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	England and Wales Court of Appeal (Civil Division) Decisions
You are here: BAILII >> Databases >> England and Wales Court of Appeal (Civil Division) Decisions >> Barrass v Harding [2000] EWCA Civ 521 (27 June 2000) URL: http://www.bailii.org/ew/cases/EWCA/Civ/2000/521.html Cite as: [2000] Fam Law 878, [2001] 1 FCR 297, [2000] WTLR 1071, [2001] 1 FLR 138, [2000] EWCA Civ 521

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IN THE SUPREME COURT OF JUDICATURE
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE CANTERBURY COUNTY COURT
(MR. RECORDER PULMAN Q.C.)

		Royal Courts of Justice Strand London WC2
		27th June 2000

1. THE PRESIDENT: This is an appeal from the order of Mr. Recorder Pulman Q.C., heard in the Canterbury County Court on 9th July 1999, and it is an application under the Inheritance (Provision for Family and Dependants Act) 1975. By section 1(1)(b), a former wife or former husband of a deceased who has not remarried may apply to the court for an order under section 2 of the 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. I have, since this was a disposition of the estate by will, excluded all the other words in that section which are irrelevant to the appeal before this court.
2. The applicant before the Recorder was the former wife of the deceased. The respondents to that application under the 1975 Act were the executor (the first respondent) and the major beneficiary (the second respondent). The second respondent was the second wife's sister, so she had no blood relationship and no other relationship with the deceased other than their relationship through the deceased's second wife.
3. The deceased and the first wife (as I shall call her) were married on 3rd September 1939. The first wife was aged 19. They both took part in service in the War and after the War they returned to live in a house provided originally by the deceased's parents. They had no children of their own but they had a son, adopted by them, who was born on 8th March 1951 and who is now 49. Throughout the marriage the first wife worked, but at the sort of job that enabled her to go home and care for the son.
4. The marriage did not prosper. The deceased was a schoolmaster and the family moved from one house to another through the marriage. On each occasion the house in which they lived was in the sole name of the deceased. After the breakdown of the marriage, a divorce petition was filed by the first wife alleging cruelty against the husband. The petition was uncontested and a decree absolute was obtained on 3rd September 1964. Shortly thereafter the deceased remarried and his second wife died in July 1996.
5. After the divorce in 1964 the first wife made an application for ancillary relief, and on 24th February 1965, by consent, all the first wife's claims for ancillary relief were dismissed. There was an order of maintenance to the son, who was under 18. However, side by side with that consent order dismissing all the first wife's claims was a separate arrangement between the deceased and the first wife whereby he provided her with a ground floor flat for her life by way of lease at a peppercorn rent. It was agreed between them that if she vacated the flat at any time she would be entitled to half the value of the property as it was in 1965 and not at the date at which she vacated. The figure that was assessed for the purposes of payment to her if she left voluntarily was the sum of £1,500 -- no doubt a reasonable sum in 1965, but of rather less value in 1985. The relevance of that date is that the first wife decided to join her son, who had bought a property in Ramsgate, and she eventually left her ground floor flat voluntarily in 1985, claimed the £1,500 and was paid it.
6. The deceased had also provided his son with a flat at well under (as the judge found) market value. The son realised that if he was to leave the flat it would be of value to his father, so he took what the judge thought was the rather unattractive course of getting his father to buy him out at £8,500 in 1985. It was at that stage that the first wife and the son went to live in Ramsgate. The son had worked in London at a modest salary. He was made redundant in 1997 and is now existing on an extremely small income.
7. The father was not, it appears, too pleased with having to buy his son out of the flat that he had provided for him. He made several wills, the first on 22nd May 1973, in which he indicated to his son that the entire property (of which the ground floor flat had been let to his mother) would be left to him. But another will was made by the deceased in which nothing was left to the son and the estate was left to his second wife and, if she predeceased him, to his niece, the daughter of the major beneficiary. Then, by a codicil dated 11th December 1985, the major beneficiary was substituted for her daughter (the niece), and the subscription to the codicil set out in the judgment of the recorder reads:

"In view of the settlements already effected for my ex-wife and adopted son, Robert, I feel that no further consideration should be effected."

8. After his second wife died, the deceased made his last will in which he left the estate to the major beneficiary (as he had done by the previous codicil) and he made no mention of either his son or of his first wife. However, shortly before his death the father had gone into a nursing home. Perhaps to say that he was reconciled with the son puts it too high; but certainly a relationship developed again between the son and the father. There was discussion that the son might have a power of attorney, that the deceased needed to nominate a next of kin and the father gave to his son a car valued at £700 which he no longer needed. He also paid that year's insurance, which, as the judge put it, was a generous provision made by the father of an adult son, and particularly helpful when Robert was earning so modestly.
9. The deceased's solicitor was told and gave evidence to the effect that the deceased had wanted to discuss his will with view to the possibility, at least, of having Robert as his next of kin, and there was, I suppose, the possibility that Robert might have been mentioned in the will. In the event, the father died before he could return to the solicitor to change his testamentary dispositions.
10. The first wife made her application under the 1975 Act as a former wife. The evidence given by the former wife before the Recorder was entirely accepted by him, who found her to be entirely frank and open and a charming lady. He found that she was in a parlous financial state and living with a son whose own income was little, if at all, above the breadline.
11. The Recorder then looked at the Act, looked at a number of cases and came to the conclusion, after a careful review of the cases, at page 15 of his judgment:

"In my judgment, the Applicant cannot show that she has a claim against the estate of the deceased, because her entitlement to financial support from him had ceased on receipt of the £1,500. The only manner in which she could establish any claim is to show that there were special circumstances, as referred to by Peter Gibson L.J. [that is to say in the case of Cameron v. Treasury Solicitor [1996] 2 F.L.R. 716, to which I shall refer in a moment]. Those special circumstances were canvassed in Fullard as I have mentioned above [another decision to which I shall refer in a moment].

"I find that the substantial capital value of the estate in excess of £200,000 is one of the special circumstances which can be taken into account. It is analogous to the insurance policy proceeds there considered.

"I also have to consider whether I can take into account as a special circumstance the new relationship between Mr. Barrass and his son, Robert, as it existed shortly before death. In my judgment I can take this into account....."

12. He then sets out the reasons -- the giving of the car, the paying of the insurance premium, the lack of consideration, that it was generosity, that it was of substantial value to the son because of his paucity of earnings. He continued:

"Mr. Barrass, the deceased, knew that his son was in parlous financial circumstances. He also knew that Mr. Barrass was assisting in maintaining his mother, the first wife of Mr. Barrass. She, too, was in parlous financial circumstances.

"Knowing of what son was doing for mother, and knowing that his death was imminent, I find that that gift and the continuing contribution to the insurance premium plainly intended for the future is something which is a special circumstance in this case."

13. Turning now to the state of the law on this subject, as I have already said, the first wife had the right to make a claim under section 1(1)(b) of the Act. But the first wife has to demonstrate that the disposition of the deceased's estate effected by his will is not such as to make reasonable financial provision for the applicant. The Act provides for those who have not been properly considered by the deceased, either by way of making a will or by failing to make a will. It does not provide that in all cases those who have previously been married who may be in poor financial circumstances are, if the former spouse dies with sufficient money, entitled to a share of the estate. We still live in a world where, to some extent at least, a man or woman is entitled to dispose of his or her assets by will as he or she chooses.
14. The question as to whether the disposition was such as to make reasonable financial provision for the applicant was posed by Ormrod L.J. in In re Fullard (Deceased) [1982] Fam. 42. That was a case of a former wife in which the judge found that it was not reasonable for financial provision for the former wife to be made out of the estate, having regard to all the circumstances in the case. Ormrod L.J. helpfully set out, at page 45 of his judgment, the background to the 1975 Act and its provenance. He said at page 45G:
15. "So there were many cases in and around that time [prior to 1975] where ex-wives were in receipt of periodical payments which ceased on the death of their former husbands and were placed in a position of extreme difficulty. There is no doubt that that section was passed originally [the 1958 section] to give the court power to deal with that sort of situation when it arose. With the coming into effect of the Matrimonial Proceedings and Property Act 1979 with the new powers to make property adjustment orders and very much freer power to order lump sums, the court now has power to make appropriate capital adjustments as between spouses after divorce and those powers, although they are not necessarily comprehensive -- and that is plain from section 15 of the Act of 1975 which clearly contemplates that proceedings may be taken under the Inheritance (Provision for Family and Dependants) Act 1975 after divorce -- nonetheless the number of cases in which it would be possible for an applicant to bring himself (or herself) within the terms of section 2 of the Inheritance (Provision for Family and Dependants) Act 1975, in my judgment, would be comparatively small."
16. He then turned to deal with the specific case before the Court of Appeal on that occasion and asked the question on page 49:

"The question is - and it is a simple question to my mind - is it unreasonable, or was it unreasonable, that this man made no financial provision by his will for his former wife? He thought he and the plaintiff had sorted out their financial claims as between each other when they reached the agreement about the house. It is right to say that if the plaintiff had been dissatisfied about that arrangement, she had her remedy. She could have applied to the court for an order and she might have succeeded in getting the whole of the house transferred to her without having to pay anything - or perhaps payment of very much less."

17. He also quoted, and it is a passage upon which Mr. Abbott for the first wife relies in this case, on the words Ormrod L.J. at page 49F:

"As I mentioned at the beginning of this judgment it seems to me that the number of cases [post divorce after the 1975 Act] must be comparatively few. In the course of argument I suggested one case where a periodical payments order has been going on for a long time and the husband is found to have a reasonable amount of capital in his estate. That is one. Mr. Reed suggested that there was another possible situation - where a substantial capital fund was unlocked by the death of the deceased, such as insurance or pension policies."

18. I should say that, having heard the evidence and looked at the cases, the Recorder, out of the £200,000 estate, gave the former wife £30,000, and it is the major beneficiary who appeals to this court.
19. There is little doubt that both the claimant and the sister-in-law are elderly and in poor health. Those matters do not really come to be considered at this stage because, as was said by Ormrod L.J. in Fullard and was said first by Oliver J. (as he then was) in In re Coventry, Decd. [1977] 1 Ch. 461, there is a two-stage process. The first stage is, did the disposition fail to make reasonable provision for the applicant? If the answer is "Yes", then the court goes on to consider what provision should have been made in the circumstances of the case. The second stage is an exercise of discretion.
20. The first stage is an objective assessment of whether the disposition was or was not reasonable. It has been called "a value judgment". In favour of the way in which the disposition was made, without reference to the former wife, are the following facts. The first is that the divorce was in 1964 and the ancillary relief was in 1965. So far as any money payments that were made, there was what subsequently was called "a clean break" that the wife agreed and there was a consent order for the dismissal of her financial claims. There was, nonetheless, a private contract between the then husband and wife, whereby he let her have the flat for the rest of her life at a peppercorn rent and made provision to give her a small capital sum if she chose to leave. Therefore, for 20 years there was a continuing semi-business arrangement between them. That was a tenuous relationship, only by way of contract.
21. The first wife then decided to leave the premises, and she left them voluntarily; no pressure was put on her. At that stage she was paid out the modest sum mentioned. Nowhere in the evidence was there any indication that, apart from providing her with a roof over her head for as long as she wanted it, there was any continuing relationship of any sort between the former husband and the first wife.
22. There was (as has been suggested in Coventry, in Cameron, in In re Hancock, Decd. and in a number of other cases) no continuing moral claim or moral obligation, which are, as Peter Gibson L.J. said in Cameron, two sides of the same coin. Indeed Mr. Abbott for the first wife concedes that the deceased had no continuing moral obligation to provide for his former wife. He relies primarily upon the special circumstance (as he sees it, although he does not call it a special circumstance) that this was a pre-1970 divorce and ancillary relief. He also relies (I think with slightly less enthusiasm) on the two grounds of special circumstances found by the Recorder.
23. As I understand it, what Mr. Abbott is saying is that, if a spouse who is in indigent circumstances at the time of the death of the deceased was divorced prior to the 1970 change of legislation and the broadening of the relief available to be provided by the court by way of transfer of property and so on, that this is a situation at which the court ought to look wholly differently from the arrangements between spouses subsequent to 1970.
24. In the case of Cameron, the choice for the disposal of the estate was bona vacantia to the Treasury Solicitor or to be paid to a former wife in parlous financial circumstances, and the judge in that case said that the money should go to the former wife. The Court of Appeal (of which Thorpe L.J. and I were two of the three members) allowed the appeal. I read the headnote for convenience:

"...the first task of an applicant making a claim under the Act was to establish that it was not reasonable in the circumstances of the case that the deceased had made no financial provision for the applicant. In the present case, in the light of the clean break order on the divorce which occurred over 19 years before the death, coupled with the absence of any subsequent financial support for the applicant from the deceased, there was no continuing moral obligation by the deceased towards the applicant and therefore no ground on which the applicant could demonstrate a moral claim. Accordingly, though a moral claim by the applicant was not a prerequisite for a successful claim under the 1975 Act, other special circumstances would have to be shown to establish any entitlement. Relevant considerations put forward by the applicant, such as her financial plight together with her deteriorating health, could not amount to such special circumstances. The devolution of the estate upon the Crown must be regarded as a neutral factor which did not advance the applicant's case. The failure in 1981 to include a s 15 restriction debarring an application under s 2 did not operate in favour of the applicant. It followed that no special circumstances had been established such as would satisfy the court that it was an unreasonable result of the intestacy laws that no provision had been made for the applicant's maintenance."

25. I do not think any point can be made as to whether or not it was by way of the administration of the estate under intestacy or by way of will. Since the applicant has the same opportunity to claim, I do not think it makes any difference; but Mr. Abbott has said that the decision in Cameron, the facts of which bear a very strong resemblance to the present appeal, can be distinguished because Cameron was post 1970 and this case is pre 1970.
26. I have to say that I cannot see that that is a correct analysis of the present law. The approach which I have read of Ormrod L.J. in his judgment in Fullard in my view is equally applicable to pre-1970 cases. The ancillary relief order was made in the light of the legislative provisions available at that time. The parties took such advantage as they chose from what was available to them. The deceased made provision for his former wife by housing her. She did not ask him for anything else. That was the closing of the account between the husband and wife, subject to his continuing to provide her with a roof over her head. When she surrendered her residual claim upon him by way of the contract to continue in the flat, she also surrendered the final part of any obligation that he continued to have in respect of her when he paid her the £1,500 upon her leaving the flat. She elected to take the £1,500, elected to leave the flat and elected wholly to close the account between them. I cannot see that there is any argument of substance that can be advanced now to say that because she received, under different legislation, less than she might conceivably have received in the year 2000 that is in itself a reason for interfering with the dispositions made by the testator.
27. If (contrary to the facts here) the deceased husband had indicated that he thought he should pay her something in the future, had made any sort of rapprochement with her (such as he made in this case with his son) and given any indication that he thought he ought to be looking after her because she was getting old and was in poor financial circumstances, that would be a wholly different situation and would come within the line of cases including, for instance, Hancock. He did not. So far as he was concerned, that was the end of the relationship. I cannot see that the fact that it was a pre-1970 divorce can resurrect a relationship between them or create any sort of obligation or any other sort of situation that entitles her to claim out of the estate, subject only to the matter to which the Recorder put his mind -- that is to say, special circumstances.
28. Again in Hancock there was an unexpected windfall. That unexpected windfall provided adequate money, in the particular circumstances of Hancock which are not relevant to the present case, that provided a daughter with some money. As Thorpe L.J. has said during the hearing of this case, £200,000 in modern days, where part of it is the former home of the deceased, is by no means to be seen as a windfall to the estate. I do not consider that the Recorder's view that the capital value of the estate was analogous to insurance policy proceeds is a helpful way of dealing with that. I do not see the money by itself as a special reason, and I do not think that it comes within the observations made obiter by Ormrod L.J. at page 49, which I read out earlier.
29. The second and last point in this case is the odd reliance of the Recorder upon the generosity of the father to the son shortly before his death. That cannot, in my view, import an equal generosity through the son to the mother. The fact that Mr. Barrass knew that his son was in parlous financial circumstances may well have affected his decision to pay for the insurance -- and almost certainly did. But to pay for the insurance and to give him a car worth £700 cannot be an opening to say that the first wife should, as a result of that, benefit from the deceased's estate. For the Recorder to say that the gift and the continuing contribution to the insurance premium, plainly intended for the future, is something which is a special circumstances in this case could only be peripherally relevant to a claim by the son, which he did not make. It cannot, in my judgment, assist a claim by the first wife.
30. We do not of course have the advantage of having seen the witnesses in the witness box. Mr. Abbott pointed that out to us in suggesting that we were not able really to get the right assessment of the case. But I have to say that in my judgment the Recorder was plainly wrong in considering that, as they stood and without anything to go with them, either of the two special circumstances (either the £200,000 or the gift of the car and the insurance) as he found them could be treated as special circumstances on the facts of this case. They are not factors, in my view, which he was entitled to take into account in perhaps clutching at straws where he found an extremely nice, charming, totally decent woman who had the grave misfortune to be in very poor financial circumstances, having been divorced as long ago as 1964 and seeing that her former husband had in fact left quite a lot of money (by her standards, a fortune) and she would understandably like to have her poor position marginally improved by a sum of money, which the Recorder gave her.
31. In my view, that order cannot stand. There was no basis for the order to be made and, although I am extremely sorry for the applicant (who is the respondent in this appeal), there is no way in which a court can properly, under the 1975 Act, make such an award or any award to her. I would allow the appeal.
32. LORD JUSTICE THORPE: I agree. This appeal raises the question of what weight should be given to a financial settlement ordered upon the divorce of the applicant and the deceased at a time prior to the enlargement of the court's powers by the commencement of the Matrimonial Proceedings and Property Act 1970 and the further enlargement of its powers by the commencement of section 15 of the Inheritance (Provision for Family and Dependants) Act 1975.
33. Mr. Abbott, in seeking to resist what seems to me to be an almost irresistible appeal, submits that little if any weight should be given to the contractual bargain translated into an order of the court in that earlier era. He refers to the decision of this court in In re Fullard, Decd. [1982] Fam. 42, which, by distinguishing, he claims as an authority for his case.
34. It seems to me that the evaluation of these orders made at any time prior to the arrival of the powers of equitable redistribution should pose no great difficulty. The bargain reached between the divorcing spouses needs to be assessed in the context of the legislative background at the date of its making and in the context of all the subsequent developments. It would be quite wrong to approach such cases upon the basis that, there having been no formal dismissal of the claim against the estate, there was any inferential survival in circumstances in which, during the intervening years, there had been no recognition of any continuing financial dependency.
35. In my judgment, the approach so clearly stated by Ormrod L.J. in In re Fullard, Decd. is of equal application in those cases in which the underlying divorce settlement was made prior to 1st January 1971. He posed the question thus:

"We come back to the same position which is, is it reasonable to expect a husband with assets of this kind who has made arrangements with his former wife which settled their financial affairs, is it reasonable for the court in his place to make provision for the wife out of his estate?"

36. Had the Recorder directed himself by posing that question, and that question only, he would surely have come to the same answer to which Ormrod L.J. came in the case of In re Fullard. Again, to return to the citation:

"To my mind the answer is plain and obvious. It is obviously 'no'."

37. For all the reasons which my Lady has given, on the facts and circumstances of this case nothing but sympathy for an attractive applicant could surely have lead the court to conclude that it was appropriate to make an order under this statute, which gives the court only limited powers to invade the deceased's discretion as to the distribution of his estate. At the date at which it was made the agreement and order was as comprehensive and final as the legislation then current allowed. No more could have been done to protect the husband and his estate from a further claim. The wife took full advantage of the consideration for the dismissal of her claims which the husband had provided. On those facts to the fundamental question, was the deceased's failure to provide for the applicant unreasonable on an objective appraisal, the answer must surely be negative.
ORDER: Appeal allowed; order of Mr. Recorder Pulman Q.C. of 9th July 1999 is set aside; no order for costs in court below; costs in Court of Appeal against Legal Aid Commission, suspended to allow the Legal Aid Commission to be heard; legal aid assessment ordered; leave to appeal refused; application under section 1(1)(b) of the 1975 Act dismissed. (DOES NOT FORM PART OF APPROVED JUDGMENT)