England and Wales High Court (Chancery Division) Decisions

IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
In the estate of Wynford Hodge
And in the matter of the Inheritance (Provision for Family and Dependents) Act 1975

		Cardiff Civil and Family Justice Centre 2 Park Street, Cardiff CF10 1ET
		29/03/2018

HH JUDGE JARMAN QC :

1. The claimant Joan Thompson claims reasonable financial provision under the Inheritance (Provision for Family and Dependants) Act 1975 out of the estate of her late partner, Wynford Hodge, who died on 4 February 2017 in his 90s. His last will, of many, was dated 19 December 2016 (the last will). Thereunder, he appointed as his executors the directors in the firm of solicitors who drew up the will, who are the first to third defendants and who have remained neutral in these proceedings. He gave his substantial estate after payment of expenses and debts to the fourth and fifth defendants, Karla Evans and Agon Berisha. They were tenants of one of his properties known as Penffordd, Narbeth, Pembrokeshire, which they had occupied since early 2015.
2. The last will made no provision for Mrs Thompson. He gave his reasons in a letter of wishes dated the same day, as follows:

"In my Will I have specifically made no provision for my partner, Joan Thompson and her children, Gary, Lee, Dean and Sharon. I currently have no contact with Joan's children. I have no issue with Gary, but I have concerns regarding Lee, Dean and Sharon and do not trust them. I feel that they have previously taken advantage of me and have already received/taken monies from me during my lifetime. I do not want Joan or her children to inherit from my estate."

3. He then went on to give some instances to justify that mistrust before continuing:

"I no longer want to leave my residuary estate on trust to pay the income to Joan for her life as this would be a substantial sum and I do not believe she will need it. Also due to Joan's health I believe she would not be able to live in my property independently. I am Joan's main carer and envisage she may have to go in to a home following my death. I confirm Joan has her own finances and is financially comfortable. Joan has her own money and her own savings."

4. The net estate was valued for probate purposes as £1,535,060. Valuations were obtained of various properties in the estate. These valued Penffordd at £343,000, Parsonage Farm and Caravan Park, also at Amroth, at £545,000, an adjoining bungalow called Parsonage Bungalow at £157,000, an adjoining cottage called Elidyr Cottage at £225,000, and a small parcel of land at £5,000. Farm machinery and vehicles were valued at £62,625. The latest estate accounts show that there is a balance of liquid assets for distribution in the amount of £168,000.
5. There is little if any factual dispute in these proceedings. Mr Hodge and Ms Thompson had lived together as man and wife for some 42 years prior to his death. She was financially dependent upon him throughout that time and at his death. Accordingly, she is entitled as a cohabitee under section 1(1) (ba) or a dependent (e) of the 1975 to claim that the last will did not make reasonable financial provision for her. In either case, that means under section 1(2) such financial provision as it would be reasonable in all circumstances of the case for her to receive for her maintenance.
6. In the mid-1970s Ms Thompson and her son Dean, then a young boy, moved into a caravan at Parsonage Farm, and then shortly afterwards into the farmhouse with Mr Hodge and his mother. She worked on the farm and in the caravan site business without pay. She helped care for his mother, then in her eighties, for some two or three years before Mrs Hodge passed away.
7. As Mr Hodge and Mrs Thompson grew older each had health issues which needed care and each relied on the other to provide care. Mrs Thompson had a serious stroke about 12 years ago and has had heart attacks since. She accepts that in the last few years that she needed more care than he did. However, she helped him whenever she could, for example by helping him dress, wash and shave after a hip replacement some years ago. In about 2015 she had a serious fall and after discharge from hospital social services were concerned that the conditions in the farmhouse were not appropriate for her to live in, and so she went to live in a local nursing home. However, Mr Hodge wanted her home and so the couple moved into a caravan near to the farmhouse.
8. In 2016, Mr Hodge bought Elidyr Cottage with a view to moving into it with Mrs Thompson. Towards the end of that year however, Mr Hodge who had a long-standing diagnosis of prostate cancer, had increasing bouts of bladder problems and urinary infections. In December that year he was admitted to hospital. During Mrs Thompson's visits he told her not to worry as she would be well looked after. It was not long after discharge that he was admitted again for a burst cyst which led to his death.
9. Since then Mrs Thompson has returned to live at the nursing home. She has modest savings, which now amount to some £2,500. Her only income consists of a state benefit and disability living allowance totalling £1,114 per month.
10. The most up to date medical evidence of Mrs Thompson's health comes from a letter from her GP dated 12 June 2017 to her solicitors which says:

"I saw Joan and her daughter in law this afternoon to discuss the matter of her intention to reside outside of Park House Court Nursing Home. As a result of these discussions I am able to inform you that this lady retains sufficient medical health not to require the facilities of a nursing home. She is certainly fit enough to reside in private accommodation with a relevant social care package. Furthermore, she retains the capacity to make this decision. I would also add that it is in her best interests that she does retain as much independence as possible because being accommodated in the long term in an institution such as a nursing home is liable to 'make her institutionalised'."

11. Expert evidence was obtained as to what is an appropriate care package from Susan Rees who is an occupational therapist with degrees in psychology and care of children with brain injuries. She has worked with children and adults in community teams and hospitals. She interviewed Mrs Thompson on 10 October 2017 and had access to her medical and social services records until May 2017.
12. She recorded that Mrs Thompson clearly stated that she no longer wished to reside in the nursing home and wished to live in Parsonage Bungalow or Elidyr Cottage and for her son Dean and his wife and children to move in with her. Ms Rees observed her standing and sitting, walking and getting in and out of bed. She visited the bungalow and the cottage. Ms Rees assessed her care needs on that basis that she would live in either of these properties with adaptations, with care from Dean and his wife and/or professional carers.
13. In replies to questions put to her on behalf of Ms Evans and Mr Berisha as to whether Mrs Thompson would be cared for by Dean and his wife (with whom she had only recently been reconciled) Ms Rees said this:

"I accept the fact that Mrs Thompson has only recently been reconciled with her son and daughter in law. However, during the assessment they and Mrs Thompson clearly stated that they wished to live together and care for Mrs Thompson. I believe that Janet Thompson has demonstrated that she is committed to the care of her mother in law. She visits once a week when she takes Mrs Thompson to the daycentre and to have her hair and nails done. She does Mrs Thompson's washing. She also accompanies her husband once a week to take Mrs Thompson out for a meal or to go shopping. Mr Thompson (son) informed me that he visits his mother daily after work and the staff at the home confirmed that he visits on a regular basis.

With regard to the experience required to care for Mrs Thompson, Mrs Janet Thompson informed me that she had worked in a care home for the elderly for 2 years, in a care home for physically and cognitively disabled young adults for 4 years, and had cared for both her father and stepfather as they become terminally ill. In addition, it is envisaged that the care that Janet Thompson would provide would be of a mainly domestic or supervisory nature i.e provision of all meals cleaning, laundry, or shopping. It was the opinion of the author that Mrs Janet Thompson would be able to provide supervision and care to Mrs Thompson."

14. Only Mrs Thompson gave oral evidence in support of her case. She did so from a wheel chair. I was told she was suffering from bronchitis. She told me that she had been driven up from Pembrokeshire to Cardiff that morning by her son and daughter in law. The three of them were in court until the end of submissions at just after 3pm. With a couple of breaks she was cross examined for about one and a half hours. Although understandably she was confused about some dates she answered questions appropriately and readily made concessions.
15. In final submissions, Mr Warner for Ms Evans and Mr Berisha, conceded that the last will did not make reasonable provision for Mrs Thompson, but then qualified that by two preconditions which he said needed to be satisfied: that the GP's letter is an accurate summary of Mrs Thompson's present condition, and that her son Dean and his wife would look after her as envisaged by Ms Rees.
16. Insofar as it is necessary for me to be so satisfied, then I am. Although the GP's letter was written some nine months ago, that taken together with Ms Rees interview and assessment and replies in October 2017, and with what I saw and heard of Mrs Thompson, I am satisfied that both of those preconditions are met.
17. The real issue in this case, in my judgment, is what amounts to reasonable financial provision for Mrs Thompson's maintenance. The powers of the court to make orders to provide for such provision are set out in section 2 of the Act and are very wide. It is not in dispute that this includes provision for her accommodation and care needs.
18. Mr Troup on her behalf submits that it is reasonable to provide that Elidyr Cottage should be conveyed to her to live in, as that is what it was bought for. He further submits that there should be a monetary award to cover the costs set out in the report of Ms Rees, namely the capital costs of making the cottage suitable for Mrs Thompson, the annual costs of maintaining the cottage, general outgoings and the costs of a suitable care package on the assumption that her son Dean and his family move in with her.
19. Mr Warner submits that such provision is along the lines of an offer contained in an open letter dated 17 August 2017 from the solicitors of Ms Evans and Mr Berisha namely that:-

i) Penffordd and the surrounding 23 acres is to pass immediately to their clients.

ii) The remainder of the estate is to be held on trust for the life of Mrs Thompson to pay her the income and thereafter to revert to their clients.

iii) Their clients would manage the estate and draw a fair salary in return.

iv) Mrs Thompson would not be able to reside in any of the properties on the estate as they are not fit for purpose.

v) Her family would relinquish any claim to the estate and would not be able to reside in the properties on the estate or to be involved in the day to day management.

vi) Their clients would be trustees together with professional trustees.

20. That offer was rejected. Alternatively, Mr Warner submits, if the proper award is such as to allow Mrs Thompson to reside in one of the estate properties with an appropriate care package then that should be on the basis of a life interest rather than an outright transfer.
21. The matters to which regard must be had in deciding what award to make are set out in section 3 of the 1975 Act, which I deal with in turn so far as relevant to the facts of this case.
22. First, regard must be had to Mrs Thompson's financial resources and needs now and in the foreseeable future. I have set these out above. The only resources which she has herself are very modest savings. The state benefits are not means tested so they will be unaffected by any award in this case. Her present and likely needs are fully set out in the report of Ms Rees.
23. Similarly, regard must be had to such resources and needs of any other applicant for an award under the 1975 Act. Dean Thompson has notified the executors of his intention to make such a claim, but no indication has been given upon what basis or the details of any such claim. He has not filed evidence in the present claim
24. Regard must then be had to such resources and needs of Ms Evans and Mr Berisha. They and their two young children occupy the house at Penffordd on an assured shorthold tenancy basis and the surrounding 23 acres of land under tenancy or licence. They carry on what their counsel describes a subsistence lifestyle on the land. Ms Evans works part time in a market garden business which she and her sister purchased for £10,000, together with a little cleaning. Mr Berisha works on the caravan site for a wage and grows flowers and vegetables. They have little savings. They were paying £400 per month rent for the house with the assistance of housing benefit until the latter stopped in 2017. As Mr Troup submits, even if an award is made to Mrs Thompson along the lines he seeks on her behalf, the estate which they inherit will nevertheless be very substantial indeed and probably beyond anything they expected. In her witness statement, Ms Evans says that Mr Hodge in 2015 asked her whether she wanted to be a millionaire and she replied that she would not and would be happy with a holiday every year and enough money to bring up their children.
25. Next, and importantly in the context of this case, regard must be had to the obligations and responsibilities which the deceased had towards Mrs Thompson (and any other applicant) or towards Ms Evans and Mr Berisha. In my judgment the disparity in this regard is very wide indeed. Mr Hodge made about 11 wills over the years, and in the earlier wills he recognised his financial obligations to his partner by making provision for her. Mrs Thompson's evidence was that he would sometimes ask her what he should do but she did not want to discuss it because she took the view that it was his money.
26. In 2002 the couple made mutual wills leaving the residue of the estates to each other absolutely. In the case of Mr Hodge, there was a proviso that if his partner did not survive him for 28 days then the residuary estate was given to her daughter Sharon.
27. In 2012 Mr Hodge made three wills. In the first, he left Parsonage Farm Caravan Park to Mrs Thompson for life and gave Penffordd to Dean Thompson and £20,000 to a friend, Glyn Minar. The residuary estate was given to Kathy Thompson, the wife of Mrs Thompson's son Leigh. In August of that year the residuary gift was changed to benefit Janet Thompson, Dean's wife. In October he executed another will leaving his estate after debts and expenses to Glyn Minar. In an accompanying letter of wishes, he said that he had made no provision for Leigh or his wife as he confronted Leigh about the theft of tools two months ago and had not seen him or his family since. He further said that he had made no provision for Dean or his wife as they had provided him with no support or assistance despite promising to do so. He then explained why he had made no provision for Mrs Thompson which was substantially in the same terms as the concluding paragraph of the 2016 letter of wishes cited above.
28. In those letters, he acknowledged that one of his responsibilities was as the main carer of his partner. He was justified in saying that she would not be able to live independently, but does not appear to have considered that she would be able to live in her own home with an appropriate care package. It is not clear upon what he based his assertion that she was financially comfortable but on the evidence before me that was not a fair reflection of her financial situation then, and it is not now. The savings which she had then and has now goes nowhere near justifying the lack of any provision for her at all. The predominant motive appears to be that he did not want any of his assets to fall into the hands of her children, and again that is not a sufficient reason for leaving her without any provision.
29. As against that, he assumed little if any responsibility towards Ms Evans and Mr Berisha. In the witness statement of the former, which is simply agreed to by the latter, details are given of some unpaid errands which they carried out for Mr Hodge after buying an acre of land from him in 2014, such as helping with shopping. After moving to Penffordd this help extending to helping him organise works to refurbish the property, which he paid for. They themselves carried out interior decoration and landscaping of that property and of Elidyr Cottage. Mr Berisha began working in the caravan park, and was paid for 1-2 days a week from 2016 which increased to 2-4 days a week and then 7 days a week in the latter months of Mr Hodge's life. Even taken with the evidence as to what they might expect to inherit from him, this does not in my judgment amount to an assumption of responsibility on the part of Mr Hodge towards them. Ms Evans in her witness statement describes the relationship as one of mutual benefit. If there was a responsibility, it was a very small one.
30. Next is the size and nature of the estate. I have set this out above. The only dispute about this is as to the incidence of inheritance tax, which amounts to £241,867, of which £72,700 has been paid already. The executors will pay the rest by instalments. Mr Warner submits that if any of the estate is disposed of then the balance outstanding will become immediately payable, but as Mr Troup points out, under section 227(4) of the Inheritance Tax Act 1984, only that proportionate part referable to the part disposed of will become immediately payable. If Elidyr Cottage passes to Mrs Thompson, a relatively small amount of the balance will become due.
31. Then there is Mrs Thompson's disability to consider. I have made findings about this above. Both parties are agreed that under the Duxbury tables, the appropriate figure for a woman of her age is 11.6. Mr Warner submits that that figure should be a little lower having regard to her disability, but in my judgment, there is no evidence before me to justify such an approach.
32. Next, the court must have regard to any other matter, including the conduct of Mrs Thompson or any other person, which in the circumstances of the case it considers relevant. The only point raised under this head is the reasons given by Mr Hodge in his letters of wishes, and I have dealt with this under paragraph 28 above.
33. In respect of her claim as a cohabitee, regard must be had to her age (79) and to the period of cohabitation (42 years) and to her contribution to the welfare of Mr Hodges' family including looking after the home, and in looking after his mother as set out about. The period of cohabitation was a very substantial one, as was her contribution under this head
34. In respect of her claim as a dependent, regard must be had to the length of time and the basis on which Mr Hodge maintained her, the extent of the contribution, and the extent to which he assumed responsibility for her maintenance.
35. Having taken those matters into account, I now return to the central issue of what is reasonable provision for Mrs Thompson's maintenance out of Mr Hodge's estate. Mr Warner submits that her accommodation needs can be met elsewhere and particulars are given of properties some distance from the farm and caravan park and of warden accommodation. To her credit, in cross-examination she accepted that she could live in rented accommodation. In my judgment it is not reasonable to provide for her accommodation away from the farm which has been her home for 42 years and where she wants to live. She said in evidence that she has friends living on the park and another friend lives a short distance away. In my judgment it is reasonable that accommodation is provided in Elidyr Cottage, which is the reason it was bought. There is an added difficulty in respect of warden accommodation in that the evidence shows that there is a long waiting list for such accommodation, albeit no doubt that units do become available now and then.
36. The issue then arises as to whether Elidyr Cottage should be transferred to her outright, or by virtue of a life interest with power of advancement. In Illot v The Blue Cross and others [2017] UKSC 17 [2017] 2 WLR 979, the Supreme Court dealt with a claim under the Act by an adult child in which it emphasised that the statutory power is to provide maintenance, not to confer capital. Lord Hughes, with whom the other Justices agreed, referred at paragraph 15 to a decision of Munby J, as he then was, in In re Myers [2005] WTLR 851, which concerned a similar claim by an adult child. The award was not of an outright capital sum but of a life interest together with power of advancement designed to cater for the possibility of care expenses in advanced old age. Lord Hughes observed that "If housing is provided by way of maintenance, it is to be provided by way of maintenance, it is likely more often to be provided by such a life interest rather than by a capital sum."
37. All cases are fact sensitive and in the present case that possibility is a reality. Mrs Thompson is elderly and in need of care. There is detailed evidence as to such need. Moreover, in her case, as a cohabitee and dependent the matters referred to in paragraphs 33 and 34 above must be considered.
38. Mr Troup referred me to cases where cohabitees have been awarded an outright transfer of property to cater for accommodation needs. In Negus v Bahouse [2007] EWHC 2628 (Ch) His Honour Judge Roger Kaye QC sitting as a judge of the High Court, awarded a flat to the cohabitee of the deceased on the basis that a clean break was needed from an antagonistic situation with the deceased's family. His Honour Judge Behrens QC, also sitting as a judge of the High Court, took a similar approach for similar reasons in Webster v Webster [2009] 1FLR 1240, [2008] EWHC 31 (Ch). At paragraph 41, the judge also relied upon the long period of cohabitation, the problems which might arise with improvements and repairs if only a life interest were granted, and the possibility of the cohabitee wishing to raise money on the property. Such an approach was approved by the Court of Appeal in another case, Musa v Holliday [2012] EWCA Civ 1268. Unsurprisingly, it was not thought necessary to cite these authorities to the Supreme Court in Illot.
39. There is not the same degree of antagonism in this case, certainly not between Ms Evans and Mr Berisha on the one hand and Mrs Thompson on the other, although it is likely that this litigation has had an adverse effect on the relationship. It was Mr Hodge who mostly had dealings with the former. However, it is evident from the witness statements of Ms Evans and Mr Berisha that they have adopted Mr Hodge's aversion to Dean receiving anything from the estate. This is reflected in the offer made, which was expressly on the basis that neither Mrs Thompson or her family should have anything to do with the estate.
40. Given the very long period of cohabitation, and given that that it is Dean and his wife who will be providing the care for his mother at the cottage, in my judgment it is reasonable to provide for her maintenance accommodation in which Ms Evans and Mr Berisha have no interest. They will still be neighbours, but that is a different matter. Such an approach is likely to facilitate all concerned moving on from this litigation. Mrs Thompson will be able take decisions relating to her home, such as making structural alterations or raising money without the need to seek permission.
41. That leaves the question of a financial award to allow the cottage to be suitably adapted and maintained, and for Mrs Thompson to move in and have the appropriate care from her son and daughter in law, as envisaged by Ms Rees. She was not called to give evidence, but in closing Mr Warner made a number of objections in relation to the costings.
42. The renovations are modest: ensuring level access which Ms Rees roughly estimates as £1000 to £2000, higher toilet at £500 and additional hand rails at £150. There are some other items such as enlarging the shower room into a wet room, which involves removing a thick structural wall, ensuring heating is adequate, putting sockets at adequate height in the bedroom, and placing laminate flooring there for use of Mrs Thompson's rollator. Ms Rees could not give an estimate of these matters. The total cost is claimed at £13,250, apparently being the average of two builder's quotes, although beyond that there was no evidence. Doing the best I can, I allow £10,000 under this head.
43. The next head is moving costs of £14,800 but no estimate or breakdown was given. Mrs Thompson confirmed in cross examination that she has some clothes, which she buys from charity shops, and a few personal effects. It was submitted that the rest relates to the moving costs of Dean and his wife and the furnishing and equipping of the cottage but apart from the report of Ms Rees there was no evidence of that. I would allow £5000.
44. Ms Rees proceeded on the basis that it would be reasonable to expect Dean and his wife to keep the garden tidy on an ongoing basis, but allowed £500 for an initial tidy up. It seems to me however that the same applies to the initial tidy up and I make no award in respect of that. There is a sum claimed for oil and oil tank without a breakdown or evidence. The ongoing costs of heating are included as such, and I make no award on a capital basis. Transport is included as a capital cost on the basis that Dean and his wife have already changed their vehicle to make it easier to accommodate his mother, but I cannot see that this capital cost already incurred is reasonably necessary for her maintenance and I make no allowance for that.
45. Mr Warner criticised the cost of some of the furniture which Ms Rees has costed as being required for her, such as dining table and chairs at £750 and a riser reclining chair at £899. However, I am satisfied that all of the remaining items set out in the report are reasonably required for Mrs Thompson's maintenance.
46. The total for adaptions therefore amounts to £28,844.68.
47. In terms of ongoing costs, the same point was made by Mr Warner in relation to gardening and I make no allowance for that. He submitted that as Dean and his wife would be responsible for council tax wherever they lived a deduction should be made for them. I agree and deduct £900. He made the same point in relation to oil and electricity and I deduct £1200. An annual sum of £4,200 was provided by Ms Rees for holidays. Mrs Thompson in cross-examination said that she enjoys going on coach holidays. The sum claimed in my judgment is high and a more reasonable sum is £2,200. Despite other points made by Mr Warner the remaining sums costed by Ms Rees are reasonable. The annual total, after benefits, amounts to £23,154.76. The appropriate figure under the Duxbury tables is 11.6. Mr Troup accepts that the total should be rounded down to £160,000 to take account of early receipt.
48. That will leave Ms Evans and Mr Berisha with by far the major part of a substantial estate. Whilst the wishes of Mr Hodge that Mrs Thompson's family should not benefit from any provision for her should be given appropriate weight, those wishes should not hinder the reasonable provision for her maintenance. That is the mistake that he made in his letters of wishes which led to no provision at all being made.
49. Counsel helpfully indicated that after judgment has been handed down they would deal with all outstanding matters by way of written submissions, subject to an application for further oral submissions should that prove necessary. Any such written submissions should be filed and exchanged within 14 days.