PERSONAL REPRESENTATIVES AND CLAIMS UNDER THE
INHERITANCE (PROVISION FOR FAMILY AND DEPENDANTS) ACT 1975
Sidney Ross examines I(PFD)A claims from the point of view of personal representatives
and considers what their role should be
(taken from Issue No 20 – July 2002
All practitioners who deal with claims under the Inheritance (Provision for Family and Dependants) Act 1975 (`the 1975 Act`) will have had experience of the confusion which exists in the minds of personal representatives who are parties to such claims, as to how they should act in the circumstances of the claim. A personal representative, whether he is an independent or an interested party, must at all times be aware that, although he is a necessary party, his role as representative is confined to assisting the court and excludes any attempt to defeat the claim.
The purpose of this article is first, to deal with some matters of general application and then, to identify a number of basic situations in which personal representatives may find themselves and to address the matters which commonly arise in those various circumstances. Those basic situations are identified by reference to the answers given to the following questions:-
(1) Are there, or is it possible that there will be, any other proceedings relevant to the outcome of the 1975 Act claim ?
(2) Is the personal representative an independent or an interested person ?
(3) If he is an interested person, does he seek to make or to resist a claim ?
2. Matters of general application
Have the personal representatives power to compromise?
s.15(f) Trustee Act 1925 provides that a personal representative may, as he thinks fit –
compromise, compound, abandon, submit to arbitration or otherwise settle any debt, account, claim or thing whatever relating to the testator’s or intestate’s estate; and for those purposes may enter into, give, execute and do such agreements, instruments of composition or arrangement, releases and other things as seem to him expedient, without being responsible for any loss occasioned by any act or thing so done by him in good faith.
However, the commentary in the Supreme Court Practice to RSC Order 99, rule 4(powers of the Court as to parties) for many years contained the following:-
`Nor do the personal representatives have any power under s.15 of the Trustee Act 1925 to compromise a claim under the Act because it is not a claim against the estate but a claim to become a beneficiary (or a larger beneficiary) in the estate` (commentator’s emphasis)
No authority for this proposition was stated, but it may be that the commentator had in mind what was said by Sir Robert Megarry V-C in In Re Earl of Strafford, deceased :-
`I think that it has to be borne in mind that section 15 is concerned with what may be called external disputes, or cases in which there is some issue between the trustees on behalf of the trust as a whole and the outside world. It is not concerned with internal disputes, where one beneficiary under the trusts is at issue with another beneficiary under the trusts`.
Whether or not the passage quoted from the Supreme Court Practice derives from that statement, it is to be noted that it has never appeared in the commentary toRSC Order 99 r.4 in any edition of Civil Procedure from 2000 on. The present author has expressed the view that, on a literal construction of s.15(f) a 1975 Act claim might reasonably be thought to fall within the meaning of the words `a claim…relating to the testator’s or the intestate’s estate`, and considers that the position is correctly stated in Foskett on Compromise. The relevant passage reads:-
`The settlement of disputed claims arising under the Act should be seen against the background of the general proposition that such claims are claims against the individual rights of the beneficiaries of the estate and not against the estate as a whole. The consequence is that the personal representatives have no power to compromise claims under the Act pursuant to s.15 of the Trustee Act without reference to the beneficiaries`
If they do, at the request of the beneficiaries, involve themselves in negotiations, they should obtain an indemnity from them for the costs which they incur in doing so.
Personal representatives should be aware that the exercise of the power of compromise is now subject to the statutory duty of care under the Trustee Act 2000. s.1(1) provides that, whenever the duty of care applies to a trustee, he must exercise such care and skill as is reasonable in the circumstances, having regard in particular:-
(a) to any special knowledge or experience that he has or holds himself out as having, and
(b) if he acts as a trustee in the course of a business or profession, to any knowledge or experience that it is reasonable to expect of a person acting in the course of that business or profession
Schedule 1, paragraph 4, applies the duty of care to a trustee when exercising power under s.15 Trustee Act 1925 to do any of the things referred to in that section.
The effect of s.35(1) Trustee Act 2000 is that that Act applies to personal representatives administering an estate as it does to trustees carrying out a trust.
How should the litigation be conducted?
In some areas of law, it is now mandatory to adhere to a pre-action protocol. No such protocol is at present in force in relation to claims under the 1975 Act. However, a draft pre-action protocol has been published in the newsletter of the Association of Contentious Trust and Probate Specialists (ACTAPS) and has been under consideration by the Lord Chancellor’s Department for some time. It is intended to apply to the resolution of trust and probate disputes and contains an annex setting out a letter of claim in a form recommended for intimating a claim under the 1975 Act for reasonable financial provision out of the estate of the deceased.
It is well recognised that, even where no protocol has been adopted, litigation should be conducted in the spirit of the protocols which are in force. Paragraph 4 of the Practice Direction on pre-action protocols states that, in cases not covered by any approved protocol, the court will expect the parties, in accordance with the overriding objective, to act reasonably in exchanging documents relevant to the claim, and generally in trying to avoid the necessity for the start of proceedings.
The basic elements of the draft pre-action protocol are that:-
As soon as there is sufficient information to substantiate a claim, the claimant should send a letter of claim to the personal representatives and to each of the persons likely to be adversely affected by the claim (referred to as `the proposed defendants`). The letter should contain a clear summary of the claim and should, so far as possible, address the matters referred to in s.3(1) and whichever of ss.3(2), (2A), (3) and (4) of the Act applies to the claimant. Copies of documents on which the claimant or any other party is likely to rely should be enclosed with the letter of claim.
Each of the proposed defendants should respond to the letter of claim within 21 days stating whether he admits or denies the claim, responding in outline to the matters of fact relied on by the claimant and setting out the matters of fact on which he relies. Again, the letter should address, so far as possible, the matters under s.3(1)and any other applicable sub-section of s.3, and relevant documents should be enclosed. If a proposed defendant intends to make a claim on his own behalf, the letter of response should contain the same information and documents as a letter of claim in respect of a Part 20 claim. If he is unable to respond within the time limit on any particular matter he should explain why and indicate when a response will be available.
The draft pre-action protocol recognises that, as events unfold, matters may come to light which will alter the basis on which a party wishes to put his case. Letters of claim and of response do not, therefore, have the same status as statements of case. The authors of the draft protocol express the view that it would not be consistent with the spirit of the protocol for a party to complain about the difference between the case as set out in the letter of claim (or response) and the case as eventually pleaded provided that there was no indication of any attempt to mislead.
3. No other proceedings
It is often the case that there are challenges to the validity of the will, or claims as to the beneficial interest, either of the estate or some other party, in a particular asset; or the personal representatives may have brought possession proceedings against an occupant of a house which is claimed to be an asset of the estate. Any of these matters may complicate the role of the personal representative because the proper discharge of his duties in relation to those claims may require him to act in a manner quite different from that which is appropriate for him in a 1975 Act claim. Those situations are considered in section 4 of this article.
Where the personal representative is an independent party
Where there are no other proceedings and the personal representative is an independent person (often, in practice, a solicitor), he should, unless the beneficiaries have requested him to enter into negotiations, confine his activities to making the statement required by RSC Order 99, rule 5, and complying with any subsequent orders or directions. This rule provides that a personal representative who is a defendant must within 21 days of service of the claim form on him file with the court a witness statement in answer to the application which states, to the best of his ability-
(a) full particulars of the deceased’s net estate, as defined bys.25(1);
(b) the persons or classes of persons beneficially interested in the estate, giving the names and (in the case of those not already parties) the addresses of all living beneficiaries, and the value of their interests so far as ascertained;
(c) if such be the case, that any living beneficiary is a child or a patient within the meaning of CPR rule 21(1).2; and
(d) any facts known to him which might affect the exercise of the Court’s powers under the Act.
His attitude should be one of strict neutrality even if his statement contains facts which may be the subject of dispute. Disputes normally centre either on matters of conduct (which need not, in general, be addressed at this stage) or matters of eligibility, which certainly should. The questions of eligibility which usually arise are whether:-
(i) the deceased died domiciled in England and Wales
(ii) a claimant under s.1(1)(e) was being maintained by the deceased
(iii) a claimant under s.1(1)(ba) had lived with the deceased as husband and wife
(iv) a claimant under s.1(1)(c) is the child of the deceased
and, less frequently, whether
(v) a claimant under s.1(1)(d) was treated as a child of the family
(vi) a surviving or former spouse was validly married to the deceased
Experience shows that disputes about matters of conduct are both the most hotly contested and the least illuminating from the point of view of the court. The commentary to RSC O.99, r.5 recognises this to some extent by the statement that the personal representative is not required, at the stage when he makes the statement referred to above, to set out `facts (possibly distasteful) which are not necessarily relevant at that stage; if they become relevant at a later stage he may lodge further evidence`. The author is not aware of any accessible decision in which an otherwise viable claim has been dismissed by the court on the ground of the applicant’s conduct. Indeed, in Espinosa v Bourke, a significant factor in the Court of Appeal’s decision to allow the claim, which had been dismissed at first instance, was that the judge had placed too much emphasis on the conduct of the applicant and paid too little attention to her difficult financial circumstances.
As is stated in the commentary to RSC O.99, r.4, it is not for the personal representative to attempt to defeat the claim; that is a matter for the beneficiaries. In making that statement, he should consider all of the matters to which the court is directed to have regard by s.3(1) of the 1975 Act and whichever of sub-sections 3(2), 3(2A), 3(3) or 3(4) applies to the claimant. However, he is not obliged to make any enquiries or investigations in order to ascertain or confirm any other matters within the 21-day period; the obligation is only to state the facts known to him at the time when he makes the statement.
Where the personal representative is an interested party
The usual situation is that the personal representative is a beneficiary who wishes to oppose the claim. A person in such a position must keep clearly in mind that, while he is entitled to be indemnified out of the estate for costs properly incurred when acting in his representative capacity, he runs the ordinary costs risks associated with adversarial litigation if he actively opposes the claim in his capacity as a beneficiary. It is extremely dangerous to assume that (as often happens in contested probate matters) an unsuccessful defendant will avoid being condemned in the successful claimant’s costs because he had reasonable grounds on which to oppose the claim. The author has remarked on the lack of consistency in decisions on costs prior to the introduction of the CPR, and anecdotal evidence suggests that there has been little, if any, improvement in that regard since.
The less common situation arises when the personal representative wishes to make a claim. The author has been involved in such a case, where the widow of the deceased’s second marriage (of which there was a child) was appointed executrix but the entire estate was left to the children of the first marriage. While it may be natural to assume that a personal representative in such a situation ought to renounce, that is not so. The commentary to RSC O.99 states that :-
The taking of a grant by the applicant is no bar to an application under the Act and the personal representative may be the claimant because an application under the Act in no way impugns the validity of the grant or of the will (if any). Thus there is no need for (e.g.) the widow to renounce probate or her right to letters of administration if the wishes to bring proceedings; likewise if the executor or administrator is the principal beneficiary and wishes to attack the deceased’s severable share of property which has accrued by survivorship to the surviving joint tenant.
What has been said in the first paragraph under this sub-heading about the costs risk associated with adversarial litigation applies equally where the personal representative is the claimant under the 1975 Act.
4. Other proceedings potentially affecting the outcome of the 1975 Act claim
Anecdotal evidence suggests the existence of some doubt as to what questions a court hearing a 1975 Act claim has jurisdiction to determine. In particular it appears to be thought in some quarters that there is jurisdiction to determine, in the course of a 1975 Act claim, whether a particular item of property is an asset of the estate, . The author has had to argue, more than once, that there is no such jurisdiction.
During the currency of the Inheritance (Family Provision) Act 1938, exclusive jurisdiction to hear and determine applications under that Act was vested in the Chancery Division of the High Court. As probate claims were also dealt with exclusively by the Chancery Division, it appears to have been thought that matters of testamentary validity could be determined in the course of claims under the 1938 Act. However, it has been laid down in cases both under the 1938 and the 1975 Acts that allegations of testamentary incapacity and undue influence should not be raised within those proceedings, and the same must logically apply to any other challenge to the validity of the will.
Whereas the Chancery and Family Divisions have concurrent jurisdiction over 1975 Act applications, and the County Court also has unlimited financial jurisdiction, probate claims are dealt with in accordance with CPR Part 57 and must be commenced either in the High Court, a Chancery District Registry or, if the claim is suitable to be heard in a county court, in one which is also a Chancery District Registry. It will therefore be relatively unusual for a probate claim and a 1975 Act claim to be tried on the same occasion, though the court has power, under its general powers of management, to direct that this be done.
Claims to beneficial interests
Except for claims relating to the ownership of personal chattels, it is suggested that directions should be sought for the claim to be tried on the same occasion as the 1975 Act claim. Thus in Perry v Horlick, where the applicant under the 1975 Act also claimed a declaration that he had an equitable interest in a house asserted by the personal representative to be an asset of the estate, the Court of Appeal expressed the view that it would be unfortunate if the two claims were not before the court at the same time. The order in which the claims should be heard may depend on the nature of the property in which the beneficial interest is claimed by the applicant and the nature of the provision which he is seeking.
It is suggested that unless the property in question is a house in which the applicant both claims a beneficial interest and seeks for financial provision which includes such an interest, the claim to the beneficial interest should be tried first; then the nature and extent of the net estate has been determined for the purpose of the 1975 Act proceedings. However, if the dispute centres around a house in the way described above, it may be more effective to try the 1975 Act application first because the debate as to the beneficial ownership may then become irrelevant.
Where the applicant is occupying a property which is undisputedly an asset of the estate, it may, again, be preferable to try the 1975 Act proceedings first. InMoody v Stevenson, the former matrimonial home was the only substantial asset of the estate. In the County Court proceedings, the executor applied for possession of the house and the surviving spouse made a cross-application under the 1975 Act. The claim for possession succeeded and the 1975 Act application was dismissed. The appeal against the dismissal of the 1975 Act claim succeeded, it being clear that the wrong test of reasonableness of provision had been applied. Had the relevant authorities been before the judge and the 1975 Act claim tried first, it should have succeeded, thus rendering the possession proceedings unnecessary.
When should a personal representative renounce ?
When the personal representative is an independent party, there is no need for him to renounce. His duty as personal representative may require him to initiate proceedings to preserve the estate (for instance, by resisting a claim by another party to a beneficial interest in an asset of the estate) or to get in an asset of the estate (as in possession proceedings), but the discharge of that duty is in no way inconsistent with his position as defendant in a 1975 Act claim. However, a personal representative who is an interested party must renounce if he intends either to challenge the will or to make a claim whose effect, if successful, would be to diminish the estate. A difficulty may arise if he has already intermeddled in the estate, since that is a bar to renunciation; the solution is to apply under s.116 Supreme Court Act 1981 to have him passed over.
11 Stone Buildings
1 This passage appeared in the commentary to RSC O.99, r.4 in the White Book for 1995, 1997 and 1999.
2  Ch 28 at 28H
3 Ross, Inheritance Act Claims-Law and Practice, 2nd edition (Sweet & Maxwell, 2000) at para. 7-72
4 4th edition (1997) p.349, cited in Ross, op.cit, at para.7-73; 5th edition (2002), p.413.
5 Personal representatives, of course, have no power, of their own volition, to vary the dispositions of a will.
6 Issue 24, April 2001
7 Civil Procedure, vol.1, Part C, para.C1-003. The Practice Direction also refers to the court’s expectation that the parties will act in accordance with the matters referred to In CPR 1.1.(2)(a), (b) and (c), these are concerned, respectively, with ensuring that the parties are on an equal footing; saving expense; and dealing with the case in ways which are proportionate to the amount of money involved, the importance of the case, the complexity of the issues and the financial position of the parties.
8 The sub-sections apply, respectively, to surviving and former spouses; cohabitants; children and persons treated as children of the family; and persons claiming on the ground of having been maintained by the deceased immediately prior to his death.
9 Such a claimant is not ineligible simply because he or she is an adult; see Re Callaghan  Fam.1; Leach v Lindemann  Ch 226, CA
10 For a near miss, see Re Snoek (1983) 13 Fam Law 19.
11  1 FLR 747, CA
12 Civil Procedure, vol.1, paragraph sc99.4.2.
13 See n.5, above
14 Civil Procedure, vol.1, para.sc99.5.1
15 The Court of Appeal in Re Fullard  Fam 42 disapproved of the practice of awarding unsuccessful applicants their costs out of the estate and observed that 1975 Act applications were different from probate cases. Their having done so seems to have had very little effect.
16 Ross, op. cit, paras.7-161 to 7-170. The CPR regime is summarised at 7-171 to 7-176.
17 Civil Procedure, vol.1, para.sc99.4.2.
18 See Re Krubert  Ch 97 CA where one of the grounds of appeal was that the judge at first instance (in the Caernavon County Court) had not quantified the proportion of the beneficial interest in the matrimonial home held by the deceased on resulting trust for the applicant by means of a contribution to its purchase. The Court of Appeal held that, because the applicant had paid for the plot on which the matrimonial home was built, she had a small beneficial interest (which they did not quantify) in it
19 See Spencer Maurice, Family Provision on Death, 7th edition (1994) at p.151, where it is stated that in the County Court a claim to a beneficial interest in property forming part of the estate can be made in the same originating application as the claim under the 1975 Act, whereas in the High Court the claims must be commenced by separate originating process. Since the introduction of the CPR, claims in all courts are regulated by RSC Order 99; the former CCR O.48 (which in any case did not provide for claims to a beneficial interest to be heard within a 1975 Act application) no longer applies.
20 The court has on each occasion ruled that the claims be tried consecutively by the same judge, the claim to the beneficial interest being tried first..
21 Which came into force on 13th July 1939 and ceased to have effect on 1st April 1976
22 Save for the jurisdiction conferred on the County Court by the Family Provision Act 1966 in respect of claims where the net estate did not exceed £5,000.
23 Re Blanch  1 WLR 987, at 991; Williams v Johns,  2 FLR 475, at 488 where it was said that the allegation of undue influence should have been made in another court at an earlier stage.
24 Such claims are identified by s.32 County Courts Act 1984
25 CPR Part 3, r.3.1(2) (h).
26 See Ross, op.cit, paras. 7-20, 7-21, and Hammond v Mitchell  2 All ER 109.
27 Unreported, 19th November 1987. This was not on the hearing of the substantive applications but of an appeal against a refusal, at first instance, to permit proceedings to be commenced out of time. The appeal succeeded.
28  Ch 486
29 Namely, whether the testatrix had acted reasonably (this being the test laid down by Lord Morton in Styler v Griffith  Ch 387, rather than whether the will made reasonable provision for the applicant (see Re Goodwin,  1 Ch 283). The applicant in the 1975 Act proceedings represented himself and the judge was referred only to the then current edition of the County Court Practice. For comment see Ross, op. cit., para 6-31 and n.58.
30 See Tristram & Coote, Probate Practice, 29th edition (2001), para.15.48 and the cases cited in n.1 thereto.
31 Tristram & Coote, op.cit, para.15-51 and n.3