Roman Kubiak takes a look at some of the biggest and most relevant cases for practitioners to hit the legal headlines since the start of 2017, with claims under the Inheritance (Provision for Family and Dependants) Act 1975 appearing particularly heavily.

Ilott v The Blue Cross and others [2017] UKSC 17

Charities win appeal to Supreme Court in long running Inheritance (Provision for Family and Dependants) Act 1975 claim

As most private client practitioners, and many civil litigators, will know, the long running legal battle by Heather Ilott, for reasonable financial provision from her mother’s estate on the one hand, and the charity beneficiaries on the other, is finally over.  

For a brief background to the case history and the decision which led to the appeal to the Supreme Court, please see my article from last year on contentious probate case law .  The appeal before the Supreme Court - the first time that a claim under the Inheritance Act has been before the Supreme Court - brought by the Blue Cross, RSPB and RSPCA (‘the charities’), was on the five questions of whether the Court of Appeal erred in:

  1. setting aside the judge at first instance’s award
  2. taking into account the factual position as of the date of the appeal, rather than the date of the original hearing
  3. its approach to the ‘maintenance’ standard
  4. making an award to Ilott which enabled her to preserve her entitlement to state benefits
  5. its application of the balancing exercise between Ilott and the charities.

When the Court of Appeal ordered that Ilott should receive £143,000 plus an option on a £20,000 fund they had held that the judge at first instance, district judge Million, had made two ‘fundamental errors’, namely that he had not considered properly the effect of:

  1. the estrangement between the deceased and Ilott, and in particular had not considered what award would have been made had they not been estranged
  2. an immediate lump sum of £50,000 on Ilott’s benefits position which, the Court of Appeal held, arguably provided no maintenance at all. 

The Supreme Court concluded as a matter of fact that the judge had made no such errors, and therefore  the Court of Appeal was wrong to overturn his decision.  It accordingly reinstated the initial award of £50,000.

The Supreme Court made a number of interesting comments on the claim which will no doubt be cited by many practitioners in the face of future claims, particularly by adult children. Some of the more interesting points are:

  1. The reasonableness (or otherwise) of the deceased can undoubtedly be a factor in Inheritance Act claims. However, Lord Hughes urged caution, given the temptation to conflate the separate questions of the reasonableness of the testator’s decisions with that of whether reasonable financial provision had been made for the applicant.
  2. ‘Maintenance’, as prescribed by the act, is flexible and is to be assessed on the facts of each case. Traditionally, where housing is required, a capital payment, as opposed to a life interest, will generally be preferred. There are good reasons for this; life interests increase costs and do not afford the parties with a ‘clean break’.  Lord Hughes’ comments appear to imply a subtle change to this principle, suggesting that where housing is to be provided by maintenance (i.e. where the claimant is not a spouse) then a life interest may be more appropriate.
  3. The presence or absence of a ‘moral claim’ will often be at the centre of the decision under the act. This appears to be a shift towards the approach adopted in Re Coventry [1980] Ch 461.
  4. It had been suggested that where a claimant receives means tested benefits, and these would be reduced or removed altogether should they receive a capital lump sum, then awarding that claimant with such a lump sum would effectively be making them no award at all. The Supreme Court did not agree with this assessment, suggesting that Ilott could spend some or all of the £50,000 award on essential maintenance, repairs and other necessary items, and would therefore suffer less (or no) detriment to her means tested benefits. Whether this contradicts the court’s earlier assertion that the purpose of the act is not to facilitate a ‘spending spree’ is open to debate. Be that as it may, practitioners would be well advised to consider carefully a claimant’s benefits position on receipt of an award as any large purchases may be deemed by the Department for Work and Pensions (DWP) to be a deliberate deprivation of assets such that a claimant’s entitlement to any subsequent benefits may be deferred. It has been suggested by some that, one way to avoid this problem may be to ensure that any settlement agreement or order to a claimant in receipt of benefits provides a schedule of necessary expenditure envisaged by the claimant. This could then be produced to the DWP in the event of any queries.
  5. The Court of Appeal’s comments that charities have no expectation of benefit or needs should be treated with caution.  While they would not of course have a personal need, many charities increasingly depend heavily on testamentary legacies, and their causes are, by definition, for the public benefit.  The judgment acknowledges that this should not be ignored and that an award to the claimant would be to deny the charity any such funds.
  6. Finally, and arguably most importantly (indeed the part largely picked up by the press), was the reassertion of the importance of testamentary freedom.  The Supreme Court felt that the Court of Appeal had put too little weight on this factor and that the exercise of considering whether reasonable provision has been made for a claimant should be with the testator’s wishes firmly in mind.

Many practitioners agreed that the Court of Appeal had gone too far in its judgment, confusing the objective test of what is reasonable financial provision with the subjective assessment of whether or not Melita Jackson’s decision to exclude Ilott was, of itself, reasonable.  As such, most will be pleased to see the first instance decision restored and a return to what Penelope Reed QC, the lead silk in the Supreme Court case for the charities, has called ‘orthodoxy’. 

Interestingly, the Supreme Court only allowed the appeal on the legal principles alone, ordering that the costs orders to date should remain, no doubt understanding the potential significance of their decision to charity beneficiaries so as to justify an appeal on the principles alone. 

Patel v Patel [2017] EWHC 133 (Ch)

Will subject to forensic analysis rejected as forgery

The claimant, Girish Patel, sought probate in solemn form of an alleged will dated 23 June 2005 of his mother, under which he was named the sole executor and beneficiary. The defendant, his brother, Yashwant, had already obtained probate of the deceased’s 1986 will under which Yashwant was the sole executor and beneficiary. 

The brothers have already been engaged in long-running, bitter disputes across numerous jurisdictions in relation to the family business, estimated to be worth c.USD200m, often including a third brother, Suresh.  A key factor to a number of those interlinked cases was the allegation that various documents had been forged by Girish, including letters and stock transfer forms. 

This, it was alleged, was on the basis that, historically, the family would regularly exchange blank pre-signed letters, often on corporate headed notepaper to facilitate various business transactions and formalities within the family businesses.  This practice is what, Yashwant alleged, allowed Girish to forge his mother’s will with a view to securing her interest in the family business, estimated to be worth approximately USD50m. 

Girish’s case was that the deceased had visited him in 2005 and, for reasons which are detailed in the judgment, decided to make a will out ostensibly leaving everything to Girish.  Girish claimed that the gifts to him were left with the intention that he would then make various charitable donations as communicated to him by the deceased in due course, akin to a ‘fully secret trust’ i.e. a trust under which a gift is made out to a person under a will who holds that gift on trust on terms communicated by the deceased which are not included in the will, albeit that this point was not raised by any of the parties. 

Girish claimed that he had written a manuscript of the will in Gujarati which was subsequently typed up in English and which he then read out to his mother and explained in Gujarati in the presence of two witnesses, each of whom witnessed the deceased sign her will and then signed the will themselves. 

Yashwant claimed that Girish had forged the will some time in 2014/15 and induced the purported witnesses to give false evidence.  As to how Girish was able to forge the alleged will, Yashwant’s case was that Girish had simply cut off the header and footer of one of the deceased’s pre-signed corporate headed letters and then prepared and formatted a will so as to make it appear that the deceased had signed the will. 

Girish conceded that the paper was the old corporate stationery but contended that he had simply used that to prepare the will to save paper and that it had not been pre-signed. 

In finding in favour of Yashwant, the court found a number of points particularly compelling: 

  1. why, if as was Girish’s case, the deceased had told Girish that she did not have any earlier wills, was a revocation clause included?.
  2. it was remarkable that Girish had decided to use ‘topped and tailed’ corporate notepaper given the significance of the document
  3. the fact that the alleged will was not disclosed until some three years after the deceased’s death and against the background of e-mails from Girish to Yashwant following his mother’s death, including one stating:’Our mother never once over the 25 years prior to her death spoke of having executed a will ’.
  4. the fact that Girish and the two will witnesses lied during cross-examination about meeting on the day before trial, that Girish’s evidence in separate proceedings did not corroborate the evidence in the probate claim such that both could not be true and that he was found by the judge to treat ‘ the truth [as] a flexible concept[ … ]to be fashioned according to his own interests and requirements ’.

However, what was perhaps most compelling was the evidence produced by the experts in the case, the forensic document examiners.  The judge, considering the evidence and the various submissions made for and against that evidence, was particularly swayed by the following key analyses:

  1. Handwriting - the analysis suggested that the quality of penmanship was, in fact, more akin to the deceased’s style at around 2001/02, rather than 2005
  2. Electrostatic detection (ESDA) - the analysis revealed the impression of another signature, very slightly different to the one on the alleged will, which supported Yashwant’s assertion that the alleged will was, in fact, part of a series of pages pre-signed by the deceased.
  3. Thin layer chromatography - a chemical analysis of the ink used for the deceased’s and witnesses’ signatures suggested a greater degree of degradation of the deceased’s signature.  Given Girish’s case that the alleged will had been stored in a cabinet once signed and only retrieved some years later, this could only support a finding that the two sets of signatures were not contemporaneous.

Whilst the standard of proof in such cases remains the civil standard of the balance of probabilities, the judge noted the judgment in Re H (Minors) [1996] AC 563 and, in particular, the observation by Lord Nicholls that: 

’the more serious the allegation the less likely it is that the event occurred and, hence, the stronger should be the evidence before the court concludes that the allegation is established on the balance of probability.’

In the present case, so overwhelming was the case against Girish that the judge had no hesitation in dismissing his claim. 

It is not uncommon in such cases where a will has been held to be forged for the criminal authorities then to prosecute the perpetrator.  This case should, therefore, act as a stark warning to those considering forging a will, as well as the routes available in the light of modern practices to practitioners who suspect that a will may have been forged.  

British Red Cross and others v Werry and others (Ch D)

Settlement and order set aside on the basis of common mistake

The recent unreported decision in British Red Cross and others v Werry and others acts as a reminder to practitioners that, in certain cases, a settlement or order can be set aside on the contractual principle of common mistake. 

In this case, the charities sought to set aside a consent order which had provided the longstanding unmarried partner of a deceased with an award under the Inheritance Act from his estate. The settlement which gave rise to the order and, indeed, the claim which preceded it, had been predicated on the belief that the deceased had died intestate such that the partner did not, on that basis, inherit anything from his estate.  It provided that the partner should receive a life interest in one of the deceased’s property plus £25,000 to cover essential repairs to the property and with the purported intestacy beneficiaries inheriting the balance of the estate. 

The consent order specifically recited that the deceased’s intestacy had failed to make reasonable financial provision for the partner. 

However, following the partner’s death some three years later, it was discovered that the deceased had, in fact, left a will which had left the property, which, by this time had been sold, to the partner absolutely, with a life interest in another property. 

The charities, who were the beneficiaries under the partner’s will, accordingly applied to set aside the consent order on the basis of common mistake and claimed an entitlement to the sale proceeds of the property. 

Judge Elizabeth Cooke, hearing the case, held that the mistake in question, namely the belief that the deceased had died intestate, was ’fundamental’. Applying Bell v Lever Brothers Ltd [1932] A.C.161, the settlement agreement was therefore void for common mistake. 

Similarly, given that the deceased’s will made reasonable financial provision for the partner, the order giving effect to the settlement agreement was also set aside, but for the provision regarding costs being payable out of the estate, given the passage of time. 

The proceeds of the sale of the property were accordingly paid to the charities.