Ilott v Mitson Michael Peter Lane (Personal Representatives of Melita Jackson Deceased) the Blue Cross Animal Welfare Charity Royal Society for the Protection of Birds Royal Society for the Prevention of Cruelty To Animals

For an adult child, reasonable financial provision under the Inheritance (Provision for Family and Dependants) Act 1975 is limited to maintenance, but maintenance is not confined to periodical income. A lump sum may meet maintenance by relieving recurring expenditure, including housing costs. Existing state benefits are not a ceiling on reasonable provision. The court must understand the effect of any award on means-tested benefits and give adequate reasons for its calculation. Where the claimant’s resources are at a basic level, provision may be structured to relieve living expenses while preserving benefits. An appellate court may re-exercise the discretion where the evidence is sufficient.

The appellant, the deceased’s only child, challenged a £50,000 award made by District Judge Million under the Inheritance (Provision for Family and Dependants) Act 1975. An earlier Court of Appeal decision restored the finding that the will failed to make reasonable financial provision and remitted quantification: [2011] 2 FCR 1. Parker J later dismissed the appeal on quantification: [2014] EWHC 542 (Fam), reported at [2015] 1 FLR 291. The Court of Appeal considered whether the district judge had erred in law and how maintenance could be provided without depriving the appellant of means-tested benefits. The appellant sought funds to acquire the rented family home and additional capital.

Disposition

Arden LJ, with whom Ryder LJ and Sir Colin Rimer agreed, set aside the £50,000 award and re-exercised the discretion. The appellant was awarded the sum required to acquire her home, reasonable acquisition expenses, and an option to take up to £20,000 in further capital.

1. Errors in the original assessment. A discretionary award must be supported by adequate reasons. It was an error to say that the award was limited because the appellant had no expectation of benefit and had lived within her means without explaining the unadjusted award or the extent of the reduction. The district judge also assumed, without verification, that a capital award would remove most or all state benefits. That assumption undermined the logic of the award. The effect of the award on benefits was a question of law which could have been clarified with the parties.
2. Meaning of maintenance. Under section 1(2) of the Inheritance (Provision for Family and Dependants) Act 1975, an adult child may receive provision only for maintenance. Maintenance is not restricted to periodical payments. A lump sum may qualify where it relieves recurring living expenditure, including rent. The court was not required to improve the claimant’s standard of living, but maintenance was not confined to mere subsistence.
3. Assessment of need and benefits. The statutory factors had to be balanced fairly. Existing income and benefits were not conclusive of the appropriate level of maintenance. The appellant’s very basic resources, lack of pension and future needs outweighed the normal significance of her being an adult child living independently. Benefits were an additional financial need to be preserved where possible. Providing the home would remove rent while allowing tax credits to continue. The charities had no competing demonstrated need. Estrangement, testamentary wishes and independent adulthood affected the amount but did not eliminate the claim.
4. Form of award. The court awarded £143,000 for acquisition of the property, reasonable acquisition expenses, and an option exercisable within two months, in whole or in part, for a further capital sum not exceeding £20,000. The appeal was allowed.

1. Court of Appeal (Civil Division): [2015] EWCA Civ 797. Set aside the £50,000 award and substituted provision for acquisition of the property, reasonable expenses and an option for up to £20,000 additional capital.
2. High Court, Family Division: Parker J dismissed the appeal on quantification: [2014] EWHC 542 (Fam), reported at [2015] 1 FLR 291.
3. Court of Appeal: restored the threshold finding that the will failed to make reasonable financial provision and remitted quantification: [2011] 2 FCR 1.
4. County Court: District Judge Million awarded £50,000 on 7 August 2007.