Lim & Ors v Walia,

For section 9 of the Inheritance (Provision for Family and Dependants) Act 1975, entitlement is assessed immediately before death. A chose in action under a joint-life policy may constitute jointly held property. Where terminal illness is assumed and the policy right to claim an accelerated benefit has crystallised, the deceased may be beneficially entitled to a joint tenancy of that right, even though no terminal-illness claim was made and the insurer subsequently paid the death benefit. The fact that the claim could be pursued only jointly does not prevent the right being jointly held.

Three claims were brought under the Inheritance (Provision for Family and Dependants) Act 1975 concerning the estate of Jocelyn Justiniani Walia. The deceased had held a fixed-term joint-life, first-death policy with the defendant, her estranged husband. On her death, the insurer paid the policy proceeds to the defendant under the death-benefit provisions. No terminal-illness claim had been made.

The claims were case-managed together, and a preliminary issue was ordered. For that issue, it was assumed that the deceased had been suffering from a terminal illness within the policy definition. The question was whether, immediately before death, she had been beneficially entitled to a joint tenancy of the right under the policy to benefit from that assumed terminal illness, so that her severable share could be treated as part of her net estate.

1. Section 9. The relevant time for determining entitlement to a joint tenancy was immediately before death. Section 9(4) expressly recognised that a joint tenancy could exist in a chose in action.
2. Effect of the policy. The majority decision in Murphy v Holland required a distinction between the rights arising on terminal illness and those arising on death. Although the judge found that distinction difficult to accept, it was binding and had to be drawn. The majority had treated the terminal-illness benefit as jointly held, while treating the death benefit differently.
3. Application. On the assumed facts, immediately before death the deceased and the defendant had an accrued, crystallised right, subject to proof, to have the death benefit brought forward because of terminal illness. The fact that the right could be pursued only jointly did not alter its character as a joint right.
4. The fact that the insurer actually paid the death benefit, and that no terminal-illness claim had been made, did not answer the statutory question. The court had to examine the position immediately before death. By parity of reasoning with Powell v Osbourne, it had to take account of the assumed terminal illness when considering the value and nature of the policy right.
5. The second limb of the reformulated preliminary issue was therefore answered for the claimant: immediately before her death, the deceased was entitled to a joint tenancy of the right under the policy to benefit from her assumed terminal illness.

The judgment was a first-instance determination of a preliminary issue in three related Inheritance (Provision for Family and Dependants) Act 1975 claims. The claims had been transferred and case-managed together by district judges before the preliminary issue was tried in the High Court.