Smith v Smith & Ors

The application concerns the estates of Mr Thomas Joseph Smith who died in 2009. When he died he was the sole legal owner and apparently sole beneficial owner of the house known as [an address], London SE5 ("the house").

In 1991 he married the claimant, Mrs Olga Smith, who came from Russia. In Russia she had a good education and got a PhD. She met the claimant and was invited over and, I think, in fairly short order they were engaged and married. Thereafter, they lived in the house.

By 2003 the marriage was in difficulties and in that year Mrs Smith went so far as to sign a statutory declaration in which she indicated there was no relationship and she considered herself separated. In that year she went to Russia according to her evidence to look after her invalid and terminally ill mother. There she stayed until relatively recently.

Shortly after the marriage in 1992 Mr Smith made the first of two wills with which this matter is concerned, which apart from making small provisions for nephews and nieces left his property to Mrs Smith. She says that that was an implementation of promises that had been made to her that because she was married to him and looking after him and if she continued to do so, then she would be left the the deceased's property. One of her frequently voiced complaints at the hearing before me was that that was a promise which ought to be fulfilled.

In the period during which she was in Russia looking after her mother she says she came back on occasions to see the deceased and when she did so she stayed in the house, although at the same time she said there was difficulty in gaining access to the house because she did not have keys. At some point during this period she commenced divorce proceedings, but according to her she did not pursue them because the deceased asked her not to do so. Before she went to Russia, there were at least two occasions on which she commenced proceedings against the deceased based on his unreasonable behaviour.

Mr Smith died on 23 July 2009. In 2005, while Mrs Smith was in Russia, he had made another will, which was effectively a will cutting out Mrs Smith and leaving his property amongst the defendants, who are some siblings, nephews and nieces. The details do not matter. What matters is that Mrs Smith no longer takes.

The estate comprises the house, which is worth about £350,000, and assets, which are effectively now cash and worth in the region of £175,000. This is not, therefore, a substantial estate.

There is a stark dispute of fact between the claimant and the defendants in this case as to the extent to which the marriage can be regarded as what Mr Smart, who appears for the defendants, described as a fossil marriage. The case of the defendants is that the marriage was effectively over from 2003, if not before. There was nothing in it after that time. It is therefore understandable and justifiable that Mrs Smith should be cut out of the will.

Mrs Smith did not pretend that all was well with the marriage, but she denied that it had effectively completely come to an end by the time of the death; and in any event she said she is still entitled to some provision from his estate.

In those circumstances Mrs Smith challenges the later will and propounds the earlier will from which she substantially benefits and she adds a claim that if that is not successful in relation to the order, then she makes an application under the Inheritance Act. She challenges the later will on the footing that Mr Smith did not have testamentary capacity at that time.

These proceedings claiming the relief that I have outlined were commenced by a claim form issued on 22 January 2010. Various directions were given by Deputy Master Mark and Master Bowles. Then on 14 February 2011 the claimant applied for the interim relief which is the substance of the application before me. What she seeks in essence is two orders - the first that she be allowed to reside in the house, and the second claim for £25,000, which is put as a claim for interim financial relief under section 5 of the Inheritance Act.

The matter came before Norris J on 21 February and he made an order by consent, which provided for a completed evidential timetable and the hearing as an application by order. Somewhat unusually, the order also provided for cross-examination of the claimant (and only the claimant) on her evidence. A month later on 21 March 2011 the defendants added a cross application for the appointment of an administrator ad litem. That is a matter with which I have to deal.

Thus the matter arrived before me and I am asked to decide whether or not the claimant should have a right to occupy the house pending the determination of the disputes encapsulated in the proceedings and whether she should have £25,000 by way of interim relief under the 1975 Act.

Her evidence in case in support of her application was in outline as follows. So far as the probate action is concerned, she claims that the 2005 will was granted at a time when the deceased lacked testamentary capacity. She has virtually no evidence of this, other than what she describes as behaviour from which one can only assume or infer Mr Smith lacked capacity, coupled with an assertion that the fact that he broke the promise to leave property to her also demonstrated that he must have lacked testamentary capacity. I do not think I do her case any injustice in describing it in that brief way.

The behaviour that she relies on is indeed strange behaviour if it occurred. She describes a pattern of irrational behaviour which she claimed to have observed on the part of Mr Smith, including breaking into her room, assaulting her, seeking to wear her underwear and appearing in the doorway with a robe open and nothing underneath. She also describes other further irrational behaviour. She was not, however, in this country when the will was made. The only behaviour evidence that she has is evidence of the kind that I have described. However, she supplemented it by relying on what transpired when the deceased's body underwent a post mortem. On that occasion it was discovered that he was suffering from a brain tumor, a glioblastoma as I understand it, and her case is that such a tumor is capable of giving rise to irrational behaviour which would be consistent with, if it does not demonstrate, lack of testamentary capacity. She also relies on a diabetic condition that he had. Her evidence is therefore all secondary and circumstantial. That is her case on want of capacity.

For the sake of completeness, I will merely say at this stage that the defendants meet that evidence by positive evidence of various of the claimants who knew the deceased at the time and saw no evidence of irrationality: a doctor who saw the deceased and who, as it happens, is something of an expert in capacity, who says that there was no evidence of incapacity that he could see; the solicitor who took instructions for the will who says that the will was rational and he saw no evidence of incapacity; and an expert who has looked at all the evidence to which I have referred and said he cannot see any evidence of incapacity and, furthermore, it does not follow that the brain tumor would cause it. That is the basis of the probate claim and its ambit.

So far as the claim under the Inheritance Act is concerned, Mrs Smith relies on the fact that she was the widow of the deceased when he died and that she there has locus standi to apply. That being the case to make no provision for her is unreasonable provision, not least because proper provision was promised, and in any event she claims to have looked after the deceased during his life and tended him when he was ill. I think she would add that that was more than he did for her when she was ill, on certain of the evidence that she gives. She therefore makes her claim under the Act.

That claim will be tried along with the probate claim in January of next year, but within that claim she makes her application for interim relief under section 5 of the 1975 Act. Section 5 reads as follows:

It is under that provision that Mrs Smith claims the sum of £25,000, of which she claims to have an immediate financial need. I will come on to the nature of her case in more detail in due course.

There was a limited debate before me as to the jurisdiction if any to order occupation of the house. For reasons which will appear, I do not think it necessary to go into that question. I shall assume for the purpose of this judgment that the jurisdiction exists, although it is not possible to see that it exists at least under the 1975 Act, but on the basis that I am going to make the assumption I do not need to lengthen this judgment by considering the question. That, then, is the basis of the claims made by the claimant in the application before me.

Mr Mason, who appeared before me for Mrs Smith, said that there was a sufficiently good arguable case in favour of the probate claim and in favour of the Inheritance Act claim. And, indeed, in relation to the Inheritance Act claim the case was strong because of the admitted fact that she was the widow, the admitted fact that she got nothing and the apparent promises that she would receive something and a marriage that lasted at least ten years as a viable marriage and as a marriage which the deceased did not wish to bring to an end for the remainder of his life. He points out that the existing divorce petition was not pursued at the request of the deceased. He says that had it been pursued, his client would have been likely to have achieved some provision in that divorce. There may well be something in that analysis, but I do not need to say more than that.

It seems to me that so far as it is material to this application, the Inheritance Act claim has more merit than the probate claim. On the current state of the evidence the probate claim seems to me to be one which Mrs Smith is very likely to lose. She has no real evidence. She has some circumstantial evidence which probably by itself is not sufficient to demonstrate incapacity, even though the burden is on those propounding the later will to demonstrate capacity, but in the face of the apparent evidence in favour of the capacity I do not see how her thin case can be likely to stand up. However, I am not asked to strike it out and need say no more than that. There is a faintly arguable case in relation to the probate claim, but a rather more than faintly arguable case in relation to the Inheritance Act.

The meat of the application before me is the needs or otherwise of the claimant. I have set out the terms of section 5 of the 1975 Act. I can make an order only if the claimant is "in immediate need of financial assistance". I shall assume that I can make an order allowing her to occupy the house if she can demonstrate a need to occupy it, whether that need is described as immediate or not. The real question before me is whether or not that need has been made out. If it has, then I would have to go on to consider questions of jurisdiction and how to fulfil it. If it has not, then those other questions do not arise.

The case of the claimant on the basis of the witness statements relied on for the purpose of this application (which numbered six, including one filed this morning) presents a thin case on need. In fact, the principal focus of most of those witness statements is not her financial need, but the testamentary capacity or incapacity of the deceased. She sets out in amounts what she says her present income is, but does no vouching, produces no documents, and produces no explanation of things which obviously require an explanation and which at least in one respect has been demonstrated to be significantly deficient.

She had an opportunity to fix those points in the witness box in the course of cross-examination. Unfortunately, she did not avail herself of it. In the witness box she demonstrated that she was combative, that she considered she had some sort of right to this provision and from time to time she refused point blank to answer questions about her means. She considered such questions to be unnecessarily intrusive and no business of the defendants’ and no business of Mr Smart (who appeared for the defendants) when it came to him asking her about them, and she would have said no business of the court either.

She did not wish to elaborate on certain questions as to what means she had in the past and what other means might be available to her. I am afraid I got the clear impression that she was evasive and that her refusal to answer questions was not based merely on a misplaced belief that the answers were irrelevant, but was based on the fact that she did not wish to give answers which might be uncomfortable for her case. She did not come across as a witness who was wishing to assist the court. I am afraid I got the impression after the cross-examination (which I allowed to go on for only just over an hour) that she was not a witness whose evidence I can rely on in relation to any aspect of her financial affairs. That means, I am afraid, that a thin case in her witness statements, which she affirmed in the usual way in the witness box, was made even thinner as a result of the giving her evidence.

My findings in relation to this important issue of need are, therefore, as follows; and I proceed from the statutory test of immediate financial need. Mr Smart pointed out that the leading textbook, Tyler, says that a strong case of need should be established, the reason being that the court is effectively pre-empting the final decision. Were a weak case to be accepted an applicant would be in receipt of monies which it could well be held that that person was ultimately not entitled to and which in the circumstances of most Inheritance Act applications it would be impossible to procure repayment of. Whether or not the test is as high as Tyler makes it, I find for the reasons which I am about to give that it has not been fulfilled.

Mrs Smith's evidence as to her means referred only to the following. First she said she was in recent of £131.99 per week in respect of her old age pension. Next, she received £101.84 per month from a pension fund, which either she or her husband had provided for. And third, she had previously been in receipt of £4,000 bereavement benefit. She painted the picture that those were effectively the only means that she had.

I do not accept at the moment and for the purpose of this application that she has indeed established that that is all she has. She did not have her old age pension, whether or not she had the others, until she was 60, which was just over a year ago. So far as the benefits flowing from her husband's death, she did not have those before 2009, so between 2003 and 2009, if not before, she must have been living on something else. She said she was living on savings which she had and loans from friends made in Russia where she was looking after her invalid mother. Her evidence was vague and any attempt to probe them to find out exactly what her level of loans were and what her means might have been led her to immoderate protestations, as I have indicated, that this was none of anyone's business.

She claimed to have one bank account with Barclays. She has not produced any statements from which a limited investigation of her financial means would no doubt be possible. How far it would take one, one does not know, but she did not produce them. True it is she was not challenged to produce them, but it seems to me it behoves an applicant in an application under section 5 to proffer to the court and to the other side convincing evidence of the case that there is immediate financial need. Mere statements of fact are not necessarily going to be sufficient and on the facts of this case they are certainly not sufficient.

On the facts of this case that view is reinforced by the fact that it appears that historically at least Mrs Smith has had other bank accounts to which no reference is made in her written evidence. The defendants have obtained a copy of a bank statement of a Barclays Bank account which is a summary for 18 to 22 January 2003. It is, therefore, somewhat historic, but it is not without significance. The account holders are Mrs Smith and a lady described as Mrs Tatiana Rusalova, who she tells me was her sister. It shows that at that time there was a closing balance (on 22 January) of £22,000 in that account. Of course, that money by now may all be spent, but it does show there was a Barclays Bank account which is an account other than the one she had hitherto described. She says that that joint account as a joint account is still the account that she has, but we have not seen the statements.

Next, there is a Citibank US Dollar account for which a statement has been obtained relating to 17 February 2003. In that account £2,983 is shown as a credit. She says that account has been closed, but the way in which she has dealt with this evidence and in particular her failure to deal with this particular evidence when it was exhibited to a witness statement to which she has replied, is significant and not helpful to her case.

Last, there is a document dated to January 2003 which gives Mrs Smith instructions from Woolwich Building Society as to how to send money to her Woolwich Guernsey account. So Mrs Smith at that point had some sort offshore account. Nothing is known about the account and whether it ever contained any and if so what money, but it is apparent that she had such an account. Again, she says that account was closed. She did not say that when she was answering the witness statement to which that document was exhibited. I am afraid the nature and quality of her evidence and demeanour in the witness box mean that I do not for the purposes of this application accept her averment that it has been closed.

So there is at least a historic pattern of bank accounts which raises serious questions as to what assets Mrs Smith has and had and is still living on. It may or may not be true that those accounts were closed, but she has not met the point.

She also gave evidence that she has in fact for some time been living off loans made by friends of hers in Moscow. This evidence had to be extracted in the face of hostility towards saying it at all. She has provided no details of what the loans are. She has provided a story which is confusing and in my view incomplete. At one stage she said that £25,000 had been borrowed, but at another stage gave the impression that more had been borrowed. So far as repayment is concerned, she said her friends were prepared to wait until she could repay them. If she has in fact been borrowing for six years while she was in Russia and at a time when she had no reason to suppose that any money would be available from her husband to repay them, and if her evidence is right she had no means of repaying, it is hard to see why anyone would lend her money. She said that some loans were secured on a flat that she owns in Moscow. Again, it is not clear which monies those are, how much is charged and what the terms of the charge are.

The evidence of loans made by friends was unconvincing and in the way she delivered it it had the air of evidence which was a contrivance in order to plug an evidential gap in her story.

I have just referred to a flat. That is the most significant omission from her evidence. She admitted that she owns the flat in Moscow. She claimed not to know how much it was worth. She made no reference in her evidence to the ownership of this property and, indeed, her evidence sought to paint a picture of poverty which is inconsistent with her owning this flat in Moscow.

I am, therefore, not satisfied on the basis of her evidence and her cross-examination that she has made out the immediate financial need which success on an application under section 5 requires her to establish. I do not think that the evidence presents a sufficiently clear picture for me to come to that conclusion, and the fault is hers. She could have made a clearer picture had she been clearer in her evidence and clearer and more convincing in her cross-examination.

I think there is a real probability that there are more assets that she has access to and which she has not disclosed. As Mr Smart said, if she really was borrowing from friends then there is no apparent reason and no stated reason why she cannot continue to borrow in order to fund the action, which she says is one of her pressing needs if not her most pressing need, other than the payment of hotel bills.

Last on this point, there is a point which emerged as the very last point she made in her cross-examination. Her written evidence said that money was required in order to pay her lawyers in order to maintain this action. In the very last thing she said in cross-examination she said she wished to have the money, the £25,000, in order to repay the friends who had lent her money. Because it was given almost as a throw-away line at the end of her evidence, I asked for confirmation of that and she confirmed that that was why she required the money. That is, in fact, contrary to what she says in her witness statements.

The need to pay for lawyers to conduct this litigation may undoubtedly be viewed as a need and, in the absence of other assets, might be viewed as an immediate financial need for the purposes of section 5. The need to repay friends' loans which they have left outstanding for many years, if her evidence is right, is not an immediate financial need, at least not in the absence of indications that they are seriously pressing for repayment and really did require repayment. In the circumstances that further weakens her evidence.

I am therefore left with an impression of non-disclosure of material assets and material income. I do not consider that the claimant has revealed a full financial picture and I find that she has not established that she has the sort of immediate need of financial assistance within the wording of section 5. That deals with her claim to be paid money at this stage.

I turn to her claim to reside in the house. As I have indicated, I shall assume that I have jurisdiction to make such an order. In my view, I should only make if it there is a clear and immediate need or at least a very good reason why she should have that right of residence now. It is not clear from her evidence why or for how long she would wish to reside there. Her family is in Russia. She obviously has an extensive social background in Russia. She was in Russia, having left her husband, for six years from 2003 to 2009 or 2010. She claimed to have friends here, but she has no family here and there is no evidence that she really wishes to move her centre from Russia to this jurisdiction, or any evidence as to why she should wish to do so. It does not seem that she wishes to make the house her home.

I am satisfied that at least for the moment she does not require it for a residence. Her case is that it would save her hotel bills when she is here. That is of course true; if she had a house to go to she would not have to pay hotel bills and the evidence is that it costs her several tens of pounds per night to stay in the hotels in which she is staying, and I accept that they are not expensive hotels. However, that factor by itself is not sufficient. Because I am not satisfied that the court has been given full disclosure of her means, I am not satisfied that she cannot pay the bills. Nor am I satisfied that she legitimately wishes to be here for such a period of time that it would be appropriate to allow her to reside in the house as an alternative to incurring hotel bills for that limited period of time.

If she wishes to reside here for a period, there is no reason why she cannot wait and see if she is successful in these proceedings before finding out whether she can, through these proceedings, become able to stay in the house. It is not apparent that she will achieve a degree of success in the proceedings which will give her that entitlement. It is apparent enough to me that that is unlikely as a result of the probate action. The only way she will get it is if she gets it in the Inheritance Act and it remains to be seen whether she does.

In the circumstances, and assuming I have jurisdiction to make the order, I decline to make an order that she be allowed to live in the house. Mr Smart in his skeleton argument made the point that the defendants were not satisfied that if an order were made it would be easy to have the claimant removed in the event of it transpiring that she had no entitlement to be in the house. A court is likely to start by being sceptical about that because a court ultimately has powers in order to procure her removal. However, in this case I have to say that having seen the claimant in the witness box it is apparent to me that if she were allowed in the house, then to put it at its lowest there would be some considerable struggle in getting her to leave the house were it to turn out that she should not have been there in the first place. In other words, Mr Smart's point had more to commend it than I confess I thought it first had when I saw his skeleton argument. I leave out of account for these purposes (because I do not need to deal with it), the submission of the defendants that Mrs Smith should not need be allowed in the house because it was not habitable. I cannot really make findings about the ultimate habitability of the house in the state of the conflict of evidence which I have and in light of the rather limited evidence of uninhabitability that the defendants have put in. But I need say no more about that.

Accordingly, in the circumstances, assuming I have jurisdiction to allow Mrs Smith into the house pending the trial of this action, I decline to exercise it for the reasons given.

It follows that Mrs Smith's application for interim financial relief under section 5 and her application to be allowed to reside in the house fail.