Qualifying as a cohabitant under the inheritance (provision for family and dependants) act 1975 By Miranda Allardice

Feature

posted 13 Sep 2000 in Volume 5 Issue 6

Qualifying as a cohabitant under the inheritance act 1975
By Miranda Allardice

The Law Commission report Family Law: Distribution on Intestacy Report No 187 determined that there would be no automatic right for a cohabitant to share in the estate of a deceased partner, but rather that a new class of applicant should be added to the list of those able to invoke the discretionary powers of the court under the Inheritance (Provision for Family and Dependants) Act 1975, “the Inheritance Act”. This represents a significant improvement of the lot of surviving cohabitants who no longer have to prove that they were financially dependant upon the deceased, pursuant to Section 1(1)(e). Where a potential applicant qualifies as both a cohabitant and dependant, then the status as cohabitant governs the case. The inclusion of a new class of applicant in the field of family provision finally recognises that there is likely to be real financial hardship where a couple pooled their resources and one partner dies.

Elderly cohabitants

A significant number of elderly people live together for reasons of companionship and support. The purpose of this article is firstly to examine the attitude of the legislature and the courts as to whether such an arrangement constitutes cohabitation, and secondly to determine what level of provision may be made by the courts. The pre-conditions are that a person may apply for reasonable financial provision as a cohabitant where:

During the whole of the period of two years ending immediately before the date when the deceased died the person was living-
(a) in the same household as the deceased, and (b) as the husband or wife of the deceased Section 1(1)(ba) the Inheritance Act

Living in the same household

The qualifying characteristics are taken from the Fatal Accidents Act 1976, and therefore guidance can be gleaned from cases arising out of claims under that Act. In the case of Pounder v London Underground Ltd [1995] PIQR 217 the main point for the determination of the Court was whether brief absences from the household in the two year period would break the continuity of living there. The female partner, following a cot death had retreated to women’s refuge for several weeks but returned on occasions to the common household. It was held that this did not break the period of living together.

Where an elderly couple are living in the same household, ill health may result in de facto separation. This aspect was considered in the case of Re Watson (deceased) [1999] 1 FLR 878 by Neuberger J. The deceased spent his last three weeks of life in hospital and it was expressly conceded that such a separation would not break the continuity of living in the same household, the Judge held:

“As a matter of ordinary language, the fact that someone is in hospital for a period, possibly a long period, at the end of which he dies, does not mean that, before his death, he ceased to be part of the household of which he was part, until he was forced by illness to go into hospital, and to which he would have returned had he not died.”

The concept of living in the same house is therefore more than just physical presence and a determination to return, if health permits, appears to shore up the continuity of living in the same household. This may be stretched to breaking point where there has been a permanent removal to a residential home years before death.

Living as the husband or wife of the deceased

This is more vexed question. Prior to the decision in Re Watson there was an unhealthy interest taken by surviving beneficiaries in the sleeping arrangements of the deceased and their partner. Commonly the people involved were an elderly unmarried couple who had lived in the same household in their twilight years, but who been married for many years to their respective spouses. The beneficiaries were children of those marriages, who found the use of the phrase husband or wife to describe the second relationship repugnant.

The facts in Re Watson were that the couple had been romantically attached in their youth, but had cared for their respective parents. In their fifties both were released from those duties and the female applicant had moved to the deceased’s house, which they had shared for ten years, although they did not share a bedroom or have a sexual relationship. The absence of such an intimate element in a relationship was not fatal. It was there was concluded that the couple had lived together as husband and wife the Judge determining:

“the court should ask itself whether, in the opinion of a reasonable person with normal perceptions, it could be said that the two people in question were living together as husband and wife, but when considering that question one should not ignore the multifarious nature of marital relationships.”

The positive features in that case upon which the Judge reached his conclusion, included:

(a) The couple had a close relationship for many years, and for ten years had chosen to live together, during which time there had been a proposal of marriage, which had been rejected by the applicant

(b) The deceased went to work and provided the bulk of the income, the applicant performed the domestic duties, they ate together and shared their recreation time

(c) There was evidence of mutual concern, the deceased caring for the applicant following the death of her parents, and him returning home to relay the fact of his terminal cancer.

The Judge made it clear that the fiction of living together as husband and wife did not mean that every conceivable permutation of how a marriage could be conducted would give rise to qualification under the Act. Not every situation of two people of the opposite sex sharing accommodation will apply, for example an “arms length house-sharing arrangement” would not qualify. I would venture to suggest that old fashioned romance is not dead, and if such an element of romance can be shown, together with a sharing of accommodation and lives, the surviving partner of such a relationship will qualify.

Cohabitation: as defined in other areas of law

The issue of what constitutes cohabitation for the purpose of ancillary relief proceedings has recently been examined in the case of Kimber v Kimber [2000] 1 FLR 383. An order had been made for maintenance to cease upon the ex-wife cohabiting with a man. The Judge identified a number of factors upon which he relied in support of his conclusion that there was cohabitation:

(1) living together in the same household
(2) a sharing of daily life
(3) stability and a degree of permanence
(4) finances: with some intermingling
(5) a sexual relationship
(6) children: either of the relationship or treatment of “stepchildren”
(7) intention and motivation
(8) the “opinion of the reasonable person with normal perceptions” : taken from Re Watson above. The judicial checklist may be useful, although some features may be absent or others have to be added.

Same sex partnerships

The then Lord Chancellor Lord Mackay in sponsoring the Law Reform (Succession) Bill introducing the reform said: “living as husband and wife, appears to us as the law stands to apply to partners of opposite sexes and not to partners of the same sex”. As the law currently stands, where there is a survivor of a same sex partnership, the surviving cohabitee is likely to be limited to mounting a claim under Section 1(1)(e) only as a dependant. In Fitzpatrick v Sterling Housing Association [1999] 2 WLR 1113, the question arose as to whether a survivor of an eighteen year “close loving and faithful, monogamous homosexual relationship”,could succeed to the deceased’s tenancy under the Rent Act 1977, on the grounds of either living with the deceased as his spouse or as a member of the deceased tenant’s family. The House of Lords refused to treat the survivor as a spouse, limiting the same to heterosexual relations, while allowing him to succeed to the tenancy as a member of the family of the deceased tenant. On the 2nd October 2000 the Human Rights Act 1998, will come into force and the issue of recognition of homosexual couples living together as husband and wife is likely to before the Courts again, although the jurisprudence from Europe has been relatively conservative on the subject. The Law Society’s paper on Cohabitees (September 1999) recommended the extension of this class of applicant to include same sex partners.

The residual category: Section 1(1)(e)

If the potential applicant fails to qualify as a cohabitant, then the burden falls on the applicant to show that immediately before death they were being maintained either wholly or partly by the deceased, and therefore dependant upon the deceased. The deceased must be making those financial contributions “otherwise than for full valuable consideration”, that is, the benefit conferred by the deceased must not be wholly offset by services rendered by the applicant. The case of Bishop v Plumley [1991] 1 WLR 582 dealt with the common situation where the deceased provided the accommodation and funds for housekeeping but was unwell and reliant upon his girlfriend to provide care and domestic services. LJ Butler-Sloss concluded:

“I do not consider that the evidence that she did everything for him over a period of years can be assessed in isolation from the mutuality of the relationship” so dismissing the argument that such services will be treated as being full valuable consideration.

The number of cases in this category will decrease. The category will remain the route for potential claims by, same sex partners, impecunious distant relatives or platonic friends who received free accommodation etc.

Level of provision for cohabitants

Once over the hurdle of qualifying as an applicant, there is a further hurdle to clear, the Act posing the question whether such financial provision has been made for the applicant as would in all the circumstances of the case be reasonable for his or her maintenance. The court is provided with a statutory checklist contained at Section 3 in determining the answer. Some of those factors are directly imported from the Matrimonial Causes Act 1973. Section 3(2A) Inheritance Act:

(a) the age of the applicant and the length of the period during which the applicant lived as the husband or wife of the deceased and in the same household as the deceased.

(b) the contribution made by the applicant to the welfare of the deceased, including any contribution made by looking after the home or caring for the family.

These considerations are relevant also were the applicant is a surviving spouse, but the Law Commission rejected the cohabitant being entitled to the same level of provision as a spouse on the following grounds:

Paragraph 60 “The claim which it is recognised that cohabitants should have is to some compensation for the contribution which the deceased was making towards the common household rather than for the, perhaps greater, share in the deceased’s accumulated assets which a spouse may reasonably expect when the marriage ends by death or divorce”

Re Watson gives some guidance as to the level of provision that may be expected. The net estate was £200,000 and was to pass as bona vacantia to the Crown. The applicant, who had retained a modest property, had capital of £25,000 and an income of £5,000 pa. The Judge concluded that she should receive a tranche of capital (less than £50,000) to enable her to move to a bungalow upon the sale of her property, (the applicant was in poor health). In addition she was to receive an additional £2,500 pa (capitalised to produce a lump sum of £24,000). There is a body of case law that has arisen in respect of provision for dependants under Section 1(1)(e), those cases will continue to be relevant when determining the quantum of provision that should be made to compensate for the loss of the deceased’s contribution to the common household. In the case of Malone v Harrison [1979] 1 WLR 1353 the deceased had assumed total responsibility for the applicant’s maintenance. Hollings J approached the case on the basis that the deceased had provided £4,000 pa towards her maintenance, and adopted a multiplier and multiplicand approach. Guidance as to life expectancy and rates of return can be found in the Professional Negligence Bar Association Facts & Figures Tables for the Calculation of Damages.

Forestalling a claim

The question arises what can be done to avoid litigation between beneficiaries and surviving cohabitants? If preparing a will for an elderly person who is apparently cohabiting then address the issue with the client. If the testator is providing housing and the beneficiaries are of a younger generation consider a licence to occupy, for the survivor. Where the testator is facilitating an enhanced standard of living consider the provision of a pecuniary legacy designed to reflect some of lost contribution to the household. If provision is not to be made, for example, because it is felt that main asset of the estate was acquired during a long marriage and the current partner has made no contribution, record the same in a side letter or in the will file. Since the case of Coventry (Deceased) [1980] Ch 461, the fact that the deceased rejected making any provision for the applicant has been a relevant consideration for the court. In the more recent case of Re Hancock (deceased) [1998] 2 FLR 346 LJ Butler-Sloss considered it relevant, pursuant to Section 3(1)(g), that the deceased did wish to benefit the applicant but at the time of making his will was constrained by lack of funds from doing so. Since the solicitor is an independent person to whom the testator, (without emotional complications) can speak freely, a court is likely to give weight to properly recorded attendance notes.

Miranda Allardice, 3 Pump Court, Temple