Claims under IPFDA 75 s4 – why it’s important not to delay

 In Trusts

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Don't delay IPFD claimsLimitation of Actions under Inheritance (Provision for Family & Dependents) Act 1975

The recent case of Berger v. Berger [2013] EWCA Civ 1305, [2014] WTLR 35 CA illustrates the need for parties not to delay if they think they may have a claim under the I(PFD)A 75. Section 4 of the Act provides for the time limits for applications as follows:-

 ‘[4] An application for an order under section 2 of this Act shall not, except with the permission of the court, be made after the end of the period of six months from the date on which representation with respect to the estate of the deceased is first taken out.’

In the circumstances, any claim under I(PFD)A 75 must be issued within six months of the date on which representation (Grant of Probate, or Grant of Letters of Administration) is taken out (unless extended by the court). However, this period of six months is in respect of issue. Service does not count in the computation of time under Section 4.

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Whilst the time limits are strict, section 4 of the I(PFD)A 75 permits the Court to grant permission for a claim to be commenced after this time limit has elapsed, but permission must be applied for. It is important to remember that there is no fixed period beyond which permission will not be granted Even short periods of time can count against a potential claimant just as much as long periods. Further, there is a plethora of reported and unreported authorities in this area of the law and most cases are fact specific. The more recent authorities show how the courts have adopted a varying approach to how far the discretion is one that does or does not require regard to be had to the factors set out in the case of Re Salmon [1981] Ch 167.

Questions the court will consider

  1. Why the claim is outside of the time limit;
  2. What has happened during the period beyond the six month-time limit from the date of the grant and what happened before the time limit expired, if material.
  3. What are the relevant factors established by case law to date? These can be summarised as follows:
    1. For how long has the Claimant delayed and their reasons for such delay;
    2. Have negotiations commenced within the time limit?
    3. To what extent has there been a distribution of the estate assets?
    4. Does the Claimant possess a remedy against any one for failing to issue the claim in time?
    5. What are the overall merits of the claim?
    6. Would the granting of permission be contrary to the requirement under the CPR, part 1 to give effect to the overriding objective.

The facts

In Berger v. Berger (supra) the Court of Appeal were invited to consider an appeal against a decision of HHJ Hayward-Smith QC, sitting as a Deputy High Court Judge, where he had refused permission to issue a case out of time. The appellant was the wife of the deceased. They had been married for 36 years prior to his death. Each had children from previous marriages. The deceased’s estate comprised the former matrimonial home valued at £2.5M, a half share in a property in Arizona owned jointly with the appellant worth £467,000.00, three properties in London valued at £1.66M and a majority shareholding in a property company worth approximately £2.9M.

Pursuant to the terms of the Will the deceased bequeathed to his wife his half share in the Arizona property on terms which provided that the former matrimonial home be placed on trust for sale with the widow being allowed to live for so long as she desired in the property, or the property be sold and the fund used to purchase an alternative property on the same terms. The residue of the estate was to be held on trust “to pay the income to the widow during her lifetime” and thereafter on trust for the deceased’s two sons.

Following the deceased’s death, the property company was operated in such a way as to require considerable funds for the gradual renovation of various properties it owned on a yearly basis. As a result the income available to the appellant was significantly reduced. The appellant concluded that the said income did not afford her reasonable provision out of the deceased’s estate, and she applied for orders under the I(PFD)A 75. The deceased had passed away on 26th June 2005 with the Grant of Probate being issued on 27th January 2006. The appellant issued proceedings on 15th June 2012, 1 month short of six years post expiration of the time limit.

In explaining the reasons for the delay in issuing proceedings, HHJ Hayward-Smith QC noted from the evidence before the court that the appellant was expressing concerns in respect of her income at a very early stage after the death of the deceased. She had also consulted solicitors very soon after his death, albeit that it appeared that they had not advised her of a potential claim under the I(PFD)A 1975. It was only when her financial situation deteriorated over the following years that her children then encouraged her to seek further legal advice. Combined with some health complications, proceedings were not issued until June 2012.

The decision

In the Court of Appeal the main judgment was provided by Black LJ who provides a very helpful summary of the legal principles and case law (See Re Salmon [1981] Ch 167 and Re Dennis [1981] 2 All ER 140) applicable to this type of application. In particular sections 1(1), 1(2)(a), 3(1), and 3(2) of I(PFD)A 75. Further, Black LJ noted the importance of section 3(5) providing:-

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’

In applying the above principles Black LJ upheld the decision of HHJ Hayward-Smith QC.

However, she disagreed with the trial judge’s judgment as to whether or not the appellant had an arguable case. Black LJ held that Mrs Berger did have an arguable case in the event that permission was granted. By virtue of section 3(2) I(PFD)A 75 the court determining a substantive application would have regard to the position had the parties been divorced on the day the deceased died. Referring to the case of White v. White [2001] AC 596 it would have been arguable that a divorce court would have effected an equal division of the parties’ assets after such a long marriage and relationship. Further, she found that the other beneficiaries did not have any particular needs which required satisfaction out of the estate. As a result she found that HHJ Hayward-Smith QC had focused on Mrs Berger’s needs for the rest of her life rather than having adequate regard to the divorce position. In the circumstances, the Court of Appeal considered the appellant’s application for permission afresh.

In conclusion Black LJ held:-

  1. It was not possible on the evidence before the court to form a reliable opinion as to whether the appellant had a claim against the sons for breach of trust or otherwise;
  2. The first instance judge was right to focus on the very long delay in Mrs Berger issuing proceedings. Even on the basis that she had not received any advice about a potential I(PFD)A75 claim from her previous solicitors, her main argument concerning her lack of sufficient income had been within her knowledge from very soon after her late husband’s death and she had taken legal and accountancy advice as early on as 2005/2006. The court was not satisfied that she had provided sufficient evidence to explain sufficiently why there had been a further delay of some 5-6 years before she took further action.
  3. Black LJ emphasised the fact specific nature of cases in this area of the law. The court found that this was not a case which had been provoked by a particular event and could thus be distinguished from Mc Nulty v. Mc Nulty [2002] WTLR 737 and Stock v. Brown [1994] 1 FLR 840.
  4. In all the circumstances it would not be fair to permit the appellant permission to make an application some six years after the expiry of the time limit.

Both Gloster and Moses LLJ agreed.

This case is an interesting judgment and worth reading for assessing whether delay in the distribution from a deceased’s estate in itself justifies a court exercising its discretion under I(PFD)A 75. It is arguable in light of this decision that in certain circumstances, in cases concerning wives with life interests, that a claim pursuant to the I(PFD)A 75 is preferable to a breach of trust claim as against trustees.

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