Shortly after Mr Justice Mostyn rejected an application to bring a claim under the Inheritance (Provision for Family and Dependants) Act 1975 outside the statutory six-month time limit in Cowan v Foreman ([2019] EWHC 349), the court allowed a claim to be brought under the act 25 years and nine months after the deadline for doing so.
Cowan provided guidance as to the court's jurisdiction pursuant to Section 4 of the 1975 act and condemned the use of standstill agreements. The court refused to exercise its power to allow a widow to bring a claim against her late husband's estate outside the statutory six-month time limit.
Mr Justice Mostyn's concise judgment held that the time limit was intended to avoid unnecessary delay and spare beneficiaries and the court from being burdened with stale claims. Perhaps most interestingly, he concluded that the question of whether to allow a claim to be brought out of time was not one of discretion, but a "qualitative decision or a value judgment", as the court must be satisfied that the claimant has shown:
- good reasons to justify the delay; and
- that they have a claim of sufficient merit to be allowed to proceed to trial.
Mostyn was highly critical of the use of standstill agreements, suggesting that the practice of agreeing them is to "cock a snook at the clear Parliamentary intention" and should come to "an immediate end".
Instead, it was directed that it was preferable for claimants to issue protective proceedings and then apply to have the proceedings stayed (if necessary) for the purpose of negotiations. The extent to which this must also be the practice beyond the sphere of the act remains to be seen.
In Bhusate v Patel ([2019] EWHC 470 (Ch)), the claimant's husband died intestate in 1990. As his estate had not been properly administered, the property in which he and the claimant had lived (which constituted the bulk of his estate) had remained registered in his name. The court had previously struck out the claimant's claims to a beneficial interest in the property and a statutory legacy (Re Kashinath Bhusate (deceased) [2018] 2362 (Ch)), and so her only recourse was to bring a claim under the Inheritance (Provision for Family and Dependants) Act for financial provision from her late husband's estate. As over 25 years had passed since the statutory deadline for bringing a claim under the act, the claimant was required to apply to court under Section 4 for permission.
Chief Master Marsh exercised his discretion in favour of the claimant. His judgment factored in:
- the strong merits of her claim;
- her limited culpability (as one of the administrators) in relation to the failure to administer the estate for over 26 years;
- the actions of her late husband's children by his first wife being the reason why she had a claim under the act (subject to the Section 4 application succeeding); and
- the fact that refusing the application would leave the claimant with no benefit from the estate and effectively homeless.
This decision is clearly difficult to reconcile with the judgment in Cowan. The court's discretion in relation to Section 4 applications is broad, and since there appears to be no consensus among the judiciary, the outcome of these applications will continue to be difficult to predict. However, this uncertainty and unpredictability are arguably by-products of a deliberately flexible regime which allows judges to consider the multiplicity of unique circumstances and hopefully strike the right balance between allowing claimants to be heard and refusing stale claims.
For more information on this topic please contact Emily Exton, Ashleigh Carr, Roberta Harvey or Rebecca Welman at Forsters LLP by telephone (+44 20 7863 8333) or email ([email protected], [email protected], [email protected] or [email protected] ). The Forsters LLP website can be accessed at www.forsters.co.uk.
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