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Transferring property out of a deceased's estate to an unmarried partner (Lewis v Warner)

Date:17 JAN 2018
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Private Client analysis: Roger Evans, barrister at Harcourt Chambers, says that Lewis v Warner is an interesting demonstration of the courts exercising their jurisdictional powers in the transfer of property under the Inheritance (Provision for Family and Dependants) Act 1975.

Original news

In Lewis (as Executrix of the Estate of Blackwell, deceased) v Warner; Warner v Lewis (as Executrix of the Estate of Blackwell, deceased) [2017] EWCA Civ 2182, W, who was aged 91, lived with the deceased at a property as her partner. L was the deceased's daughter and sole beneficiary. Following an application by W under s 1(1)(ba) and 1(1A) of the Inheritance (Provision for Family and Dependants) Act 1975 (I(PFD)A 1975) it was decided by a recorder that the property should be transferred out of the deceased's estate to W in exchange for payment of £385,5000, which was the amount of a second valuation obtained by L. That was on the basis that the deceased's will had not made reasonable financial provision for W's maintenance. That decision was upheld by the High Court. L appealed.

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What is the significance of this case? Why is it important for practitioners?

This case concerns a transfer of property out of the deceased’s (Mrs Blackwell) estate to an unmarried partner (Mr Warner). This is the first time that an application by an unmarried partner under the amended I(PFD)A 1975, s 1(1)(ba) and 1(1A) has reached the Court of Appeal. This case also raises the questions of whether the court has jurisdiction under I(PFD)A 1975 to order that the property of a deceased person’s estate be transferred to a surviving partner for full value, and for this to be regarded as a ‘reasonable financial provision’ for the partner’s maintenance within the meaning of I(PFD)A 1975, ss 1(1), 1(2)(b), 2, 3.

The court stated that the balancing of financial needs of the applicant against the needs of others mentioned in I(PFD)A 1975, s 3(1)(b) and (c) and considering the other non-financial factors in I (PFD) A 1975, s 3 is an exercise highly individual to each case and requires a value judgment by the trial judge, with which an appellate court should only interfere if there has been an error of principle or law.

The recorder did find that Mr Warner was being maintained by the deceased in that she was providing a roof over his head and that, taking into account the matters referred to in I(PFD)A 1975, s 3, Mr Warner needed that maintenance. In the recorder’s evaluation, the absence of a moral obligation was outweighed by what was required to preserve the status quo for a very old and infirm person, who had been kept in a suitable house by the deceased for nearly 20 years. Once it was established that the deceased was maintaining Mr Warner by providing him with a home, it followed that, if all other requirements of I(PFD)A 1975 were satisfied, there was jurisdiction to order that such maintenance continue.

How helpful is this judgment in clarifying the law in this area? Are there any remaining grey areas?

It is to be stressed that the facts of this case were very unusual. No doubt had Mr Warner been younger and less infirm when the deceased died, he would have been required to move out of the property and buy himself another one as he could well afford to do so.

On the other hand, Mrs Lewis, the sole beneficiary of the estate, had told the recorder in evidence that she was happy to sell the property to anyone for full value, including Mr Warner. Mrs Lewis did not pursue an argument that Mr Warner should be given only a life interest in the property. Mrs Lewis did not have permission to appeal the factual findings of the recorder on the basis that they were perverse or such that no reasonable judge could have made, and the Court of Appeal declined to review the facts and considered the case on the basis of the facts as found.

The combination of an applicant with serious needs (in welfare terms) to remain in the particular property and a respondent who said, in evidence, that she was happy to sell the property to anyone for full value, including the applicant, is perhaps the most unusual feature of this case.

This case provides an interesting demonstration of the court’s powers under I(PFD)A 1975 on the facts of the case.

What are the practical implications of the judgment? What should practitioners be mindful of when advising in this area?

Practitioners should ensure that all material relevant to I(PFD)A 1975, s 3 criteria is in evidence, and should bear in mind that non-narrowly financial factors can, in some circumstances, assume great significance.

Interviewed by Stephanie Boyer.