Charities and internal investigations
The decision in the case of Sargeant v Sargeant EWHC 8 Ch was handed down last week. The Court held that the widow of a farmer was too late to make an application for reasonable financial provision from her husband’s estate; having made the application more than 10 years after the grant of probate was obtained.
Mary Sargeant applied for an order under section 2 of the Inheritance (Provision for Family and Dependents) Act 1975, for reasonable financial provision from the estate of her deceased husband, Joe Sargeant, who died in May 2005.
Mr Sargeant’s will was not disputed and left almost everything (including farmland which is now estimated to be worth approximately £8m due to planning permission) to a discretionary family trust which was for the benefit of Mrs Sargeant and their daughter, Jane.
Under the 1975 Act, claimants have six months from the grant of probate to make an application for financial provision. If a claimant wants to make a claim after this time limit has expired, then they must make an application to Court for permission.
Mrs Sargeant’s application for permission was made on the basis that she did not understand the financial implications of her position as a discretionary beneficiary.
The Court rejected her application and found that on the evidence, Mrs Sargeant had not made out a sufficient case for permission to be given. By her conduct, Mrs Sargeant had accepted the provisions of the will despite knowing that she was in financial difficulties. She could have sought independent legal advice (and had been advised to do so) but did not take that step for many years. Cooke HHJ found,
“This is not a case in which any material facts have been concealed from Mary at any stage, or where she has been misled by Jane or the trustees…Nor is it a case in which the claim is been made necessary by any supervening event outside Mary's control”
He went on to say:
“The reality is that Mary took her own decision to continue to work within the arrangements provided for by the will, rather than to explore whether she had any option available to vary them, in the full knowledge of the financial difficulties she was under, and maintained that decision over a very long period”
There is no statutory guidance on the factors which the court should take into account when considering an application to make a claim outside of the six month time period but there is case law in which this issue has been considered.
The case of Berger v Berger  EWCA Civ 1305 concerned an application for provision which was made six years after the grant of probate had been given. In this case, the Court of Appeal refused permission for the surviving spouse to make a claim out of time, but the parties agreed that the High Court Judge, HHJ Hayward Smith QC had formulated the correct approach when refusing permission.
This formulation was based on seven considerations identified in the cases of Re Salmon  Ch 167 and Re Dennis  2 All ER 140 and sets out that the Court should consider the following:
Cases where applications have been successful include circumstances where there had been a dramatic fall in interest rates and therefore a widow’s provision was no longer enough to live on (Stock v Brown  1 FLR 840) and where there had been deliberate concealment of the value of the estate which was not discovered until three and a half years after probate was granted.
Despite the formulation set out above as to what the Court should consider, it remains clear that each case will turn on its own set of facts and will largely depend on the strength of the underlying claim and the extent to which the estate has been administered. The reason for the delay will, of course, always be important. Potential applicants ought to make every effort to make a claim within the time limit of six months rather than run the risk of the Court not granting permission for a claim to be made out of time. The risk can also often be mitigated considerably if a standstill agreement has been entered into, although even then there are no guarantees.
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