Bush v Rogers

Wills - Part 36

Sidney Ross acted in this case. Ellen Louisa Bush died on 21st August 2006, survived by her daughter, the Claimant in the proceedings. Her husband had died on 13th September 2005. She had had relatively little contact with the Claimant for some years, but her two sisters, Patricia and Pamela, had helped to look after her and her husband since about 1995. Shortly before Mrs Bush's death arrangements had been put in train for her and her sisters to sell their respective properties and buy a house for their joint occupation, but this fell through as the Claimant took it upon herself to take her mother's house off the market.

By her will, made on 18th August 2006, Mrs Bush appointed her sisters to be her executors and trustees, and left her estate (£178,074 gross, £157,511 net) to them in equal shares. Had she not done so, she would have died intestate and her daughter would have been the sole beneficiary under the intestacy. The daughter was initially minded to contest the will (which included a statement of the reasons why she had been excluded from taking any benefit under it) in addition to making a claim under the 1975 Act, but eventually agreed to enter into negotiations to settle the 1975 Act claim on the basis that the validity of the will was not challenged. Following a case management conference on 17th June 2008, at which the District Judge expressed the view that this was a case of competing needs, the Defendants made a Part 36 offer.

At the time of the offer, the Claimant was 54 years of age and had both mental and physical disabilities within the meaning of S.3(1)(f) of the 1975 Act. There had been a history of psychiatric disturbance and she also suffered from chronic obstructive pulmonary disease. Her income was derived entirely from non-means-tested State benefits and she had no home of her own. For some time she had been living with a Mr S but it was expected that that arrangement would cease when her claim had been disposed of. She put forward her claim on the basis that reasonable provision for her would be the purchase of a modest home for her absolutely.

The Defendants were, respectively, 70 and 66 years of age with a combined annual income, derived from State and occupational pensions, of £15,447. They owned their house, worth £110,000 but in need of considerable repair and replacement of major household items, which would absorb such of their savings as had not been used up in the litigation. Over their respective life expectancies of 19 and 22 years, it was probable that inflation would reduce the purchasing power of their incomes and they would need a capital reserve to cover that and other contingencies such as the need for further repairs and replacements.

The Defendants' Part 36 offer was put forward on the following basis:-

(1) It was not reasonable that they should be placed in danger of financial hardship in old age, particularly in view of their obvious moral claim, arising from their care and attention to her, to some benefit from the deceased's estate.

(2) Their needs could be met by a capital sum representing the cost of topping up each of their incomes by a further £1,000 per year and a contingency fund to cover items such as further repairs and replacements of major household items over the next 20 years.

(3) Using the Ogden Tables (Table 28, 6th edition, May 2008) and assuming the conventional net rate of return of 3.75%, the cost of the respective income top-ups would be £13,070 for the older sister and £15,080 for the younger sister. Adding to this a contingency fund of £25,000 gave a total of £53,150, leaving just over £100,000 out of which to make provision for the Claimant.

(4) The Claimant's housing needs could be adequately met by the purchase of a 1-bedroom flat. Internet searches revealed that such accommodation in the where she was currently living was obtainable for as little as £80,000. Therefore, a payment of £100,000 would be sufficient to meet her reasonable housing needs and would leave a sufficient sum out of the fund available for distribution to meet the Defendants' needs as explained in (1)-(3) above.

The Part 36 offer was accepted.