The Issues

Mr Lilleyman died aged 64, leaving a widow to whom he had been married for 2 ½ years at death, following a period of cohabitation of approximately 18 month.  Both Mr and Mrs Lilleyman had been married previously and Mr Lilleyman had 2 sons, who were executors and beneficiaries under the terms of his will.

Mr Lilleyman’s estate was worth in the region of £6m, of which £5m was made up of shareholdings in 3 private companies.  He left almost the entirety of his estate to the defendants, with Mrs Lilleyman bequeathed conditional rights of occupation in the matrimonial home and a holiday home.  He had also set up an annuity for Mrs Lilleyman of £378 per calendar month.  Mrs Lilleyman had assets of £400,000 and an income of £11,000 per annum.

Mrs Lilleyman argued that reasonable provision under the Inheritance Act should include a substantial share of matrimonial property in excess of her reasonable needs. The defendants argued that provision should be limited to her reasonable needs.

Held

In deciding the claim, Briggs J considered, inter alia Cunliffe v Fielden [2006] and Miller v Miller [2006].  Undertaking the divorce cross-check, His Lordship assessed the matrimonial property at £1,475,000, including £250,000 of increased value of the company shares. Mrs Lilleyman’s housing needs were assessed as being met by a full life interest in the estate's share of the matrimonial home, which could be rolled over to another property if her needs changed. Her income requirement was £31,770 pa, which, on Duxbury terms, would require a payment of £235,000 from the estate.

On the facts of the case, it was considered that a life interest for Mrs Lilleyman was not ideal, failing as it would to achieve a clean break between the parties to the claim, with an outright transfer of the FMH to her deemed fairer. Taking into account all the relevant circumstances, his Lordship ruled that Mrs Lilleyman wife should receive some £500,000 from the estate (roughly 8% of the total value), to include the estate's half interest in the former matrimonial home and (at the wife's election) either the estate's half interest in the holiday property or an equivalent lump sum. The estate was also required to transfer a third property to the wife, on the basis that the court considered this to be beneficially the wife's in any event, but if not, as reasonable provision under the Inheritance Act.

Costs

Throughout the proceedings both parties had made offers to settle under Part 36 of the Civil Procedure Rules. The claimant failed to beat the Defendant’s Part 36 offers and the usual cost consequences applied, with the Claimant ordered to pay the costs of her late husband’s sons. 

It is notable, however, whilst the defendants were awarded their costs for a period of time, Briggs J concluded that a combination of their unrealistic refusal to concede the fact that the deceased’s will did not make reasonable financial provision for the Claimant and the litigation conduct of the defendants meant that he considered that “it would be unjust if the strict application of Part 36.14(2) were to prevent the court from signifying its disapprobation of a no holds barred approach to this claim by an appropriate proportionate disallowance of the costs to be recovered.” This was reflected in a 20% disallowance of the Defendant’s costs.

The full judgment can be found athttp://www.bailii.org/ew/cases/EWHC/Ch/2012/821.html

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