Berger v Berger

Permission to bring a claim after the six-month limit under section 4 of the Inheritance (Provision for Family and Dependants) Act 1975 depends upon a judicial evaluation of all the circumstances. An arguable substantive claim and an undistributed estate are important, but neither is determinative.

For a surviving spouse, reasonable financial provision is not confined to maintenance. The court must consider the provision reasonably expected on a hypothetical divorce, alongside all the statutory factors and the facts known at the hearing.

A very substantial and inadequately explained delay may outweigh the claim’s potential merits and the availability of estate assets. The statutory time limit is substantive. Applicants must establish a substantial case that an extension is just and proper.

The appellant widow sought permission under section 4 of the Inheritance (Provision for Family and Dependants) Act 1975 to claim reasonable financial provision from her late husband’s estate. Probate had been granted in January 2006, but proceedings were not commenced until June 2012. The estate was worth about £7 million and remained partly held on trusts under which the appellant had rights of occupation and income but no fixed capital entitlement.

HHJ Hayward Smith QC refused permission. He regarded the delay as fatal and considered that the proposed substantive claim was not arguable, although reasonable minds might differ on that issue. The widow appealed, contending principally that the judge had undervalued the hypothetical-divorce comparison, assessed her substantive case incorrectly and placed excessive weight on delay.

The central issue was whether, considering the claim’s merits, the undistributed estate, the explanation for delay and the administration of the estate over six years, permission should be granted out of time.

1. Appeal dismissed. Black LJ held that the proposed substantive claim was arguable, but that permission to commence it approximately six years after expiry of the statutory limit should nevertheless be refused. Gloster and Moses LJJ agreed.

2. The judge had adopted an untenable assessment of the merits. Under sections 3(1), 3(2) and 3(5) of the Inheritance (Provision for Family and Dependants) Act 1975, a surviving spouse’s claim required consideration of all the statutory factors, the provision reasonably expected upon a hypothetical divorce and the facts known at the hearing. The divorce comparison was not confined to the widow’s lifetime needs. Applying White v White [2001] 1 AC 596, equal division was at least a realistic starting point after a long relationship, subject to needs, liquidity and other relevant circumstances. The error affected the judge’s exercise of discretion, so the Court of Appeal determined permission afresh.

3. The discretion under section 4 is unfettered but must be exercised judicially. Relevant matters include the promptness of the application, any negotiations within time, distribution of the estate, alternative remedies and whether the substantive claim is arguable. The time limit is substantive. The applicant must establish a substantial case that an extension is just and proper.

4. The arguable merits and the continued availability of sufficient estate capital strongly favoured the appellant. No beneficiary would necessarily have to surrender an executed gift. The court also proceeded on the basis that the appellant had not been advised about a possible statutory claim by the solicitors consulted shortly after the death.

5. Those matters were outweighed by the exceptional delay and its history. The appellant’s concerns about her income and dependence upon the trustees had been apparent from the outset. She had obtained professional assistance and explored restructuring, yet took no effective action for years. Unlike Stock v Brown [1994] 1 FLR 840 and McNulty v McNulty [2002] WTLR 737, no sudden extraneous event or concealed material fact explained the eventual claim. Meanwhile, the respondents had administered the estate and company without expecting a challenge to the will.

6. Gloster LJ added that the trustees appeared to appreciate their obligation to consider exercising their powers to advance capital or otherwise meet the appellant’s needs. She expressed the hope that suitable provision could be agreed without further litigation.

1. Court of Appeal (Civil Division): In Berger v Berger [2013] EWCA Civ 1305, the court dismissed the widow’s appeal. It held that her substantive claim was arguable but refused permission to commence it approximately six years out of time.
2. Principal Registry of the Family Division: HHJ Hayward Smith QC refused permission on 5 February 2013. He regarded the prolonged failure to act promptly as fatal and considered that the proposed claim was not arguable, although reasonable minds might differ.