COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM
HIS HONOUR JUDGE HOWARTH
MANCHESTER DISTRICT REGISTRY
Strand, London, WC2A 2LL
B e f o r e :
LORD JUSTICE WALL
LORD JUSTICE MOORE-BICK
| JOHN ANTHONY HAIGH FIELDEN
KATHRYN ANN GRAHAM (Executors of the Estate of John Derrick Cunliffe deceased)
|MONIKA THERESIA GERDA CUNLIFFE
Miss Judith Bryant (instructed by Messrs Aughton Ainsworth - Solicitors) for the Respondent
Hearing date : 25th October 2005
Crown Copyright ©
Lord Justice Wall :
The deceased's will
The value of the estate
Money accruing to Mrs. Cunliffe on survivorship
The statutory provisions
"1.- Application for financial provision from deceased's estate
(1) Where after the commencement of this Act a person dies domiciled in England and Wales and is survived by any of the following persons—
(a) the wife or husband of the deceased…
that person may apply to the court for an order under section 2 of this Act on the ground that the disposition of the deceased's estate effected by his will …… is not such as to make reasonable financial provision for the applicant.
(2) In this Act "reasonable financial provision"—
(a) in the case of an application made by virtue of subsection (1)(a) above by the husband or wife of the deceased means …… 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;
(b) in the case of any other application made by virtue of subsection (1) above, means such financial provision as it would be reasonable in all the circumstances of the case for the applicant to receive for his maintenance.
2. Powers of court to make orders
(1) Subject to the provisions of this Act, where an application is made for an order under this section, the court may, if it is satisfied that the disposition of the deceased's estate effected by his will or the law relating to intestacy, or the combination of his will and that law, is not such as to make reasonable financial provision for the applicant, make any one or more of the following orders—
(a) an order for the making to the applicant out of the net estate of the deceased of such periodical payments and for such term as may be specified in the order;
(b) an order for the payment to the applicant out of that estate of a lump sum of such amount as may be so specified;
(c) an order for the transfer to the applicant of such property comprised in that estate as may be so specified;
(d) an order for the settlement for the benefit of the applicant of such property comprised in that estate as may be so specified;
(e) an order for the acquisition out of property comprised in that estate of such property as may be so specified and for the transfer of the property so acquired to the applicant or for the settlement thereof for his benefit;
(f) an order varying any ante-nuptial or post-nuptial settlement (including such a settlement made by will) made on the parties to a marriage to which the deceased was one of the parties, the variation being for the benefit of the surviving party to that marriage, or any child of that marriage, or any person who was treated by the deceased as a child of the family in relation to that marriage …..
3. Matters to which court is to have regard in exercising powers under s 2
(1) Where an application is made for an order under section 2 of this Act, the court shall, in determining whether the disposition of the deceased's estate effected by his will or the law relating to intestacy, or the combination of his will and that law, is such as to make reasonable financial provision for the applicant and, if the court considers that reasonable financial provision has not been made, in determining whether and in what manner it shall exercise its powers under that section, have regard to the following matters, that is to say—
(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.
(2) Without prejudice to the generality of paragraph (g) of subsection (1) above, where an application for an order under section 2 of this Act is made by virtue of section 1(1)(a) or 1(1)(b) of this Act, the court shall, in addition to the matters specifically mentioned in paragraphs (a) to (f) of that subsection, have regard to—
(a) the age of the applicant and the duration of the marriage;
(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,
and, in the case of an application by the wife or husband of the deceased, the court shall also, unless at the date of death a decree of judicial separation was in force and the separation was continuing, have regard to the provision which the applicant might reasonably have expected to receive if on the day on which the deceased died the marriage, instead of being terminated by death, had been terminated by a decree of divorce…….
(5) In considering the matters to which the court is required to have regard under this section, the court shall take into account the facts as known to the court at the date of the hearing.
(6) In considering the financial resources of any person for the purposes of this section the court shall take into account his earning capacity and in considering the financial needs of any person for the purposes of this section the court shall take into account his financial obligations and responsibilities."
The correct overall approach to a claim under section 1(1)(a) of the 1975 Act
The judgment and the attack upon it
"65. Subject to that, I must find an appropriate sum of capital which should be awarded to Monica (Mrs Cunliffe), and doing the best that I can and how much is always one of the most difficult questions a Judge ever has to answer or a barrister to advise upon. Counsel will know that very often within a set of barristers chambers, people will go into each other's rooms and say "We have a claim under the Inheritance Act. These are the facts. How much?" and you will get from members of chambers differing answers over sometimes a quite broad spectrum. For better or worse the case has ended upon before me and no doubt one party will say it is better for them and another party will say it is worse for them, and perhaps they might both say it is worse for them, and if that is so, that would be a very good indication that I have got it about right.
66. The figure I have in mind is £800,000, and that is the amount of the order."
"It has on a number of occasions been made plain that the decision of an Industrial Tribunal is not required to be an elaborate formalistic product of refined legal draftsmanship, but it must contain an outline of the story which has given rise to the complaint and a summary of the Tribunal's basic factual conclusions and a statement of the reasons which have led them to reach the conclusion which they do on those basic facts. The parties are entitled to be told why they have won or lost. There should be sufficient account of the facts and of the reasoning to enable the EAT or, on further appeal, this court to see whether any question of law arises; and it is highly desirable that the decision of an Industrial Tribunal should give guidance both to employers and trade unions as to practices which should or should not be adopted. "
(1) that the judge failed to have sufficient regard to the very short duration of the marriage - namely a period of just over a year;
(2) that he failed to take into account properly or to give sufficient weight to the likely award Mrs Cunliffe would have obtained had the marriage to the deceased ended in divorce rather than his death, and in particular wrongly applied the principles in White v White to the case;
(3) that he failed to give sufficient weight to the fact that other beneficiaries under the discretionary trust comprised in the deceased's will, namely his sister in law, his nephew and members of the nephew's family, were deaf and dumb and dependent wholly on family money including the discretionary trusts comprised in the deceased's will;
(4) that he gave too much weight to the legal duty of the deceased to maintain his wife;
(5) that he placed too much weight on Mrs. Cunliffe's contribution to the welfare of the deceased which, on any view of the evidence, could not have been significant because of the short duration of the marriage;
(6) that in assessing Mrs. Cunliffe's resources, the judge failed to give any or any proper weight to her earning potential (which she had accepted); and
(7) that in assessing Mrs. Cunliffe's housing needs wrongly stated that it was not for the court to say that Mrs. Cunliffe should move out of the deceased's house known as Chaddock Hall and failed to assess her reasonable housing needs.
White v White and the short marriage point
"58. I have been quoted a number of other authorities which it seems to me turn very much on their own individual facts, which do not necessarily help me in any meaningful way as to how I am to exercise this jurisdiction, but one comes back, it seems to me, to the question of first of all is it right within the context of this litigation that Mrs Cunliffe continues to live at Chaddock Hall. It is worth some £325,000 or was so at the date of death. No doubt it may well have gone up due to appreciation since that time, but I do not know whether it has remained in the same state of repair as it was at the date of death, and I simply do not know its present value, but let us take it at that.
59. Having myself moved from a large house to a small bungalow four years ago, I might well be sympathetic to Miss Reed's point that Chaddock Hall is unreasonably large for Mrs Cunliffe, but it was my decision and my wife's decision that we moved house four years ago. It is not for me to tell Mrs Cunliffe how she lives her life and where she lives. If she can afford reasonably to continue living at Chaddock Hall, a house which must have some happy memories for her, that is not necessarily anything which I ought to deprive her of. On the other hand, I do not propose to award her Chaddock Hall itself. I propose to award her a sum of money, and if she wishes to use part of it to purchase Chaddock Hall from the trustees at no doubt an independent valuation so be it. That will be her choice and the trustees' choice."
The judge's attitude to White v White
"56. In regard to what the claimant would be likely to receive had the marriage ended in divorce, it is clear from White v White that one starts from the position that you add up together what each of the parties to the divorce has and starts from the presumption that that is to be split so that each has a similar sum. That is a starting point, it is not a finishing point, and any circumstances of the case have to be looked at and appropriate action taken to ensure that the ultimate aware is a just one.
57. It is right that where there is a short marriage, the authorities show that a wife will get less. See, for example, the extract from Duckworth which has been put in in this regard by Miss Reed, and I fully accept that."
Other relevant findings by the judge
"24. A great deal of time has been spent in saying whether or no Derek and Monika were happy together or whether Monika dominated Derek, and frankly at the end of the day I doubt whether any of that evidence helps me to any marked degree to determine whether this application should succeed or no, and if it should succeed, as to what extent."
"The first is the financial resources and financial needs which the claimant has or is likely to have in the foreseeable future. Well, it seems to me that in that regards, the claimant has a number of and I think it is conceded that she has a number of matters in terms of financial needs. She will need a house in which to live. She will need income on which to live, and she will need some form of capital. It is described as a capital cushion by Miss Reed when addressing me on behalf of the defendants, and in many cases that is so. Certainly there is a need for capital out of which any extraordinary expenditure can be met, and extraordinary expenditure can be anything from having to look after one's own health through to providing repairs to a house, providing yourself with a new care when the old one is not longer acceptable of functioning."
"We will have to look at what sort of a house is appropriate for Mrs. Cunliffe and what amount should be paid, held on trust for her by way of capital. "
"This is clearly a case, and I say this as strongly as I can, where there has been a falling out between Mrs. Cunliffe on the one hand and other persons entitled to an interest in the estate on the other hand, and any suggestion of their being life interest is frankly inappropriate in this case. ……any awards in favour of Mrs. Cunliffe will have to be of a capital nature and not by way of a life interest during widowhood or anything of that sort."
Nobody asserts that this is the wrong approach. I have, however, already set out what the judge went on the say about Mrs. Cunliffe's future housing at paragraph 32 above.
"In simple terms, Derek had obligations and responsibilities to his wife. He did not have obligations and responsibilities to his brother's family. It is perfectly reasonably (sic) for him to want to benefit his brother's family, especially reasonable bearing in mind the unfortunate circumstances of some of them, but it seems to me that they are not even in a moral sense obligations or responsibilities once Derek has become a married man. His primary obligation is to his wife, and that is that."
"45. In that regard I have been referred and I have no complaint about having been referred to the principles of matrimonial law which are set out by the House of Lords in the case of White v White  AC 596, and in particular to the speech of Lord Nicholls in that case, and I will come to those again perhaps in some greater detail later in this judgment, as I have to have regard to all the circumstances of the case. "
I have already set out the judge's further reference to White v White in paragraph 38 above.
"49 …. I know I have to look at the age and during of the marriage. The duration of the marriage was of course just over a year. The age of Mrs. Cunliffe, she is now I think 51 years old or thereabouts. She accepts that she may be able in the future to obtain employment and to provide in part at least for her own support, but she has been unemployed since she ceased to be the housekeeper and carer of Derek in October of 2001 when they married. Thus, one has something like I think three and a half years of what could be unkindly called unemployment, and one knows that obtaining further employment for a lady of 51 with little in the way of paper qualifications but a great deal in the way of experience as is shown by her curriculum vitae , will not necessarily be that easy."
"60. In addition to that in terms of housing, she is in need of capital, capital which will form the basis for her investing it to get her an income, which together with anything she may earn by way of future salary or wages, will provide her with a proper and fair means to support herself for the rest of her days. She is now 51. Even if she obtains employment, it would be surprising if that employment were to last beyond her sixtieth birthday. One knows that some people do carry on working until well after retirement age, and one does hear that the government is considering putting the retirement age up, but it is one thing putting it up for people who are in secure employment. It is another thing actually obtaining employment when you have got past 50 years of age anyway.
61. In addition to that, the capital must not only provide it seems to me income, it must provide some form of fund which can be used to meet such expenses as are not ordinary everyday expenses, whatever it is. If the house in which she is living, whether it be Chaddock Hall or elsewhere needs repairs carrying out to it, that it can be resorted to for that purpose."
"63. Now doing the very best that I can, and looking at all the circumstances and looking at for example the Ducksbury (sic) tables providing some form of annuity, one still is not necessarily that much further forward. One the one hand, I have no doubt that the £200,000 that the executors have so far proposed does not go far enough. On the other hand, when giving evidence, Mrs. Cunliffe sought to portray her position as being that of someone in whose favour the vast majority of the estate should be paid to her directly. That, it seems to me, whilst being perfectly reasonable if that is what Derek had wanted to do and had done, is not the situation I am in. I have to award reasonable financial provision, and that, it seems to me, is more than is in fact what it would be proper for me to award, and in all the circumstances of this case. I think doing the best that I can, that one should first of all seek to prevent future disputes. There has been a suggestion that Monika should pay something for living in Chaddock Hall from the date of the death to the present time. I am going to provide her with an interest up to today in possession in that property so that the trustees are not bound to make any claim against her, and if they do it will not succeed.
64. Similarly, in regard to the two motor vehicles that she eventually purchased from the trustees, I am going to provide again that the trustees should not make any claim in that respect. Nor in respect of any furniture that is in Chaddock Hall or anything of that sort. I want a clean break between these parties. They are not going to get on, and it is plain that I will be doing nobody any service by prolonging legal disputes."
The proper application of the 1975 Act to the facts of this case
The assessment of the claim
The length of the marriage, contribution and comparison with an award on divorce
The Besterman cushion
"So to exercise those powers as to place the parties, so far as it is practicable and, having regard to their conduct, just to do so, in the financial position in which they would have been if the marriage had not irretrievably broken down and each had properly discharged his or her financial obligations and responsibilities towards the other."
Reasonable financial provision on the facts of this case
|(1) Income need||£49,885|
|Less Earning Capacity||£20,000|
|Duxbury calculation required to produce £30,000 pa||=||£560,000|
|(3) Besterman cushion||£100,000|
|(4) Deduct Mrs. Cunliffe's own assets||£150,000|
I have therefore calculated that on balance my future needs are somewhat less than my initial expenditure schedule but more than I have been living on as this has been very much the bare minimum. These figures appear in column 3 (£49,885).
Lord Justice Mummery :
"So the question on the appeal is whether the [recorder's] decision as to the provision she should receive was wrong in principle or, viewed as an exercise of discretion, plainly wrong."
Lord Justice Moore-Bick: