Experts Discuss The Cowan V Foreman Landmark Case

A landmark decision to refuse a widow’s request to contest the Will and Trust of her late husband’s estate because the request was made after the six-month deadline has been overturned by the Court of Appeal.

Judge Justice Mostyn’s original assessment during the High Court’s ruling of the Cowan v Foreman case was disapproved on the grounds that the widow in question’s claim was over 17 months too late and there was a lack of exceptional factors to overlook the six-month time limit.

The widow and defendants had originally entered into a standstill agreement, allowing all parties to discuss the issues and concerns without enforcing the six-month deadline. But Judge Mostyn was highly critical of the ‘standstill agreement’.

The Court of Appeal’s overruling by Lady Justice Asplin has accused Judge Mostyn’s decision to be ‘plainly wrong.’

This decision falls in line with other cases this year – namely Bhusate –v- Patel [2019] EWHC 470 (Ch) case. The Court allowed a claim to be brought under the Inheritance (Provision for Family and Dependants) Act 1975 approximately 25 years and nine months after the deadline.

Industry professionals give their opinion on the case and whether they agree with Judge Mostyn’s original judgement concerning the six-month deadline or the Court of Appeal’s overruling.

Katherine Pymont, Senior Associate, Kingsley Napley LLP said:

“Lady Justice Asplin’s determination that the judge at first instance was “plainly wrong” in reaching the conclusion that Mrs Cowan could not make a claim out of time for reasonable provision from her late husband’s estate will be a relief for potential claimants.

“And for lawyers, the clarity given that (clearly documented) standstill agreements do still have a place in 1975 Act claims of similar comfort in circumstances whereby the original judgment asserts that such agreements should come to an immediate end. The apparent emphasis on prospects of success over the reasons for any delay bring the case in line with that of Bhusate v Patel [2018] (where the spouse was permitted to bring a 1975 Act claim 25 years out of time) and highlights once again the fact specific nature of these cases when applied to the factors set out in the 1975 Act.”

Oliver Black, Solicitor at Hugh James, said:

“Many lawyers specialising in contentious wills, trusts and probate will have breathed a sigh of relief following the Court of Appeal’s judgment in Cowan v Foreman. Following the first instance decision, huge doubt was cast over the legal status and enforceability of ‘standstill agreements’, where Defendants agree not to raise a limitation defence to claims under the Inheritance (Provision for Family and Dependants) Act 1975. Such agreements are commonplace and allow all parties the possibility to avoid having to issue protective proceedings, and thereby save further cost, whilst claims are properly investigated, and perhaps even compromised, before proceedings are issued. In a sense therefore, normal service has been somewhat resumed.

“One thing that Cowan certainly does remind us, however, is that each case will turn on its own facts. The Court of Appeal found that by adopting a “disciplinary” approach to the six month limitation deadline, the High Court had erred by failing to consider the strength of Mrs Cowan’s claim. This, for many specialists, was the real highlight to come from the case. The Court of Appeal found that the fact that the only assets left to Mrs Cowan outright out of her husband’s £29m estate were his personal possessions (which were of limited value), was sufficient for her to argue that her case was one with realistic prospects of success at trial, despite the fact that she was the principal beneficiary under her late Husband’s discretionary Will Trust.

“In essence, the court demonstrated that whether or not the case is an arguable one may be a more significant factor than the reasons for why the claim has been brought out of time in deciding whether or not to allow an out of time claim to proceed.

“What will also be comforting to practitioners is that the confusion caused by the first instance decision in Cowan (26 February 2019) to adopt a disciplinary approach and refuse permission to bring a claim 17 months out of time, which was then followed by the case of Bhusate v Patel & Ors ([2019] EWHC 470) (7 March 2019), where Chief Master Marsh granted permission for a claim which was over 25 years out of time to proceed, has now been clarified, although by all accounts the Bhusate case was somewhat unique and again reinforces the point that each case will turn on its own facts”.

Ben Wilson, Contentious Trusts and Probate Associate at Forbes Solicitors added. He said:

“I agree with Asplin LJ on standstill agreements that the power to extend time under section 4 belongs to the court and not with the parties. If I am acting for a Claimant, I will not enter into a standstill agreement and generally issue proceedings but not serve for the 4 month period allowed under the CPR.

“The judgment is particularly helpful in clarifying that when considering an out of time application, the court must consider all of the factors set out in Berger v Berger, not simply cherry pick. There does not necessarily need to be a “good reason” for the delay, and there is no “disciplinary element” to s.4; the matter must be considered in the round.

“It also provides helpful guidance on discretionary trusts and life interests in these claims, and clarifies that discretionary trusts, however generous, do not necessarily amount to reasonable financial provision in IPFDA claims. Each case is fact specific and must be considered in light of all relevant factors.”

Tara McInnes, Senior Associate at Shoosmiths LLP comments further on the case. She said:

“As most legal practitioners specialising within the Private Client field will be aware, there are strict time limits for applicants to bring certain types of claims against an estate.  For example, an applicant seeking to make a claim under the Inheritance (Provision for Family and Dependants) Act 1975 (“the Act”) for reasonable financial provision from the Deceased’s estate has only six months from the date of the grant of probate in which to issue proceedings for their claim. However, the court has a discretion to permit an eligible applicant to bring their claim out of time in accordance with section 4 of the Act. This time limit is provided by the Act itself and not covered by The Limitation Act 1980.

“In the claim of Cowan v Foreman and ORS

“After reviewing the authorities, the presiding judge, Mostyn J, identified two fundamental issues for the court to consider when deciding whether to permit an applicant to issue a claim out of time under the Act: whether there are good reasons for the delay; and whether the claim has sufficient merit to proceed to trial.

“He categorised this exercise as the making of a qualitative decision or value judgement, rather than the exercise of an unfettered discretion.

“Regarding the first issue, Mostyn J concluded that the Claimant had failed to adduce cogent reasons for the delay, adding that excusable delay should be limited to weeks or a few months at most, absent exceptional circumstances.

“As to whether the claim had merit, he determined that the Claimant also had no real prospect of success given that there was no evidence to suggest the trustees would defy the Deceased’s wishes and, what’s more, any attempt to do so would likely be actionable as a breach of trust.

“Notably, in the course of his judgment Mostyn J disparaged the use of standstill agreements in these cases, commenting: “I was told that to agree a standstill of this nature is ‘common practice’. If it is indeed common practice, then I suggest that it is a practice that should come to an immediate end. It is not for the parties to give away time that belongs to the court.

“In the later claim of Bhusate v Patel, the court found that: the delay in bringing the claim was explicable on the basis that the First Defendant and the Claimant’s other stepchildren, beneficiaries of the deceased’s estate, had failed to engage with the Claimant’s initial steps to administer the estate. The Claimant’s own culpability was negligible; and the merits of the claim under the Act were very strong.

“This decision appears at odds with the Cowan claim.

“The main issue of contention for legal practitioners in the Cowan matter was Mostyn J’s reference to parties entering into Standstill Agreements where limitation was a concern.  Inheritance act claims have a very short period of time within which to bring a claim (6 months) especially in comparison to other types of claims; contract 6 years, tort 6 years and claims under deed 12 years.  It is therefore perfectly understandable and common practice that, in an attempt to limit the legal costs and encourage parties to try and settle matters without the need to proceed to a fully contested court hearing parties enter into standstill agreements.  This can surely only be acting in the best interests of both the client and the estate and in accordance with the overriding objective of the Civil Procedure Rules.  I would suggest that the original decision was harsh and whilst the courts need to ensure that parties deal with matters as quickly as possible and there should be some limit on how long a standstill agreement can extend time for they should not be outlawed completely in these types of disputes.

“The Court of Appeal’s decision really just upholds what practitioners are currently doing which is trying to resolve disputes as quickly and cost effectively as possible and sometimes this does involve entering into standstill agreements.”

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