Reported cases under the Inheritance (Provision for Family and Dependants) Act 1975 are few and far between. Here is a summary of a recent Judgment in the Court of Appeal.
It involved the estate of Ramadan Houssein Guney (“Mr G”) who died intestate (without a Will) on 2 November 2006. He was survived by six children who, under the English intestacy rules, each received an equal share of his English assets.
The inheritance claim was brought by Diane Holliday (“Diane”), her adult son from her former marriage, Kevin Holliday (“Kevin”) and her 12 year old son who was fathered by Mr G, Houssein Guney (“Houssein”).
The defendants to the claim were Mr G’s adult children.
It was accepted that Diane and Houssein were dependant upon the deceased at the time of his death and further, that Diane was entitled to a substantial share.
The course adopted by the Judge was:-
(1) ascertain what the claimants’ reasonable needs for maintenance are
(2) make an award from Mr G’s English assets to meet those needs and
(3) if the net estate is insufficient to meet the claimants’ reasonable needs, award the whole estate to the claimants.
The defendants objected to this approach on the basis that Diane was not married to Mr G and should not be treated as his widow.
In determining Diane’s reasonable needs, the Court took into account the fact that she was 50 years old, had little formal education and no earning capacity outside of Mr G’s cemetery business (from which she had been dismissed by the family for gross misconduct and fraud). The Court accepted that Diane and Houssein had enjoyed “a more than comfortable” lifestyle whilst the deceased was alive.
The Court took the view that Diane and Houssein needed accommodation free of mortgage, an income to maintain the standard of living which they were afforded whilst the deceased was alive (including private healthcare insurance), a reliable vehicle and private school fees for Houssein.
Arguably, the house which Diane and Houssein were living in was larger than absolutely essential for their needs but the Judge took the view that it was “entirely reasonable not to expect her to uproot”. The house was worth £450,000 with equity of £260,000. The Judge took the view that Hussein’s dependency on Diane would extend to the age of 21 years, if not older.
The Judge ruled that Mr G’s North Cypriot assets, worth circa £2.5 million, were sufficient to deal with any “needs” which the defendants had.
There were substantial areas of uncertainty over the value of Mr G’s assets. But it was approximated that his English assets were worth circa £1,000,000.
As is often the case with inheritance disputes, relations between the parties were at breaking point. However, the circumstances of the claim took this to the extreme so far that the Judge took them into consideration under section 3(1)(f) which refers to “any other matter, including … conduct”. The Judge was exceptionally critical of the conduct of the defendants, their lack of cooperation in the proceedings as a whole and their attempts to deprive Diane and Hussein of a home. Further, they stripped Diane of any realistic opportunity to gain employment and one of the defendants was charged, and subsequently cleared of an attempt to procure the murder of Diane.
The Judge’s paramount concern was to enable Diane and Hussein to have mortgage free accommodation. The property which Diane, Hussein and Kevin had lived in was transferred to Diane outright, mortgage free.
It was ordered that the proceeds of sale from one of Mr G’s properties would be used to discharge the mortgage of their home and thereafter split between all of his children, providing Hussein with a lump sum of circa £123, 571.51.
Mr G’s shares in the cemetery business (the main asset in the estate) valued at £1.2 million and which provided an income of £60,000 per year were transferred to Diane outright.
Kevin was awarded a sum from the English estate to enable him to pay any tuition fees, enrolment fees associated with his ambition to qualify as a lawyer
The High Court decision was delivered on 11 November 2011. The defendants appealed the decision as they disputed the way in which Diane’s financial needs had been valued. On 15 October 2012 the appeal was dismissed on the basis that it could not be established that the judgment was plainly wrong. It was a difficult case with a number of uncertainties and ambiguities but the judgment was made on the basis of Diane and Hussein’s reasonable financial needs for their maintenance.