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Tuesday, 03 July 2018 00:00

Marc Brown appointed as a Recorder

We are delighted to announce that Her Majesty the Queen has now appointed Marc Brown as a Recorder. Marc was officially sworn in by The Honourable Mr Justice Jeremy Baker at Nottingham Crown Court on 19th June and has been deployed to the Midlands Circuit.

Marc is a member of St Philips Business & Property Group and his profile can be viewed here.

Iqbal Mohammed has succeeded in obtaining an order for specific performance and judgement for damages in the High Court against a tenant who refused to abide by an expert determination in a lease dispute with the Council. The High Court ordered the Defendant to enter into a Deed of Variation, increasing the annual rent for a commercial property from £225 to £21,000, with 5-yearly upward rent reviews, for 48 years. The Court also gave judgement for damages, valuing the victory at over £1.1m for the Council. 

Background

The Defendant acquired the lease at auction in early 2011. It subsequently altered the property, in breach of covenant, from a public house to convenience store, hot food take-away, ATM and two residential flats. The Council served a s. 146 notice, requiring the breaches to be remedied and damages to be paid. The Defendant disputed that it was in breach of lease and agreed to refer the dispute to a RICS-appointed expert for determination. The parties agreed the terms of reference and, if there was a breach of lease, agreed two proposed deeds of variation, for the expert to determine the appropriate one to compensate the Council. One required the payment of a premium, the other increased the rent to the prevailing market value for the property. 

The expert determined that there was a breach of lease and that the deed of variation increasing the rent, which he assessed at £21,000, was the appropriate deed to be executed. The Defendant refused to execute the Deed arguing that (1) the expert had no power to compel it to execute the deed; (2) by submitting to expert determination, it had not agreed to execute the Deed; and (3) it was entitled to simply reverse the alterations rather than abide by the expert determination; it being unjust to order specific performance. At trial, the Defendant also argued that if there was an agreement to execute the Deed, it was unenforceable as it failed to comply with section 2, Law of Property (Miscellaneous Provisions) Act 1989.

Litigation & trial

The Council instructed Iqbal at the pre-action stage to advise on strategy and tactics. Iqbal successfully argued that the case should be tried under Part 8, significantly reducing the cost of litigation and time to trial. The case was tried within 1 year and heard without oral evidence. The judge held that the Defendant (1) had accepted, in its email exchanges with the Council, the offer to resolve the dispute through expert determination and had agreed to execute the draft deed; (2) in any event, the agreement could be implied; (3) s. 2 did not apply as the deed did not dispose of, assure or create an estate in land; and (4) it was just to order specific performance. The court further gave judgement for the rent lost by the Defendant’s failure to execute the Deed.

Points of law

This is a rare decision on enforcing an expert determination. The judge applied Cott UK Limited v F E Barber [1997] 3 All ER 540, in which Hegarty J accepted that if “a dispute as to performance is referred to the expert, then he must by implication have the power to make a final and binding decision.”

Practical significance

This case demonstrates the need to carefully consider any decision to refer a matter to expert determination, specifically, the consequence of an expert determining the issue against the client. Further, where a party reneges on an expert determination, careful consideration should be given to obtaining relief through a claim for specific performance. 

Iqbal is a member of the Property Bar Association. Please click here to see his real estate experience.

Please contact chambers for a copy of the judgement.

Morris-Garner v One Step (Support) Limited [2018] UKSC 20

A couple of weeks ago (18 April 2018) the Supreme Court decided a landmark case on damages.  It was unusual in that it appears a unanimousdecision in the result, but Lord Sumption dissented from the majority in the reasoning.  Lord Reed gave the majority judgment with which Lord Carnworth agreed, but then he went in to explain the differences between the two judgments.

It concerns the recoverability of "negotiating damages", the expression settled upon by the Supreme Court, and therefore one which now seems to be established in our law. 

Legal Background to the Decision

Negotiating damages have been around quite some time, particularly given prominence after the judgment of Brightman J in Wrotham Park Estate v Parkside Homesin 1974[1].  The original evolution from Wrotham Parkconcentrated on damages in lieu of an injunction, sometimes referred to as damages under Lord Cairns' Act[2].  There then followed a line of cases where damages were given in place of an injunction, if it would otherwise have been appropriate to grant an injunction so long as one had been claimed or where otherwise the claimant had not debarred himself from obtaining it[3]. These tended to be property cases, predominately cases where there had been breach of a restrictive covenant and the court had refused to order the taking down of much-needed housing stock built in breach.  In these cases, the court would award a sum of money which it thought would represent the amount willing parties would have negotiated for the buying off, or release, of the right.  The classic subsequent example is Jaggard v Sawyer[4]and the much respected judgment of Millett LJ (as he then was). In Jaggard damages in lieu were calculated in the sum of £694 being one ninth share of £6250, the price the defendants might reasonably have had to pay to the nine inhabitants of the cul-de-sac having the benefit of the breached covenant. In Barnes v Severn Trent[5]the much larger damages awarded at first instance for trespass were reduced in the Court of Appeal to a sum (£110) based on that which the water company would have had to pay had it used the statutory machinery for laying new water mains (it did not know of the claimant’s interest in the land at the time it laid the main over his land).  The possibility of service of a notice, and ultimately the possibility of determining the sum under the relevant statute, would have featured in the theoretical negotiations between the landowner and the water company.  This would be the maximum the landowner could have achieved had things been done properly, although the court also allowed an additional sum of £500 to take account of the possibility negotiations would probably have produced more for the landowner than the statutory amount. 

Things started to go in a different direction consequent on the House of Lords opinions in the well-known case of Attorney General v Blake[6].  Blake was a former member of the British security services and a Soviet spy.  He wrote and published his autobiography.  The UK government sought damages from Blake for his breach of contract in disclosing official secrets.  The court held that in an exceptional case, and this was one, an order for an account of profits could be granted following the breach of contract.

Thus started, was a line of discussion in cases (as well as academic debate) concerning monetary awards for breach of contract which did not relate to the actual provable and proved losses incurred, but which sought to deprive the contract-breaker the fruits of his wrongdoing.  These included Vercoe v Rutland Fund Management[7]which involved the breach of a joint venture agreement.  It had been agreed that damages should be assessed on the basis of a hypothetical release fee.  The Supreme Court in Morris Garner reconciled the case as one where actual loss had been calculated for loss of the opportunity to control confidential information. Another case was Experience Hendrix LLC v PPX Enterprises[8] and its interpretation in World Wide Fund for Nature v WorldWrestling Federation[9].  These were cases where the Supreme Court had difficulty reconciling the reasoning (where in effect gains-based damages were awarded) but the result was again justified on conventional principles as damages for lossof a (property) right, which could be calculated on a release fee basis. 

What appeared to be forming was the more expansive view that, at least where proprietary rights are concerned, andwhere damages were difficult to prove, hypothetical release fee/ negotiating damages could be awarded.

It is now time to return to the instant case.  

The case before the Supreme Court

Facts 

The claimant, One Step, had been owned and controlled by the Morris-Garners (civil partners) as to 50%; and a Mr and Mrs Costello as to the other 50%.   The working relationship broke down and the Morris-Garners left and sold their shares to the Costellos with non-compete and non-solicitation covenants.  They set up another company substantially trading in the same area.  The claimant company, One Step, sued the Morris-Garner's for breach of these covenants and a confidentiality covenant, and breach of equitable duties of confidence.  The High Court and then the Court of Appeal held that the company was entitled to Wrotham Parkdamages on the basis that the Morris Garner's had breached straightforward governance in circumstances where it would be difficult for the company to identify the financial loss it had suffered by reason of the wrongful competition (the indications were that these were greater than losses – which were still substantial – on a conventional, actual, loss basis[10]).  The Court of Appeal held that the test for awarding (as it described them) Wrotham Parkdamages was not whether the case was exceptional but what justice required.

Conventional principles return

The Supreme Court allowed the appeal and scotched any suggestion that, save in a truly exceptional case, damages for breach of contract or covenant could be based on the hypothetical sum which could be negotiated ("negotiating damages").

The majority reasoning reasserted conventional principles thus[11]:

  1. the general principle is that damages are compensatory [25].  In tort damages are generally intended to place the claimant has nearly as possible in the same position he would have been in if the tort had not been committed [31].
  2. In contract, damages are intended, so far as money can do it, to place the claimant in the same situation as if the contract had been performed [32].
  3. However, in the case of tort "user damages" can be awarded.  For example, where real property has been taken, or damaged, by a trespasser.  In these cases, the courts had treated user damages as providing compensation for loss, albeit not loss of a conventional (actually occurring) kind [30].  It is no answer for the wrongdoer to show that the property owner would probably not have used the property himself had the wrongdoer not done so.
  4. User damages are also available for patent infringement and breaches of other intellectual property rights [26].
  5. In contract the obligation to pay damages is secondary (the primary obligation being to perform the contract) as a substitute for performance.  The court will notaward damages designed to deprive the contract breaker of any profit he may have made a consequence of his failure to perform [35] except, according to the decision in Attorney General v Blaketo the discretion to order an account of profits in exceptionalcircumstances [35].
  6. Separate to the concept of compensatory loss and or damages under the user principle are those which the Court of Chancery historically awarded under Lord Cairns Act. As Lord Reid explained, such damages are equitable in nature [46].  He rationalised that there were two phases in the development of these damages – the first phase, following from the Wrotham Park decision itself, where release fee damages had been awarded; and the second phase defined by the Attorney General v Blakedecision.
  7. The second phase was where matters started to go wrong; unless the hypothetical release fee resulted in an identifiable loss equivalent to the economic value of a proprietary right taken by the defendant.  Other than such cases, where the loss suffered is appropriately measured by reference to the economic value of the right which had been breached or infringed, there could be no damages for depriving the defendant of profits made as a result of the breach.
  8. In other words, the hypothetical release fee can be used as a tool for calculating the value of an asset lost, but it was notto be used as a matter of discretion to determine the measure or basis of damages.
  9. As Lord Reid concludes, common law damages for breach of contract are not a matter of discretion.  They are claimed as of right, and they are awarded or refused on the basis of legal principle.  [91] – [95]
Application to the facts of that case

Lord Reid held that the case before him was not one where the breach of contract had resulted in a loss of a valuable asset.  In reality, the claimant's losses were the cumulative result of breaches of a number of obligations, the most significance of which were the non-compete and non-solicitation covenants.  The decisions of the lower courts had to be overturned, and the case remitted for determination of what actual losses the claimant had suffered.

The reasoning of Lord Sumption

As stated earlier, Lord Sumption's reasons diverged from his brethren.  Lord Carnforth sought to explain the differences, describing Lord Reid's (and the majority's) analysis as entirely orthodox.  Lord Sumption's approach was, he said, more radical. Essentially, Lord Sumption was seeking to include cases where a notional release fee could be used as an evidential technique for estimating the claimant's loss [131] [124], and that this technique should be available to the judge.  Lord Carnforth disagreed with that approach, as it conflicted with the previous development of the law; it was not supported by the cases Lord Sumption used; and the approach gave no clear indication of the circumstances when such technique could be employed [136].

Conclusion

In conclusion, the conventional approach means losses must be proved.  There may be evidential difficulties in calculating such losses, but a way to so so has to be found.  The court should not shy away from making appropriate assessments and judgments even when the material before it only indirectly assists.  There is no place for an account of profit in the law of damages.  Damages in equity, under Lord Cairns Act of course survive but they are restricted to traditional categories where, principally, there is loss of a property right which is not remedied by specific equitable relief.  Attorney General v Blakemeans there is an exception to the prohibition on account of profits as a basis of damages, but this is confined to truly exceptional cases.  It is interesting to note that their Lordships did not identify any other single case where it was considered appropriate. Perhaps, Attorney General v Blakewill stand alone, for ever; or until the next spy tries to profit from his treason.



[1][1974] 1 WLR 798

[2]section 2 Chancery Amendment Act 1858

[3]Examples include Bracewell v Appleby [1975] Ch 408; Amec Developments v Jury’s Hotel (2001) 82 P&CR 22; Lunn Poly v Liverpool & Lancashire Properties [2006] EWCA Civ 430.  In some cases, no such damages were given; and actual loss was assessed as nominal (Stoke on Trent v Wass [1988] 1 WLR 1406, Surrey CC v Bredero Homes [1993] 1 WLR 1361).  The reasoning in these decisions is not easy to reconcile but it is to be noted in the first one an injunction was granted; in the second one no injunction was claimed (and in each compensatory damages, based on actual loss was nil or nominal). 

[4][1995] 1 WLR 267

[5][2004] EWCA Civ 570

[6][2001] 1 AC 268

[7][2010] EWHC 424 Ch

[8][2003] EWCA Civ 323

[9][2007] EWCA Civ 286

[10]The case had not been completed – liability had been determined but damages were still to be assessed. 

[11]Square brackets designate reference to paragraph numbers of the judgments

St Philips Business and Property are extremely proud to announce that Marc Brown and Mark Jones have been appointed to sit as Recorders across the country.

  • Marc Brown will be assigned to the Midland Circuit (Crime).
  • Mark Jones will be assigned to the Northern Circuit (Crime).

These appointments are a fantastic achievement and a resounding acknowledgment of the high level of expertise that St Philips offers.

In Re TPS Investments Ltd [2018] EWHC 360 (Ch), administrators had been appointed as office-holders of three connected companies. A creditor applied to remove the administrators as office-holders of one of the companies on the basis that it had a potential TUV claim against one of the others and the administrators were in a position of actual conflict in dealing with the claim from both sides. However, HHJ Stephen Davies (sitting as a judge of the High Court) accepted James’ submissions that (1) the existence of an actual conflict of interest was not an absolute bar to the administrators continuing to be appointed and (2) in the instant case the conflict could be managed by a range of possible options. In so holding, the Judge held that the contrary suggestion in a leading textbook on conflicts was not consistent with authority, in particular the observations of Warren J in SISU Capital Fund v Tucker [2006] BCC 463. 

This case underlines the point that the court may, in the interests of creditors, adopt a more generous attitude to conflicts of interest in the case of office-holders holding multiple appointments over connected companies than in relation to fiduciaries more generally. That is because such appointments are likely to save costs, professional office-holders are well used to dealing with conflicts and there are ready mechanisms for applying to court for directions as required. 

The Judgement can be found here.

Decision: On 1 November 2017 HHJ Simon Barker QC (sitting as a Judge of the High Court in the Business and Property Courts in Birmingham) handed down judgment in the application of the Official Receiver (“OR”) to commit Mr. Brown to prison for contempt of court for failing to comply with his obligations under ss.288, 291, 312 and 333 of the Insolvency Act 1986 (“IA 1986”). Judgment on sentence was handed down on 7 November 2017 [[2017] EWHC 2762 (Ch)].

Mr. Brown was found guilty of contempt on all grounds put forward by the OR and there being no meaningful attempt to purge the contempt and only nominal mitigation, which the Judge referred to as being “nothing other than very late…and marred by untruth and persistence in denying the validity of court order”, Mr. Brown was given an immediate custodial sentence of 8 months. A warrant was issued for his arrest.

After a failed appeal to the Court of Appeal on 25 January 2018, where Mr. Brown once again represented himself despite being entitled to legal aid, the judgment of the lower court was upheld and the stay on the warrant of arrest was lifted.

Overview: Mr. Brown was adjudged bankrupt on 12 May 2016. In accordance with its powers and duties under the IA 1986 the OR (and the Trustee in Bankruptcy) required Mr. Brown to provide information and documentation as to his assets and liabilities.

After a dogged refusal to comply with any of the said requests and failure to answer any of the OR’s questions when he was called for public examination on 20 January 2017, DJ Shorthose suspended Mr. Brown’s automatic discharge from bankruptcy until such as the OR reported that he had satisfactorily complied. The OR was granted permission to bring committal proceedings against Mr. Brown. After a slight false-start, the committal application proceeded by way of the certification procedure under CPR 81.15.

There is much to be said about the voluminous representations made against the committal, which included allegations of fraudulent conspiracy against the Birmingham judiciary, bar, legal profession and the OR’s office. There was also a mildly comical moment when Mr. Brown served a statutory demand on HHJ Barker QC during the course of the hearing. Ultimately however, nothing Mr. Brown said against the application had any basis in law - the bankruptcy order was valid, the application(s) to set it aside and/or annul had failed, and the appeal(s) against it had been dismissed. The writing was very clearly on the wall, albeit unseen by Mr. Brown.

Unlike some applicants the OR had no vested interest in securing Mr. Brown’s committal to prison and only sought his compliance with his statutory obligations; the committal application was a measure of “last resort”.

The Court afforded ample opportunity to Mr. Brown at the hearing on 25 October 2017 to make representations against the application and/or otherwise argue why he had a reasonable excuse for failing to comply. Mr. Brown made no representations as to “reasonable excuse” and in fact left the Court before the hearing had concluded.

Judgment was handed down on 1 November. When the Court re-convened for judgment on sentence on 6 November 2017 Mr. Brown, whom had attended late, interrupted judgment part-way through to submit that he had not refused to purge his contempt and that he was prepared to answer the OR’s and Trustee’s questions. The hearing was adjourned to 7 November 2017 for such questioning. However, it became patently clear a short way into cross-examination that Mr. Brown was not prepared to be candid or compliant.

Sentence: In his judgment HHJ Barker QC acknowledged that the “modern approach” to sentence was to take a fine as the “starting point” and that for the purpose of sentence the Court is concerned with three elements: (i) punishment; (ii) deterrence; and (iii) coercion.

Taking Proudman J’s checklist of sentencing factors as set out in JSC BTA Bank v. Solodchenko (No.2) [2010] EWHC 2843 (Ch), HHJ Barker QC found that “In all the circumstances, it is impossible to view (Mr Brown’s) contempt as anything other or less than serious and deliberate... (he) has made clear that he has no intention of admitting contempt or apologising for his contempts. He refuses to acknowledge that he is in contempt if that means, as it must, recognising court orders which he regards as invalid”.

Having maintained his position that the bankruptcy order itself was “null and void”, Mr. Brown was sentenced to 8 months (the maximum sentence for contempt being 2 years under s.14(1) of the Contempt of Court Act 1981). He is entitled to immediate release after 4 months (pursuant to s.258 (2) of the Criminal Justice Act 2003) and at any point during that tenure can apply to the court for immediate release if he is willing to comply.

Comment: The function of the contempt process is to protect and promote the integrity of court orders and the administration of justice, in this case embodied as statutory provisions within the IA 1986. Whilst the committal procedure is rarely used against bankrupts, mainly because such patent disregard by a bankrupt to his/her statutory obligations is relatively unheard of, it remains a powerful weapon in the OR’s/TIB’s arsenal.

The case stands as a reminder that these statutory obligations must be taken seriously and, if they are not, a committal application may be deployed.

It is unknown whether Mr. Brown remains “at large”.

A somewhat antiquated title (though no-one seems to suggest anything better) for a principle that is long established in law and is underpinned by common sense. It has only recently been considered for the first time by the Court of Appeal since the late 19th century. 

Most of us would recognise the concept. It is part of the law of sureties: the principle is that where husband and wife (or other co-owners) jointly own property, and husband incurs a debt which is solely for his own benefit but which is secured over the whole property, wife is entitled to a charge over husband’s interest in the property to the extent that husband’s indebtedness is discharged out of wife’s share of the property. Where the property is sold the secured creditor will be paid out of husband’s share first, and will only have recourse to wife’s share of the property once husband’s interest in the property has been exhausted. 

The full article can be found here.

Wednesday, 15 November 2017 00:00

Agriculture Seminar Success

On the 7th November, our specialist Agricultural Team - which encompasses barristers from across our Wills, Trust and Probate, Property, Commercial and Family teams – held the inaugural annual 1 day Agriculture Conference in Leeds Park Square.

The Conference was fully booked with over 50 delegates from across Yorkshire, Lancashire, Teesside and Cumbria in attendance to hear presentations from our expert panel on the following topics -

If you would like any further information regarding this seminar and the topics that were covered, or would be interested in our speakers providing you with a tailored in-house talk, please do not hesitate to contact us.

Next Years conference is anticipated to take place in September 2018.

In Re BW Estates Ltd [2017] EWCA Civ 1201, a challenge to the appointment of administrators resulted in a reaffirmation by the Court of Appeal of the need for formality and strict compliance when managing the affairs of a company.

Background

The company initially had two shareholders, a husband and wife. The wife's shareholding was transferred to a company, Belvadere (an Isle of Man company), which was later dissolved but remained on the register as being a member of the company. The husband was disqualified from being a director, and his son became the sole director, while still being apparently accustomed to receiving instructions from the husband.

The son appointed the respondents as administrators over the company. The appellants, having a final charging order over the husband’s shareholding in the company and also having taken an assignment of debt from one of the company’s creditors, appealed against the administrators’ appointment, which they claimed was invalid.

At first instance, HHJ Purle QC found that the administrators’ appointment was valid.

The key issues

The key areas of dispute were:

  1. Given that the Company’s articles of association required any management decision to be taken by a quorum of at least 2 directors, whether HHJ Purle QC was wrong to find that the administrators’ appointment was valid even though the son had been the sole director making the decision
  2. Whether the administrators’ appointment was valid by reason of the Duomatic principle
  3. In any event, whether there was acquiescence by the appellants such that the administrators’ appointment could be deemed valid or their objections would be an abuse of process.

Decision and reasoning

The first point had three elements to it.

  • The first was the respondents’ argument that, when Belvadere was dissolved, the company then became a single-member company, thereby negating the need for a quorum of two directors. The Court of Appeal rejected this, saying that the list of members in the register was definitive, even if the members were dead or dissolved, and in this case Belvadere continued to be listed in the register as a member.
  • The second was the respondents’ argument that IA 1986, Sch B1, para 22(2) conferred a separate right on the director to appoint administrators, and that this was to be read separately from the quorum rules in the articles of association. The Court of Appeal rejected this, and found that any statutory powers must be exercised in accordance with the articles.
  • The third was that HHJ Purle QC had found that the articles had been varied by the conduct of the son and the husband to allow decisions to be taken by a sole director. The Court of Appeal also rejected this argument, saying that the articles could only have been varied by a properly constituted meeting, which it was not, or by the application of the Duomatic principle which, for the reasons below, did not apply.

On the second point, the Court of Appeal reiterated that the Duomatic principle was applicable only where all of the shareholders gave informed consent to a course of action. The Court of Appeal had already found that Belvadere remained a member of the company, and so was a shareholder which ought to have been informed of the proposed decision to appoint administrators (or, in respect of the first point of argument, above, to amend the articles). Given that it received no such notice nor gave notice of its consent, the administrators could not rely on the Duomatic principle to validate their appointment.

On the third point, the administrators argued that, before challenging the validity of their appointment, the appellants had first challenged their remuneration and, in doing so, acquiesced in their appointment such that they were debarred from now challenging it. After reviewing the authorities on abuse of process and acquiescence, the Court of Appeal rejected this argument. Not only did the facts not support such an argument, in any event the Court was concerned with the factual and technical issue of whether the respondents were validly appointed, and in that sense it did not matter whether a challenge by a third party was subject to issue estoppel.

The implications

This decision reiterates that the management of company affairs requires a strict degree of formality and compliance with the articles of association, and that a company cannot simply cure procedural defects in an informal manner. This is even so where, as in this case, strict compliance would have been difficult. The company should either have restored Belvadere from dissolution in order to provide its consent to the appointment of administrators, which would have been unlikely, given the passage of time. Alternatively, another director should have been appointed to provide the quorum for management decisions. In the absence of those steps, there was no curing the defective appointment.

The decision also demonstrated the outer limits of the Duomatic principle, which should not be seen as a simple fallback option to correct procedural defects.

Finally, it was useful for the Court of Appeal to emphasise that, whatever the merits of arguments about acquiescence and abuse of process, ultimately the court was primarily concerned with the technical aspect of the administrators’ appointment, which reduced the importance of such considerations.

A modified version of this article first appeared on the Lexis PSL website on 11th August 2017.

Thursday, 17 August 2017 00:00

Post Ilott Provision - Marisa Lloyd

I was recently involved in the case of Nahajec v Fowle [2017] EW Misc 11 CC in which judgment was handed down on 18th July 2017.This was possibly the first case of its kind under the Inheritance (Provision for Family and Dependants) Act 1975 since the Supreme Court decision in Ilott v Blue Cross [2017] UKSC 17. The facts were reminiscent of those in Ilott involving an estranged daughter who had had little contact with the deceased for many years preceding his death. Read the full transcript of the judgment

The claimant was one of three children of the deceased. She was the only child of the deceased’s second marriage, but had two half-brothers from the deceased’s first marriage. One of her half-brothers, Mark Nahajec had made a separate claim which was settled for £22,000 after being consolidated. Her other brother Philip Scott Nahajec (“Scott”) made no claim.

The deceased's relationship with the claimant had broken down shortly after her mother separated from him in 1996. On her account, there had been no relationship between the claimant and the deceased until about 2007. The relationship was rekindled for a period of around 2 years after she contacted the deceased. It then broke down again allegedly when the deceased disapproved of her choice of boyfriend. Since her mother and the deceased had separated, the deceased failed to answer letters she had sent to him as a child and made no efforts to communicate with her.

The claimant alleged that from 2009 she had tried to re-establish the relationship, but had been rejected by the deceased. It was not disputed that the absence of a relationship between her and the deceased was entirely his choice.

The deceased had known the defendant Mr Fowle since he was a child in 1969. Their relationship spanned both their working and social lives and culminated in the defendant caring for the deceased during his time of ill health. The deceased’s Will left the entirety of his estate to the defendant (also sole executor). The Will was accompanied by a letter of wishes which stated that the deceased had not seen or heard from any of his children for 18 years. The deceased also stated his belief that “all of my children are of independent means ... and are, to my knowledge, sufficiently independent of means not to require any provision from me”. The letter of wishes concluded that the deceased did not feel it was necessary or appropriate to make provision for his children in his Will.

The net value of the estate at the time of the hearing was around £264,000.

The claimant brought her claim under the 1975 Act for reasonable financial provision. The court had to consider what would be reasonable in all of the circumstances for the applicant to receive for her maintenance. In determining the claim, the judge considered all of the factors in section 3 of the 1975 Act.

At the date of the hearing, the claimant was in debt and despite having paid employment with two separate employers had limited income which did not cover her outgoings. One of her jobs was in a veterinary practice. The Claimant gave compelling evidence that she wished to train as a veterinary nurse in order to improve her financial situation and pursue a career in which she was passionate. Whilst she did not have the requisite GCSE grades to apply for the course she stated that she wished to study to get sufficient grades to make such an application. In order to assist any future application, the claimant worked around 15 hours per week on a voluntary basis in a veterinary practice to gain relevant experience.

Whilst section 3(3) of the 1975 Act was relied on by the claimant’s representative to assist in her claim for education and training, HHJ Saffman did not accept that it assisted her in this case. Section 3(3) required the court to have regard to the manner in which the applicant was being or in which he might expect to be educated or trained. At the time of the deceased death, the claimant was neither being trained nor expected to be trained at the expense of her father. On the facts of this case a consideration of the training element was regarded under section 3(1)(g) of the 1975 Act.

In relation to a “moral claim”, HHJ Saffman recalled Lord Hughes’ comments in Ilott that although it was not necessary for an adult child to show a moral claim upon the estate of the deceased, it would be difficult for a financially independent adult child to be successful in such a claim without showing some other special circumstance, such as a moral obligation, that would warrant an award under the 1975 Act. HHJ Saffman was impressed by the claimant’s evidence at trial and believed her account of the circumstances of her relationship with her father which was supported by witness evidence from Scott. He saw the Claimant as “a daughter who has very much regretted the absence of a relationship with her father” and as a daughter who had tried to rekindle the relationship. He was satisfied that the claimant’s claim was based on more than simply the qualifying relationship to which Lord Hughes referred in p20 of Ilott. It was accepted that there was no relationship between the claimant and her father but found that this was because the deceased appeared to be stubborn and intransient, which was through no fault of the claimant.

Limited weight was given to the letter of wishes which, whilst recognised as important, was premised on the mistaken belief that the deceased’s children were sufficiently financially independent not to require any provision under his Will. Further whilst the deceased stated that he had not seen his children for 18 years, this was inconsistent with evidence from the claimant and Scott that they had seen the deceased since his separation from the claimant’s mother.

HHJ Saffman concluded that the claimant was leading “a rather frugal existence” and only making ends meet with the help of expensive payday loans, even though in evidence she conceded that she could cope financially going forward if her debts were paid off. He accepted that she was “far from well off” and that she was not significantly profligate. He also accepted that she had a genuine aspiration to improve herself by undertaking training to become a veterinary nurse.

In his judgment HHJ Saffman held that the Will failed to make reasonable financial provision for the claimant and he found that an appropriate award was £30,000 (11.3% of the net estate), as against the claimant’s claim of approximately £70,000.

There have been many articles post the Supreme Court decision in Ilott regarding the implications of the judgment. In his judgment, HHJ Saffman spent some time discussing Ilott and it’s journey to the Supreme Court, however, he made it clear that his decision was based on consideration of the section 3 factors as applied to the facts of this case, and not on the basis that District Judge Mullion reached his decision in Ilott on essentially similar facts.

This case merely highlights the fact that despite some sensationalist headlines about testamentary freedom post Ilott, it is still possible for adult child claims under the 1975 Act claim to be successful where they can show special circumstances that warrant an award. In the case of estranged adult children, it may assist if they can show a history of attempts to reconcile or if they are able to give convincing evidence that the estrangement was through no fault of their own but solely or largely due to the behaviour or temperament of the deceased.

The financial basis of the claimant’s case was that she needed “maintenance” to undertake further qualifications and training to become a veterinary nurse and that the funds awarded would enable her to pursue this wish. If successful she would then be in a better position to support herself going forward. Whilst recognising that an award would be confined to maintenance needs, HHJ Saffman referring to the broad definition of maintenance in re Dennis Deceased (1981) 2 All ER 140 (p145-146) held the view that this could “include monies that would enable the claimant to undergo her retraining.” (p101)

In terms of the status of a letter of wishes, the case confirms that whilst a letter of wishes will be an important factor for consideration, it will not necessarily be the determining factor. A letter of wishes stating reasons for excluding adult children from a provision in the will, however elaborate, do not override the provisions of the 1975 Act and will be considered alongside the other section 3 factors.