Iqbal v Ahmed

[2011] EWCA Civ 900; CA (Pill, Jackson and Gross LJJ); 29th July 2011; BAILII transcript

The deceased was survived by his widow, to whom he had been married for 22 years (and who was 61 years old at the time of the appeal) and his son, from an earlier marriage.  He appointed his son to be his sole executor and his son and a friend as his trustees.  He gave his widow a right to occupy the matrimonial home rent free but with a liability to pay outgoings in the discretion of the trustees and "subject to a number of other conditions which, in practical terms, rendered that occupation precarious in the event of a dispute with the trustees" (para [8(iii)]).  Subject to the occupation of the widow, the property was given to the son absolutely.  The residuary estate was also given to the son.

In the will the deceased declared that he had excluded the widow from further benefit because:

“…..she has not been a loving and caring wife before and during my illness. She also acts compulsively and repetitively and gives me verbal abuse and physical abuse.”

The main property in the estate was the matrimonial home.

The widow applied for aan order under the Inheritance (Provision for Family and Dependants) Act 1975.

The judge found the following (para [10(vi)):

With regard to the criticisms made by the deceased of the widow, set out in the Memorandum of Wishes (see above), the Judge was prepared to accept that she may not have been an easy person to live with and may have irritated the deceased, particularly in his last years when ill. Further, she was somewhat eccentric and inclined to “compulsive and repetitive behaviour”.  That said, the Judge accepted the widow’s evidence that she looked after and cared for the deceased when he was ill; throughout a long marriage, she had kept house and cooked for him. Her conduct was largely irrelevant.

 He found that the widow had been almost entirely dependednt on the deceased and that the son was a man of substantial resources and no immeidate needs.

Gross LJ (with whom the other members of the court agreed) upheld the decision of the first instance judge, who had said (see para [12]):

“ 100.  I cannot accept that a mere life interest in addition to the small bequest (even a life interest that gives a right to occupation in another house bought from the proceeds of sale and a right to income from the proceeds of sale) is reasonable in these circumstances. The repair works necessary on the house are so extensive that there is a real and substantial risk that if they are not done soon, the house will become uninhabitable.  The claimant simply does not have the necessary capital to fund those repair costs and there is no current obligation on the trustees to fund them. If the house falls further into disrepair and has to be sold the claimant has no capital reserve to put towards a small property, say, a flat or to have capital to help her keep herself in rented accommodation.  She has no share in the ownership of the home to allow her to obtain a secured loan to assist in the works of repair, with the loan and interest paid back out of her
very small income……

101. On the other hand, a complete transfer of the property substantially ignores the testator’s wishes and still leaves the claimant without the capital resources even to come close to effecting the repairs to the property. If the house has to be sold, there would be more capital available to her, but still not sufficient in all probability, to provide a home for her having regard to the value of the property and the necessity for costly repairs. ”

The judge ordered that the house be held by the friend and the widow on trust for the widow and the son as beneficial tenants in common in equal shares upon certain conditions and gave her the entire residuary estate.  He said:

 "In all the circumstances I consider that the appropriate course balancing all the various factors and giving ….due weight to the testator’s wishes but reflecting what appears to be the most important of the various factors, namely the needs and resources of the claimant, is to settle the property, giving a full life interest to the claimant, but imposing on the trustees of the will a trust to sell the property, postponed during  the claimant’s life or until she agrees to a sale, with the net proceeds of sale being held by the trustees on equal shares for the claimant and the defendant but also ordering that the entire residuary estate ….be transferred to the claimant. She may use that if she wishes, to put the property into as good a state of repair as she can, or she can agree that the property can be sold and put it, with her half share, to provide a capital cushion for her when attempting to obtain some other suitable accommodation."

The following comments were made by Gross LJ on the section 3 conditions:

ii) The question of what is reasonable financial provision for a surviving spouse is necessarily fact specific. In some cases a capital provision may be appropriate; in other cases, such as [Re Krubert, decd [1997] Ch 97], a life interest sufficed. 

iii) The observations of Lord Nicholls of Birkenhead (admittedly in a somewhat different context) in Miller v Miller  [2006] UKHL 24; [2006] 2 AC 618, at [22],  underline the importance of the matrimonial home:

“The parties’ matrimonial home, even if this was brought into the marriage at the outset by one of the parties, usually has a central place in any marriage. ”

Whether or not these dicta constitute a proposition of law does not matter; they are, on any view, of powerful persuasive force.

iv) S. 3(2) of the Act imposes a “statutory cross-check” in proceedings brought by a widow: per Wall LJ (as he then was) in Cunliffe v Fielden [2005] EWCA Civ 1508; [2006] Ch 361, at [20]. Thus the Court is required to have regard to the provision which the applicant might reasonably have expected to receive had the marriage terminated by divorce instead of by the death of the husband.  

But too much should not be made of this “cross-check”; as Wall LJ went on to observe in Cunliffe v Fielden, at [21]:

“ Caution, however, seems to me necessary when considering the ….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 section 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.”

v) Testamentary provisions are to be respected, subject to the need to ensure that reasonable financial provision is made for the applicant.  As Thorpe J (as he then was) observed in Davis v Davis [1993] 1 FLR 54, at pp. 59-60, cited with approval in In re Krubert, decd. (supra), at pp. 104-105:

“ …It is not for this court to rewrite the testamentary provisions of deceased persons lightly. …” 

 Gross LJ gave five reasons for upholding the judge's decision:

1. the relatively small size of the estate was the governing reality of the case (para [20]);
2. the primary practical consideration was the provision of a share of the captial to give the widw a cushion to cope with whatever factual eventualities unfolded (para [21]);
3. tt was a long marriage and the award of a capital share in the matrimonial home seemed appropriate; further, given the deeply hostile relationship between widow and stepson, it was only by making a capital provision that there could be any prospect of a clean break; a life interest would have precluded it (para [22]);
4. as the decision of the judge involved the exercise of a judicial discretion, the function of the appeal court was to interfere only if the judge erred in principle or was plainly wrong and he was not persuaded that the judge erred in principle or was plainly wrong (para [23]); and
5. finally:

• a life interest would not have given the widow resources either to maintain herself or carry out repairs
• the way the arguments were put left only two alternatives: provision of a capital share or a life interest