Negus v Gordon Charles Bahouse & Anor [2007] EWHC 2628 (Ch)

Case Nos: HC06C03370 & HC06C03371[2007] EWHC 2628 (Ch)
IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
Venue Royal Courts of Justice, Strand, London, WC2A 2LLDate Tuesday, 23 rd October 2007
Before
HIS HONOUR JUDGE ROGER KAYE Q.C.
Between
CYD NEGUSClaimantGORDON CHARLES BAHOUSE and AnorDefendants
Wordwave International, a Merrill Communications CompanyPO Box 1336, Kingston-Upon-Thames KT1 1QTTel No: 020 8974 7305 Fax No: 020 8974 7301Email Address: Tape@merrillcorp.com(Official Shorthand Writers to the Court)
Mr E Price appeared for ClaimantMr A Riza Q.C.appeared for Defendant
Judgment
[1]I have before me, in effect, three applications:(1) An application by Ms Cyd Negus (whom I shall refer to, if I may, as “Ms Negus” or “Cyd”) for a declaration that she has a beneficial interest in property situate at and known as Flat 8 Glen Chess, Loudwater Lane, Rickmansworth, WD3 4HQ (“Flat 8”);(2) Subject to (1), an application by Ms Negus for an order under s.2 of the Inheritance (Provision for Family and Dependants) Act 1975 as amended (“the 1975 Act”) in respect of the Estate of Henry Bahouse, deceased (“the deceased” or “Henry”) who died on 27th March 2005;(3) Subject to (1) and (2), an application by a Mr Gordon Charles Bahouse, the deceased’s son, and a Mrs Patricia Bahouse, the deceased’s first wife, as Executors of the deceased’s Estate, for possession of Flat 8, currently in the occupation of Ms Negus.[2]Henry left a Will dated 24th January 1996 (“the 1996 Will”). This was admitted to probate on 18th October 2005, probate being granted to his first wife, Mrs Patricia Bahouse, and to his son, Mr Gordon Charles Bahouse (together “the Executors”). In the events which have happened it is not disputed that this Will appointed the deceased’s first wife, Patricia, and his son Gordon as his Executors and, after payment of debts and inheritance tax, left £75,000 to each of his siblings, Richard, Gordon and Susan, and the residue to his son Gordon. The gross estate was valued at £2,466,272 and the net estate at £2,147,902. For the purposes of the claim under the 1975 Act it is agreed that the “net estate”, as defined by s.25 of the 1975 Act, is to be treated as having a value of £2.2m. However, this does not include other properties, which I shall mention in a moment.[3]The present proceedings have had a chequered career. Possession proceedings seeking possession of Flat 8 were commenced first in the Watford County Court by the Executors on 24th May 2005, even before they had obtained a grant of probate to the 1996 will. These proceedings were accordingly stayed until that grant was eventually obtained.[4]In the meantime Ms Negus defended the possession proceedings basically on two grounds:(1) She was entitled to remain in the flat in which she had a beneficial interest;(2) Alternatively, she was entitled to remain there, because it would or ought to form part of an award to her by way of an order under the 1975 Act.[5]Following the grant on 10th January 2006, Ms Negus herself commenced a second set of proceedings, also in the Watford County Court, this time against the Executors seeking an order under s.2 of the 1975 Act. It was for these reasons that I said there were, “in effect”, three applications before me. The first two arise out of the possession proceedings, the last two (there is an overlap) out of the 1975 Act proceedings. If Cyd has an interest in Flat 8, then that obviously affects what is to be regarded as the “net estate” for the purposes of the 1975 Act; see s.3(1)(e), 8 and 25 of that Act.[6]On 22nd May 2006, the two actions were consolidated. On 1st June 2006, they were transferred to the Luton County Court and, on 17th August 2006, they were transferred to the Chancery Division of the High Court.[7]Initially, the issues included questions whether the deceased was domiciled in England and Wales, whether or not Ms Negus was claiming an interest in other properties owned by the deceased and, whether or not she qualified as a Claimant under the 1975 Act. Most of these issues have gone by the way. The parties have concentrated on the real issues of whether or not Ms Negus has a beneficial interest in Flat 8 and, assuming that she is an eligible Claimant under the 1975 Act as a co-habitee of the deceased, whether or not she succeeds in that claim.

The Evidence

[8]I heard evidence for Ms Negus from a Mr Paul Brooker, a long-standing friend of Henry’s, from Ms Negus and a friend of Ms Negus, a Mrs Linda Main.[9]For the Executors I heard evidence from Mr Michel Manneh, Henry’s brother-in-law, from his son, Mr Gordon Charles Bahouse, his brother, Mr Gordon Joseph Bahouse, who produced evidence in the form of an undated and unsigned letter, later replaced or supplemented by a witness statement, from Mrs Evy Bahouse, Henry’s daughter-in-law and Gordon’s wife, from Mrs Patricia Bahouse, Henry’s first wife and Gordon’s co-Executor.[10]I also had a large number of documents in the trial bundles.

The Factual Background

[11]The facts as I find them are as follows.[12]The deceased had three brothers, Gordon, Harry and Richard and a sister, Susan.[13]He was married twice, first in 1970 to Mrs Patricia Bahouse, by whom he had a son, also called Gordon, one of the Executors. He was born in February 1971. Patricia and Henry divorced in 1979, but remained friends and in contact thereafter.[14]Henry then married Pauline Bahouse in 1983, they too were divorced, the decree absolute being pronounced on 7th January 1997.[15]In 1995, after effectively separating from Pauline (though it appears she did not actually move out of the matrimonial home until December 1995) Henry met Cyd. He was then in his early 50s and she in her late 30s. She was living in rented accommodation in Essex (a two-bedroom maisonette), working as a dental receptionist on an annual salary of about £15,000. She too had been previously married, to a Mr Murray for some 12 years, divorcing in the late 1980s. They had one son, Adam, who was then at college and living with his mother.[16]Henry and Cyd started dating, but it was not until some time in 1996 that it became serious. In the meantime, on 24th January 1996, Henry had made the 1996 Will.[17]By this time Henry was a reasonably wealthy individual. He owned and operated his own office furniture company, in which he had a substantial, but minority interest called Directive Office Limited. He liked gambling at casinos and was a member of various exclusive clubs such as The Claremont, Crockfords, The Ritz and others. He also liked to go out to expensive restaurants. He liked travel. He liked being accompanied by attractive and attentive women. In all, he enjoyed something of what might be described by most people’s standards as a luxurious and lavish lifestyle, but he could afford it, he did not live beyond his means.[18]In late 1996 he and Cyd became lovers. He purchased a two-bedroom flat in Glamis Place, London E1, where they used to stay at weekends. They also went on holiday together, the romance blossomed, she found him fun and vivacious. He, no doubt, found her attractive and companionable and good to go out with. He was generous to her, bought her expensive presents including jewellery. He purchased a Landrover Freelander, registered in his name, but for her use. The insurance for this vehicle was for a good many years until 2003, in her name, only reverting to his when he saw a financial advantage in so doing. To all intents and purposes, however, it continued to be her car. He paid for the petrol. (Despite an initial dispute between the parties, the Executors have agreed that she might keep this car, currently valued in the region of £8,500.) She had nothing like his income, but would pay for the odd night out at the cinema or cook him meals.[19]In about October 1997, he asked her to move in with him to his six-bedroom flat in Sudbury Court Drive, Harrow. She was concerned about her son, Adam, who was then about to start at a new college. They tried to get him into a college near Harrow, but that did not prove possible. They discussed what was to be done and agreed that she would move in with him, giving up her rented accommodation. Adam would stay with her mother, his grandmother, during the week and with them at weekends.[20]Also at Sudbury Court Drive was Gordon, Henry’s son. He had been married to Evy, but they had encountered a temporary upset in their marriage, leading to Gordon staying for a while with his father. Cyd’s moving in did not seem to bother him, he kept much to himself or was out a lot, he said. After a while he returned to Evy.[21]Having moved in, after a very short while Henry asked Cyd to give up work and look after him. She was to become, in effect and in substance, his housewife in all but name. Not unnaturally she was concerned about her future and her security. She had the modest job as a receptionist and although she had not then made any provision for a pension, she had this and a roof over her head to think about. Before moving in with Henry she had begun to make enquiries about buying herself some property. Henry, she said, assured her or reassured her that everything would be okay. She could even have the flat in Glamis Place if anything happened.[22]Mr Riza QC, for the Executors, made much of the fact that in an early witness statement Cyd had stated that Henry had assured her she would have a roof over her head and, in her later statement this became an income and a roof over her head. I do not think it much matters. I find that he did lead her to believe that her fears over her future security would be met by him. She would have a roof over her head. In return she would give up work and look after him and the home. She agreed.[23]Having given up work she had no other means of support or income. He gave her a small allowance paid direct into her bank account of £250 a month for her personal things, spending money and cigarettes and make-up and the like. This was not increased before his death. Otherwise, he paid for everything. He continued to work. They continued to go out to casinos, she did not gamble, and to restaurants and to other entertainments and to be entertained. They liked foreign holidays and went to Europe to travel or see a friend in Cannes. They went to Cyprus, Tenerife, France, Spain, cruises to the Middle East and the Caribbean. They spent, she said (unchallenged) some £10,000 to £12,000 per year on holidays. She used her store card to make purchases for the home, which he paid off every month (anything from between £200 to £600 per month and sometimes as much as £2,000 £3,000 per month).[24]In 1998 they thought about trying for a baby and attended a fertility clinic, but by this time he had developed diabetes.[25]In May 1999, they went on a cruise to Dubai. There, he bought her an expensive ring. She maintained that this was an engagement ring and that they agreed to marry. No specific date was set. Henry’s old and good friend Paul Brooker (who gave evidence) certainly understood them to be engaged, as did her long-standing friend, Linda Main.[26]On the other hand, Henry’s son Gordon and other members of Henry’s family were vehement that this was not so. They also agreed that he was a very private man about such things. They also agreed that she had been showing off her ring and maintained that he had corrected her in front of them that it was not an engagement ring. It may be that the engagement was another means of reassuring her and making her feel more secure, but I find that as between them at least, he did make some kind of commitment to her consistent with an expression of a long-term desire to marry her. It may equally well be that in his own mind, after two marriages, he was not actually keen to marry again, or thought his family might not approve, which is why he kept it fairly quiet or low-key as far as they were concerned. It is noticeable that he sounded out members of his family early on in their relationship and close friends as to what they thought of Cyd - almost seeking their approval. At the same time he remained on good terms with his previous wives. Cyd may have needed the security of a roof over her head; he equally seems to have needed the security or comfort of a female companion to look after him. More than one witness described her as, introduced by him as his “companion”. But what is not disputed is that from when she moved in to the time of his death they were cohabiting together.[27]Later, towards the end of his life, it was suggested on behalf of the Executors and their witnesses that Henry had wanted her to go back to work. I do not accept this evidence. There is also evidence at the time from Syd and others, that he also wanted her to be at home and look after him and this was increasingly so in the last six months of his life. It seems clear to me that after he had persuaded her to give up work he never really expected her to work again.[28]Mr Brooker’s evidence was to the clear effect that he loved her. He may not have been a publicly demonstrative man, but I accept this evidence. I found Mr Brooker a quiet, restrained, independent, fair and helpful witness. The relationship between Henry and Cyd suited them both. He wanted a devoted female friend, companion and lover and got it. She wanted security and a roof over her head. I find they were indeed living as man and wife and I further find that he had made or indicated sufficient commitment to her that she regarded herself and was entitled to regard herself as engaged to him.[29]In late 1999 they went to Spain where Cyd’s mother had a small one-bedroom flat. Henry decided to buy a luxury two-bedroom apartment in Marbella (“the Spanish Property”). Again, it was in his name. Although the originals have not been produced, it is accepted that on 18th November 1999, almost immediately after the purchase, Henry made a Spanish Will in which he left this apartment to Cyd and to his son Gordon in equal shares.[30]In 2000 they again went abroad. At some stage that year they decided to look for a new home together. They found a rather run down property nearby called Greenways in Loudwater Lane, which they decide to buy and redevelop. It was purchased in his name with the aid of a mortgage, in October 2000. (I was not told, but I infer, he sold Sudbury Court Drive. It did not form part of his estate at death.) It was to be their home. Cyd got involved with the architects, with the interior design of the new property. She organised a lot of the materials and features, and fixtures and fittings of the new place. As ever, Henry dealt with all the financial aspects. A project manager was engaged in December 2001.[31]Mr Michel Manneh, Henry’s brother-in-law, said that when he met Henry in September 2001, Henry told him that Greenways was purchased just for investment. I find that Henry may well have said this to Michel, but in my judgment it was said at a later stage, when they decide to change their plans owing to the fact that problems with Greenways had developed; but not, in my judgment, at this early stage. Then it was to be their home.[32]However, the ambitious project inevitably took longer than first anticipated and the works no doubt were disturbing and disruptive. In March 2002 they decided to move to another nearby property, Flat 8, which they rented whilst the works were being done to Greenways. I have not seen the tenancy agreement and there is some evidence to suggest it may have been in joint names, but it is noticeable that Henry was well in the habit of putting all major assets, houses and cars in his name and I infer that the tenancy of Flat 8 was put into his name too. It was and became, however, their home, albeit it was at first intended to be temporary.[33]As matters progressed the clouds started to darken. Henry’s diabetes became worse and problems with the refurbishment and redevelopment of Greenways developed. The builders found by the project manager were unsatisfactory. Dissatisfaction with the workmanship developed. It all began to get on their nerves. Michel said he saw Henry again at the end of 2002 and said that, Henry was complaining that Cyd was feeling insecure. He, Henry, made it plain, Michel thought, that he did not want to marry again.[34]In March 2003, Cyd’s father died. In May they consulted Kennedys, solicitors, over the problems they were encountering with the project manager and the builders at Greenways. Towards the end of that year they planned and booked a cruise for the following year. Cyd says she was looking forward to getting married on this trip.[35]In April 2004, they commenced proceedings in their joint names against the project managers and builders, complaining of poor workmanship.[36]At some stage the couple plainly became fed up with Greenways and changed their plans. Instead, Henry, after a period of negotiation, purchased Flat 8 on a long-leasehold in his name, again with the aid of a mortgage. They decided to stay there and to make that their home rather than Greenways. In my view, it was at this stage that Henry may well have decided to sell Greenways and recoup his losses or perceived losses, as much as he could.[37]By November 2004, Henry had semi-retired. The problems over Greenways were mounting.[38]The litigation with the project manager and builders was settled at the end of the year, with the Defendants agreeing to pay the Claimants, that is Henry and Cyd, the sum of £215,000 plus their costs, but the whole business and Henry’s developing illness had taken its toll. They went on the booked cruise. Henry, at first, somewhat reluctantly. His state of health at this stage was such, that they decide to postpone their wedding plans, or it may be that Henry did not wish to get married at this stage anyway.[39]There is little medical evidence in the papers, but what there is, is entirely consistent with the evidence of the relevant witnesses I heard. Henry’s diabetes developed to type 2 in August of 2004. Later he developed a severe depressive illness, with symptoms of anxiety and sleeplessness. He was prescribed antidepressants, but stopped taking them. Over the last six months of his life he lost weight, became more and more depressed and anxious (interspersed with good days) and confused, but never lost his mind. His perceptions were that his money was running out, that he was not sure how he would cope financially, that Cyd would leave him, alternatively, that she was persistently trying to marry him. In addition, he was worried about the litigation over Greenways. Also towards the end of the year he made unsuccessful attempts to alter his Will by making new Wills (which were not validly executed or attested), to revise the nominations for benefits under his Scottish Widows Pension policy in the event of his death, and he surrendered other policies in favour of his son, Gordon.[40]Overall, he seems to have become less confident, more afraid and even, at times, I infer on the evidence, quite paranoid. As these signs and symptoms developed his relations with Cyd became strained and I have very little doubt that the anxiety it caused her and him all resulted in them getting on each others nerves.[41]I am also, however, quite satisfied that despite all these worries and anxieties his finances, as subsequent events have shown, were in reasonable, if not fairly good shape, that Cyd had no intention of leaving him and, that in their way they continued to love and care for each other. In this developing emotional hothouse in the last six months of his life, it is not surprising if at times she felt the need to break out (though her friend, Linda Main, corroborated her evidence that, as Henry became increasingly ill they actually stayed in more and more). Cyd visited her friends and her mother. She was subject to much criticism by Henry’s family for visiting her mother over the weekend that Henry died. This coincided with the approach to the second anniversary of her father’s death. She was also criticised for leaving Henry at a time when he was especially depressed.[42]The basis of this criticism was or appeared to be, that she had come home one evening a few days before his death to find him in the dark with his hands clasped behind him, possibly clutching a rope and behaving somewhat strangely. Two days later, whilst she was at her mother’s, Henry hanged himself. I was told the inquest officially recorded an open verdict.[43]She was also criticised for failing to manage or control his diabetes.[44]It is, however, easy to be wise after the event. For my part, I do not think that it was fair to criticise Cyd either for being with her mother on this occasion, or for failure to control his diabetes. In the latter case, such medical evidence as there is (in the form of post-death pathology reports), at best reports that although the glucose reports may reflect relatively poor control, there was no evidence of ketosis at the time of his death.[45]He died, as I have said, on 27th March 2005.

The Claim to Flat 8

[46]There were many factual issues, not all of which I have to decide, but the first issue I do have to determine is whether Ms Negus establishes a claim to a beneficial interest in Flat 8. The claim is based essentially on s.14 of The Trusts of Land and Appointment of Trustees Act 1996 (“The 1996 Act”), which so far as relevant provides:
“(1) Any person who is a trustee of land or has an interest in property subject to a trust of land may make an application to the court for an order under this section (2) On an application for an order under this section the court may make any such order- ... (b) declaring the nature or extent of a person’s interest in property subject to the trust, as the court thinks fit.” (b) declaring the nature or extent of a person’s interest in property subject to the trust, as the court thinks fit.”
[47]The legal basis of the claim is not in dispute and was summarised by Mr Price on behalf of Ms Negus, quoting from Lewin on Trusts; 17th ed., London, 2000, paragraph 9-50; “… where the purchaser of the property shares a common intention with the claimant that the claimant is to have a beneficial interest in the property even though not a legal owner, and the claimant acts to his detriment upon the basis of the common intention, a trust is imposed so as to give effect to the common intention.”[48]It is important to remember that the court cannot adjust the shares under this Act; it can only declare them unlike the court’s power, for example, under s.24 of the Matrimonial Causes Act 1973. It is also important to remember that s.53(1) of the Law of Property Act, 1925 provides that, no interest in land can be created orally and no declaration of trust in respect of land can have effect if made orally. However, excluded from this ambit by s.53(2) are resulting, implied or constructive trusts. Thus, the usual way the interests are established are by one or other of these methods or, as Ms Negus seeks here, by the doctrine of proprietary estoppel. Since she is the one who is seeking to depart from the legal title in the name of Henry and show that there was a joint beneficial entitlement, the burden is on her: see Stack v. Dowden [2007] 2AER 929 HL at p. 953, paragraph 68 per Baroness Hale of Richmond.[49]The first and fundamental task of the court is to determine whether there was at the time of acquisition of the property or exceptionally at some later date, some agreement, arrangement or understanding between the parties that the property is to be shared beneficially.[50]An understanding between the parties may arise from some assurance, promise or representation made by the owner that another is to have some right in or to the owner’s property. It may amount to a belief by the other that he or she was to have such right where it is known to and encouraged by the owner (see Gillett v Holt [2001] 2 Ch. 210 at p. 226). In considering whether it would be inequitable or unconscionable to allow the owner to rely on his trict legal title, it may be relevant to consider whether the representation or assurance was equivocal: see Jones v Watkins cited in Gillett v Holt (above, at p. 226).[51]The task of considering whether there has been any such assurance or understanding has to be evaluated independently of any conduct of the parties in the course of sharing a home or managing their joint affairs, but by reference to the evidence of express discussions of, or representations by the parties, however imperfectly remembered or imprecise or equivocal their terms.[52]The detriment relied on must, of course, be substantial and there must be some causal link between the assurance relied on and the detriment asserted.[53]Mr Price submits, in essence, that the intention was that Greenways was to be their home and that when this went wrong it was, and ought to be regarded as, substituted by Flat 8. He relies on the assurances given to her by Henry and the fact that the claim against the project managers and builders was a joint claim in which Henry stated in witness statements that they had purchased the property though he was the registered owner, on the fact that Flat 8 was rented apparently in joint names, and that it was their home. He relies also, of course, on the statements made to Ms Negus at a time when he asked her to move in with him, to the effect that she would have a roof over her head.[54]I accept all of these points as far as they go, but Ms Negus in her own evidence expressly disavowed the existence of any arrangement beyond that she was to be at his home and she was to have a roof over her head. He had the money, she did not. He simply made it clear to her, she said, that if anything happened to him she was to have a roof over her head.[55]Even allowing for equivocal statements, in my judgment these statements were and are insufficient to enable me to spell out a specific agreement, arrangement or understanding, even as regards either Greenways or Flat 8. I conclude therefore, that on this aspect of the case she fails at the first hurdle and does not establish any claim to a beneficial interest in Flat 8 under s.14 of the 1996 Act, whether by proprietary estoppel or otherwise.

The 1975 Act claim

[56]I must therefore now turn to the 1975 Act claim.

The Estate

[57]As I have said, on 18th October 2005, Henry’s 1996 Will was admitted to probate.[58]After much debate it was agreed, as I have previously indicated, that the net estate for the purposes of the 1975 Act claim was to be valued at £2.2m. That is after payment of inheritance tax, debts and other liabilities of the estate.[59]The estate seems to have consisted of the deceased’s interest in the unlisted company, Directive Office Limited (worth just over £500,000, that is his interest), and other listed shares, dividends, moneys in various accounts, and properties. These were Flat 8, valued at £290,000; Greenways, valued at £955,000 and Glamis Place, London E1, valued at £215,000 plus a variety of other assets, including a debt for costs arising out of the Greenway litigation of £48,000. Only Greenways was freehold, the others were held on long leases. In the case of Flat 8, 150 years from 1992 and in the case of Glamis Place, 125 years from 1996. In addition, not passing under the Will, there was the Spanish Property at Marbella left, under the 1999 Spanish Will, to Cyd and to Gordon, his son, in equal shares.[60]As to Greenways, at some stage it appears that Henry had decided and agreed, subject to a formal contract, to sell this for £955,000, hence the value at probate. This sale had, however, not been completed by the time of his death and it may be that contracts were not then formally exchanged until later. No doubt, however, by that time, towards the end of his life, he was thoroughly fed up with this property. Gordon, his son, however, negotiated an increased sale price to £1,124,144.[61]In addition, Henry also had a pension policy with Scottish Widows, which following his death seems to have had a capital value of £1,147,358.38. This it is common ground must also be taken into account; see, for example, s.8 of the 1975 Act.[62]The pension policy was split following Henry’s death in accordance with his surviving valid and communicated wishes as at the date of his death between his two nominations, Cyd and his son Gordon. (His attempts to revise the nominations were not received by the relevant people until after his death; at any rate, no one has challenged before me the split that in fact took place.) Cyd thus received, just short of £459,000 shortly after Henry’s death and the balance went to Henry’s son Gordon, almost £573,700.[63]In addition, Gordon received the benefit of policies paid up by Henry and in his name on Henry surrendering these a few days before his death in the sum of about £134,000. This does not, however, include one policy, not apparently cashed, but the value of which Gordon does not reveal in his witness statement.[64]As to the Spanish Property there was controversy over this. In the end the parties agreed a value of £397,469. The tax position was unclear. The Executors had apparently paid £175,280 inheritance tax on account of this property, but there was uncertainty whether this would be subject to double taxation treaty or convention benefits and if so, how? Would the benefits fall on the Estate or accrue to the individuals concerned, Cyd and Gordon? They agreed in the end that I should approach this property on the basis that it had a value, so far as Cyd was concerned, of at least £110,000, but it might be more, subject to resolution of the tax position, as much as £200,000.

The Needs and Resources of the Parties

[65]Ms Negus was left nothing by the 1996 Will, but she has the benefit of substantial moneys under the Scottish Widows’ policy. Following investment of the bulk of these moneys in a bond and the drawing down of some moneys to live off, since she has no others, was ineligible for State benefits, once the pension policy moneys had been received she was left with about £395,000 producing an income of about £20,000 per annum.[66]This capital has been presently further reduced by £25,000 by payments to her solicitors on account of her costs. I shall return to this later.[67]In addition, Cyd now has the Freelander car (which, as I say, has been finally conceded in her favour) and a half share in the Spanish apartment, valued, as I have said, at anything between £110,000 and £200,000 depending upon the outcome of the tax position. She has had the mortgage on Flat 8 and all outgoings on the property paid to date, and the Executors do not seek to recover these from her come what may. She has not, however, received any part of the litigation settlement monies arising from the Greenways litigation, even though she was a co-litigant and part of the claim included her own distress and inconvenience.[68]She enjoyed a good lifestyle for nearly eight years living with Henry and was never short of money. This was an undoubted improvement on her lifestyle before. She is now aged 50 and independent. Adam, her son, has grown up. She has not worked since 1997 and has not sought work since Henry’s death. Apart from her needs, I am unaware of any obligations or liabilities she has to others.[69]Gordon’s needs and resources are less clear. He is the residual beneficiary under the 1996 Will after payment of the pecuniary legacies of £75,000 I mentioned previously in favour of Gordon’s siblings. He is a comparatively young man with potential considerable wealth. He has a wife and daughters, but how many daughters I know not, nor their ages. He was made redundant at the end of 2005, but whether he is now working, I also know not. He received substantial monies, both from the Scottish Widows’ pension plan and from the policy monies, which have enabled him, together with the net proceeds of sale of his previous house, to buy a new house mortgage free of over £500,000. He has a half share in the Spanish Property, as I have mentioned, and is the residuary legatee under the 1996 Will. He has the benefit of the un-cashed policy. Again, details were not provided. Apart from his obligations to his family I do not know what his remaining needs, resources, liabilities and obligations are.[70]Ms Negus presented to the court, both in her witness statements and in response to enquiries, information about her needs and outgoings. She listed her approximate outgoings in a witness statement of January 2006, as totalling £38,870 odd a year. This did not include holidays and credit cards, nor does it include any mortgage. It does include (in round figures) £1,800 for council tax, £2,100 for gas and electricity, though these appear to have been paid by the estate. It also included £500 for building insurance, which has also been paid by the estate.[71]She explained that the figures were attempts by her to explain her needs and I have the impression they were part guesswork, part based on what had happened in the past, and part on totting up what she was now spending. Certainly it seemed a rather rough and ready list and did not, for example, include contents insurance.[72]She was challenged that the figures were too lavish and on four items in particular: first, household repairs of £5,000 per annum, which she explained is carpets and decorations and did produce the bills backing up these amounts; second, cigarettes at £3,600 per annum -- she was clearly a heavy smoker --; third, alcohol of £1,200 per annum. She explained that she bought five or six bottles of wine a week at around £6.50 or £6.75 per bottle, partly for her own consumption, partly for entertaining friends or taking to parties. Fourth, as a separate item, she claimed “Entertainment (restaurants etc)” at £6,000 per annum. She accepted that she ate out once or twice a week. She also accepted that she did not necessarily need that much for entertainment. This expenditure does, however, seem consistent with her previous lifestyle before Henry’s death.[73]If the items for gas, electricity, building insurance, council tax are excluded (in total £4,400) this reduces the annual figure to £34,500 (rounded up). If the current mortgage payments are any guide at all as to what she might need for housing (I was not giving any meaningful comparables) these were, I was told, £1,400 per month or £16,800 per year. This, plus the council tax, gas, building insurance and electricity would put her needs back, on her figures, to £55,700 (that is the £34,500 + £4,400 + £16,800 = £55,700) but without any provision for holidays unless that is included in the £6,000 for entertainments.[74]Later, she produced figures for her outgoings with Henry i.e. during his lifetime and figures for her updated current needs. The former she totalled at £82,445 per annum. The latter, in the apparent form of a further analysis of what was now her current expenditure, she calculated at £39,247. These calculations were exhibited in the form of Schedules to a Response dated 22nd June 2006, pursuant to an order apparently made on 24th March 2006. I have seen no copy of any such order. The request asked for details of her outgoings. The Response itself (which exhibited the Schedules) referred to items listed (such as hairdressers, toiletries, cigarettes, alcohol and holidays) but these were, in fact, not on the lists exhibited which were included in the bundles. Moreover, the calculations set out in the Schedule of her Current Expenditure said to be £39,247.50 annually based on an expenditure said to be £3,270.63 per month did not even reconcile with the figures she did produce, which totalled, by my calculation, £2,314 per month or £27,768 per annum. However, as I say, the list did not include the items specified or referred to in the response. What explained the difference I know not.[75]So far as the Schedule of Outgoings specifying the expenditure during her life with Henry was concerned similar points can be made. The listed items totalled £55,627 annually. Coincidentally, almost the same figure as reached by me to which I have referred to above. They were said, however, to amount on the Schedule to £82,445.40. Again, how the difference was explained save and unless it is covered by the same missing items, which were not included in this Schedule either, or was some kind of increase to reflect two people rather than one, was not revealed and something I have to infer.[76]This makes the task of determining whether or not reasonable financial provision was made difficult and, of course, I must not forget that the burden of proving it is on her. An injustice could be done to her by these omissions or equally, to the residuary beneficiary, Gordon. My analysis of these figures tends to suggest that there were either pages missing from the Schedules, which did not get into the trial bundles, or at least a rather unsatisfactory approach to an important question, the calculation of her needs and outgoings. More than once during the trial I had cause to express some dissatisfaction with the preparation of the bundles. But the least said about that the better. It is simply not fair to the parties on both sides to leave matters in this state. I have to do the best I can.[77]If I halve the figures set out in her Schedule of her outgoings spent during her life with Henry (the figure of £82,445 odd) and take her calculation of her current needs of £39,247 they are all around the £39,000 mark or ceiling, even by her own calculations. But either way there are many omissions and deficiencies, as I have made clear and, the figure may be legitimately much more, even as high as the £55,700 I referred to a moment ago. Even allowing for Mr Riza’s criticism that even these figures are too high, the ceiling of £38,000 to £39,000 for outgoings doing the best I can does not seem to me to be unreasonable having regard to her lifestyle as enjoyed over eight years, bearing in mind the real figure was probably actually more. Mr Price in his submissions seemed to adopt the figures first produced by Cyd and his approach was to assess her needs in his submissions and arguments at around the £40,000 mark.[78]Having regard to the requirement that I must have regard to “maintenance” and, allowing for the difficulties in reconciling and analysing the figures as well as their omissions and apparent in some items, extravagance, this does not seem to me at the end of the day too far off the mark and, I shall therefore assume, based on her current lifestyle a current income need of around £38,000 to meet her outgoings.[79]Henry managed the finances. She has had, as the foregoing, I hope, makes clear, plainly some difficulty, even with her solicitors, in working out what it was all spent on and what she really needs for her “maintenance”, but the figures, as I have said, if accepted, do reflect a “tone”, as Mr Price put it, of some comfort.[80]Her current income, i.e. the income of the Scottish Widows’ money, she calculated at £20,600, but it must now be less since the capital has been reduced, even excluding the costs that she has recently taken out of the bond for the purposes of these proceedings. It seems to me, therefore, reasonable to assume a current income receipt in round terms of £20,000 for present purposes.

The First Issue

[81]Miss Negus’s claim is as a cohabite, that is a person who has for at least for two years immediately preceding death been living as the wife of the deceased; see s.1(1)(ba), (1A)(b) of the 1975 Act.[82]The first question I have to decide is whether the disposition of the Deceased’s estate effected by his Will was not such as to make reasonable financial provision for her (see s.1(1)), that is, such financial provision as would be reasonable in all the circumstances of the case for her to receive for her maintenance (see s.1(2)(b)).[83]In answering that question the court must have regard to a wide variety of matters listed in s.3 of the 1975 Act, including the resources and needs of the applicant and of any beneficiary, any obligations and responsibilities the deceased had towards the applicant or any beneficiary, the size and nature of the estate, the age of the applicant, the length of the cohabitation, her contribution to the deceased’s welfare and any other relevant matter. In determining this issue I must have regard to matters as at the date of the hearing (see s.3(5)) and also, to the applicant’s earning capacity (see s.3(6)).[84]“Maintenance”, for the purposes of the 1975 Act is not defined, but Goff LJ said this about it in Re Coventry (Deceased) [1980] Ch. 461 at pp. 484 to 485:
“So that whatever be the precise meaning of the word "maintenance" - and I do not think it necessary to attempt any precise definition - it is clear that it is a word of somewhat limited meaning in its application to any person qualified to apply, other than a husband or a wife. There have been a number of cases under the Inheritance (Family Provision) Act 1938 previously in force, and also some cases from sister jurisdictions, which have dealt with the meaning of "maintenance." In particular, in this country there is In re E., decd. [1966] 1 W.L.R 709 in which Stamp J. said that the purpose was not to keep a person above the breadline but to provide reasonable maintenance in all the circumstances. If I may say so with respect, "breadline" there would be more accurately described as "subsistence level." Then there was Millward v. Shenton [1972] 1 W.L.R. 711 in this court. I think I need only refer to one of the overseas reports, In re Duranceau [1952] 3 D.L.R. 714, 720, where, in somewhat poetic language, the court said that the question is: "Is the provision sufficient to enable the dependant to live neither luxuriously nor miserably, but decently and comfortably according to his or her station in life? What is proper maintenance must in all cases depend upon all the facts and circumstances of the particular case being considered at the time, but I think it is clear on the one hand that one must not put too limited a meaning on it; it does not mean just enough to enable a person to get by; on the other hand, it does not mean anything which may be regarded as reasonably desirable for his general benefit or welfare.”
[85]I have also considered carefully the cases cited by counsel or to which I was referred. Since there was no dispute on the law it is not necessary for me to add to the length of his judgment by referring to them. At the end of the day it is accepted that each case is to some extent fact specific.[86]The Executors submitted forcibly that Ms Negus has enough in what she was effectively left, i.e. in terms of the Scottish Widows’ pension money and the share in the Spanish apartment and now the car, and needs no more. Accordingly, she does not pass the first hurdle.[87]In my judgment, having regard to her age, the length of time she was with Henry, the factual background that I have previously mentioned, the fact that he paid for everything and provided her with a home and to the promises she made to him about a roof over her head, she is entitled at least to a reasonable degree of financial security and a degree of comfort for the rest of her life. His promises may not have been enough to provide her with a beneficial interest in Flat 8, but I agree with Mr Price on her behalf, that it is relevant to take these assurances into account on this part of her claim. HH Judge Norris QC, as he then was, took just such an approach in Churchill v. Roach and Others [2004] 3FCR 744 at pp. 764 to 765.[88]I entirely accept too, that “maintenance” is the touchstone but this must be maintenance in the context of her lifestyle as it was with him, not what it was immediately before, but paying due regard to what was said by Goff J in Re Coventry, which I have just quoted. Her life had changed in eight years, no doubt allowing for the ups and doubts and vicissitudes of life, nevertheless, much for the better. It does seem to me that lifestyle or “tone” in the sense described by Mr Price is at least to be taken into account.[89]I have already commented at length on the figures she has provided. I do not overlook the fact that the burden of proof on this first hurdle is on her. Her own outgoings, as listed, do not reflect her need for housing nor do they reflect the lavish holidays she enjoyed, except insofar as included within “entertainment” on her list. So to some extent she has plainly cut down on what was expended by the pair of them whilst they were alive on their joint benefit.[90]If I assume that her current needs are in the region of around £38,000 and, that her current income is in the region of £20,000 then there is still a shortfall of £18,000. I have used the £38,000 figure as just short of her calculated ceiling of around £39,000 for the reasons previously indicated.[91]Mr Riza urges on me that I must take account of her earning capacity. He submits that she can return to her job as a receptionist with comparative ease and receive at least £15,000.[92]Allowing for her age and absence of work for over eight years, if not by now ten, her prospects of finding such work must be risky at least. I take it into account, but I consider that it would be unjust to assume that she would find employment at her age and with her experience.[93]In addition, even if I were to allow it at that figure, that is £15,000, since the calculation of her outgoings at £38,000 seems not to reflect all her likely needs, including the housing, seems to me still to fall short of the line.[94]The next question, however, before concluding on this first hurdle she must surmount is whether the shortfall is met by her other benefit, the Spanish Property. I am told the intention is to sell this, but I do not know how far that has progressed.[95]The minimum value to be ascribed to this property by agreement is, as I have said, £110,000. If that is added to the £395,000 left of her policy monies, ignoring the £25,000 paid in costs, this would give her £505,000 or on a Duxbury table basis, just over £25,000 per annum at her age. This is still short of the £38,000 by £13,000, never mind criticisms that the figure of £38,000 might be subjected to as being if anything, having regard to her lifestyle hitherto enjoyed, but without being too generous, even too low. On a Duxbury table basis this suggests that this £13,000 shortfall, capitalised having regard to her age, is in the region of £200,000. On this basis she would still need a capital sum therefore, of around £200,000 to add to the pension moneys and the Spanish apartment.[96]I must, of course, not forget that the Spanish apartment might come out at more depending on the tax results. Nor must I forget that she might find work.[97]However, I have already mentioned that her outgoings (and hence the figure of £200,000) does not reflect her housing needs (whether a capital sum, mortgage, rent or contents insurance and matters of the like).[98]Flat 8 had a probate value as at death of £290,000 as long leasehold. This was also the value for which it was purchased in October 2004. The flat is apparently in a Grade II listed building, which needs as much as a one-off spend, over and above annual maintenance costs (no doubt recovered by service charges) of £40,000 to £45,000 per apartment. £5,000 of this has already been paid on account by the Executors and out of the estate. The flat must have increased in value since death. I have seen no valuation and Cyd thought that it was not worth as much as the £400,000 put to her. This seems not unreasonable given that the flat was purchased in October 2004 and Henry died just over six months later.[99]The Executors consider that Cyd can return to the maisonette or equivalent that she had before she joined Henry. Having regard to the length of time that she was with Henry I consider that unreasonable and unfair. For present purposes, having regard to the assurances that she was given especially taking into account the gesture the deceased made about Glamis Place, it seems to me not unreasonable that she should have reasonably expected a modest long leasehold or freehold flat or apartment on the lines of Flat 8.[100]Even allowing, therefore, for the Spanish Property and her portion of the pension moneys, the car, and the prospects or otherwise of her earning capacity, I conclude and find that the Will did fail to make reasonable financial provision for her maintenance and that accordingly, she passes the first hurdle.

The Second Hurdle - What is reasonable?

[101]As regards the second hurdle I must, of course take into consideration the points I have already made.[102]In addition, it seems to me legitimate to bear in mind that regrettably, as evidenced mainly by Gordon, the son, Henry’s family have become somewhat resentful and antagonistic towards her, although this does not seem to have been the case during Henry’s lifetime. I only mention this without any desire to exacerbate matters, but it does suggest to me that a complete clean break is desirable if effect can be given to it, bearing in mind she is only to be awarded what is reasonable for her “maintenance”.[103]But here, I also have to have regard to the size and nature of the estate and to the needs and resources of the competing beneficiaries. Gordon is really the only competing interest and I have set out already what I know of his position.[104]On the rather rough and ready basis, I acknowledge, of a capitalised evaluation of her needs I have arrived at the figure of £200,000 on the basis I have already mentioned, but subject to the limitations previously set out.[105]If Cyd were awarded the flat, that is to say Flat 8, that would still leave a net estate of around £1.9m (i.e. the agreed £2.2m less say, £300,000 for the flat). The calculation of the net estate agreed for the purposes of this case, as I have said, £2.2m assumes the mortgage debt in favour of Abbey National on the flat (which according to the inheritance tax return was £244,460) as paid. Hence the reduction in the net Estate by the full amount of the £300,000 for Flat 8, only comes down to £1.9m.[106]If one then had regard to the capital value of her maintenance requirements of £200,000 and added the £40,000 as a one-off sum for refurbishment of the flat which would have fallen on Henry during his lifetime, this gives her an additional £240,000 to add to her £395,000 with Scottish Widows, plus, I must not forget, the £110,000 minimum, receivable at some stage, for the Spanish Property.[107]If thus the £240,000 (the £200,000 plus the £40,000) is added to the £395,000 and the £110,000, this produces £745,000 which, as I read the Duxbury tables, ought to produce something in the mid range of £30,000 to £40,000 per annum by the time all is gathered in. This is not inconsistent with what I assessed her needs at, having regard to all that I have said before. If the Spanish Property yields £200,000, then a further £90,000 has to be added making a capital sum of £835,000, which would give her just over £40,000.[108]All this suggest to me, doing the best I can, that the right order is to make an order transferring the flat, Flat 8, into her name, free of mortgage under s.2 of the 1975 Act, plus a sum of £200,000. That leaves the estate still at £1.7m, to which, so far as Gordon is concerned, has to be added his half share of the Spanish Property and his unclaimed policy. Having regard to Henry’s wishes as expressed in his 1996 Will, this seems to me more than reasonable. If the flat cannot be transferred free of mortgage, then there ought to be transferred to her a sufficient sum as to enable her to pay off the mortgage. All that seems reasonable to me in all the circumstances of the case and reflecting, as I have said, that it is intended to be an award for her “maintenance”. It does not mean just enough to enable a person to get by. On the other hand, it does not mean anything which may be regarded as reasonably desirable for her general benefit or welfare. I have therefore done the best I can in all the circumstances of the case.[109]Ought I to reduce this award to Cyd, having regard to her earning capacity and the uncertainties over the valuation of the Spanish Property?[110]It seems to me in this uncertain position, as I have said, that I have to do the best I can to assess matters as they now stand. Reflecting the fact that she has received no part of the settlement moneys in the Greenways litigation; that she might or might not be able to work; that she has had a generous and, as described by some, a lavish lifestyle for over eight years; that the Spanish Property might or might not be sold at some stage in the future and might or might not give her more than £110,000, as much as £200,000; reflecting also on all the uncertainties of when all this will be resolved, the needs and resources of Gordon, the son, as known and what he has received to date, and on his father’s wishes as regards him and the absence of other competing beneficiaries, in my judgment in this uncertain area, the right amount is to award her a capital sum of £240,000 to include the £40,000 for the repairs allowing for the £5,000 already paid, plus Flat 8 mortgage free. As I say, if the latter cannot be arranged then the award will include a sum to enable her to pay off the mortgage.[111]I should also explain lest it be thought I have forgotten, that it will be recalled I approached Cyd’s financial position on the footing that she had a capital asset, including the policy moneys, of £395,000. I do not forget that she has paid out some £25,000 for her own legal fees, which would reduce the capital figure to £370,000. It seems to me proper at this stage to reach a decision on the two hurdles dealing with matters as costs neutrally as possible. Thus, the net estate agreed at £2.2m does not include the potential liability for costs or the potential benefit for costs depending upon who wins or who loses and I have, therefore, likewise excluded it from the £395,000. As it happens, as I say, I have adopted a cost neutral approach to both sides.

Conclusion

[112]I shall, accordingly, award the award I have just indicated and it follows also, that the possession action will stand dismissed. _____________________________

Cited in 1 later judgment