In the Estate of JT (aka TEJS), deceased
Inheritance Act
Sidney Ross acted in this case.
1. The case concerns a preliminary issue which arose in a claim by M under S.2 of the Inheritance (Provision for Family and Dependants) Act 1975 (“the 1975 Act”), for an order that financial provision be made for her out of the estate of JT, who died on 7th November 2002. The substantive claim has not yet been finally disposed of.
2. The points of particular interest relate to the way in which:-
a. the court should exercise its appellate jurisdiction when the appeal involves a challenge to the exercise of a discretion; and
b. applications under S.4 of the 1975 Act to commence proceedings out of time should be approached, with particular reference to the guidelines formulated by Sir Robert Megarry V-C in the leading case of Re Salmon [1981] Ch 167.
3. JT died on 7th November 2002 and, although he had indicated in writing that he had intended to leave all, or nearly all his estate to M, no will was ever found. In 2005, solicitors acting in the administration of his estate decided to proceed on the footing that he had died intestate. A claim on behalf of M was intimated but not actively pursued. Because the claim was not issued within six months from the date (13th October 2006) when a grant of representation to JT’s estate was first taken out, it was necessary to apply under S.4 of the 1975 Act for the permission of the court to commence proceedings out of time. The merits of the substantive claim under S.2 are a matter to which the court will normally have regard when considering the S.4 application; see Re Dennis [1981] 2 All ER 140.
4. M was eligible to make a claim by virtue of Ss.1(1(ba) and 1(1A) of the 1975 Act since she had lived in the same household as JT, as his wife, for a period exceeding 2 years immediately before his death. The facts relevant to M’s substantive claim are that they had been cohabiting in this way from 1966 until JT’s death; that she had made a substantial contribution to the welfare of the family by performing the usual household tasks of cleaning, cooking, laundry and so forth, and had cared for the deceased for some years before his death in hospital from chronic obstructive pulmonary disease. At the date of issue of the claim she was 76 years of age and suffering from bowel cancer; her only income was the minimum pension credit guarantee, currently £124.05 per week and she had no capital. She had no beneficial interest in, or right to occupy the property (purchased by JT in his sole name in 1973) in which she had been living with him. The estate after payment of IHT was just over £550,000 which was amply sufficient to meet any award that the court might reasonably make to M. The beneficiaries under the intestacy were JT’s 84 year old sister, L, who would take 50%, and a nephew and niece who would take 25% each.
5. The claim was finally issued on 11th November 2007 and the application under S.4 was heard in the Central London County Court on 4th July 2008. For M it was argued that she had a strong case on the merits, the estate had not been distributed, there was no evidence that any of the beneficiaries under JT’s intestacy were in need of the benefits which they stood to take, and that, having regard to the overriding objective and the recent case law as to whether procedural failings justified barring a claimant from pursuing a valid claim, the application should be granted and the substantive claim allowed to proceed. It was also argued that M would be prejudiced if she was left to her remedy against her own solicitor as she would have to begin a fresh action, for which she would have to obtain public funding, and would be under pressure from her solicitor’s insurers to compromise for significantly less than her claim was worth.
6. For L, who as JT’s personal representative was the defendant to the claim, it was argued that M’s solicitor’s delay, both before and after the issue of the grant, was lengthy and inexcusable and that although no evidence of prejudice to L was before the Court, it could properly be inferred that she was prejudiced by the delay and her inability to wind up the estate while the 1975 Act claim remained live. These arguments found favour with the court, and in an extempore judgment which set out the history of the delay at some length but barely addressed M’s substantive case and the prejudice to her which would result from the refusal of the S.4 application, the learned Recorder dismissed the S.4 application and refused leave to appeal as it was a matter for his discretion.
7. Permission to appeal was granted on paper by Blackburne J on 14th October 2008 for the following reasons:-
a. Although the matter involved the exercise of a discretion, an appeal plainly had a real prospect of success given the absence of any mention in the Judgment (beyond recording the Defendant’s concession that the Claimant has “a reasonable case on the merits”) of the Claimant’s circumstances and the prejudice that she will suffer (as set out in her witness statement) if her application for permission to apply under the 1975 Act out of time were refused; and
b. The absence of any obvious prejudice (beyond delay) to the Defendant if the Claimant’s application were to be allowed.
8. The appeal was heard by a deputy High Court Judge on 15th January 2009. For M it was argued that the appellate jurisdiction should be exercised in accordance with the following principle (for which see Lord Woolf MR in Phonographic Performance v AEI Rediffusion Music Ltd [1999] 2 All ER 299 at 314, cited by Brooke LJ in Price v Price (t/a Poppyland Headware) [2003] 3 All ER 911, at 918j):-
‘Before the court can interfere it must be shown that the judge has either erred in principle in his approach or has left out of account or not taken into account some feature that he should, or should not have considered, or that his decision was wholly wrong because the court is forced to the conclusion that he has not balanced the various factors fairly in the scale’ ”
9. On this point L relied on the following from Lord Hoffman’s speech in Piglowska v Piglowski [1999] 3 All ER 632, at 643j-644a:-
“The exigencies of daily court room life are such that reasons for judgment will always be capable of having been better expressed. This is particularly true of an unreserved judgment such as the Judge gave in this case but also of a reserved judgment based upon notes. The reasons should be read on the assumption that, unless he has demonstrated to the contrary, the Judge knew how he should perform his functions and which matters he should take into account.”
10. It was also argued for M that the overriding objective of disposing of cases justly required that the approach to an application to disapply a time limit should be the same, whether the time limit was provided by a statute or a rule of court. This argument arose because the following passage from Re Salmon at 175B suggests otherwise:-
“the onus lies on the claimant to establish sufficient grounds for taking the case out of the general rule, and depriving those who are protected by it of its benefits. Further, the time limit is a substantive provision laid down in the Act itself, and is not a mere procedural time limit imposed by rules of court which will be treated with the indulgence appropriate to procedural rules. The burden on the applicant is thus, I think no triviality: the applicant must make out a substantial case for it being just and proper for the court to exercise its statutory discretion to extend the time”.
11. Applying the following passage from the judgment of Ormrod J in the 1975 Act case of Adams v Schofield (which, although decided by the Court of Appeal on 26th July 1981, was not reported until it appeared at [2004] WTLR 1049), the learned deputy High Court Judge was not prepared to hold that Re Salmon imposed any higher burden on M than that imposed by the Civil Procedure Rules. At 1058F-G Ormrod LJ had said:-
“I think we should start from the principle that all limitation periods are intended to promote justice and not injustice, and where there is a discretion, or where Parliament has created a discretion to adjust the limitation period, the object of Parliament is to give the court power to adjust the balance of interest between the parties so as to avoid, so far as possible, the totally artificial situations which all the time limits sooner or later give rise to.”
12. On considering the Judgment below and the reasons for allowing the appeal given by Blackburne J, the learned deputy High Court judge was not satisfied that the factors had been balanced fairly in the scale. There was no indication in the Judgment below that M’s case, or the prejudice to her if the application were refused, had been considered. Accordingly, he held that he could, and should exercise the discretion afresh.
13. Comparing the prejudice to the respective parties he found that, while it was a very bad case of delay by M’s solicitor, her remedy against him would not adequately compensate her for the strong prejudice that refusal of her application would entail. That strong prejudice had to be balanced against the ordinary prejudice to L resulting from the delay. Accordingly, subject to submissions as to how the claim would be promptly proceeded with from then on, the appeal was allowed so that the substantive application could proceed, and the order of the Court below (including the costs order against M) would be set aside. Costs would be costs in the claim.