Lansforsakringar Bank AB v Wood & Ors

For the purposes of CPR 72.2, a debt must be a debt properly so called. An entitlement under a will, including a pecuniary legacy or a share in residue, is not attachable merely because it is payable in the future. The same applies to an order under section 2 of the Inheritance (Provision for Family and Dependants) Act 1975. Such an order re-orders the deceased’s testamentary provision and gives the recipient rights equivalent to those of a beneficiary. It does not create an order for payment of money or a debt due or accruing due from the personal representatives.

The bank appealed against Master Leslie’s refusal to make final an interim third-party debt order under CPR 72.2. The bank sought to attach £300,000 directed to be paid to Dr Wood from his late mother’s residuary estate under an order made pursuant to section 2 of the Inheritance (Provision for Family and Dependants) Act 1975.

The issue was whether Dr Wood’s entitlement under the statutory order constituted a debt due or accruing due to him from the estate.

1. The appeal was dismissed. Master Leslie had correctly concluded that the court had no jurisdiction under CPR 72.2 to attach the £300,000 provision.
2. Part 72.2 reproduces the former garnishee jurisdiction under Order 42 of the Rules of the Supreme Court. The relevant expression is any debt due or accruing due to the judgment debtor from the third party. Although a debt need not be immediately payable, it must still be a debt properly so called.
3. In McDowell v Hollister [1855] 25 LT 185, it had been established that a beneficiary’s interest under a will in a pecuniary legacy could not be attached by garnishee order.
4. The reasoning in Re Jennery (deceased) [1967] Ch 280 applied. An order for a lump sum under the Inheritance Act establishes the dependant’s rights and makes the dependant equivalent to a beneficiary under the will. It is not an order requiring a person to pay a sum of money and cannot be made the subject of a garnishee order.
5. Sections 2 and 19 of the Inheritance (Provision for Family and Dependants) Act 1975 reinforce that conclusion. Relief is granted out of the deceased’s net estate, subject to its proper administration and liabilities, and the order takes effect as if it were a provision under the will from the deceased’s death.

• High Court (Queen’s Bench Division): The appeal from Master Leslie’s decision of 29 January 2007 was dismissed. The refusal to make the interim third-party debt order final was upheld.