Roman Kubiak, Partner, and Oliver Black, Solicitor, discuss the Court of Appeal judgment handed down on 30 July 2019 in Cowan v Foreman as well as the implications for parties facing out of time Inheritance (Provision for Family and Dependants) Act 1975 claims.
This case concerns a claim brought by Mary Cowan against the estate of her late husband, Michael Cowan.
Mr and Mrs Cowan were married in February 2016, shortly after Mr Cowan had been diagnosed with cancer. Mr Cowan subsequently died on 9 April 2016. Despite the relatively short period of the marriage, Mrs and Mrs Cowan had been in a relationship since 1991.
By the time of his death, Mr Cowan’s estate was worth in excess of £29m.
Shortly before his death, Mr Cowan made a will leaving legacies to his children, giving his personal possessions to Mrs Cowan and leaving much of the remainder of his estate on a discretionary trust for various beneficiaries, including Mrs Cowan. Mrs Cowan also received the residue of the estate.
Mr Cowan left a letter of wishes directing how the discretionary trust should be administered. The letter of wishes stated, save for specific sums ring-fenced for other members of the family, that Mrs Cowan was to be regarded as the principal beneficiary of the trust. She was to receive an income from the trust and requests for payments out of the trust were to be considered generously.
Probate was granted in Mr Cowan’s estate on 16 December 2016. Shortly after, Mrs Cowan received an email setting out the structure of her husband’s will and how she would benefit. At this point Mrs Cowan instructed lawyers and raised concerns that the trust was not disclosing information to her, nor providing her with enough funds to live.
Section 4 of the Inheritance (Provision for Family and Dependants) Act 1975 states as follows:
(4) Time-limit for applications.
An application for an order under… this Act shall not, except with the permission of the court, be made after the end of the period of six months from the date on which [a grant of probate] with respect to the estate of the deceased is first taken out…
The limitation date, by which a claim should have been brought in this case, was therefore 16 June 2017. It was accepted that Mrs Cowan had received advice from her solicitor confirming the limitation date on 28 March 2017. After deciding to reinstruct her solicitor on 9 November 2017, a meeting took place in early December and, on 7 December 2017 her solicitors wrote to their counterparts seeking a standstill agreement; an agreement where the trustees would not oppose Mrs Cowan issuing her claim outside of the limitation period.
After failing to achieve a negotiated settlement, Mrs Cowan issued proceedings on 12 November 2018, some 17 months after the statutory limitation date had passed. In doing so, she also sought the court's permission to bring the claim out of time.
At first instance
In the High Court, Mr Justice Mostyn found that the proper approach to an application brought out of time required the court to be satisfied that the claim was arguable and there were good reasons justifying the delay.
It was considered that the purposes of the six month deadline were as follows:
- the deadline exists to avoid unnecessary delay in the administration of estates;
- to prevent beneficiaries (and indeed the court) being “vexed by stale claims”; and
- to ensure compliance with the Civil Procedure Rules, namely that cases should be dealt with expeditiously, utilising an appropriate share of the court’s resources, and ensuring compliance with rules.
The court also found that no proper explanation had been given for the delay.
Following the court’s decision in Berger v Berger  EWCA Civ 1305, a major factor the court should consider when deciding whether to allow a claim to be brought out of time is whether the claim could be said to stand reasonable prospects of success at trial. Mr Justice Mostyn found that the trust arrangements provided for Mrs Cowan in her husband’s will were generous and therefore found that the claim would not have strong prospects of success at trial.
The Court of Appeal found that the concept of a “stale claim” was irrelevant for these purposes, and that sufficient protection from such claims was afforded to the trustees by section 20 of the Inheritance (Provision for Family and Dependants) Act 1975: specifically, trustees who have made distributions after the expiry of the six month period are not held personally liable for those payments out.
The Court of Appeal also disagreed with the first instance findings concerning the Civil Procedure Rules, and considered that these were rules designed to govern claims once they had been commenced, whereas section 4 of the Inheritance (Provision for Family and Dependants) Act 1975 was concerned with whether it is appropriate to allow a claim to be issued out of time. The court found that it was not necessary for there to be a good reason in every case for a delay, and that each case should be considered on its own facts, bearing in mind the factors outlined in Berger.
Interestingly, the Court of Appeal also found that the judge at first instance may have been distracted from the real question before him, namely, whether it was arguable that reasonable financial provision had been made for Mrs Cowan. Given that the only outright inheritance Mrs Cowan received from her husband’s estate was his personal chattels (which had a nominal value), and other factors, namely the size of the estate, the length of the relationship, the fact that Mrs Cowan had no autonomy, security or direct interest in her and her husband’s joint home of 20 years, the Court of Appeal found that the court at first instance had erred in this regard.
So what can be deduced from comparing the first instance and appellate decisions in this case? It appears that whether or not the claim has strong prospects of success is a far more important factor in the consideration of the court than what the reasons are for the delay.
For more information or advice about contesting a will or Inheritance Act claims, please visit our Contested Wills, Trusts and Estates service pages.