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29 April 2019 | Comment | Article by Roman Kubiak TEP

Illegitimate children and Inheritance Act claims


The case of Ubbi and Anor v Ubbi [2018] EWHC 1396 (Ch), is a claim brought on behalf of the illegitimate children of Mr. Malkait Singh Ubbi, (“the deceased”), seeking financial provision from his estate under the Inheritance (Provision for Family and Dependants) Act 1975.

Background

The deceased was married to Mrs. Susan Ubbi, at the time of his death in February 2015. Divorce proceedings were ongoing, but not finalised. There were two children of the marriage, one of which born in 1994 suffered from a number of disabilities.

The deceased made a will in 2010, leaving the entirety of the estate to his wife. At the time of his death, his estate was valued at approximately £3.4.million.

In 2007, the deceased had met Bianca Corrado, and had begun an affair with her. They had subsequently had two children together born in 2012 and 2014.

At the time of his death, the deceased had not taken the step of updating his will, and accordingly, no provision was made for the illegitimate children.

The legal position

Under the Inheritance Act, reasonable financial provision for a child refers to finances that would be reasonable for the claimant to receive for their “maintenance”, with this very much depending on the particular circumstances of each case. In addition, when considering cases of children of the deceased, the court will take account of how the applicant was being, or might expect to be educated or trained.

The parties’ positions

The illegitimate children sought a lump sum of £848,105.78 from their father’s estate.

The defendant accepted that the claimants were entitled to reasonable financial provision and that the financial provision should be by way of a lump sum. They accepted the claimants’ methodology of adopting the multiplier set out in Ogden table 28 for calculating the lump sum that would cover costs of raising each of the children to 18. However, this would be subject to factoring in their mother’s own income over that period to reduce the liability on the estate. The main issue of the case focused upon the amount of the potential lump sum, with the main points in dispute arising in relation to housing needs, childcare and private schooling.

The defendant’s case was that the illegitimate children should not receive anything from the estate. In addition, there were other parties with competing needs, namely the deceased wife and her two adult children. One of whom lived at home, having suffered a horrific attack some years prior, and the other who suffers from hemiplegia, paralysis to one side of the body, and learning difficulties.

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The decision of the court

With no dispute between the parties that the illegitimate children were eligible to bring the claim, the task for the court was to arrive at a suitable figure with consideration of authorities and relevant factors under section 3 of the Inheritance Act.

In undertaking this task, the Judge relied upon Re Coventry [1980} Ch 461, and the Supreme Court decision of Ilott v The Blue Cross {2017} UKSC 17.

Before setting about calculating a figure, the judge affirmed that:

  • the illegitimacy or otherwise of the children was entirely irrelevant to the quantum of their claim;
  • whilst he noted that in many cases infant children will have needs paramount to other beneficiaries, to adopt that as a starting point in all such cases would be inappropriate. The very purpose of section 3 was to enable the courts to assess competing claims; and
  • although counsel for the claimant children drew parallels between maintenance by reason of an infant child’s claim under the Act and maintenance under schedule 1 of the Children Act 1989, such parallels were inappropriate.

He then considered the factual background which, even on an objective assessment, rendered all parties in the litigation with just cause to adopt their stances.

The defendant’s case, which was accepted by the judge, was that she had been a loyal and devoted wife, mother, carer, housekeeper and colleague in the deceased’s business.

The claimants’ mother’s case was that the deceased was keen to build a family with her and their two children. The judge also accepted this evidence.

Turning, therefore, to the value of the claimants’ claim, the judge held as follows:

  • the multipliers applied under Ogden table 28 were applicable in this case;
  • in relation to the children’s housing need, he held that together they required provision of £4,050 per month for eight years to house them in a four bedroomed home (to include a room for a professional, live-in nanny) and, thereafter, £3,000 per month to enable them to downsize to a three bedroomed property once there was no need for a nanny, plus an additional £4,000 for two sets of removal costs. Applying a discount rate of -0.75%, this produced a figure of £701,950;
  • in relation to childcare, the judge held that the sum of £234,234 amounted to reasonable childcare costs to enable the children to be cared for by a live-in nanny;
  • in relation to their schooling costs, the judge did not accept the argument that the provision of private education could amount to reasonable financial in the present case and so set the allowance for those fees at £0;
  • the judge accepted the claimants’ mother’s figures in a Schedule of Dependency accompanying the claim which provided for utilities, council tax, additional school costs, university and past contributions from the estate; and
  • the claimants’ mother’s base income for calculating her contribution towards the children’s financial needs was set at 65% of her income over 18 years with 2% compound interest, producing a figure of £901,639 which was to be subtracted from the total figure calculated for the children’s maintenance.

The illegitimate children were awarded £386,290.60. As a proportion of the entire estate, this sum is similar to the amount awarded in Ilott i.e. which is approximately 10% of the net estate. Although both cases reached a similar result, the methodologies used for achieving these outcomes were vastly different and critical to reaching the decision.

The case also reinforces the importance of ensuring your will is kept up to date. Had the deceased updated his will so as to include reasonable provision for the illegitimate children then, such costly litigation may well have been avoided. However, as the deceased had not taken such a step, court action was the only option available.

Author bio

Roman Kubiak is a partner and head of the market leading Contested Wills, Trusts and Estates team.

He advises across the whole spectrum of private wealth disputes, with a particular focus on high value, complex and cross-border disputes including: trust disputes, breach of trust claims and applications to remove trustees; will disputes, particularly those with an international element; claims under the Inheritance (Provision for Family and Dependants) Act 1975; and claims for equitable relief under proprietary estoppel, constructive trusts and resulting trusts.

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