1. Introduction
- This is an application by Warwick Barron ("Mr Barron") for reasonable provision out of the estate of his late wife Ann Waite ("Mrs Waite") who died on 3rd May 2003. The claim is made against Mrs Waite's 2 children who are the residuary beneficiaries and the personal representatives of her will dated 16th October 2002. It will be necessary to set out the history in some detail later in this judgment and to consider the various factors required by the Act.
2. Representation
- Mr Barron was represented by Michael James instructed by Clarke Willis of Catterick. The Respondents were represented by Simon Stevenson instructed by Hellewell Pasley & Brewer of Mirfield.
- Both Counsel produced skeleton arguments for which I am grateful.
3. History
- Mr Barron was born on 30th January 1935. He was thus 73 at the time of the hearing. For much of his life he ran a haulage business. No documents were disclosed about the affairs of the business. In his witness statement Mr Barron stated that at one time it had a turnover of in excess of £6 million per annum. According to the Respondents Mr Barron has not worked since the early 1990's and has been in receipt of various forms of state benefits since then. He was adjudged bankrupt in November 1999 on a petition from the Revenue. It is the view of the Respondents that Mr Barron disposed of assets to various family members to avoid creditors.
- Mrs Waite was born on 29th July 1948 and was 54 when she was found dead on 3rd May 2003. Mrs Waite was married before she met Mr Barron and had 2 children, Mrs Woodhead and Mr Waite. Little is known about Mrs Waite's financial affairs. No documents have been produced. All parties agree that Mrs Waite worked throughout the marriage. She was at one time a Regional Manager for a Building Society. Later she was a financial adviser. There is some debate about how much money she brought into the marriage. According to Mr Barron she only brought £2,500. According to Mrs Woodhead her mother had the entire proceeds of the former matrimonial home – in excess of £50,000.
- Mr Barron and Mrs Waite met in 1986 and cohabited from that date. They married in September 1993. Everyone agrees that the marriage had its ups and downs. Both Mr Barron and Mrs Waite were heavy drinkers. Mrs Waite became an alcoholic and was on at least one occasion admitted to hospital for alcoholism. There were incidents of domestic violence. When he gave evidence Mr Barron denied being violent but alleged that he had to restrain Mrs Waite on occasions. Mr Waite and Mrs Woodhead did not accept this. They accused Mr Barron of assaulting Mr Waite and (on occasion) Mrs Woodhead herself. They did not dissent from the suggestion that Mrs Waite could be violent and that it was a case of "6 of one and half a dozen of the other". There is no corroboration of any of the allegations and cross allegations. The parties separated by September 2001 and probably in 2000. Mrs Waite consulted solicitors and considered a possible divorce but no divorce proceedings were ever commenced.
- Mr Barron's father died in 1989. Following his death his children inherited a sum of approximately £71,000. According to Mr Barron this sum was originally invested in his sister's name in this country but in 1993 was transferred to the Isle of Man. In 1994 those moneys were transferred into Mrs Waite's name. The moneys were at one time the subject of a Revenue Investigation, but according to Mr Barron, the investigation was not pursued. As at the date of her death Mrs Waite had foreign assets of £116,590 According to Further Information provided by the Respondents there was £61,559 in an account in Benidorm , Spain and £35,889 in an account in the Isle of Man. Mr Barron alleges he provided the monies invested in Spain. In her witness statement Mrs Woodhead does not accept that these monies originated from Mr Barron's family. However she does not provide any other explanation for the source of these monies or any explanation as to why Mrs Waite chose to invest monies in the Isle of Man or Spain.
- Mr Barron and Mrs Waite occupied 2 Etherley Bank, Bishop Auckland. 2 Etherley Bank was originally owned by Mr Barron. It was where he started his haulage business in 1981. According to Mr Barron he made considerable changes to it. In his second witness statement Mr Barron exhibited a document showing that he had spent over £200,000 on it. There are no documents indicating the source of any funds. At that time 2 Etherley Bank was occupied by Mr Barron, his sister Audrey, her husband Alan and his ill brother Cyril. At the hearing Mr Barron told me that his brother had died of cancer leaving no estate and that his sister had emigrated to Cyprus.
- There have been a number of dealings with the legal title of 2 Etherley Bank. In February 1994 Mr Barron purported to convey his share of 2 Etherley Bank to Mrs Waite. The recital to the deed describes Mr Barron and Mrs Waite as beneficial joint tenants. It is by no means clear whether this deed was ever executed.
- On 10th June 2005 Mr Barron purported to transfer 2 Etherley Bank to his brothers and sister. Mr Barron's trustee in bankruptcy challenged these transactions. On 8th March 2007 the Trustee compromised the claim against the Respondents (as personal representatives of Mrs Waite's estate) on terms that the estate would receive 25% of the net proceeds of sale of the property. The claim against Mr Barron came before Judge Langan QC as a contested hearing on 12th December 2007. Judge Langan QC set aside both the transactions, declared that 2 Etherley Bank was vested in the trustee and ordered the occupants (including Mr Barron) to give vacant possession on 30th June 2008. As already noted Mr Barron's brother Cyril has died; his sister and her husband have just left and moved to Cyprus. Mr Barron is still in occupation. He says he has nowhere to go and does not know where he is going to live after 1st July 2008. It was suggested that other members of his family would buy out the trustee's interest but he did not accept this and no evidence of any negotiations was adduced.
- In April 2005 Mr Barron had conveyed part of 2 Etherley Bank to David Foody for £40,000. There is no evidence of what happened to this £40,000. It was suggested that Mr Barron gave it to his brothers and sister. In any event he has dissipated it. In her witness statement Mrs Woodhead suggests that the sum of £40,000 was an undervalue but there is no valuation evidence before me. There is a possibility that the trustee will seek to challenge the transaction. 2 Etherley Bank has been valued in the sum of £420,000 including the land sold to Mr Foody. If and in so far as the transaction is set aside Mr Barron may face a claim from Mr Foody.
- On 16th October 2002 Mrs Waite made a will under which she gave £5,000 each to her 4 grandchildren and the residue to be shared equally between the Respondents. Probate of that will was granted to the Respondents on 16th June 2005. These proceedings were commenced by Mr Barron in November 2005.
4. The Law
4.1 The Act
- The provisions of the Act are relatively well–known. However for convenience I shall set out the provisions so far as they are relevant to an application by a spouse:
'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.'
4.2 The approach
- Before considering the authorities to which I was specifically referred in argument it is worth making a number of general observations about the Act.
1. It remains the law that a deceased spouse who leaves a widower is entitled to leave her estate to whomsoever she pleases. Her only obligation is to make reasonable financial provision for her widower.
2. In the case of a claim by a widower the claim is not limited to maintenance. As already noted the widower can apply for 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.
3. The Act envisages an objective rather than a subjective approach. Thus the question in this case is whether objectively it was reasonable for no provision to be made for Mr Barron out of the estate of Mrs Waite rather than whether Mrs Waite acted unreasonably in making no provision for Mr Barron
4. The Act contemplates a 2 stage approach. First the Court has to consider the factors set out in section 3 in order to determine whether it was reasonable to make no provision for Mr Barron. If it considers that reasonable provision has not been made it must then consider the same factors in order to evaluate any provision to be made under the Act. The Court has a wide discretion and extensive powers as to the nature of the order to be made under the Act.
4.3 The authorities
- There are a number of authorities in relation to the significance of the requirement in section 3(2) of the Act to consider the award that the widower might have expected to receive if on the day of the death there was a decree of divorce. These include the decision of the Court of Appeal in Re Krubert [1997] Ch 96 where Nourse LJ discussed the difference of approach between the decisions of the Court of Appeal in Re Besterman [1984] Ch 458 and Moody v Stevenson [1992] Ch 486. It is apparent that Nourse LJ preferred the approach of Oliver LJ in Re Besterman as exemplified at p 469 of his judgment:
In an application under the 1975 Act, however, the figure resulting from the s 25 exercise is merely one of the factors to which the court is to 'have regard' and the overriding consideration is what is 'reasonable' in all the circumstances. It is, however, obviously a very important consideration and one which the statute goes out of its way to bring to the court's attention.
- I was referred to Cunliffe v Fielden [2006] Ch 361 where there are a number of passages dealing with the correct approach to such cases in the light of the decision of the House of Lords in White v White [2001] 1 AC 596. Perhaps the most important observations in the comprehensive judgment of Wall LJ appear at paragraphs 19 – 21 of the judgment:
[19] There can, I think, be little doubt that in relation to claims for financial provision and property adjustment in proceedings between divorced former spouses, the correct approach for the court to adopt, following the decision of the House of Lords in White v White [2001] 1 All ER 1, [2001] 1 AC 596, is to apply the statutory provisions to the facts of the individual case with the objective of achieving a result which is fair, and non-discriminatory. Having undertaken that exercise, 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, 'equality should be departed from only if, and to the extent that, there is good reason for doing so' (see [2001] 1 All ER 1 at 9, [2001] 1 AC 596 at 605). He added: 'The need to consider and articulate reasons for departing from equality would help the parties and the court to focus on the need to ensure the absence of discrimination.'
[20] With appropriate adjustments based on the different statutory provisions, I see no reason, in principle, why the White v White approach to marital financial claims should not be applied to proceedings under the 1975 Act brought by a widow, not least because, in any case brought under s 1(1)(a) of the 1975 Act, s 3(2) imposes a statutory cross-check of its own to the provision which Mrs Cunliffe 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. This subsection assumes a particular importance in the instant case due to the brevity of the marriage.
[21] Caution, however, seems to me necessary when considering the White v White cross-check in the context of a case under the 1975 Act. Divorce involves two living former spouses, to each of whom the provisions of s 25(2) of the Matrimonial Causes Act 1973 apply. In cases under the 1975 Act, a deceased 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.
- The note of caution spelled out by Wall LJ in paragraph 21 was emphasised by both Counsel. Indeed I was in addition referred to a passage in the judgment of Cazalet J in Re Krubert to much the same effect.
- In the recent decision of the House of Lords in Miller v Miller [2006] 2 WLR 1283. Lord Nicholls distinguished between various types of property and made the point that a judge in exercising his discretion under section 25 does not have to treat all property in the same way. He pointed out that there is a real difference between property acquired during the marriage (otherwise than by gift) which he calls matrimonial property and other property.
- Mr Stevenson referred me to two additional authorities. Both of these were factually very different from the case before me. In Re Snoek [1983] 13 Fam Law 13 Wood J made some observations about conduct. He said that it should be approached in a similar way to conduct under the section 25 of the Matrimonial Causes Act 1975. He asked himself whether a reasonable man would be so appalled by the atrocious and vicious behaviour of the applicant over the latter part of the marriage that he would say that Mrs Waite had not failed to make reasonable provision for Mr Barron. It is plain that the facts of that case are a mile from the facts of this case. Whilst there are incidents of domestic violence the Respondents accepted that Mrs Waite had a drink problem and had herself been violent towards Mr Barron.
The other case to which I was referred was Parish v Sharman [2001] WTLR 593. To my mind that was also a case that depended on its own facts. To my mind it provides little assistance in this case.
5. The matters to which the Court is bound to have regard
5.1 (a) the financial resources and financial needs which the applicant has or is likely to have in the foreseeable future;
- In his third witness statement Mr Barron states that he has an income including state retirement pension and disability living allowance totalling £190.62 and weekly expenses amounting to £264.50. He said he had capital assets totalling £1,020.
- In evidence he admitted owning a car which he valued at between £4,000 to £5,000 and a cherished number plate which he valued at £3,500. It was suggested to him that he had other sources of funds from other members of the family. He agreed that his sister Audrey had provided him with funds in respect of this litigation and had helped with his monthly outgoings. She was, after all living at 2 Etherley Bank. He said that financial assistance would now cease.
- He is facing eviction and has nowhere to go. It was suggested that other members of his family would purchase 2 Etherley Bank from the trustee but he strongly refuted this.
- I was invited to treat Mr Barron's evidence with caution. A number of discrepancies were pointed out in his evidence.
5.2 (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;
- Both the Respondents have filed short statements of means.
Mrs Woodhead
- Mrs Woodhead is a chiropodist. Her husband is a fire officer. They have 2 children. In 2006 she had negligible earnings. They owned a property then worth about £150,000 subject to a £50,000 mortgage. They had savings of £5,000.
- These figures were not updated during the course of the hearing
Mr Waite
- Mr Waite also describes himself as a man of limited means. In 2006 he was earning £30,000 per annum. His partner earned £5,000 per annum. They had 2 dependent children. They owned a house worth £175,000 subject to a mortgage of £90,000.
- These figures were not updated during the course of the hearing
5.3 (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;
- This was a marriage where the parties had cohabited for 7 years prior to the marriage and then lived together whilst married for at least a further 7 years. Mrs Waite had the normal obligations and responsibilities of one spouse to another in such a marriage. To some extent there is an overlap with the considerations under this head and the matters that fall to be considered under section 3(2).
5.4 (e) the size and nature of the net estate of the deceased;
- In her first witness statement dated January 2006 Mrs Woodhead provided details of the estate. Regrettably her advisors did not take the trouble to provide the Court with an up to date valuation so that there is an element of uncertainty about the estate.
- The original valuation of the assets was £239,536 comprising:
Stocks and Shares - £4,633.00
- There is no up to date valuation of the stocks and shares. I was told that they remain unsold.
Bank and Building Society Accounts - £7,813.00
- I was told that these will have accumulated some interest. No details were provided.
Household Goods - £500
Property at 25 Poppleton Way - £110,000
- This property was bought by Mrs Waite very shortly before she died. I have not been shown any documents relating to it. There is no evidence as to the source of the funds. It is likely that the value increased between 2006 and 2008 but may now have declined. There is no up to date valuation.
Foreign Assets - £116,590
- I have dealt with the foreign assets above. The source of these funds is controversial but neither of the Respondents was able to assist as to Mrs Waite's financial affairs. It seems likely that a significant proportion of these funds were derived from Mr Barron or other members of his family.
- I was told that there was accrued interest but not given any details. There was a suggestion that it might have accrued at the rate of between 5% and 7% per annum. It was not clear to me whether this was based on actual knowledge or was a guess.
2 Etherley Bank
- As a result of the compromise with the trustee the estate is entitled to a 25% share in this property. After taking into account the costs of sale this might be of the order of £100,000.
- It is impossible to form an accurate view of the assets in the estate. My best estimate is that they are worth of the order of £360,000
Liabilities
- In her statement Mrs Woodhead indicates that there are only modest liabilities of £2,432. Mr Barron's solicitors have produced a summary of their costs estimated at £21,740. There is no such summary from the Respondents' solicitors but I was told that their costs were between £20,000 and £25,000.
- If and in so far as all of the costs are payable out of the estate and if and in so far as they are allowed on assessment it means that the liabilities increase to about £45,000 and that the nest estate is valued at about £315,000. Out of that there is approximately £140,000 in liquid assets.
5.5 (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;
- There is a medical report dated 13th March 2008 from Dr Ward. Mr Barron has suffered ill health for many years. He has had back problems, poor mobility and depression. There is some impairment of his mental congenital function and he has a poor memory.
5.6 (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.
- Mr Stevenson relies heavily on the conduct of Mr Barron as a ground for submitting that there should be no award. He relies on the domestic violence and on his evasiveness with both the court and the trustee over financial matters. He relies on the transfers which were avoided by the trustee.
- I do not accept that this is a case where conduct is relevant to decrease any award that Mr Barron might otherwise expect. I have dealt with the allegations of violence above. Whilst it is true that I cannot be confident as to Mr Barron's means or sources of funds, I am in no better position so far as Mrs Waite is concerned. I have no idea where she got the money to purchase 25 Poppleton Way or the substantial foreign investments. Not a single document has been produced by the Respondents.
- To my mind the most relevant factors in this case are the fact Mr Barron is likely to be homeless in 3 weeks and that he has been bankrupt with the result that all of his former assets including 2 Etherley Bank have vested in the trustee. There is no evidence that he will be in a position to re-house himself.
5.7 (a) the age of the applicant and the duration of the marriage;
- I have dealt with this already. Mr Barron is 73. The marriage lasted 7 or 8 years.
5.8 (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,
- I have set out the history of the marriage earlier in this judgment. I shall not repeat it.
5.9 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.
- It is, to my mind very difficult to know what award would have been made if the parties had divorced in May 2003. The Court would not have known what steps were to be taken by the trustee in relation to 2 Etherley Bank. The Court would in my view plainly have tried to ensure that Mr Barron had a roof over his head. Equally it would not have significant further awards if there was a risk that they would have been liable to be claimed by the trustee or any other creditors. March 2003 was before the transfer to Mr Barron's brothers and sister.
6. Analysis and Conclusions
6.1 Was it reasonable for there to be no award
- As already noted the test is objective. I do not intend in this section to repeat much of what has been considered in the previous sections. Despite the uncertainties in respect of Mr Barron's financial position, I am not satisfied that he has funds that would enable him to re-house himself.
- In all the circumstances I have come to the clear conclusion that the will does not objectively make reasonable financial provision for Mr Barron.
6.2 The award
- In my view the suggestion by Mr Stevenson that there should be no award or a very small award is wholly unrealistic. However I do agree that the principal concern of the Court on the facts of this case is to ensure that Mr Barron has a roof over his head and has sufficient means for his every day needs. I do not see that in all the circumstances of the case that it is appropriate for there to be a substantial additional capital award. There are a number of reasons for this:
- Mr Barron has plainly had and has dissipated funds since the death of Mrs Waite. He has for example had the £40,000 following the sale of part of 2 Etherley Bank.
- If, as may be the case Mr Barron was willing to give monies to his wife which made up a substantial part of the foreign investments, I do not see why he should be entitled to be awarded the return of a substantial sum over and above what may be needed for his reasonable needs.
- I agree with Mr Stevenson that the fact that the parties made no claim against each other in the 2 years following the separation militates against an award over that which is necessary for his maintenance.
- I therefore propose to concentrate on Mr Barron's needs. Neither side has put forward any evidence of the costs of suitable alternative accommodation in the area, though neither side dissented from a suggested figure of £100,000. I propose to direct that Mr Barron, in effect, has a life interest in £100,000. I direct that up to that sum be used to purchase a flat/or house to be agreed between the parties or in default of agreement selected by the Court. I direct that Mr Barron be permitted to live there rent free for the rest of his life. Mr Barron is to be responsible for the outgoings. In so far as the cost of the house is less than £100,000, I direct that the difference between £100,000 and the cost be invested so as to maximise the income and that income be paid to Mr Barron for the remainder of his life.
- In addition I think Mr Barron should be entitled to a lump sum to defray any costs of moving to set himself up in the property and to provide a cushion against the future expenses. I would assess that lump sum at £25,000.
JOHN BEHRENS Wednesday 25 June 2008
