent though some of that money may be required
for meeting the expenses that she will have as owner. As Ms
Stevens-Hoare submits, having the Property will enable her to
raise capital (by equity release) when she needs further income
in the future.
63. In addition, I would add to the award a further sum to
provide for a very small additional income to supplement her
state benefits without the necessity of an equity release. If my
Lords agree, I would provide that she has an option, exercisable
Page 22
by notice in writing to the [executors] within two months of the
date of this order (or within such longer period as the appellant
and [they] may agree) to receive a capital sum not exceeding of
£20,000 out of the estate for this purpose. According to the
current Duxbury tables in At a Glance for 2015/6, the sum
£20,000 [sic] would if invested give her £331 net income per
year for the rest of her life. This is not a large amount because
of the factors which weigh against her claim, particularly the
fact that she is an adult child living independently, Mrs
Jackson’s testamentary wishes and to a small extent the
appellant’s estrangement from Mrs Jackson.
64. The option may be exercised in part more than once
provided that the total sum of £20,000 is not thereby exceeded.
I have expressed the provision of a capital sum as an option so
that, if the award of a capital sum would result in the loss of
benefits, she can if she wishes take a lesser sum, or (as she may
prefer to do if she is advised that her benefits will not be
prejudiced) she may take the lesser sum and spend it, and then
exercise the option for an amount or amounts not exceeding the
balance.”
The first suggested error
32. The Court of Appeal held that the first error was revealed by para 67 of the
judgment of the District Judge. He had said this:
“67. In my judgment all of the above factors has produced an
unreasonable result in that no provision at all was made for Mrs
Ilott in her mother’s will in circumstances where Mrs Ilott is in
some financial need. However, I also accept that Mrs Ilott has
not had any expectancy of any provision for herself. Mr and
Mrs Ilott have managed their life over many years without any
expectancy that Mrs Ilott would receive anything. That does
not mean that the result is a reasonable one in the straightened
financial circumstances of the family. But it does mean, in my
judgment that any provision now must be limited.”
33. As to that, the Court of Appeal said, at para 35:
Page 23
“… at the end of para 67 of his judgment … DJ Million states
that because of the appellant’s lack of expectancy and her
ability to live within her means, her award should be ‘limited’.
In the paragraphs which follow he does not state how he has
limited the award to reflect those matters … Those matters
might justify a less generous award than would otherwise be
made, but, even if that was so, it was wrong in law to state that
the award had been limited for those reasons without
explaining what the award might otherwise have been and to
what extent it was limited by the matters in question. It was a
situation in which reasons were required so that the appellant
could consider whether the reductions were excessive (which
might give her an arguable error for the purposes of any
appeal), and it is of the essence of a judicial decision that
adequate reasons are given on material matters.”
34. The Act requires a single assessment by the judge of what reasonable
financial provision should be made in all the circumstances of the case. It does not
require the judge to fix some hypothetical standard of reasonable provision and then
either add to it, or discount from it, by percentage points or otherwise, for variable
factors. To the contrary, the section 3 factors, which are themselves all variables and
which are likely often to be in tension one with another, are all to be considered so
far as they are relevant, and in the light of them a single assessment of reasonable
financial provision is to be made. There is no warrant in the Act for requiring a
process of the kind suggested by the Court of Appeal. If the judge were to arrive at
a figure for reasonable financial provision without one or more of the relevant facts
in the case, he would not be undertaking the assessment required by the Act. Which
of the facts is he to ignore for the purpose of arriving at a hypothetical or “headline”
figure, before adjusting it?
35. The District Judge did not make the suggested or any error in taking into
account the nature of the relationship between the deceased and the claimant. In
many cases this will be of considerable importance. If, by contrast with the present
case, the claimant were a child of the deceased who had remained exceptionally and
confidentially close to her mother throughout, had supported and nurtured her in her
old age at some cost in time and money to herself, and if she had been promised
many times that she would be looked after in the will, it could not be said that the
judge was required first to assess reasonable financial provision on the basis of some
supposed norm of filial relationship, neither particularly close nor particularly
distant, and then to lift the provision by an identified amount to recognise the special
closeness between the two ladies. But without going through any such exercise, and
yet adhering to the concept of maintenance, a judge ought in such circumstances to
attach importance to the closeness of the relationship in arriving at his assessment
of what reasonable financial provision requires. In the paragraphs leading up to the
Page 24
one criticised by the Court of Appeal, this Judge had dutifully worked his way
through each of the section 3 factors. The long estrangement was the reason the
testator made the will she did. It meant that Mrs Ilott was not only a non-dependent
adult child but had made her life entirely separately from her mother, and lacked any
expectation of benefit from her estate. Because of these consequences, the
estrangement was one of the two dominant factors in this case; the other was Mrs
Ilott’s very straitened financial position. Some judges might legitimately have
concluded that the very long and deep estrangement had meant that the deceased
had no remaining obligation to make any provision for her independent adult
daughter – as indeed did Eleanor King J when it appeared that she had scope to remake the decision. As it was, the judge was perfectly entitled to reach the conclusion
which he did, namely that there was a failure of reasonable financial provision, but
that what reasonable provision would be was coloured by the nature of the
relationship between mother and daughter.
The second suggested error
36. The Court of Appeal described this as follows:
“36. The second fundamental error in my judgment is this.
The judge was required to calculate financial provision for the
appellant’s maintenance. Yet he did not know what effect the
award of £50,000 would have on her state benefits. He made a
working assumption at the end of para 74 of his judgment that
the effect of a ‘large capital payment’ (which would include an
award such as he ultimately made) would disentitle the family
to most if not all of their state benefits, Failure to verify this
assumption undermined the logic of the award.”
That proposition was allied to the conclusion which appears at the end of para 60 of
the judgment, cited above, namely that there would be little or no benefit for Mrs
Ilott in the District Judge’s award because of the effect it would have on state
benefits. What the court meant was that capital beyond £16,000 would disentitle
Mrs Ilott from two of the benefits her family received, namely housing benefit and
council tax benefit (see para 9 above). Since those two benefits paid a little over
£5,000 per year to the family, the court was no doubt right to say that the reduction
in benefits would equal or probably exceed the annual sum produced if the District
Judge’s capital award were invested on Duxbury lines.
37. It is relevant to note the case made for Mrs Ilott which the District Judge was
addressing. He recorded it as follows.
Page 25
“70. … At the end of his final submissions, under pressure
from me to quantify his claim, Mr Smith descended to some
figures. On behalf of Mrs Ilott he sought:
(1) £186,000 to permit her to purchase their own
home (with a discount under the right to buy
provisions);
(2) £53,000 to pay for a single storey extension to the
house, to give more living room for the family
(including the four children who live at home);
(3) A capitalised sum equivalent to an income of
£10,000 per year for life. (He put no figure on this, but
the Duxbury tables in At A Glance indicate a sum of
£173,000 for a woman aged 46.);
(4) Some further capital sum to permit the
refurbishment and re-equipment of the house after its
purchase. According to a list produced during the final
hearing such a sum might amount to £40,950 (£27,450
plus £13,500).
71. The claimant also produced a proposed annual budget
for the family which totalled £34,600. Allowing for Mr Ilott’s
income from his part time earnings at £5,304 (that is £4,164,
plus £900 plus £240), and the current child benefit of £1,570,
this would have required an additional annual income of
£27,776. Capitalised for life for a female aged 46 years would
require a sum of about £562,000 (using figures from At a
Glance). This exceeds the size of the estate.
72. I regret to say that the claimant’s case on these matters
was presented in an ill thought out and unhelpful way.
73. I must keep in mind that under section 1(2)(b) of the Act
the financial provision is for ‘maintenance’ – that is, income
based. Mr Smith’s justification for the capital sum sufficient to
buy the family home was that it would free up income which
would be spent otherwise on rent. But, because of the incidence
of housing benefit, the net income released would be about
Page 26
£912 per year (£76 per month). This is the net amount of rent
paid by the family after housing benefit.
74. Further, I was presented with no figures which showed
the net effect (after benefits and tax credits) of providing an
income of £10,000 per year. Also, when advancing the
proposal for a capitalised sum I was presented with no figures
to show the net effect which took into account the state benefits
which the family receive. I assume that the practical
consequence of a large capital payment would be that the
family would lose most, if not all, of their benefits. None of
these consequences appeared to have been thought through.
75. I have therefore been left to deal with this case with a
more rough and ready approach.”
38. Faced with this position, the District Judge rejected the distinctly ambitious
claim made. Nobody now suggests he was not entitled to do that. He did not fail to
address the impact on benefits of any order which he might make. On the contrary,
although he had been provided on behalf of Mrs Ilott with no materials at all on this
(as clearly he should have been if it was her case that the point was relevant), he
was, unsurprisingly as a District Judge sitting regularly in the Principal Registry of
the Family Division, sufficiently familiar with the structure of state benefits to work
on the basis of the likely consequences for them. As can be seen, he specifically
addressed the impact of benefits twice. First, in rejecting the part of the claim which
was for the purchase price of the house, he concluded, correctly, that the income
effect of enabling Mrs Ilott to buy the house would be limited to about £912 pa
precisely because Housing Benefit was meeting the bulk of the rent. He might have
added that that figure would be reduced by house maintenance costs which were
presently met by the landlords. Secondly, he made the assumption (which can only
have been in favour of the claimant) that a capital award of the kind that he made
would disentitle her from “most if not all” of the “benefits” presently received. He
appears to have been (correctly) distinguishing between benefits and credits (and
probably including child benefit in the latter). If so, he was right. If not, then he over
– rather than under – estimated the effect of such an award, since working tax credits
and child benefit (between them about £10,000 pa) would be unaffected. Although
the Court of Appeal criticised him for not calling of his own motion for chapter and
verse on the relevance of capital to benefits claims, it cannot be suggested that he
was wrong to the disadvantage of the claimant in either of these conclusions.
39. The real gravamen of the Court of Appeal’s criticism is not so much that the
District Judge did not “verify” the benefits rules, but that he produced an award
which had little or no value to the claimant because of the impact on benefits. If that
Page 27
were so, and certainly if it were done in ignorance of the true position, it might
indeed be a legitimate error of principle justifying an appellate court in setting aside
his order. But in fact it was not only not done in ignorance; it was not an award of
little or no value to the claimant.
40. It was a central feature of Mrs Ilott’s financial position that although the
family could manage – just – on its income, this was at the cost of being unable to
maintain the ordinary domestic equipment on which every household depends. She
produced a telling list of the equipment which needed replacement, and of
elementary refurbishment required, in order to enable the household to function
adequately. The District Judge referred to it directly at para 70(4), set out above.
Although some of the list itemised repairs to the structure, which would chiefly arise
only if the house were to be purchased, and although no doubt some of the other
items may not have been costed conservatively, one has only to read the document
to see that Mrs Ilott made a strong case for the necessity of spending a substantial
sum on items which could properly be described as necessities for daily living. They
included such things as essential white goods, basic carpeting, floor covering and
curtains, and the replacement of worn out and broken beds. That list did not include
other similar necessities such as a reliable car, nor a holiday.
41. Although the District Judge arrived at his figure of £50,000 by reference to
the income which it might produce, perhaps because he interpreted the statutory
requirement for the award to be for maintenance as pointing to such an approach,
these items which Mrs Ilott needed to make the household function properly can
perfectly sensibly fit within the concept of maintenance. The Court of Appeal rightly
said that the 1975 Act is not designed to provide for a claimant to be gifted a
“spending spree”. But this kind of necessary replacement of essential household
items is not such an indulgence; rather it is the maintenance of daily living.
Moreover, how the claimant might use the award of £50,000 was of course up to
her, but if a substantial part of it were spent in this way, the impact on the family’s
benefits would be minimised, because she could put the household onto a much
sounder footing without for long retaining capital beyond the £16,000 ceiling at
which entitlement to Housing and Council Tax Benefits is lost.
Conclusions
42. It follows that the District Judge did not, on fuller analysis, make either of
the two errors on which the Court of Appeal relied to revisit his award. That is
enough to require this court to set aside the order of the Court of Appeal.
43. The claimant pressed on this court the submission that the District Judge’s
award was vitiated by errors other than those attributed to him by the Court of
Page 28
Appeal. It was said that he wrongly took the level of tax credits and child benefit (he
attributed half to Mrs Ilott and thus about £4,000 pa) as a benchmark of basic
maintenance income as recognised by the government. True it is that he referred to
this as an indication of minimum income needs, and checked his figure of £50,000
against the capital sum which would produce an annual £4,000 on a Duxbury basis,
namely about £69,000. But he did not make his award on this basis. He confronted
the submission for the charities that Mrs Ilott’s maintenance needs should be met by
the sum of about £3,000-5,000 to pay for driving lessons and to see her back into
work. He concluded that her reasonable needs were significantly greater than simply
driving lessons and a small “starter” sum of capital. He accordingly provided a much
greater capital sum, saying that there was a significant degree of approximation in
it. Since he made clear that the award was limited to take account of the
estrangement, and given the arguments put before him, his order is not to be taken
as vitiated by erroneous reliance on the level of income produced by the working
tax credits and child benefit. It was in fact an award which met many of Mrs Ilott’s
needs for maintenance. There was nothing about it which was outside the generous
ambit of judgment available to him. His order ought to be restored.
44. There were in any event a number of potential difficulties about the Court of
Appeal’s proposed order. Plainly some judges might legitimately have concluded
that this was a case in which reasonable financial provision for the claimant should
be made by way of housing, even though the actual benefit of doing so would be
much reduced by loss of housing benefit. In the absence of error of principle by the
District Judge the occasion for the Court of Appeal to say what its own order might
have been did not of course arise. But even if it had arisen, the right order would be
likely to have been a life interest in the necessary sum, rather than an outright
payment of it. There was no discussion of this question in the judgment. The rather
incidental reference to the possibility of equity release was founded no doubt on a
tactically astute argument advanced on behalf of Mrs Ilott in the Court of Appeal,
designed to clothe the claim for the price of the house with a vestige of incomeprovision, but it was not supported by any evidence of how the figures might work,
nor of the impact on benefits which understandably concerned the court. It also
seems likely that in the absence of a discretionary trust the additional “option” to
draw down £20,000 at will would fall foul of exactly the same capital
disqualification rules as to benefits, because those rules treat capital which is
available to the claimant, but of which he has deprived himself, as being in his
possession: see Housing Benefit Regulations 2006, SI 213/2006, regulations 49 &
50, (consolidated with the Council Tax Benefit Regulations SI 215/2006), together
with the Guidance Manual issued to officers by the Department of Work and
Pensions BW1 (13 September 2013), to which it does not seem the Court of Appeal
was referred.
45. The treatment of benefits by the Court of Appeal at its para 60, cited above,
might raise difficulty if taken literally. The court clearly cannot have meant that
Page 29
dependence on benefits increases the claimant’s needs, as disability is likely to do.
In some circumstances, different from those of the present case, receipt of state
support greater than the testator could sensibly provide may be an understandable
reason why it was reasonable for the deceased not to make financial provision for
the claimant – see for example the observations of Stamp J in In re E, deceased
[1966] 1 WLR 709 at 715C. More generally, benefits are part of the resources of the
claimant, and it is relevant to consider whether they will continue to be received.
The court must have meant that, at least if they are means tested, receipt of them is
likely to be a very relevant indication of her financial position.
46. More critically, the order under appeal would give little if any weight to the
quarter of a century of estrangement or to the testator’s very clear wishes. The Court
of Appeal indeed offered the view (at para 51) that these factors counted for little,
and that Mrs Ilott’s lack of expectation of any benefit from the estate was likewise
of little weight, in part because the charities had no expectation of benefit either.
Those observations should be treated with caution. The claim of the charities was
not on a par with that of Mrs Ilott. True, it was not based on personal need, but
charities depend heavily on testamentary bequests for their work, which is by
definition of public benefit and in many cases will be for demonstrably humanitarian
purposes. More fundamentally, these charities were the chosen beneficiaries of the
deceased. They did not have to justify a claim on the basis of need under the 1975
Act, as Mrs Ilott necessarily had to do. The observation, at para 61 of the Court of
Appeal judgment, cited above, that, because the charities had no needs to plead, they
were not prejudiced by an increased award to Mrs Ilott is, with great respect, also
erroneous; their benefit was reduced by any such award. That may be the right
outcome in a particular case, but it cannot be ignored that an award under the Act is
at the expense of those whom the testator intended to benefit.
47. It was not correct to say of the wishes of the deceased that because Parliament
has provided for claims by those qualified under section 1 it follows that that by
itself strikes the balance between testamentary wishes and such claims (para 51(iv)).
It is not the case that once there is a qualified claimant and a demonstrated need for
maintenance, the testator’s wishes cease to be of any weight. They may of course be
overridden, but they are part of the circumstances of the case and fall to be assessed
in the round together with all other relevant factors. Lastly, for the reasons adverted
to above, it was not correct that so long and complete an estrangement was of little
weight. The Court of Appeal suggested that this was so because (a) the claimant had
not wished for the estrangement, (b) she had made a success of her life as a mother
and home-maker and (c) it might well be that the estrangement was not really a
matter of fault on either side, thus simply, in effect, a sad fact of family life. It was
certainly true that the claimant had made a success of her home life, but that does
not bear at all on the relationship between mother and daughter. As to the other two
considerations, the District Judge had indeed held that both sides were responsible
for the continuation of the estrangement, whilst attaching the greater responsibility
Page 30
to the deceased. These matters of conduct were not irrelevant, but care must be taken
to avoid making awards under the 1975 Act primarily rewards for good behaviour
on the part of the claimant or penalties for bad on the part of the deceased. It is clear
that the District Judge gave effect to his findings as to the causes of the estrangement
in allowing the claim, as he was entitled to do, but it does not follow that the
relationship between mother and daughter was of insignificant weight to the
exercise, and he rightly held that it was not.
Disposal
48. For all these reasons, the appeal of the charities should be allowed. The order
of the Court of Appeal should be set aside and the order of the District Judge
restored. This court was told that this appeal was brought by the charities largely on
principle because of the possible impact of the decision below on other cases, and
that some arrangement has been arrived at between these parties in the event that the
appeal succeeded. Given the very protracted nature of these proceedings, that is
clearly likely to have been sensible, but the court has rightly not been concerned
with its details, and it has no relevance to the order now made.
LADY HALE: (with whom Lord Kerr and Lord Wilson agree)
49. This case raises some profound questions about the nature of family
obligations, the relationship between family obligations and the state, and the
relationship between the freedom of property owners to dispose of their property as
they see fit and their duty to fulfil their family obligations. All are raised by the facts
of this case but none is answered by the legislation which we have to apply or by
the work of the Law Commission which led to it.
50. In his book on The Inheritance (Family Provision) Act 1938 (Sweet &
Maxwell, 1950), Michael Albery commented:
“The protection of the rights of the family as an essential unit
in society is a primary concern of most systems of law.
Complete freedom of testation, as enjoyed under English law
for a brief period of 47 years, is therefore by the standards of
contemporary jurisprudence an anomaly.”
In many modern legal systems, mostly those descended from Roman Law, complete
freedom of testation is unknown. Members of the family enjoy fixed rights of
inheritance to the estate of a deceased, which leave only limited scope for the
deceased to make his own dispositions. In some systems, consanguinity is preferred
Page 31
to affinity. The claims of descendants of the deceased are favoured over the claims
of a surviving spouse. The theory is that the property belongs to the family or lineage
rather than to the owner for the time being and should pass down the blood line.
Other systems favour affinity over consanguinity. Early English law also recognised
certain fixed rights of inheritance, but these were only between husbands and wives,
and the limited rights given to widows and widowers disappeared long ago.
51. In 1971, the Law Commission published a wide-ranging consultation paper
on Family Property Law (Working Paper No 42), discussing, among other things,
both community of property between husbands and wives and fixed rights of
inheritance for spouses and children. In the course of discussing the latter, the
Commission suggested (para 4.13) that:
“The principle of absolute freedom of testation is acceptable
only if the view were taken that it is more important to be able
to dispose of property than to meet natural and legal obligations
to the family. We do not believe this view to have any degree
of support.”
Nevertheless, although they raised the possibility that a surviving spouse might have
fixed inheritance rights, they rejected the idea that a surviving child might do so. In
their view, the moral obligation to provide for children was as great as that to provide
for a spouse. But children play less part in building up the family assets than do
spouses; are more likely to be self-supporting adults independent of their parents;
and it would be difficult for a fixed rights system to distinguish between dependent
and independent adult children. The better solution, therefore, was discretionary
family provision rather than fixed rights (para 4.16).
52. When the Commission came to make their Report in relation to the various
matters canvassed in their Working Paper, they concluded that it was “neither
necessary nor desirable” to introduce a system of fixed inheritance rights for the
surviving spouse: see First Report on Family Property: A New Approach (1973,
Law Com No 52). This was on the basis that their proposals for improving the
system of discretionary family provision would be implemented. Those proposals
were contained in their Second Report on Family Property: Family Provision on
Death (1974, Law Com No 61) and implemented in the Inheritance (Provision for
Family and Dependants) Act 1975, with which (as amended) we are concerned in
this case. Freedom of testation is thus the default position in the law of England and
Wales, subject to the courts’ limited discretionary powers.
53. Freedom of testation seems also to enjoy strong support from public opinion,
although the need to interfere in certain circumstances is also recognised. When the
Page 32
Law Commission returned to the subjects of intestacy and family provision in 2008,
family forms were a great deal more varied than they had been in the early 1970s.
Many more couples lived together without marrying. Many more children were born
to unmarried parents. Many more married or unmarried partners separated and
formed new relationships, often blending children from earlier relationships with
children from the new. The Commission recommended a variety of improvements
in the present law, but none which is directly relevant to the dilemma posed by this
case (see Intestacy and Family Claims on Death, Consultation Paper No 191, 2009,
and Law Com No 331, 2011). However, the Commission did have the benefit of two
empirical studies of attitudes towards inheritance, both of them under the auspices
of the highly respected National Centre for Social Research, the findings of which
are of some interest.
54. G Morrell, M Barnard and R Legard, The Law of Intestate Succession:
Exploring Attitudes Among Non-Traditional Families (NatCen, 2009) used focus
groups of people from such “non-traditional” families to explore attitudes on the
basis of a series of vignettes. This revealed strong emotional support for
testamentary freedom, linked to ideas of individualism and human rights. But
underlying this was an “assumption of reasonableness”, that testators had good
reasons for doing what they did, and that it would not necessarily be possible to
ascertain what their reasons were, so it should be assumed that they were reasonable.
Nevertheless, there were circumstances in which it should be possible to challenge
a will. One was where there was good reason to think that the will did not reflect the
true wishes of the testator. The other was where his decisions were clearly
“unreasonable”: this might be because they were unfair, cutting someone out of a
will who had contributed directly or indirectly to the deceased’s wealth or who had
earned a share by caring for the deceased while he was alive. It might also be unfair
to cut children out of wills because of the contribution they had made to enriching
the lives of their parents or to exclude a potential beneficiary who was disabled or
vulnerable and the alternative was that the state would have to look after him. When
it came to the intestacy rules, however, different opinions were expressed about the
claims of adult descendants: some who viewed the importance of the “bloodline” as
paramount took the view that adult children should always be able to benefit from
the deceased’s estate. Others took a more flexible view, depending on the relative
claims and needs of surviving partners and adult children.
55. The other study was by A Humphrey, L Mills and G Morrell of the National
Centre and G Douglas and H Woodward of Cardiff University, Inheritance and the
family: attitudes to will-making and intestacy (NatCen, 2010). This used a
combination of quantitative and qualitative approaches. The quantitative study
asked for respondents’ views on will-making and what should happen on intestacy
in a variety of scenarios. One was a married man survived by his wife and two
children over 18. 80% thought that the whole estate should go to the widow or that
she should have priority over the children, 16% thought it should be shared equally,
Page 33
and the remainder that the children should have priority or get it all. There was
stronger support for the grown-up children when a woman died survived by a man
with whom she had lived for 25 years and their two children over 18. A quarter
thought that the estate should be shared equally and almost a quarter thought that
the children should have priority or have it all. There was even stronger support if a
man died survived by a wife and grown up children from his first marriage. 35%
thought that the estate should be shared equally and 19% that the children of the first
marriage should have priority or get it all.
56. The qualitative study explored the reasons for respondents’ views, including
their views on testamentary freedom, and found three approaches: complete
testamentary freedom in all circumstances; challenging a will being permitted in
some circumstances; and challenging a will being permitted in all circumstances.
Some favoured the entitlement of children to challenge based on lineage and
expectations. These respondents tended to favour equal distribution amongst
descendants. Others favoured an entitlement based on need or providing care for the
deceased. The “overriding influence” on those who favoured a right to challenge in
all circumstances was the importance of retaining property within the family. When
it came to the intestacy rules, there were some who felt that the age of descendants
should have no effect on their entitlement; some who felt that adult descendants
were less entitled than child descendants; and some who felt that age should not
affect entitlement as such but should affect how and when the descendant actually
inherited their share of the estate.
57. It will therefore be seen that, unsurprisingly, there is a variety of reasons why
people believe that descendants should be entitled to a share of the deceased’s estate.
The bloodline or lineage is undoubtedly one of these, and seems to have featured
strongly in both studies. Another is need, whether stemming from disability or
poverty, although others felt strongly that descendants should be treated equally
irrespective of need. And a third is desert, having earned a share by caring for the
deceased or contributing directly or indirectly to the acquisition of his wealth.
58. The point of mentioning all this is to demonstrate the wide range of public
opinion about the circumstances in which adult descendants ought or ought not to
be able to make a claim on an estate which would otherwise go elsewhere. That
range of opinion may very well be shared by members of the judiciary who have to
decide these claims. The problem with the present law is that it gives us virtually no
help in deciding how to evaluate these or balance them with other claims on the
estate. Nor does the Law Commission Report which led to the 1975 Act. That Report
recommended that any child or child of the family of the deceased should be able to
apply, irrespective of age, sex or marital status, thus removing the restrictions
imposed by the 1938 Act (para 79). The argument against doing that was that “it
might encourage able-bodied sons capable of supporting themselves to apply for
provision from the estate, thereby possibly incurring costs to be paid from the estate
Page 34
and reducing the share of the surviving spouse or other beneficiaries”; but the
Commission argued that such sons (or even daughters!) could not succeed unless
the deceased had failed to make reasonable provision for them (para 74).
59. The Commission considered limiting adult claims to children who were
actually dependent on the deceased when he died, but rejected that because:
“this would rule out a claim against the estate of a parent who
had unreasonably refused to support an adult child during his
life time where it would have been morally appropriate to
provide such support. Moreover an adult child, who is fully
self-supporting at the time of the parent’s death, may quite
suddenly thereafter cease to be so.”
Hence their final recommendation was to remove all age limits “leaving the court to
distinguish between the deserving and the undeserving” (para 76). But the
Commission gave no further guidance as to who should be thought deserving and
who should not.
60. The only guidance the court is given is: (1) the threshold question is whether
the estate makes reasonable financial provision for the applicant; (2) if it does not,
the actual provision to be ordered is limited to what is reasonable for the claimant’s
maintenance (unless the applicant is a spouse or civil partner); and (3) that in
deciding both of those questions, the court has to have regard to the matters listed in
section 3 (see para 11 above). These look at the actual and foreseeable financial
resources and needs of the applicant, any other applicant and any beneficiary; the
obligations and responsibilities of the deceased towards any applicant or
beneficiary; the size and nature of the estate; any physical or mental disability of
any applicant or beneficiary; and any other matter, including the conduct of the
applicant or any other person, which the court may consider relevant. In the case of
children, the court must also consider the manner in which the claimant has been, is
being or might be expected to be educated or trained. Section 1(7) of the 1938 Act,
requiring the court to have regard to any reasons given by the deceased for making
or not making the dispositions in his will, has been repealed: the reasonableness or
otherwise of the testator’s dispositions was to be tested objectively; the Commission
agreed with Michael Albery that if the testator’s reasons were “good and founded
on fact” they would be relevant under “other matters”, so there was no need to
mention them separately (para 3.23).
61. As Black LJ wisely observed when this case first came before the Court of
Appeal: [2011] EWCA Civ 346; [2011] 2 FCR 1, para 88:
Page 35
“A dispassionate study of each of the matters set out in section
3(1) will not provide the answer to the question whether the will
makes reasonable financial provision for the applicant, no matter
how thorough and careful it is. … [S]ection 3 provides no
guidance about the relative importance to be attached to each of
the relevant criteria. So between the dispassionate study and the
answer to the first question lies the value judgment to which the
authorities have referred. It seems to me that the jurisprudence
reveals a struggle to articulate, for the benefit of the parties in the
particular case and of practitioners, how that value judgment has
been, or should be, made on a given set of facts.”
62. How then is the court to “distinguish between the deserving and the
undeserving”? It might be thought, for example, that in the case of a large estate
consisting mostly of inherited property, the children ought to inherit even if they are
not in need. But that would run counter to the restriction of their claims to reasonable
maintenance. It would also run counter to the approach long taken in the law of inter
vivos financial provision for adult children. Thus in Lord Lilford v Glynn [1979] 1
WLR 78, the judge had ordered a father, in addition to making periodical payments
and providing for his daughters’ education, to make an immediate settlement upon
them of £25,000 (a not inconsiderable sum in those days). The Court of Appeal held
that “a father – even the richest father – ought not to be regarded as under ‘financial
obligations [or] responsibilities’ to provide funds for the purpose of such settlements
as are envisaged in this case on children who are under no disability and whose
maintenance and education is secure” (p 85). That, of course, was a value judgment
which may or may not have been based on a view that such provision ought to be
“earned”. But it could be justified under the Matrimonial Causes Act 1973, because
it contains age limits on the provision which may be ordered for children unless they
are disabled, with the obvious aim of seeing them into adulthood and beyond that
only to the end of their education. The 1975 Act contains no such age or disability
related limits. So once again we are driven to ask what makes an adult child
deserving or undeserving of reasonable maintenance?
63. One factor which is not in the list, but which does feature elsewhere in family
law, is the public interest in family members discharging their responsibilities
towards one another so that these do not fall upon the state. In the well-known case
of Hyman v Hyman [1929] AC 601, the House of Lords held that the court’s
statutory powers to order a divorced husband to maintain his former wife were
granted “partly in the public interest to provide a substitute for this husband’s duty
of maintenance and to prevent the wife from being thrown upon the public for
support” (per Lord Atkin, at p 629; see also Lord Hailsham LC, at p 608). However,
while the common law recognised a husband’s duty to maintain his wife and his
infant children (reluctant though it was to provide effective means of enforcing this),
it did not recognise a duty to maintain adult children. Public law, similarly, has not
Page 36
(at most periods) imposed the intra-familial maintenance duties which are known,
for example, in French law. So what, if anything, is the relevance of the fact that an
applicant’s household is very largely dependent on state benefits (in this case some
75% of their income) to the threshold question, let alone to the quantification of any
order to be made?
64. For these reasons, I have every sympathy for the difficult position in which
District Judge Million found himself. He was faced with the complete disinheritance
of an adult child in favour of charities in which the deceased had shown little or no
interest while alive. The adult child was in straitened circumstances, living in rented
accommodation which was almost entirely financed by the public purse, through
housing and council tax benefit. These benefits were means-tested by reference to
income and to capital and would be lost if there were capital of more than £16,000.
The family lived within its modest means, but these too were largely derived from
the public purse, the husband’s meagre earnings being supplemented by tax credit,
child tax credit and child benefit. Apart from child benefit, these were means-tested,
but by reference only to income and not capital. The household goods were old and
dilapidated – the family could do with another car, some furniture and carpets and
white goods, and had never had a holiday, so it might be regarded as reasonable to
spend money on these and thus quite quickly reduce a capital sum to below £16,000
without incurring penalties. On the other hand, mother and daughter had been
estranged since the daughter left home to live with and then marry her husband, of
whom the mother disapproved, three attempts at reconciliation having failed. The
mother had left a letter explaining why she had disinherited her daughter, which the
district judge did not find wholly “founded on truth”.
65. So what was he to do? A respectable case could be made for at least three
very different solutions:
(1) He might have declined to make any order at all. The applicant was
self-sufficient, albeit largely dependent on public funds, and had been so for
many years. She had no expectation of inheriting anything from her mother.
She had not looked after her mother. She had not contributed to the
acquisition of her mother’s wealth. Rather than giving her mother pleasure,
she had been a sad disappointment to her. The law has not, or not yet,
recognised a public interest in expecting or obliging parents to support their
adult children so as to save the public money. Thus it is not surprising that
Eleanor King J regarded this as the reasonable result: [2009] EWHC 3114
(Fam); [2010] 1 FLR 1613. The Court of Appeal allowed the appeal on the
basis that the District Judge had not erred in law and the exercise of his
discretion had not been plainly wrong, so Eleanor King J should not have
interfered. But Sir Nicholas Wall P commented that (as Wilson LJ had
observed when giving permission to appeal) had the District Judge dismissed
Page 37
the claim “I doubt very much whether the appellant would have secured
reversal of that dismissal on appeal” (para 59).
(2) He might have decided to make an order which would have the dual
benefits of giving the applicant what she most needed and saving the public
purse the most money. That is in effect what the Court of Appeal did, by
ordering the estate to pay enough money to enable her to buy the rented home
which the housing association was willing to sell to her and a further lump
sum to draw down as she saw fit. Housing is undoubtedly one of the first
things that anyone needs for her maintenance, along with food and fuel. This
was benefits-efficient from her point of view, because it preserved the
family’s claims to means-tested income benefits. It was benefits-efficient
from the public’s point of view, because it saved the substantial sums payable
in housing benefit. She would lose the benefit of the landlord’s repairing
obligations, but how valuable this would be is a matter of speculation. It is
difficult to reconcile the grant of an absolute interest in real property with the
concept of reasonable provision for maintenance: buying the house and
settling it upon her for life with reversion to the estate would be more
compatible with that. But the court envisaged her being able to use the capital
to provide herself with an income to meet her living costs in future.
(3) He might have done what in fact he did for the reasons he did. He
reasoned that an income of £4,000 per year would provide her with her
“share” of the household’s tax credit entitlement and capitalised this in a
rough and ready way, taking into account some future limited earning
potential, at £50,000. He did not expressly consider, and was not presented
with the information to enable him to consider, the effect that this would have
on the family’s benefit entitlements, and in particular the fact that they would
lose their entitlement to housing benefit until their capital was reduced below
£16,000.
66. Some might think that the best choice was between options (1) and (2).
Option (1) was not, however, open to the Court of Appeal this time round and is not
open to this Court now. The case for option (2) is that, if it is reasonable for the
applicant to receive some support, it is reasonable for that support to be meaningful
to her and her family, as well as to the public purse. Securing her accommodation is
more meaningful than proving her with a capital sum which will be of little use
unless she is able properly to reduce it within a relatively short time. This is not to
down-play the public interest in charitable giving and the importance of legacies in
the funding of charitable activities. But just as the applicant had no expectation of a
legacy, neither did the charities. However, the greater the weight attached to
testamentary freedom, the smaller the provision which might be thought reasonable
in an unusual case such as this. It is, as Black LJ observed, a value judgment. The
District Judge did not make his order on the express basis that it would enable the
Page 38
applicant to buy much needed household goods and have a family holiday, but that
will be its beneficial effect. Hence I agree with Lord Hughes that it was entirely
open to him to make the order that he did, and just as it should not have been
disturbed first time round it should not have been disturbed this time either. I have
written this judgment only to demonstrate what, in my view, is the unsatisfactory
state of the present law, giving as it does no guidance as to the factors to be taken
into account in deciding whether an adult child is deserving or undeserving of
reasonable maintenance. I regret that the Law Commission did not reconsider the
fundamental principles underlying such claims when last they dealt with this topic
in 2011.