CHANCERY DIVISION
B e f o r e :
IN THE MATTER OF THE ESTATE OF
GEOFFREY CHARLES BAKER (DECEASED)
AND IN THE MATTER OF THE INHERITANCE (PROVISION FOR FAMILY AND DEPENDANTS) ACT 1975
____________________
SUSAN BAKER |
Applicant |
|
and |
||
(1) RAYMOND ROBERT JOHN BAKER (2) ANTHONY DAVID TOWELL (3) GEOFFREY CHARLES BAKER (4) JODHIE BAKER (5) KEVIN JOHN BAKER (6) GREG BAKER |
Respondents |
____________________
Mr Allston for the Applicant (instructed by Sherratte Caleb)
Mr Rowntree for the First and Second Respondents
Mr Buswell for the Third to Sixth Respondents
____________________
Crown Copyright ©
"4. (a) I give all my interest in the freehold property known as Dale House 103 Henley Road Ipswich … ("the Property") to my Trustees upon trust with the written consent of my wife … during her widowhood to sell the same with full power to postpone such sale …
(e) My Trustees may permit … my said wife during her widowhood to reside in any house which or an estate or interest which is for the time being subject to the foregoing trusts of this clause … upon such conditions as to insurance repair payment of rent rates or other outgoings and generally upon such terms (if any) my Trustees think fit …
(g) Subject as aforesaid my Trustees shall hold the proceeds of sale of the Property and the income thereof upon trust for such of my said wife … and my sons (the Third to Sixth Respondents) as survive me and if more than one in equal shares …
5. I give absolutely … to my sons (the Third to Sixth Respondents) the goodwill of my business Whip Street Motors carried on by me at Great Whip Street Ipswich and all the machinery plant stock in trade and all effects of every kind employed or used in carrying on the same and all book debts owing to me in respect of my said business … for the avoidance of doubt I declare that in the above bequest the words "business" shall not include any interest in the premises of Great Whip Street upon which the said business is carried on which may be vested in me at the time of my death … but shall include any interest in the premises at Bramford Pit which may be vested in me at the time of my death …
6. I give all the remainder of my estate … to my Trustees …
(ii) to hold the Trust Fund upon trust absolutely for such of my wife … and my said sons (the Third to Sixth Respondents) as survive me and attain the age of twenty one years and if more than one in equal shares …
8. I declare that my Trustees shall have full power to carry on my business of Whip Street Motors at Great Whip Street Ipswich Suffolk and Paper Mill Lane Bramford Suffolk and to postpone the sale and conversion thereof into money for so long as they shall think fit …"
"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".
"It may assist the Court to know that the business today bears no relation to the situation at the time of death of the late Mr Baker. The four brothers have invested the majority of the profits into new plant, equipment fabric and structure of the site. This has allowed them to improve the efficiency and productivity of the business. They have also dedicated significant time and effort to achieve this".
These comments followed the earlier observation from Mr Short, the author of the letter:
"I do not carry out formal valuations as this is a specialist area and would require professional valuation of the assets and consideration of the relevant business areas. The above cannot therefore be construed as a formal valuation but as a ball park figure based on generally known principles."
(1) The inherent benefits which attached to the name Whip Street Motors;
(2) The levels of turnover and net profit at the date of the Deceased's death;
(3) The values attributed to the assets at death;
(4) The fact that the Respondents were immediately able to continue to operate a successful business;
(5) The customer base and the contacts with relevant authorities which existed at the time of the Deceased's death;
(6) The fact that the current business operates as Whip Street Motors and Bramford Pit;
(7) The fact that the current business continues to benefit from some of the initial customers and contacts;
(8) The fact that the Respondents have used the assets which existed at the Deceased's death;
(9) The efforts, hard work and skill of the Respondents;
(10) The replacement of machinery and equipment;
(11) The scope for argument in relation to the actions of the Respondents in continuing the business without having to make any payment to the estate and the response of the personal representatives who knew of the actions of the Respondents;
(12) The fact that no payment has ever been made by the Respondents to the estate in respect of the business.
Dale House | £340,000 |
Great Whip Street | £150,000 (ie. on the basis that it continues to be used for the business) |
Goodwill and other assets | £600,000 - £800,000 |
Balance of funds (not including costs and expenses) is | £55,000 |
This gives a total in round figures of approximately £1,150,000 to £1,350,000.
"(a) The financial resources and financial needs which the applicant 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 … or towards any beneficiary …
(e) The size and nature of the net estate of the deceased
(f) Any physical or mental disability of any applicant … or any beneficiary
(g) Any other matter, including the conduct of the applicant or any other person, which in the circumstances of the case the Court might consider relevant"
"… a way of assessing the fairness and non-discriminatory nature of the proposed result is to check it against the yardstick of equality of division. There is, however, no presumption of equal division of assets, but as a general guide, in the words of Lord Nicholls of Birkenhead at 605, "equality should be departed from only if, and to the extent that, there is good reason for doing so …". Caution however seems to me necessary when considering the White v. White cross check in the context of the case under the 1975 Act … in cases under the 1975 Act a deceased's spouse who leaves a widow is entitled to bequeath his estate to whomsoever he pleases; his only statutory obligation is to make reasonable financial provision for his widow. In such a case, depending on the value of the estate, the concept of equality may bear little relation to such provision".
PAUL CHAISTY QC