Life Interest rather than capital awarded to cohabitant claimant in necessitous circumstances under the Inheritance Act 1975

In the recent High Court case of Banfield v Campbell [2018]a claim was brought under the Inheritance (Provision for Family Dependants) Act 1975 by the Deceased’s cohabitee, Mr Banfield.  Mr Banfield who had lived with the Deceased in her home for many years, was set to inherit just £5,000 of her £750,000 estate.   

Being partly disabled and having no home of his own, Mr Banfield argued that he was not sufficiently provided for in his deceased’s partner’s Will, and needed money to purchase alternative accommodation to meet his specific mobility needs.   

Notwithstanding the claimant’s necessitous circumstances, the Court refused to make an outright capital award as sought and instead awarded the Claimant a life interest in half the net proceeds of the sale of the Deceased’s house.  

Background 

Mrs Campbell died in October 2015.  By a Will made in 2001, she left most of her £750,000 estate to her only child, Mr Campbell, and a £5,000 legacy to Mr Banfield describing him in her Will as a “friend”.   

Despite conflicting views surrounding the exact date they started cohabitating, and Mr Campbell claiming that Mr Banfield was nothing more than ‘a lodger’, the Judge accepted that prior to 2002 Mr Banfield and the Deceased lived “part-time” with each other and that post 2002 Mr Banfield was a full time resident at the Deceased’s property, 3 Westville Road. Whilst the couple were not romantically involved in the final years prior to the Deceased’s death and Mr Banfield slept downstairs, it was acknowledged that Mrs Campbell did still recognise their relationship as more than lodger/landlady and had made several assertions to her friends stating ‘she needed to be needed’ and ‘she needed the companionship’. It was also accepted Mr Banfield had become dependent on the Deceased, even if he was somewhat burdensome to her.

Mr Banfield claimed he required a two bedroom maisonette with a garden in the suburbs of Thames Ditton in London, worth approximately £450,000.  Mr Campbell argued that this was excessive and that only £220,000 was needed to provide Mr Banfield with suitable accommodation.  

The case was settled by Master Teverson who drew heavily on the previous Supreme Court Judgement of Illot v Blue Cross [2017] in which Lord Hughes JSC examined the concept of maintenance. It was held that for a reasonable financial provision claim to be successful ‘the applicant must show that the Will failed to make provision for his maintenance’. However, the provision of maintenance cannot extend ‘to everything which would be desirable’, nor does it mean providing capital for the Claimant, more an income in which the Claimant can live and get by on.   

On these submissions therefore, Master Teverson refused to confer any of the estate’s capital upon Mr Banfield, instead granting him a life interest in alternative accommodation, paid for by the sale proceeds that would eventually pass back to Mr Campbell on Mr Banfield’s death. Moreover, Master Teverson concluded there were two special circumstances in this case which swayed him towards granting a life interest rather than capital – 1. Mrs Campbell had inherited the property from her late husband before the start of her relationship with Mr Banfield and 2. Mr Banfield’s housing requirements were relatively expensive, requiring 50% of the estate.   

Master Teverson accordingly ordered that the Deceased’s house be sold and that Mr Banfield be granted a life interest in one half of the net proceeds of sale, to be used in or towards providing alternative accommodation for him.  It was also directed that the sum of £20,000 be kept available in the event that the property purchased for Mr Banfield needed specific adaption to meet his needs.  

Conclusion 

For remaindermen beneficiaries, an award of a life interest can be a double-edged sword.  Although the asset held on trust will ultimately return to them, it potentially means an on-going relationship with the claimant, which could be difficult. It can also mean a lengthy wait for any inheritance, depending on the circumstances. The unpredictable nature of 1975 Act claims reinforces the importance of compromising cases by way of mediation, rather than leaving it to the Court to decide where the outcome is often less than predictable.   

Does this latest case indicate that Illott has truly set a precedent for the court when considering whether to award capital or a life interest?  Quite clearly Master Teverson took Illott into account, however, he also set out the pertinent individual facts in this case which persuaded him to reach his conclusion. In contrast in the recent ‘post Illott’ case Thompson v Ragget & ors [2018] the Court concluded that the cohabitee claimant was entitled to a capital award, rather than a life interest. It appears to me, therefore, that, whilst the court will clearly be taking Illott into account, whether it awards capital or a life interest, still very much depends upon the facts of each individual case. 

 

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