In the recent case of Warner v Lewis [2016], the Court of Appeal considered whether a cohabitant could successfully make an inheritance claim under the Inheritance (Provision for Family and Dependants) Act 1975, despite the fact that he was financially secure in his own right.
Taking into account the claimant’s age and personal circumstances, the Court concluded that the house he shared with the deceased should be transferred to him at a cost determined by the Court.
Warner v Lewis
Facts of the case
When Audrey Blackwell died in May 2014, her estate passed to her only child, Lynn Lewis. Audrey’s partner and cohabitant was Stanley Warner, who had lived in her home in the village of Twyning Green, Gloucester since 1995.
It soon became clear that Stanley was not in any financial need, but he was elderly and had lived in the village for much of his life. Following Audrey’s death, Lynn commenced possession proceedings against Stanley, who in response issued a claim under the 1975 Act.
At the first trial, the Judge closely considered the background of the matter. Stanley was 91 years old and had lived with Audrey for almost 20 years. Stanley had not expected to survive Audrey and admitted at trial that he would have been surprised if she had left him anything in her Will.
He also admitted there was never any understanding that he would have any interest in her estate, nor did he claim any. Nor was there any understanding that he would be able to stay in the house or be able to purchase it in the event of her pre-deceasing him as it was never discussed. Stanley also accepted that he was significantly better off than Audrey and that he had the means to buy the house (or alternative accommodation) if necessary.
Shortly before Audrey’s death and when it was clear that she did not have much longer, Lynn had asked Stanley to sign a declaration that he would not make any claim for the house. Whilst reluctant to do so, he signed it.
Stanley told the Court that he would be very unhappy and stressed if he had to move from the house where he had spent the happiest 20 years of his life. His neighbour was a doctor and kept a close eye on him in light of his frail health. Other reasons included the fact he had lived in the village most of his life and that everything he needed was very close by. Lynn had previously said she would sell the house to Stanley, but they had disagreed over the price and Lynn wanted it to go on the open market.
The law
A person who, throughout the two years up to the date of death, was living in the same household as the deceased and as their husband or wife can make a claim under the 1975 Act (Sections 1(1)(ba) and (1A) as a cohabitant.
Furthermore, any person who immediately before the deceased’s death was being maintained, either wholly or partly, by the deceased (section 1(1)(e)) can also claim under the 1975 Act as a dependant. As a cohabitant or as a dependant, a claim can only be made for ‘maintenance’, which usually means enough to discharge the costs of living at a standard applicable to the applicant.
In this case, Stanley clearly had enough money to re-house himself elsewhere. But his attachment to the house was significant and the Judge said he could see no reason why keeping the current roof over the head of an applicant who had lived there for 20 years could not come within the definition of ‘maintenance’.
If Stanley was to move, this would mean no provision had been made for the continuance in the house and therefore Audrey had failed to make reasonable financial provision for him. But what should Stanley be awarded? Here the Court had to balance the interests of Stanley and Lynn.
The Judge focused on Stanley’s particular physical disability, his age, the length of time that the house had been his home and the fact that he made contributions to the costs of the home during that time. He also took into account the location of the house, being in the centre of the village where he grew up and had lived most of his life, but also because it is located next door to neighbours who looked after his welfare.
All these matters satisfied the Judge that the upheaval and likely consequences of Stanley having to move should be avoided if at all possible. The Judge concluded that Stanley should be given an option to purchase the house for £385,000.
Appeal
Lynn appealed on a number of grounds, including whether the Judge had incorrectly applied the law and whether he had exceeded his powers by making an order which he had no power to make.
The Court of Appeal found the Judge did correctly address the maintenance issue and had correctly applied the law under section 1(1)(ba). Although the Judge had referred to Stanley under section 1(1)(e) as a dependant, when clearly he was not a dependant in the usual sense, he was still able to make a claim under section 1(1)(b).
The second point was that Stanley clearly had no financial need. He had money to move elsewhere and did not have to live at the house any longer. Put another way, Lynn argued that if someone is financially well off, should they not be ineligible for financial provision for ‘maintenance’?
The Court of Appeal said maintenance can exceptionally encompass something more, including other forms of assistance with the requirements of daily life. If need includes want of a particular thing to sustain a reasonable quality of life, the provision of it could possibly represent ‘maintenance’ regardless of the applicant’s financial means.
In other words, a person can potentially (albeit only very rarely) be in need of ‘financial provision’ for his ‘maintenance’ without being in any way short of money; money may not be able to secure him what he requires.
The Court of Appeal found the Judge had made a ‘value judgment’ and that such a decision is difficult to disturb on appeal, unless the Judge has clearly proceeded on some error of principle. The Court of Appeal was unwilling to accept that the Judge had arrived at an impermissible conclusion.
Lynn objected to being forced to sell the house and argued that the Judge had acted beyond his power. The Court of Appeal said the Judge was entitled to make the order he did to give effect to Stanley’s claim under the Act. It was noted a joint valuation priced the house at £340,000 and Stanley had offered £385,000, which it found would not have been beaten on the open market.
Comment
1975 Act claims by cohabitants are usually limited to ‘maintenance’, which often means meeting the shortfall to cover the costs of daily living. In this case, the claimant had plenty of money to find alternative accommodation and therefore money wasn’t the problem. At first, it did not appear to be a strong claim. But the claimant was certainly in need of staying in the same home.
Following this appeal, maintenance can now be something other than money. This potentially widens the scope to make a claim under the 1975 Act for something that money cannot buy. But these circumstances are relatively unique and had Stanley been somewhat younger or had weaker attachments to the house and the area, the claim may very well not have succeeded.
How Nelsons can help
Kevin Modiri is a Partner in our Dispute Resolution team, specialising in inheritance dispute claims.
If you have any questions in relation to the subjects discussed in this article, please contact Kevin or another member of our expert team in Derby, Leicester or Nottingham on 0800 024 1976 or via our online form.