Bahouse & Anr v Negus

This is a renewed application for permission to appeal. The application relates to an order made by HHJ Kaye QC on 23 October 2007. There were before him a number of applications. The one with which the proposed appeal is concerned is the application that was made under the Inheritance (Provision for Family and Dependants) Act , as amended 1975, in respect of the estate of the late Henry Bahouse, whom the judge called “the deceased” or “Henry”. He died on 27 March 2005 leaving a will dated 24 January 1996, in respect of which probate was granted on 18 October 2005. His net estate was £2.2 million. The application under the 1975 Act was made by Miss Cyd Negus who had been a partner of the deceased for the last eight years or so of his life.

The judge made an order under the Act, in which he directed that there should be a transfer to the claimant, as I shall refer to her, of the property known as Flat 8, Glen Chess, Loudwater Lane, Rickmansworth, plus a garage there numbered 17. He directed that the executors, who were the defendants to the proceedings, should ensure that the debts secured by charges on the properties were discharged or, alternatively, if that was not done then a sufficient sum of money should be paid to the claimant to enable her to discharge the debts that were secured by the charges. In addition to the transfers, the directors were ordered to pay the claimant the sum of £240,000, as to £200,000 to meet part of the claimant’s capitalised income needs and as to £40,000 to meet an expected claim by the landlords on the properties that were to be transferred. The order went on to dismiss the defendant executor’s action for possession of the flat. The judge had also found during the course of his judgment that the claimant had not got any beneficial interest in the flat as she had claimed, either by virtue of the doctrine of proprietary estoppel or on any other basis, that might support a constructive trust. He then made orders for payment of costs.

In brief the executors, who wish to have permission to appeal against that order, submit through their leading counsel, Mr Riza, that this is not only too generous, it is actually wrong in law, for a number of reasons that I will come to in a moment. And so it is submitted by leading counsel that this is a case in which the executors are able to show a real prospect of succeeding. I should say at this point that appeals in this kind of case to this court are rare for this reason: that although the trial judge is not exercising a discretion there is a quite wide latitude to him in making value judgments about what is reasonable, first as to whether the deceased has made such financial provision as would be reasonable in all the circumstances of the case for the claimant to receive for her maintenance, and if he is satisfied that such provision has not been made there is a wide ambit for the judge to make a value judgment as to what would be reasonable provision to receive for her maintenance in all the circumstances of the case. When an appeal is against a judgment of what is or is not reasonable the position in this court is that it has to be satisfied that the judgment was wrong in the sense that it either was erroneous in principle because the judge has misunderstood the law or he has come to a decision that is plainly wrong, having regard to the facts that he has found on the evidence and the proper application of the law to those facts. So I emphasise at the outset it is exceptional for permission to be given to appeal against decisions of this kind and there will be very few cases found in the reports of decisions of the Court of Appeal on cases brought under the 1975 Act. That is the reason why there are so few.

Now the application for permission was first considered on the paper by Rimer LJ. He refused permission on 11 January 2008, giving these reasons:

“The judge correctly directed himself with regard to the objective question posed by section 1 of the 1975 Act and made an evaluation that he was entitled to make. Having done so, he correctly directed himself with regard to the discretionary exercise required of him under section 2. In neither respect is there any real prospect of a successful challenge to his conclusions on an appeal. The grounds of appeal attempt to argue that he misdirected himself as to the applicable principles, but in my view the attempt fails. They amount to no more than a bid to re-argue the case on the facts.”

Now the facts in this case are that Henry Bahouse died on 27 March 2005. He had been married twice before and there was a son of the marriage, Gordon, who is one of the executors who is seeking permission to appeal, and he is the residuary legatee under the will of 24 January 1996. No provision was made for the claimant in the will. The position as regards the claimant was that she satisfied the requirement -- this is not disputed -- for a claim under the Act by someone who was not a surviving spouse. The provision which the judge referred to in paragraph 81 of his judgment enables a cohabitee who has for at least two years immediately preceding death been living as the wife of the deceased to make a claim for provision under the Act. That is provided for in section 1(1)(ba) and 1A(b) of the 1975 Act. The judge then said:

“I have to decide…whether the disposition of the Deceased’s estate effected by his Will was not such as to make reasonable financial provision for her (see s.1(1)), that is, such financial provision as would be reasonable in all the circumstances of the case for her to receive for her maintenance.”

And he referred there to section 1(2)(b) which is in different terms than section 1(2)(a) and 1(2)(aa) that deal with the cases of applicants who are not cohabitees but are, for example, surviving husband or wife or partner to a civil partnership.

The judge then went on to say that, in answering the question which he posed, the court had to have regard to a wide variety of matters in section 3 which he summarised. He addressed himself specifically to the question of what was meant by “maintenance” under the 1975 Act, pointing out that it was not a term that was defined in the Act but there had been judicial explanations of what it meant, of which one of the best known is that given by Goff LJ in the case of In Re Coventry (Deceased) [1980] Ch 461 at 484. The judge in that case said:

“So that whatever the precise meaning of the word “maintenance” -- and I do not think it necessary to attempt any precise definition -- it is clear that it is a word of somewhat limited meaning in its application to any person qualified to apply, other than a husband or a wife.”

He referred to a number of cases and he concluded this aspect of his judgment by saying this:

“What is proper maintenance must in all the circumstances depend upon all the facts and circumstances of the particular case being considered at the time, but I think it is clear on the one hand that one must not put too limited a meaning on it; it doesn’t mean just enough to enable a person to get by; on the other hand, it does not mean anything which may be regarded as reasonably desirable for his general benefit or welfare.”

As to the latter part it has been made clear time and time again that in the exercise of the maintenance jurisdiction the court is not in the business of rewriting wills to give people legacies or bequests. The judge then went on to say in crucial paragraphs which have been quoted to the court today what conclusion he had reached about maintenance. He said in paragraph 87:

“In my judgment, having regard to her age, the length of time she was with Henry, the factual background that I have previously mentioned, the fact that he paid for everything and provided her with a home and to the promises that [he] made to [her] about a roof over her head, she is entitled to at least a reasonable degree of financial security and to a degree of comfort for the rest of her life. His promises may not have been enough to provide her with a beneficial interest in Flat 8, but I agree with Mr Price on her behalf, that it is relevant to take those assurances into account on this part of her claim.”

And he cited a case where such an approach had been adopted. And he said at 88:

“I entirely accept too, that “maintenance” is the touchstone but this must be maintenance in the context of her lifestyle as it was with him, not what it was immediately before, but paying due regard to what was said by Goff in Re Coventry, which I have just quoted. Her life had changed in eight years, no doubt allowing for the ups and downs and vicissitudes of life, nevertheless, much for the better. It does seem to me that lifestyle or “tone” in the sense described by Mr Price is at least to be taken into account”.

He then correctly pointed out that the burden of proof on this first hurdle was with the claimant. He said that he assumed on the basis of the evidence he had heard, which was not entirely satisfactory, that her current needs were in the region of £38,000 and that her current income was in the region of £20,000 -- that was by reason of the income of the Scottish Widows money which he had explained earlier in his judgment.

“…then there is…a shortfall of £18,000. I have used the £38,000 figure as just short of her calculated ceiling of around £39,000 for the reasons previously indicated.”

And he went on to explain why he made the order that he did in her claim. I say, the order that he made, added on to the £20,000 a year that she was getting from Scottish Widows, the £240,000 made up as to capitalised income and £40,000 to meet the claim of landlords, the transfer of the flat and garage free of mortgage. And there was also, as he mentioned in his judgment, a half-share in a flat in Mondeo in Spain, which was the subject of a Spanish will, and so the judge said at paragraph 107:

“If thus the £240,000 (the £200,000 plus the £40,000) is added to the £395,000 [that was the Scottish Widows money] and the £110,000 [which was the estimated value for the half-share in the Spanish flat] this produces £745,000 which, as I read the Duxbury tables, ought to produce something in the mid range of £30,000 to £40,000 per annum by the time all is gathered in. This is not inconsistent with what I have assessed her needs at, having regard to all that I have said before. If the Spanish Property yields £200,000, then a further £90,000 has to be added to make a capital sum of £835,000, which would give her just over £40,000.”

That is the award the judge made, those are the reasons he made it and the bits I have quoted are the relevant legal provisions in the 1975 Act and the authorities which he relied on as justifying the making of that order.

Now that is criticised in the submissions made on this application in a number of respects. It was made clear that there was not any attempt to appeal findings of fact by the judge though if permission were given there would be an application to adduce further evidence. It was made clear that no further evidence was sought to be adduced for the purposes of obtaining permission. It was submitted that the main question which would be raised on the substantive appeal was how had the judge approached maintenance. It was said this was an issue of importance. The submission was that it was a case in which the guidance of this court would be helpful, particularly in the context of maintenance, for the purposes of dealing with a claim by a person who has led an extravagant style of life with the deceased. It was submitted that the judge had erred in law by taking account of what was described as the deceased’s and the claimant’s extravagant lifestyle. The details of that -- of expenditure, on holidays and housing and so on -- are given in the judge’s account of the facts. It was submitted by reference to the provisions in the Act and to the judgment in Coventry that in making a value judgment, as the court has to, the judge should recognise the difference which is reflected in the provisions of the Act between a claimant who is a surviving spouse or civil partner and a claimant in the position of this claimant who has been a live-in partner of the deceased. It is said that the law could be clarified by this court, explaining more than the existing authorities do, the concept of maintenance in the extravagant lifestyle situation. It was emphasised that provision under the Act is made for needs, that this Act is to deal with injustice rather than upholding extravagant styles of living. And it was said that the amount awarded in this case, which totted up to nearly £1 million, was not justified on a proper interpretation and application of the statutory provisions to this case.

We were quoted other aspects of the law from a judgment given by my Lord , Mr Justice Munby in Myers v Myers & Ors [2004] EWHC 1944 (Fam), which dealt with a claim under the 1975 Act though in quite a different context. The value of this judgment for the purposes of today’s application was in the very helpful quotations, which are set out from the relevant cases in the judgment, (section headed “The law”) where there are quotations from Re Coventry from Goff LJ’s decision, from Browne-Wilkinson J’s decision in the case of Re Dennis [1981] 2 AER 140 at 145 where Browne-Wilkinson J said in respect of the word “maintenance” this:

“In my judgment the word ‘maintenance’ connotes only payments which, directly or indirectly, enable the applicant in the future to discharge the cost of his daily living at whatever standard of living is appropriate to him.”

I pause to say there that that statement, which has been acted on in many subsequent cases, does seem to me to allow regard to be had in awards under the 1975 Act to the fact that some people have a much more expensive or extravagant way of life than others. Having regard to what standard of living is appropriate to him means that one does not apply some objective standard of what is reasonable for everybody; it is a standard which has to be flexible to suit the circumstances of the case. It is what is appropriate to that case, and that means looking at what style of life the claimant was accustomed to live with the deceased during his lifetime.

And there was also a quotation on a judgment given by Hoffmann LJ, not under the 1975 Act, but it’s a judgment that contains some helpful comments. That’s the case of Piglowska and Piglowski [1999] 1 WLR 1360 at 1373, quoted in paragraph 20 of my Lord’s judgment in Myers, where Lord Hoffmann referred to guidelines which are obtained by the courts from values about family life which it considers to be widely accepted in the community rather than from the legislation itself and he went on to give examples of the way that this part of the law worked. In referring to value judgments Lord Hoffman did, however, make it clear that they are judgments on which reasonable people can differ, and judges are people and they can have different views about what is reasonable without actually being wrong in the view of the Court of Appeal.

I am returning now to the point I mentioned at the beginning that in this type of case the court is not justified in granting permission to appeal simply because it thinks that a judge has been too generous or not generous enough according to the case. Some latitude is allowed as to what is reasonable appropriate to the circumstances of the case. As Lord Hoffman said in the concluding words of the quotation:

“The appellate court would be willing to permit a degree of pluralism in these matters”

Well, having considered these submissions I have to consider whether this is a case in which I would grant permission to appeal. Is there a real prospect of it succeeding?

In his final remarks leading counsel pointed to some other matters which his clients wanted him to mention. I only mention them for the purposes of saying they are not relevant for the purposes of our deliberation today. The two matters related first to a possible investigation by the Inland Revenue to certain tax matters and the second related to some work that had possibly been done by the claimant and was not mentioned in the judgment. They have no bearing on this application today.

The task of the court on an application for permission to appeal is whether, looking at the judgment that the judge gave in this case back in last October, looking at the matters that were before him on the evidence, his findings of fact and the relevant law, there is a real prospect of that judgment being overturned by this court. I have reached the conclusion that there is not any real prospect in this case of overturning the judgment. It seems to me that the passages which I have quoted from the judgment on the law contain perfectly correct directions by the judge to himself about the relevant provisions of the Act and the relevant interpretations which have been placed on those provisions in the various judicial decisions. In my view he acted on a correct indication of what was meant by “maintenance” in Coventry and he applied it correctly to the facts which he found.

He was criticised in one respect about the way he dealt with the evidence. It was said that in relation to the outgoings of the claimant he had rather than making them a finding on the evidence made an assumption, that is in paragraph 90, as to the current needs of the claimant being in the region of around £38,000 a year, and of course that was a key figure in him assessing what top-up he ought to apply by way of maintenance in addition to the income that she was getting of £20,000 a year from the Scottish Widows fund.

In my judgment there is no real prospect of this appeal succeeding on the basis that the judge expressed himself as making an assumption in this case. It is clear from the earlier discussion by him of the various respects in which some of the evidence was unsatisfactory that he was reaching a figure of £38,000 that was justifiable on the basis that he had to do the best that he could with the evidence that was before him. I do not think that this comes anywhere near the case where one can say that the judge has misunderstood or misinterpreted some important evidence that was before him. Time and time again, particularly in relation to things like outgoings, judges have to make an assessment on the basis of what evidence they have because it is a matter on which they probably never would receive perfect evidence. So I do not think in this case there has been any misdirection of the law. I do not think there has been any misunderstanding by the judge of the facts which he found on the evidence before him. I think he correctly applied the law to the facts and I would agree with every word that Rimer LJ said, that this is really no more than an attempt to reargue the case on the facts. I would add that I can well understand the feelings of the family and the executors as to why they think this provision is too generous. One knows that in family circumstances these feelings can arise and in a sense they are quite justifiable, but we have to look at the matter on the basis of the jurisdiction that the courts have been given and it seems to me on the basis of the 1975 Act jurisdiction this judge reached a conclusion which there is no prospect of overthrowing on an appeal to this court. I would therefore refuse permission.

I agree that for all the reasons given by my Lord, Mummery LJ, as also for the reasons previously given by Rimer LJ, this application fails and must be dismissed on the simple basis that there is no real prospect of an appeal being successful.

The task of the judge, having considered all the matters set out in section 3(1) of the 1975 Act, was to answer two questions: (1) Has financial provision been made for the claimant as would in all the circumstances of the case be reasonable for her to receive for her maintenance? (2) If not, what financial provision would be reasonable in all the circumstances for the claimant to receive for her maintenance? Essential to each of those two questions is the concept of reasonable “maintenance”.

At the forefront of Mr Riza’s submissions is the assertion that the judge erred in his approach when he held that in determining reasonableness the court could have regard to what Mr Riza characterises as the claimant’s previous “lavish lifestyle”. There is in my judgment no arguable merit in that criticism whether as a matter of law or as a matter of fact.

The meaning of maintenance in this particular statutory context has for many years been recognised as being that described by Goff LJ in In Re Coventry [1980] Ch 461 in the passage at page 485 to which my Lord has already referred, supplemented by the passage in the judgment of Browne-Wilkinson J (as he then was) in Re Dennis [1981] 2 All ER 140 at page 145 to which again my Lord has referred. Goff LJ made clear that:

“What is proper maintenance must in all cases depend upon all the facts and circumstances of the particular case…”

In an earlier passage in his judgment, Goff LJ had made clear that what was reasonable maintenance had to be assessed having regard to what, quoting the Canadian case of In Re Duranceau [1952] 3 DLR 714 at page 720, he referred to as the applicant’s “station in life”.

Browne-Wilkinson J in Re Dennis, as appears from the passage to which my Lord has already made reference, made clear that what is reasonable maintenance has to be assessed having regard to “whatever standard of living is appropriate to him”.

It seems perfectly plain to me in the light of those two judgments that, in assessing in any particular case what is or is not reasonable maintenance, the court must have regard to the nature and quality of the lifestyle previously enjoyed by the applicant and the deceased.

It cuts both ways. The applicant who lived with the deceased in a hovel will not be able to look to maintenance at the same level as the applicant who lived together with the deceased in a palace. If, in fact, as in the present case the lifestyle was indeed lavish and extravagant then, in my judgment, consistently with the authorities, it was perfectly permissible for the judge, in determining what the proper answer was to each of these two questions, to say that the reasonableness or otherwise of the provision made for the claimant by the deceased, and the provision which it would be reasonable for the judge to make for the claimant, had to be assessed having regard to the lifestyle she had previously enjoyed with the deceased. If the lifestyle was indeed lavish and extravagant then it is entirely acceptable, and a proper application of established principle, for a judge to reflect that in his evaluation of the proper answer to the first question and in the exercise of his discretion in providing an answer to the second question. So there was, in my judgment, no even arguable error of law on the part of the judge in the present case.

So far as concerns the facts I draw attention only to this: that the judge assessed the claimant’s ongoing maintenance requirement in the sum of £38,000 per annum. That, it might be thought, in current circumstances, is hardly an immoderate or excessive figure having regard to the kind of lifestyle that the claimant had previously been enjoying with the deceased. Indeed the judge himself on more than one occasion commented that the claimant’s own figure was if anything on the low side rather than the extravagant side when compared with the previous standard of living she had enjoyed with the deceased.

In my judgment the judge directed himself impeccably as a matter of law and came to conclusions which it was plainly open to him to arrive at in circumstances where it would, for the reasons given by Lord Hoffman in Piglowska v Piglowski [1999] 1 WLR 1360 at page 1373, be wholly inappropriate for this court to seek to interfere.