Developments in Inheritance Act claims

Some testators have provided us with humourous comments made while cutting out one person or another. A testator in New Jersey left a will stating: “To my wife Anna (who is no damn good) I leave $1.” Another, more subtly, noted: “I give and bequeath to my dear husband the simple satisfaction of being remembered in my will.” It may seem churlish to challenge such wills. But sometimes, a claim against a deceased’s estate is rational, reasonable and by that logic necessary. Those difficult situations contain a serious humour deficit.

The general scheme of the Inheritance (Provision for Family and Dependents) Act 1975 (as amended) is probably well known to readers involved in will drafting and in the administration of estates. The aim was to prevent the arbitrary and socially unconscionable effects of both unrestricted will-making and on occasion, the intestacy rules. That is if inadequate financial provision for those who might reasonably expect to be supported by the deceased would result without court intervention. In the first of two articles for ECA, Giles Harrap, barrister of Pump Court Chambers, notes recent developments and current concerns in the context of the Inheritance Act.

Extension of time: The modern approach

An application for provision under the Inheritance (Provision for Family and Dependants) Act 1975 may 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 is first taken out. In Re Salmon, deceased [1981] Ch 167, Megarry V-C set out six guidelines that were never intended to be exhaustive. In Re Dennis [1981] 2 All ER 140, Browne-Wilkinson J added that the court must take a provisional view of the merits: it must decide whether the claimant has an arguable case for provision and will only allow the claim to go forward if satisfied that the claimant does have an arguable case.

The case of Re McNulty [2002] WTLR 737 neatly illustrates the reality of how these cases come to be decided. The question the court asks itself is: what is just and fair? If the claimant has a substantial claim with merit, the estate has not been distributed and the defendant will suffer no other prejudice from extending time, then the court will be likely to find it just and fair for the claim to be allowed to proceed.

In Re McNulty, the application was 3½ years out of time. The applicant widow was found to have a good claim. Failure by the defendants to communicate the true value of the estate to the applicant justified delay by the applicant for 2¾ years – and that is a lesson for those who are in the position of defending these claims. But there followed ten months of inexcusable tardiness by the applicant. Yet still, in the absence of distribution or any other prejudice to the defendants, the judge granted the application to proceed out of time. The judge expressly stated that the time limit is not a disciplinary matter to be enforced for its own sake but to protect personal representatives and beneficiaries and provide a measure of certainty.

In Re McNulty, the question of time was dealt with at the final hearing and it was suggested by the applicant that she faced a lower burden on account of that. The judge rejected the argument as wholly irrelevant. That is good law and good sense. To hold otherwise would impel defendants to insist that the matter be dealt with as a preliminary point, even where that is not convenient.

An interesting point as to the merits threshold for claimants arose in a recent case in front of a master. In Re Dennis, Brown-Wilkinson J did say that the court should decide whether the applicant had an arguable case for provision but he did so on the basis that the question was whether the case was fit to go to trial adopting an approach similar to that adopted under the old Order 14 of the RSC. But now under CPR Part 24, the threshold for a case being fit to go to trial is somewhat higher: does the claimant have any real prospect of succeeding on the claim. The master, in fact, adopted the old “arguable case” test for the permission application. It may be wise for defendants to take out a cross application under Part 24 where the applicant’s substantive case is weak.

Homosexuals and transsexuals as cohabitants

The position of both homosexuals and transsexuals is likely to be addressed in legislation in the future. The position under current legislation is in a state of flux.

Homosexual applicants
Can a homosexual who has lived with his deceased partner in the same household for the necessary two years immediately before death qualify as an applicant under the Act? The question is whether he (or she) lived “as the husband or wife” of the deceased under Section 1(1A) of the Act during that period?

When Lord Mackay introduced the 1995 Act into the House of Lords, he stated his view that under the law as it then was, the new provisions would not apply to partners of the same sex. The House of Lords in the Rent Act case of Fitzpatrick v Sterling HA [2001] 1 AC 27 held that a person could only live with another “as his or her wife or husband” if that other was a person of the opposite sex. So, in that case a man living in a longstanding, close, loving, caring and faithful monogamous relationship with another man was not able to succeed to a tenancy on the basis he was living “as the deceased’s husband or wife”. Their Lordships were able, on other grounds, to permit him to succeed to the tenancy.

But what is the position now that the Human Rights Act 1998 is in force? By section 3 of that Act the courts are required to: “Read and give effect to primary legislation in a way that is compatible with the convention rights.” That the words “living as the husband or the wife” of the deceased may now fall to be reconsidered in the light of the convention is clear from the decision of the Court of Appeal in Ghaidan v Godin-Mendoza [2003] 2 WLR 478. The Court of Appeal revisited Fitzpatrick v Sterling HA in the light of the Human Rights Act 1998 and held that the courts are now compelled by that Act to construe the words “living as his or her wife or husband” in the Rent Act 1977 to mean “living as if they were his or her wife or husband” so as to avoid a breach of Article 14 as applied to the rights contemplated in Article 8.

The route by which the court in Ghaiden arrived at its conclusion is complex but provides a fascinating insight into the potential impact of the Convention where the state provides remedies that affect private and family life and yet does so in a way that discriminates against homosexuals.

Article 8 provides that: “Everyone has the right to respect for his private and family life, his home and his correspondence.”
Article 14 provides that the enjoyment of the rights and freedoms set forth in the convention: “Shall be secured without discrimination on any ground such as sex...”

The Court of Appeal held that Article 14 made sexual orientation an impermissible ground of discrimination. Further, the court held it was not necessary to establish an actual breach of the substantive Article, here Article 8, in order to establish a breach of Article 14 taken together with Article 8. Applying the jurisprudence of the European Court of Human Rights the court held that: “Article 14 comes into play whenever the subject matter of the disadvantage constitutes one of the modalities of the exercise of the right guaranteed.” Further the court held that Article 8 places the state under an “obligation of positive action to promote the values that Article 8 protects” and that the state having intervened to protect the home, that is in a manner characteristic of Article 8, Article 14 is engaged if there is relevant discrimination in the mode of that intervention. Finally, the court specifically rejected the submission that there was in the case of the provision being considered an objective and reasonable justification for the discrimination between heterosexual and homosexual partnerships and did so in terms that suggested that in 2002 there would seldom be any such justification.

In claims by homosexuals under the 1975 Act, what primary Article is engaged? It may be necessary to fall back on Article 8 since Article 1 of the First Protocol, the entitlement to peaceful enjoyment of possessions, does not appear to protect future interests (the matter is briefly discussed in Ghaiden at page 485). In Ghaiden, the litigation was concerned with respect for the home. Inheritance Act 1975 applications may, and often are, concerned with respect for the home. But the matter goes wider than that since in the Inheritance Act 1975 the state appears to have intervened to promote respect for family and private life in the wider sense that inheritance provision is, in a modern society, an essential element of family life. The way is now open for the survivor of a same sex relationship to put forward a claim under section 1(A) of the Inheritance Act 1975 but the ultimate success of such a claim will depend on both the outcome of Ghaidan in the House of Lords (leave to appeal was granted 17 February 2003) and the willingness of the courts to apply Article 14 to an Act, giving only potential rights to inheritance on the ground that the relevant discrimination comes within the ambit of Article 8.

Transsexuals as applicants

The position before the Human Rights Act was that English law did not recognise a change of sex by a transsexual. So a person born male remained male in law for all purposes. In Bellinger v Bellinger [2003] 2 WLR 1174, a person born male in 1946, dressed and lived as a woman from about 1975, underwent hormonal treatment and gender re-assignment surgery before February 1981, went through a ceremony of marriage to a man in 1981 and lived happily with him as his wife ever after. She sought a declaration that the marriage was valid. The House of Lords rejected her case on the short ground that by section 11(c) of the Matrimonial Causes Act 1973, a marriage is void unless the parties are “respectively male and female” and she was and remained male, despite her beliefs, her way of life, her artificial hormones, and the surgery to remove her external sexual organs and create an artificial vagina. In the result, if the reasoning in Fitzpatrick were applied to section 1(1A) of the Inheritance Act 1975, the transsexual would be in difficulty in persuading the court that she lived “as the wife of the deceased”.

But again, the position falls to be reviewed following the Human Rights Act coming into force. In Goodwin v UK [2002] 2 FLR 487, the ECHR had held that the UK’s failure to recognise change of sex by a transsexual breached her right to respect for her private and family life under Article 8 of the Convention and her right to marry under Article 12. In Bellinger, the House of Lords declared section 11(c) of MCA 1973 incompatible with Articles 8 and 12 of the convention. The House did not confine its decision that the Bellinger marriage was invalid to the prefix-Human Rights Act position but positively declined to interpret section 11(c) as applying to a transsexual “female”.

Section 1(1A) of the Inheritance Act 1975 contains no express requirement that the parties be “respectively male and female”. It only refers to “living as the husband or the wife” of the deceased. That leaves scope for the English courts, in the light of Goodwin and the declaration of incompatibility in Bellinger, to interpret “living as the wife” to include a male to female transsexual under section 3 of the Human Rights Act 1998. All that would be needed to overcome the want of respect for the transsexuals new private and family life would be to “read and give effect” to section 1(1A) of the Inheritance Act 1975 in the manner proposed in Ghaiden: that is by reading the provision of the 1975 Act that the applicant must be “living as the husband or wife of the deceased” as if it read “living as if they were the husband or wife of the deceased”.

Reform
In June 2003, the government published a detailed Consultation Paper entitled: “Civil Partnership – A framework for the legal recognition of same sex couples.” In the introduction to this consultation paper, the minister responsible (Jacqui Smith MP) stated: “Grieving partners can find themselves unable ... to inherit the possessions they have shared for years when one partner dies without leaving a will. In ... many areas, as far as the law is concerned, same sex relationships simply do not exist. This is not acceptable.”

What the government proposes is that same sex couples should be able to register a civil partnership on giving 15 days notice to the registration officer, that there should be a ceremony in front of the officer and a public register. A court order would be required to dissolve the partnership during life and the court would have power to make orders for financial provision and property adjustment. On death, the government proposes that a registered partner should have the same rights of intestate succession as a spouse now has.

The government’s specific proposals as to family provision on death should be seen against the background I have set out. The proposals are that:

a) Registered partners and former partners should be added to the categories of people who are entitled to apply for provision under the 1975 Act;
b) Applications by registered partners should be treated on the same basis as an application by a spouse.

The implications of this second proposal are that the surviving registered partner would be entitled to reasonable financial provision whether or not that provision is required for his or her maintenance. In short, he or she would be entitled to a fair share of the capital, not just to maintenance.

A useful piece of information is that anyone wanting a copy of the Consultation Paper should contact the Department for Trade and Industry – not the most obvious source of family provision law – civil.partnerships@dti.gsi.gov.uk.

I should add that in a separate exercise on 13 December 2002, the government announced its intention to bring forward legislation to recognise the changed position of transsexuals.

Heterosexual cohabitants
Impact of reforms
The government’s proposals do not address the position of heterosexual cohabitants. They are to have no right to register their partnerships. So, never mind how long the cohabitation or how great the contribution, the survivor of the unmarried heterosexual couple will remain restricted to provision for maintenance.

Guidance on entitlement to apply
At the time of writing, the only reported authority on the application of section 1(1A) remains Watson, deceased [1999] 1 FLR 878. In that case, the judge commented that it had rightly been conceded by the treasury solicitor that the fact that the deceased spent a few weeks in hospital before he died did not break the continuity of living in the same household for the requisite two years immediately before death. In a case where the facts were the other way round, a district judge allowed the claim of a survivor who had spent the 19 months before the death of the deceased in a nursing home on account of her own Alzheimers’ dementia to go forward (as having some prospect of succeeding for the purposes of Part 24). They had lived together for 12 years before that.

The test for living as the wife or as the husband of the deceased that was put forward by the judge in Watson was: whether, in the opinion of a reasonable person with normal perceptions, it could be said that the two people in question were living as husband and wife; but when considering that question one should not ignore the “multifarious nature of marital relationships”. The test appears to be working well. Recent experience confirms that the court does not regard sexual activity as essential – especially where the couple are of mature years – and that spending nights apart is an ordinary feature of living as husband and wife in the same household.

Impact of cohabitation
In GW v RW (Financial Provision: Departure from Equality) [2003] 2 FLR 108, Nicholas Mostyn QC sitting in the family division had to consider the impact of prefix-marital cohabitation in the context of claims for ancillary relief following divorce. Historically, the courts, seeking to reflect public opinion, have shown themselves ready to recognise a stronger claim founded on years of marriage than upon years of cohabitation. The judge noted that the authorities to this effect were over 20 years old, that the law must, as the House of Lords stated in White v White, move to reflect changing social values and that prefix-marital cohabitation is no longer regarded as “living in sin” or lacking the quality of emotional commitment assumed in marriage. Thus he concluded, where a relationship moves seamlessly from cohabitation to marriage without any alteration in the way the couple live, it is unreal and artificial to treat the two periods differently.

This decision is strictly more relevant to the amount of provision that spouses can expect to receive – a subject I plan to address in the next edition of Elderly Client Adviser – than to the consideration of applications by cohabitants. But I think it is of importance in connection with claims by cohabitants. Although the court in making provision for a cohabitant is required to limit such provision to that which it is reasonable for the claimant to receive for his or her maintenance, it is also required to have regard to the length of the period of the cohabitation. What the comments of the deputy judge indicate is that a substantial period of cohabitation will at least weigh heavily in the balance in terms of justifying substantial maintenance. In my experience, where there has been a substantial period of cohabitation the courts are prepared to award maintenance on a basis that is generous rather than mean and will generally be prepared to award capitalised maintenance in the form of a lump sum rather than by periodical payments.

Giles Harrap can be contacted at 3 Pump Court, Temple, London EC4 or via clerks@3pumpcourt.com.