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Following recent decisions in Cowan v Foreman (2019) and Bhustate v Patel (2019), it may be tempting to think late claims under the Inheritance (Provision for Family and Dependants) Act 1975 (“the 1975 Act”) are likely to be viewed, in certain circumstances, sympathetically by the Court.
In Bhustate, the Court at first instance allowed a claim under the 1975 Act to proceed despite being a whopping 26 years late. This is an extreme example of lateness where permission was granted, but it was subject to its own very unusual facts. The eagerly awaited decision of the Court of Appeal in Cowan also emphasised, among other things, that standstill agreements made between represented parties not to take a limitation point so to allow negotiations to continue out of time should be respected by the Courts provided the terms of the agreement are clearly recorded - https://www.thomasflavell.co.uk/news/cowan-v-foreman-2019-court-of-appeal-decision-re-late-applications-in-claims-under-the-inheritance-provision-for-family-and-dependants-act-1975.
In Hendry v Hendry (2019) the Court took a more critical view of the circumstances that led to the delay to commence the 1975 Act claim and illustrated the dangers for legal representatives allowing that to happen. Once again, the particular circumstances of this claim would have a bearing on the Court’s approach to assessing the merit of an application for permission to proceed out of time.
Mr and Mrs Hendry married in 2003. Mrs Hendry was from the Philippines and lived in Mr Hendry’s UK home. The parties had signed a pre-nuptial agreement (where both were legally advised) and whereby in the event of divorce, Mrs Hendry would be paid £10,000 and given a one way ticket back to the Philippines. They separated in June 2016 and Mr Hendry made a new will in August 2016 making no provision for Mrs Hendry and leaving his Estate equally to his two children from a previous relationship. Mr Hendry died in February 2017 after Mrs Hendry had commenced divorce proceedings.
The Grant of Probate (which starts the clock for 1975 Act claims) was obtained on 29 August 2017. Under section 4 of the 1975 Act, unless the Court decides otherwise, any such claim must be commenced within 6 months of the date of the Grant of Probate, i.e. by 1 March 2018. Mrs Hendry did not commence proceedings until 27 April 2018, just under two months late. As a pre-requisite to making a claim for reasonable financial provision under section 2 of the 1975 Act, Mrs Hendry was obliged to obtain permission from the Court to proceed out of time.
The most recent authority cited extensively by the Court of Appeal in Cowan is Berger v Berger (2013) which, following on from re Salmon (1981), set out a number of factors a Court should consider when assessing whether to allow permission to proceed with a 1975 Act claim out of time being:
(1) The court's discretion is unfettered but must be exercised judicially in accordance with what is right and proper.
(2) The onus is on the Applicant to show sufficient grounds for the granting of permission to apply out of time.
(3) The court must consider whether the Applicant has acted promptly and the circumstances in which she applied for an extension of time after the expiry of the time limit.
(4) Were negotiations begun within the time limit?
(5) Has the Estate been distributed before the claim was notified to the Defendants?
(6) Would dismissal of the claim leave the Applicant without recourse to other remedies?
(7) Looking at the position as it is now, has the Applicant an arguable case under the Inheritance Act if I allowed the application to proceed?"
Applying the Berger factors, the Court declined to give Mrs Hendry permission to proceed with her 1975 Act although it was less than two months late and ruled she had not acted promptly enough. The Court considered carefully the background, even going so far as to allow Mrs Hendry permission to file a further witness statement explaining reasons for the delay. Mrs Hendry explained her reasons which included her wish to avoid litigation as well as a lack of funds for bringing the claim, despite knowing about the six month deadline. This was not enough for the Court as Mrs Hendry had failed to put forward evidence outlining sufficient reasons for the delay. It was open to Mrs Hendry’s solicitors to issue the claim once they realised they were late and the other side notified but they failed to do so. The Court also carefully examined the chronology of the claim noting Mrs Hendry was holding out for 50% of the Estate. Although preliminary negotiations were commenced before expiry of the six month deadline, these were neither advanced nor sufficiently certain to outweigh the decision to refuse the application to proceed out of time. The Court found Mrs Hendry’s solicitors should at a minimum have set a considered analysis of her claim. By asserting Mrs Hendry felt she was entitled to half of the Estate in accordance with the divorce cross check rule, this was not a platform for proper negotiations between the parties. On the prejudice point, the Court disagreed with Mrs Hendry’s position, nothing that the Estate was undistributed and this was having a knock on effect upon Mr Hendry’s beneficiaries under the Will.
Interestingly, the Court did note it appeared Mrs Hendry had a professional negligence claim against her solicitors who had admitted they had missed the six month time limit, even going so far as to suggest a separate claim could be funded by a no win, no free agreement.
Finally and in light of the pre-nuptial agreement, the Court said this weakened the claim (albeit not fatally) and this would be another reason leaning towards refusing permission. Mrs Hendry is therefore left without the option of making a claim under the 1975 Act but a professional negligence claim against her solicitors may still be open to her.
This is a reminder that late applications are fact specific. In light of Cowan, applicants who wish to negotiate without commencing litigation (but are facing the expiry of the six month time limit) are best advised to quickly explore whether a standstill agreement is possible. If it is not, they should issue the claim before the six month deadline because Hendry emphasizes that, in certain circumstances, even a relatively short delay could be fatal.
If you require further information about 1975 Act claims or any contentious probate matter, please get in touch with Noel McNicholas on 01455 610747.