Lewis v Warner

Mrs Audrey Blackwell died on 6 May 2014. Her last will has not been found, but a reconstituted version has been admitted to probate. This provides for Mrs Lynn Lewis, who is Mrs Blackwell’s only child, to inherit her mother’s estate. Had there been no will, Mrs Lewis would anyway have been entitled to the estate under the intestacy rules.

The estate principally comprises Mrs Blackwell’s home, a house called “Green Avon” in the village of Twyning Green in Gloucestershire. Since 1995, Green Avon has also been the home of Mr Stanley Warner.

On 30 January 2015, Mrs Lewis, as the executrix of her mother’s estate, issued a claim against Mr Warner in the County Court at Gloucester and Cheltenham. The proceedings sought, among other things, possession of Green Avon and damages for trespass or mesne profits. In response, on 13 February 2015, Mr Warner issued an application of his own, for relief under the Inheritance (Provision for Family and Dependants) Act 1975.

Both sets of proceedings came before Recorder Christopher Gardner QC in September of last year. In a judgment handed down on 11 November 2015, the Recorder concluded that Mr Warner should be given an option to have Green Avon transferred to him for £385,000. The order giving effect to the judgment stipulated that, in exchange for payment of £385,000 by Mr Warner to Mrs Lewis as executrix of Mrs Blackwell’s estate, Mrs Lewis was to transfer Green Avon to Mr Warner within 28 days. The Recorder further ordered Mrs Lewis to pay Mr Warner’s costs from 30 June 2015 (subject to a specific exception). Mrs Lewis now appeals.

As the Recorder noted, there was no real dispute as to the relevant facts. He summarised them in these terms in his judgment:

“13.

… Mr. Warner, who is now aged 91 years, began living with the deceased, who was eight and a half years his junior, in about 1995, and they lived together in her house until her death nearly 20 years later. Having heard Mr. Warner, who clearly has all his mental faculties, and who I found to be a frank, direct and credible witness, and their neighbour, Mrs. Walton, I accept that during this time they lived together as if husband and wife in all its aspects…. Until her death the relationship between Mr. Warner and Mrs. Lewis and her husband was a friendly one.

14.

Mr. Warner, who expected to die long before her, made a will leaving her a substantial sum. He frankly admitted that he would have been surprised if she had left him anything in her will that could not be found. He was quite clear that there was never any understanding that he would have any interest in her estate, nor did he claim any. Nor was there any understanding that he would be able to stay in the house or be able to purchase it in the event of her death. This was something that they never discussed. So far as their respective financial circumstances were concerned, Mr. Warner accepted that he was significantly better off than the deceased, and that he has the means to buy the house or alternative accommodation if necessary. During their time together Mr. Warner and the deceased shared the expenses of the house and he paid for the oil, which tended to be their largest outgoing.

15.

When it became clear that the deceased was not going to survive, Mr. and Mrs. Lewis became concerned as to Mr. Warner’s occupation of the house, and so drafted a declaration that he did not wish to make any claim for the house, which they asked him to sign. He said that he was not very happy that they felt unable to trust him but, as he was not making any claim on the house, he signed it. When they lost this and a typed replacement was prepared by Mr. Lewis, again he signed it….

17.

Mr. Warner said that he would be very unhappy and very stressed if he had to move from the house where he had spent the happiest 20 years of his life, and where he is lucky to have a doctor as a neighbour, Dr. Walton, who had arranged for him [to] have an emergency button around his neck and is first on call if he pushes it. Mrs. Walton confirmed that they keep an eye on him and that he comes round to their house for about 10 minutes each morning. Mr. Warner described, dispassionately and without any attempt at exaggeration, his state of health. He has a very arthritic back and the main artery in his left leg is closed. He is on medication for problems with his small intestines which produces stomach pains and side effects. He has difficulties with his hands due to carpal tunnel syndrome. I was told … that the house is in a location where Mr. Warner has lived his long life, including the house where he was born, his former matrimonial home, the Green, his caravan park, and the village shop to which he is able to walk. I accept all of this evidence.

18.

As for Mrs. Lewis’s intentions in relation to the house, it seems that her views have varied from time to time. In her witness statement she accepted that 7 days after her mother’s death she had told Mr. Warner that she did not want him to rent it but that he could buy it at a price the estate agent would tell them. Her husband said he could buy it for £425,000 but he had rejected this as an overvaluation. This offer was repeated in a letter from Mr. Lewis to Mr. Warner’s on 16 May 2014, and Mrs. Lewis said that, if he had accepted this, the house would probably have been sold to him.

19.

In her evidence she said that she wanted the house to go on to the market to get the full market value. She said that she may want to extend it or improve it prior to sale, and Mr. Lewis said that it may increase in value if the sale was delayed, but agreed that this was solely his own assessment. She ended by saying that she was willing to sell the house to the highest bidder, including Mr. Warner, if he was that person.”

Section 1 of the Inheritance (Provision for Family and Dependants) Act 1975 (“the Act”) authorises a range of people to apply to the Court for an order under section 2 of the Act on the ground that the disposition of the estate of a deceased person effected by his will and/or the law relating to intestacy “is not such as to make reasonable financial provision for the applicant”. Those entitled to apply include, by virtue of sections 1(1)(ba) and (1A), a person who throughout the two years up to the death of the deceased was living:

“(a)

in the same household as the deceased, and

(b)

as the husband or wife of the deceased”.

Other possible applicants include the wife or husband of the deceased (section 1(1)(a)) and (by section 1(1)(e)):

“any person … who immediately before the death of the deceased was being maintained, either wholly or partly, by the deceased”.

By section 1(3), a person is to be treated as being “maintained” wholly or partly by the deceased for the purposes of section 1(1)(e) if:

“the deceased, otherwise than for full valuable consideration, was making a substantial contribution in money or money’s worth towards the reasonable needs of that person”.

In the case of an applicant other than a husband or wife, “reasonable financial provision” is defined by section 1(2)(b) to mean:

“such financial provision as it would be reasonable in all the circumstances of the case for the applicant to receive for his maintenance”.

In contrast, where a spouse is the applicant “reasonable financial provision” refers to “such financial provision as it would be reasonable in all the circumstances of the case for a husband or wife to receive, whether or not that provision is required for his or her maintenance” (see section 1(2)(a), emphasis added).

Section 3 of the Act lists matters to which the Court is to have regard in determining whether the disposition of the deceased’s estate is such as to make reasonable financial provision for the applicant and, if not, whether and how to exercise its powers under section 2. Section 3(1) refers to:

“(a)

the financial resources and financial needs which the applicant has or is likely to have in the foreseeable future;

(b)

the financial resources and financial needs which any other applicant for an order under section 2 of this Act has or is likely to have in the foreseeable future;

(c)

the financial resources and financial needs which any beneficiary of the estate of the deceased has or is likely to have in the foreseeable future;

(d)

any obligations and responsibilities which the deceased had towards any applicant for an order under the said section 2 or towards any beneficiary of the estate of the deceased;

(e)

the size and nature of the net estate of the deceased;

(f)

any physical or mental disability of any applicant for an order under the said section 2 or any beneficiary of the estate of the deceased;

(g)

any other matter, including the conduct of the applicant or any other person, which in the circumstances of the case the court may consider relevant.”

Where the application is made under section 1(1)(ba), the Court is also directed (by section 3(2A)) to have regard to:

“(a)

the age of the applicant and the length of the period during which the applicant lived as the husband or wife or civil partner of the deceased and in the same household as the deceased;

(b)

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

As Oliver J explained in In re Coventry, decd. [1980] 1 Ch 461 (at 469), where the applicant is someone other than a surviving spouse the matters set out in section 3 of the Act have to be considered at these two stages:

“first in determining the reasonableness of such provision (if any) as has been made by the deceased for the applicant’s maintenance and, secondly, in determining the extent to which the court should exercise its powers under the Act if, but only if, it is satisfied that reasonable provision for the applicant’s maintenance has not been made”

Oliver J went on to observe (at 472) that, in the case of an applicant other than a husband or wife, the Court “is to look at what is reasonably ‘required’ for that applicant’s maintenance” (a point endorsed by the Court of Appeal in In re Jennings, decd. [1994] Ch 286, at 295 and 301).

The Act does not define “maintenance”, but some guidance as to the word’s meaning is to be found in the Coventry case and the decision of Browne-Wilkinson J in Re Dennis (Deceased) [1981] 2 All ER 140. In Coventry,Goff LJ observed (at 485) that “maintenance” is “a word of somewhat limited meaning in its application to any person qualified to apply, other than a husband or a wife” and went on:

“What is proper maintenance must 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 does not 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.”

In Dennis, Browne-Wilkinson J said (at 145-146) in a much-quoted passage:

“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. The provision that is to be made is to meet recurring expenses, being expenses of living of an income nature. This does not mean that the provision need be by way of income payments. The provision can be by way of a lump sum, for example, to buy a house in which the applicant can be housed, thereby relieving him pro tanto of income expenditure.”

A judge is not entitled to exercise his powers under the Act merely because he thinks that he would have been inclined, if he had been in the position of the testator, to make provision for the applicant (see In re Styler [1942] 1 Ch 387, at 389). In In re Coventry, Goff LJ explained (at 488):

“The question is not whether it might have been reasonable for the deceased to assist … the plaintiff, but whether in all the circumstances, looked at objectively, it is unreasonable that the effective provisions governing the estate did not do so.”

Having summarised the parties’ submissions, the Recorder said this (in paragraph 22 of his judgment):

“Looking at the matter objectively, I am unable to see why the maintenance of a roof over the head of an applicant for 20 years cannot come within the definition of ‘maintenance’ in s.1(2)(b) of the Act. Its provision had a financial value because, without it, the applicant would have had to rent or buy an alternative roof. Its removal, by there being no provision for the continuance of the same in the reconstituted will, meant, therefore, that it failed to make reasonable financial provision for him, and so the first stage is satisfied, enabling the court to proceed to the second discretionary stage of deciding whether, and if so what, needed to be done about it. Here the court has to balance the interest of both the applicant and the beneficiary.”

The Recorder continued:

“23.

Taking into account the specific matters referred to in s.3 of the Act, in particular the physical disability of the applicant, his age and the length of time that the house has been his home, and the fact that he made contributions to the costs of the home during that time, I consider these all favour a continuance of his ability to remain in the house. Further, I consider that I am entitled to take into account such matters as the location of the house, not only by reason [of] it being in the centre of the village where he grew up and has lived all his life, but also because it is located next door to neighbours who look after his welfare. All these matters satisfy me that the upheaval and likely consequences of this applicant having to move should be avoided if at all possible.

24.

Turning now to the interests of the beneficiary, she wishes to realise the market value of the house, and I consider that it would be unreasonable for her to have to wait until Mr. Warner’s demise to do so, even though she and her husband own a garden centre that it presently on the market at almost £1.4 m. It was suggested on her behalf that to sell the house at auction may not achieve the true market value and that it should be sold by private treaty. However, in this case a single joint expert was appointed and has valued the house at £340,000. Mr Lewis was not happy with that valuation, and so obtained an alternative valuation of £385,000, and permission was given to introduce that valuation as part of his wife’s case. Mr Evans [i.e. counsel for Mr Warner] said that his client would be content if the court accepted the higher valuation. By so doing the full value of the interest of the beneficiary would be realised. I accept that submission.

25.

Fortunately the applicant has the means with which to purchase the house at that price, and, in all the circumstances of this case, I consider that he should be given the option during an appropriate period to have the house transferred to him upon him paying £385,000 to the deceased’s estate. The applicant would thereby be able to continue living in the house for the rest of his life, with his son as a carer if and when necessary. Further, although she has collected a number of items from the house, there are some other personal items of the deceased, which Mrs. Lewis identified on a list of objects in the house …, which she should have the opportunity to collect.”

It was on this basis that the Recorder ordered Mrs Lewis to transfer Green Avon to Mr Warner in exchange for a payment of £385,000.

Although Mrs Lewis advanced a large number of grounds of appeal in her appellant’s notice, Mr Bernard Weatherill QC, who appeared for her, recognised that they involved essentially three complaints:

I shall take these in turn, but begin with the Section 1(1)(e) Point.

As I have indicated, the Section 1(1)(e) Point proceeds on the basis that the Recorder treated Mr Warner’s claim as made under section 1(1)(e) of the Act. There is no doubt that, if he did indeed act in this way, he was wrong to do so. Mr Warner’s case was always founded on section 1(1)(ba) and the evidence did not justify a finding that Mr Warner had been “maintained” by Mrs Blackwell within the meaning of section 1(3).

The suggestion that the Recorder viewed Mr Warner’s claim through the prism of section 1(1)(e) of the Act is based on paragraph 22 of the judgment. The first sentence of that paragraph can be said to show that the Recorder considered Mr Warner to have been in receipt of “maintenance” for 20 years. Such a finding might be said to chime more obviously with section 1(1)(e), which is concerned with whether the applicant was being “maintained” by the deceased, than with section 1(1)(ba), which raises the question of whether reasonable financial provision has been made for future maintenance.

Even so, it seems clear in the context that the Recorder did not treat Mr Warner as having applied under section 1(1)(e) of the Act. As I read his judgment, he was essentially making the point that, in his view, the fact that the will did not contain anything to allow Mr Warner to remain at Green Avon meant that it had failed to make reasonable financial provision for his maintenance within the meaning of section 1(2)(b). In fact, the Recorder referred in terms to section 1(2)(b) and the meaning of “maintenance” for the purposes of that provision in paragraph 22 of the judgment. As Mr Roger Evans, who appeared for Mr Warner, was inclined to accept, paragraph 22 of the judgment might have been expressed more felicitously, but it does not show the Recorder to have erroneously focused on section 1(1)(e).

This ground of appeal therefore fails.

Mr Weatherill argued that the Recorder went spectacularly wrong. The Recorder failed to appreciate, Mr Weatherill said, that an Act whose purpose is to enable qualifying applicants to ask for “reasonable financial provision” to be made at the expense of an estate necessarily imposed as a practical requirement an obligation on Mr Warner to satisfy the Court that he had financial needs which, unreasonably, were not met by Mrs Blackwell’s will. It would obviously have been welcome to Mr Warner if provision enabling him to remain in occupation of Green Avon had been made, and it is understandable that a man of his age and medical condition who has spent the whole of his life living close by should wish to continue to occupy the property and would be stressed and unhappy if he had to move. It may be that many testatrices would have made provision for Mr Warner to stay at Green Avon. But, argued Mr Weatherill, it does not follow that it was unreasonable for Mrs Blackwell’s will to contain no such provision, particularly when account is taken of Mr Warner’s income and capital resources, of the absence of any agreement, understanding or arrangement that he would be entitled to remain and of “Mrs Blackwell’s expectation that he would be as good as his word and move out in the event that she died first” (to quote from Mr Weatherill’s skeleton argument). Objectively speaking, so it was said, Mr Warner had no financial need to continue to live at Green Avon and the fact that he wished to do so in order to avoid the upset and stress of a move did not render it unreasonable that no provision was made for him to remain there.

One question raised by this complaint is whether a will can have failed to make reasonable provision for an applicant who is in no need of anything being done for him otherwise than for full consideration. Must “financial provision” and “maintenance” be at less than market value? Will someone who is financially well off necessarily be ineligible for “financial provision” for his “maintenance”?

Plainly, “financial provision” for an applicant’s “maintenance” will in the overwhelming majority of cases involve an overall transfer of value from the estate to the applicant. As I have mentioned, Browne-Wilkinson J spoke in Re Dennis of “maintenance” connoting payments enabling an applicant “to discharge the cost of his daily living”. An arrangement allowing a person to remain in a property on market terms is not obviously of that kind.

It is also noteworthy that arrangements for full value will not support a claim to have been “maintained” by the deceased for the purposes of section 1(1)(e) of the Act. By virtue of section 1(3), a person is to be treated as having been “maintained” only if the deceased was contributing towards his reasonable needs “otherwise than for full consideration”.

On the other hand, section 1(3) of the Act applies only in relation to section 1(1)(e) and provides for when a person is to be “treated” as “maintained”. Further, unlike “maintained”, “maintenance” is nowhere defined in the Act, and the Courts have shied away from providing a precise or comprehensive explanation of the word (see e.g. In re Coventry, decd., at 484, Re Dennis (Deceased), at 145, and Ilott v Mitson [2015] EWCA Civ 797, [2015] 2 FLR 1409, at paragraph 68).

On balance, it seems to me that “maintenance” can exceptionally encompass an arrangement for full consideration. The word “maintenance” suggests the provision of assistance to enable a person to meet the requirements of his daily life. Someone of ample financial means will not normally need any such help. In principle, however, “maintenance” does not seem to me to be necessarily confined to support with a person’s “cost of … daily living” (to quote from the Dennis case). It is capable, in my view, of referring to other forms of assistance with the requirements of daily life. If, therefore, a person is in want of a particular thing to sustain a reasonable quality of life, the provision of it could possibly represent “maintenance” regardless of his financial means. In other words, a person can potentially (albeit only very rarely) be in need of “financial provision” for his “maintenance” without being in any way short of money: his money may not be able to secure him what he requires. As a result, there appears to me to be no absolute bar on the provision of something for full consideration representing “financial provision” for a person’s “maintenance”.

In paragraph 22 of his judgment, the Recorder concluded that the fact that Mrs Blackwell’s will did not allow Mr Warner to keep the roof over his head meant that it failed to make reasonable provision for him. While he did not elaborate on the point to any real extent in paragraph 22 itself, the Recorder’s thinking can, I think also be discerned from the account he gave in the immediately preceding paragraph of Mr Evans’ contentions on behalf of Mr Warner and the various matters that he identified in paragraph 23. In paragraph 21, the Recorder noted that Mr Evans had submitted that Mr Warner should be able to live in Green Avon, and potentially buy it, since he would then “avoid, at his great age, having to move” and that that “would be in his best interests medically”. In paragraph 23, the Recorder said that he was satisfied that “the upheaval and likely consequences of [Mr Warner] having to move should be avoided if at all possible”, having regard to his physical disability, his age, the length of time Green Avon had been his home and the location of the property, both in terms of being in the centre of the village where he grew up and has lived all his life and as being next door to neighbours who look after his welfare.

Was the Recorder, in these circumstances, entitled to hold that Mrs Blackwell’s will failed to make reasonable financial provision for his maintenance? Mr Weatherill argued that he was not. He stressed that “proper maintenance” does “not mean anything which may be regarded as reasonably desirable for [the applicant’s] general benefit or welfare” (see paragraph 10 above) and that the Court cannot grant relief under the Act just because “it might have been reasonable for the deceased to assist” the claimant (see paragraph 11 above). He also emphasised such matters as Mr Warner’s ability to pay for alternative accommodation, his acceptance that there was no understanding between himself and Mrs Blackwell that he would be able to stay in Green Avon and his signing declarations to confirm that he would not be claiming the property (though Mr Weatherill accepted that the declarations did not oust the jurisdiction of the Court under the Act).

However, the decision that a judge has to make on a claim under the Act is “a qualitative decision, or what is sometimes called a ‘value judgment’” and such a decision is “particularly difficult to disturb on appeal, unless the judge of first instance has clearly proceeded on some error of principle” (In re Coventry, decd., at 495-496, per Buckley LJ). In the present case, it has not, to my mind, been demonstrated that the Recorder made an error of principle or otherwise arrived at an impermissible conclusion on the question of whether Mrs Blackwell’s will failed to make reasonable provision for Mr Warner’s maintenance. Considerations such as those urged on the Recorder by Mr Weatherill might have led another judge to take a different view, but it does not follow that the Recorder’s decision can be impugned.

Mr Evans summarised his case in these terms in his skeleton argument for this appeal:

“Stage 1 objectively was satisfied in that it was not reasonable financial provision to make no provision in the deceased’s will, so as to lead on her death to the sudden eviction of her partner of nearly 20 years from his home of the same period when aged then 90 years, when he had his support system in the Waltons next door and he had lived all his life around Twyning Green. The one thing Mr Warner’s means could not buy him without the intervention of the Court was what he needed, his home as a consequence of Mrs. Blackwell making no financial provision for him.”

It appears to me that the Recorder was justified in concluding on the basis of such arguments that Mrs Blackwell’s will had failed to make reasonable provision for Mr Warner and, in particular, that this was a case where, exceptionally, there had been a failure to make reasonable financial provision for the maintenance of someone who was not short of money.

In short, I cannot accept Mr Weatherill’s arguments on the Utterly Wrong Conclusions Point. The Recorder’s conclusion was, as it seems to me, one that he was entitled to reach.

The No Power Point has two strands. It is said, first, that the Court cannot use its powers under section 2 of the Act to order an estate asset to be transferred at full market value. A second argument is to the effect that, if Mrs Lewis was to be obliged to transfer Green Avon to Mr Warner, the Recorder should have ordered Mr Warner to pay for his occupation up to the date of the transfer.

So far as the first of these elements is concerned, Mr Weatherill accepted that the powers conferred on the Court by section 2 of the Act extend to ordering estate assets to be transferred in specie in suitable cases. He submitted, however, that “it is not a legitimate exercise of the Court’s discretion under section 2 to order executors against their wishes to transfer estate assets to applicants at their full market value under the guise of so providing for the applicant’s maintenance” (in the words of Mr Weatherill’s skeleton argument).

It seems to me, however, that this contention adds nothing to those I have already considered. In the event, I have concluded that the Recorder was entitled to decide that, Mr Warner’s financial means notwithstanding, Mrs Blackwell’s will failed to make reasonable provision for him. If that is correct, it must, I think, have been open to the Recorder to give effect to his view by exercising his powers under section 2 of the Act to compel Mrs Lewis to transfer Green Avon to Mr Warner.

Turning to the second element of the No Power Point, Mr Weatherill raised with the Recorder after he had handed down his judgment the question of whether Mr Warner should be required to pay for his occupation up to the point Green Avon was transferred. Mr Weatherill suggested that the “draft Order ought … to make provision for the payment by Mr Warner of an occupation rent from the date of Mrs Blackwell’s death on … until the date of completion of the sale and purchase”.

The Recorder dealt with this issue in a supplemental judgment dated 16 November 2015 which was principally concerned with costs. The Recorder said this in paragraph 2 of the supplemental judgment:

“Although it had been submitted on behalf of Mrs Lewis that [Mr Warner] should pay mesne profits for his occupation since [Mrs Blackwell’s] death, I deliberately made no such order, having found that the failure of the reconstituted will to continue to provide a roof over his head constituted a failure to make reasonable financial provision for him.”

This sentence plainly does not contain any detailed explanation of the Recorder’s thinking. On the other hand, the sums at stake here were modest. Moreover, several matters can, as Mr Evans pointed out, be said to have made it inappropriate, or at least unnecessary, for any provision to be made in respect of the period up to the transfer of Green Avon. Thus, the £385,000 price that Mr Warner is to pay for the property is £45,000 more than the value attributed to it by a jointly-appointed expert and assumed “exposure to the market of say 6 months” during which, presumably, the house would not have had a tenant. It may be fair to infer that, had she been free to dispose of Green Avon on the open market, Mrs Lewis could have effected a sale a number of months before the date on which the house was to be transferred under the terms of the Recorder’s order, but Mrs Lewis would not, on the face of it, have been likely to have gained more than a rather limited return on the £385,000. Since that figure was already quite generous to Mrs Lewis, it is, I think, understandable that the Recorder saw no need to compensate her further.

In all the circumstances, I have not been persuaded that the Recorder’s decision can be impugned on the basis of either element of the No Power Point. To the contrary, it seems to me that the Recorder was entitled to exercise his discretion in the way that he did.

In my view, the Recorder was entitled to make the order he did for the transfer of Green Avon. I shall therefore dismiss the appeal against that order. As agreed at the hearing, Mrs Lewis’ challenge to the Recorder’s costs order will be considered after this judgment has been handed down.