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You are here: BAILII >> Databases >> England and Wales Court of Appeal (Civil Division) Decisions >> Baynes v Hedger & Anor [2009] EWCA Civ 374 (07 May 2009) URL: https://www.bailii.org/ew/cases/EWCA/Civ/2009/374.html Cite as: [2009] 2 FCR 183, (2008-09) 11 ITELR 987, [2009] Fam Law 666, [2009] EWCA Civ 374, [2009] WTLR 759 |
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COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT, CHANCERY DIVISION
Mr Justice Lewison
HC07C01001
Strand, London, WC2A 2LL |
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B e f o r e :
LORD JUSTICE LONGMORE
and
LORD JUSTICE GOLDRING
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BAYNES |
Appellant |
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- and - |
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HEDGER & ANR |
Respondent |
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MR JEFFREY TERRY (instructed by Messrs Allan Janes) for Respondent 3
MS EMILY CAMPBELL (instructed by Messrs Sheridan) for Respondent 4
Hearing date : 22 April 209
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Crown Copyright ©
The Chancellor:
(1) Was Hetty "[a] person....who immediately before the death of [Mary] was being maintained, either wholly or partly, by [Mary].." within s.1(1)(e) of the Act? And if so
(2) Was "the disposition of [Mary]'s estate effected by [her] will.....not such as to make reasonable financial provision for" Hetty? And if not
(3) What (if any) order should now be made?
I shall deal with those issues in that order but first it is necessary to consider in detail the facts of the case and the conclusions of the judge.
"Mr Henderson says that at the meeting Mary made it clear to Hetty that this would be the last time that she would be assisting. He understood that the clear message was that from then on Hetty would have to stand on her own. He said that the two women shook hands on the deal; and he thought that that transaction would bring an end to Mary's financial support. In her cross-examination Hetty was reluctant to give direct answers to questions about what actually happened at the meeting. She was more keen to interpret the meeting with the aid of hindsight. However, she did eventually agree that there was a bit of a showdown; and that Mary told her that this was the last time that she would help. She agreed that she was told that there would be no more help; and that the meeting was quite formal. She did not remember shaking hands at the end of the meeting. She thought it more likely that she and Mary hugged each other. In fact Mr Henderson was not talking about a handshake at the end of the meeting, but a handshake to seal the deal. In substance Hetty agreed with Mr Henderson's evidence, which I accept, including his evidence about the handshake."
"At this stage, therefore, I find that Mary's intention was to help Hetty clear her debts and no more. She did not intend to make an immediate payment to buy a home for Hetty; nor to provide Hetty with any additional lump sum. In addition she expected to be repaid out of the maintenance claim for the stop gap payments she had recently made. She expressly rejected any responsibility for supporting Hetty. Her comments on Mr Sherbrooke's letter also show that she still wanted to leave Dunshay Manor to the Landmark Trust; and that she did not want the cottages to be sold off to pay for borrowing. She did not want to leave the cottages either to the Baynes family or to Hetty alone. Nor did she wish to assume responsibility for Margot's care. So far as the residue of her estate was concerned she wished to bypass Margot, and leave it all to Hetty. Mr Sherbrooke was to investigate the funding of equity release. The kind of equity release he was to investigate was not an immediate lump sum drawdown, but a facility to borrow as and when borrowing was needed."
"Mary had not "agreed" to Hetty's proposal in the sense of having committed herself to it."
The judge continued in paragraph [80]:
"On 14 February [Hetty] spoke to Mr Sherbrooke and made it clear that she was looking for an undertaking by Mary to the bank that Hetty would be receiving substantial funds. The letter of comfort was not enough. Hetty's own note of that date contains a draft form of undertaking that Hetty would be receiving £600,000 early inheritance in four to six weeks' time. Mary gave no such undertaking."
"that Mary was racked with indecision between wanting to help Hetty but at the same time wanting the Landmark Trust to have Dunshay and for the tenants of the cottages to be safeguarded. These objectives were in conflict. She was reduced to asking Mr Sherbrooke to make the decision for her, which quite properly, he could not and would not."
Mr Sherbrooke reported the effect of this meeting to Mr Midgley who, in turn relayed it to Hetty. As the judge recorded in paragraph [90]:
"Hetty did not mention this at all in her written evidence, although she made a written note of the conversation. She attempted to explain in her oral evidence that this was because the situation was "fluid", but I found her explanation unconvincing. It is clear from her private journal that she was furious at what she saw was Mary's reneging on her promise. She wrote in her journal that Mary should grow up and honour her relationship with Margot and her parenting of Hetty and her siblings; and take responsibility. She described Mary's behaviour as "selfish + childish + cruel + abusive"."
"Ms Harvey was with Mary in hospital very shortly before she died. Her evidence was unchallenged. She said that while she was sitting with Mary, Mary took off her oxygen mask, and said:
"I can't be doing with this, I've got to get up. I've an important meeting this morning, I have to make sure Hetty is settled, looked after, that she has what she needs from the estate. I've got to get it sorted."
Ms Graham calmed her and she drifted off to sleep. She died shortly afterwards."
The judgment of Lewison J
"that Mary and Margot had a loving relationship which spanned fifty continuous years. In its early phase they shared a bedroom and so it was probably also sexual; although since 1978, when each of them had her own bedroom in the other's house, it was probably not. But they were undoubtedly emotionally committed to one another. When they were not together they would speak on the telephone every day. There was no falling out between them, and their relationship carried on until Mary's death. But their relationship was a private relationship. Although those close to them might have guessed, or even known, that they were a couple; it was not something that they themselves acknowledged. Had any sexual element in the relationship been suggested, they would have denied it."
"By now Hetty had realised that her application for a large lump sum from Ken Russell would not succeed. She confronted Mary about her relationship with Margot, and Mary admitted that their relationship had been an intimate one. All the witnesses agreed that Mary was a very private person, who had never previously acknowledged her relationship with Margot; and to do so at this juncture must have been very difficult for her. Hetty herself said that Mary confessed to guilt and shame about the relationship. In her oral evidence, however, Hetty said that it was not her purpose to use the meeting to get Mary to pay her bills. It was, as she put it, about the "bigger picture"; although the canvas of the bigger picture seemed to be filled by her and Rex, and in particular her financial problems. What she wanted was for Mary to make her and Rex secure, by clearing her debts, buying her somewhere to live and giving them a solid base. She said to Mary that without anything coming from Ken she would be bankrupt and homeless; and asked Mary whether she would be happy with that. Without Mary's help, she said, they would not survive. These statements must have put considerable pressure on Mary and in my judgment they were designed to do so. They had some effect. By the end of the meeting Mary had said that she would put the wheels in motion and see what was possible."
"any person...who immediately before the death of the deceased was being maintained, either wholly or partly, by the deceased;"
Subsection 1(3) provides that:
"For the purposes of subsection 1(e) a person shall be treated as being maintained by the deceased, either wholly or partly, as the case may be, if the deceased, otherwise than for full valuable consideration, was making a substantial contribution in money or money's worth towards the reasonable needs of that person."
"Without prejudice to the generality of paragraph (g) of subsection (1) above where an application for an order under section 2 of this Act is made by virtue of section 1(1)(e) of this Act, the court shall, in addition to the matters specifically mentioned in paragraphs (a) to (f) of that subsection, have regard to the extent to which and the basis upon which the deceased assumed responsibility for the maintenance of the applicant and to the length of time for which the deceased discharged that responsibility."
"..section 3(4) assumes that in any case within paragraph (e) of section 1(1) which reaches that stage that there has in fact been an assumption of responsibility, and so I think it excludes from the Act any such case where there has been no such assumption of responsibility."
He also considered the phrase in S.1(1)(e) "immediately before the death of the deceased". Sir Robert Megarry V-C considered that this required the court to consider the general basis or arrangement then existing and not merely the de facto state of maintenance at that time.
"Where, however, I feel bound to part company from Sir Robert Megarry V.-C. is in his interpretation of assumption of responsibility for the maintenance of the supported person. I do not question his opinion that the requirement of section 3 (4) that the court:
"shall… have regard to the extent to which and the basis upon which the deceased assumed responsibility for the maintenance of the applicant and to the length of time for which the deceased discharged that responsibility"
implies or "assumes" (in another sense) that at the first stage, when the court is considering the applicant's right to apply under section 1 (1) (e ), he must prove that the deceased did "assume responsibility" for his maintenance. But I cannot, with respect, agree with him... that the bare fact of maintenance raises no presumption that responsibility for it has been assumed. I am of opinion that it generally does."
Later he added:
"It may be that the presumption can be rebutted by circumstances including a disclaimer of any intention to maintain. But here there is, in my judgment, a distinction to be drawn between an intention to maintain during the lifetime of the giver who has something to offer and an intention to provide continuing support after death."
Stephenson LJ concluded (p.138):
"Accordingly, I am of opinion that the court has to consider whether the deceased, otherwise than for valuable consideration (and irrespective of the existence of any contract), was in fact making a substantial contribution in money or money's worth towards the reasonable needs of the plaintiff, on a settled basis or arrangement which either was still in force immediately before the deceased's death or would have lasted until her death but for the approach of death and the consequent inability of either party to continue to carry out the arrangement."
"I agree with the construction of sections 1 (1) (e )and (3) expounded by Sir Robert Megarry V.-C. in In re Beaumont, decd. [1980] Ch. 444. I adopt his reasoning and set out the following conclusions.
Section 1 (3) contains an exhaustive definition of the words "being maintained" where they appear in section 1 (1) (e ).
The words "immediately before the death of the deceased" in section 1 (1) (e ) cannot be construed literally as applying to the de facto situation at death but refer to the general arrangements for maintenance subsisting at the time of death. So that if for example the deceased had been making regular payments to the support of an old friend the claim would not be defeated if those payments ceased during a terminal illness because the deceased was too ill to make them."
He added at page 141:
"The difficulty I have is to know what significance to attach to the words "assumed responsibility for the maintenance of the applicant" in section 3 (4). Section 1 (1) (e ) appears to me to be aimed at giving relief to persons where the relationship to the deceased is such that it is highly unlikely that any formal arrangements will have been made between them. Obvious examples are the elderly but impoverished relative or friend who is taken into the deceased's household and given free board and lodging and treated as a member of the family or a man living with a woman out of wedlock but supporting her as he would a wife. In such circumstances I would not as a general rule expect to find any formal declaration of assumption of responsibility, but it cannot have been the intention that such cases should fail for want of some such formality. I read "assumed responsibility for" as being equivalent to "has undertaken" and not adding much to the fact of maintenance."
"134. If, therefore, Mary in fact maintained ...Hetty immediately before her death (in the extended sense of "immediately"), there is a presumption that she assumed responsibility for it; but the presumption may be rebutted by other evidence. Arrangements that have come to an end do not count as such maintenance.
135. In addition to considering whether Mary assumed responsibility for maintenance of ... Hetty, I must also have regard to both the extent of the assumption of responsibility and the basis on which responsibility was assumed."
"163. What is left, then, is the fact that during 2004 Mary made available to Hetty some £3,000 plus a generous Christmas present, and in 2005 some £8,200, part of which was the stop gap payments. Was this substantial? I have hesitated about this, but in the end I have come to the conclusion that, by a narrow margin, it was.
164. [Counsel for Hetty] submitted that the sums that Mary made available to Hetty were either gifts or were what he called "soft loans" and were, therefore, contributions made otherwise than for full valuable consideration. By soft loans [Counsel for Hetty] meant a loan which:
i) Was interest free;
ii) Would never be enforced;
iii) Did not have to be repaid; and
iv) Was unlikely to be repaid, to Mary's knowledge.
165. Given Hetty's repeated protestations that she did not want gifts or handouts and that she intended to repay, it is distasteful that she now seeks to characterise the payments as gifts. There are, as I have recounted in dealing with the narrative, indications that Mary herself saw them as loans. But I am willing to accept that they were soft loans in the sense in which [Counsel for Hetty] used that phrase. The contributions were therefore made otherwise than for full valuable consideration.
166. I hold, therefore, that Hetty was being partly maintained by Mary immediately before her death. She is therefore eligible to make a claim."
"190. The arrangements made in March 2004 were expressly said by Hetty to be "arrangements for the following few months." The monies were repayable with interest on the sale of Hetty's flat. These arrangements, even if they were a "soft loan", cannot in my judgment be seen as any assumption of responsibility by Mary for Hetty's future maintenance. On the contrary, they were both repayable and time limited. When Ms Parmigiani asked Mary for money on Hetty's behalf, Mary kept her options open, even though she did not in the event ever refuse. But the point is that Hetty had to ask every time. In addition the arrangements made in 2005 were made in the expectation that at the beginning of the following year Hetty would succeed in obtaining a significant increase in her maintenance payments from Ken Russell and, at the inception of the arrangements, the possibility of a large lump sum as well, out of which Mary would be repaid. Mary's agreement to pay the mortgage in the summer of 2005 was expressly limited to six months. As late as December 2005, when it was known that there was no possibility of a lump sum, but that there would shortly be a hearing of Hetty's application for increased maintenance, the payments that Mary made to Hetty were described as "stop gap". Again this was expressly a temporary arrangement. There is also Mary's significant annotation on Mr Sherbrooke's letter of 10 January 2006:
"[Hetty] says if she can be freed from her debts she can maintain herself by her career and Russell maintains his son. I do not want her to feel she is supported by me or to feel that there is money for that purpose"
191. There are two points of significance about this annotation. First, what was being contemplated was the payment of Hetty's debts, and not the provision of a flat, let alone an unencumbered flat. Second, Mary was expressly disclaiming any responsibility for Hetty's ongoing support. Thus even after the pressure exerted on Mary at the meeting on 15 December 2005, she was still not willing to do more than pay off Hetty's debts. Hetty's furious reaction in her private journal, berating Mary for not taking what Hetty saw as her "responsibility", also shows that Mary was not assuming responsibility for Hetty's financial well-being and, importantly, that Hetty appreciated that.
192. During the meeting with Mr Sherbrooke and Mr Midgley Mary's attitude softened, and she was willing to give Hetty more help. This was a result of considerable pressure put on her by Hetty. But I find that she made no firm commitment to do so; and in any event by the end of the meeting, she was in no fit state to do so. But it is true to say that she said more than once during the meeting, and on a number of occasions thereafter, that Hetty was her first priority. Having said that, I find that Mary was not prepared to help Hetty to the extent that it might jeopardise her gift of the Dunshay Manor Estate to the Landmark Trust. There is a note made by Mary, to which I have not previously referred because it is undated. However, I think it probable that it records Mary's position at a point very shortly before her death:
"Must live with what I have
I must take the blame for my decision – whatever –
I.E. SECURITY FOR "Bricks & Mortar" above human life for future"
193. There is another note, also difficult to date, but almost certainly after 14 February 2006, and thus very close to Mary's death:
"Nothing further -– she must make her own life in the future - that is what she is saying today "get my debts paid and then I can get on with my life""
194. I must not, of course, overlook what Mary said in hospital just before she died, but her expression of desire to help Hetty is consistent with merely paying her debts; and with the extent of the help not jeopardising the gift to the Landmark Trust.
195. I find therefore that Mary made no firm commitment of any sort to Hetty; that her primary concern was that Hetty's existing debts be paid, so that Hetty could support herself and get on with her life; that she did not want Hetty to feel that money was there for her continuing support; that she was willing to consider making up to £250,000 available; but that she was not willing to jeopardise the gift to the Landmark Trust."
"Mary's annotations on Mr Sherbrooke's letter of 10 January 2006 make clear what her intention was at that time. She made the annotations on 14 January 2006 after Hetty and Rex had returned to London. Her first annotation read:
"I need repaying for my "stop gap" payments of the last week or so. Details later this week."
The stop-gap payments were those to which the judge referred in paragraph [63] of his judgment and which I have described in paragraph 14 above as a number of smaller payments aggregating £7,300. Counsel for Hetty submitted that those loans were to be repaid from the proceeds of the equity release or lifetime mortgage scheme and not by Hetty. To that extent they were not loans to Hetty.
"unless the payment of those debts enables the claimant to derive a future income which he or she could not do if the debts remain unpaid; or the debts represent living expenses incurred since the date of death of the deceased."
The judge was not invited to reach any such conclusion in relation to any specific proposition. Fourth, had this submission been made to the judge it would have raised the question whether any such assumption was freely made by Mary. A conclusion favourable to Hetty cannot be assumed given the judge's comments in relation to the statements made to Mary at the meeting on 13th December 2005 (see paragraph 16 above), his conclusion expressed in paragraph [56] that "I have no doubt that Hetty did try to persuade Mary to change her will and did so in forceful terms", the huge strain on the relationship between Mary and Hetty imposed by the requests for money to which the judge referred in paragraph [58] suggesting that Mary was not a willing giver and the nature and duration of the meeting held on 6th February 2006 to which the judge referred in paragraph [76]. In a different context the judge observed in paragraph [203]:
"But Mary's primary concern was to pay off Hetty's existing debts. That concern was at least in part due to the unreasonable pressure that Hetty exerted on her."
To that may be added the further comments quoted in paragraph 49 below.
"In my judgment [Hetty] exploited Mary's generosity at the end of 2005 and the early part of 2006 and brought pressure to bear on her to bail her out yet again. From December 2005 to the end of Mary's life Hetty mounted a sustained campaign to persuade Mary to pay off her debts and provide for her future. Mr Sherbrooke, Ms Ratuszniak and Mrs Wooster, all of whom are disinterested witnesses, all thought that Mary was being pressurised, if not bullied. So did Nigel and Mr Cooper. I think that they were right. Even Ms Parmigiani said that Hetty's demands for money put a "huge strain" on the relationship. For Mary to have succumbed to the pressure would have jeopardised either her ardent desire to see the Dunshay Manor Estate preserved as a memorial to eighty years of artistic endeavour, or would have deprived Margot of money which may be needed for her care. This is not conduct which, in my judgment, should be rewarded."
"The most powerful factor in Hetty's favour is her parlous financial position. But there are other, counter-balancing, factors which must be taken into account. Of these, Hetty's conduct is one of the most important."
206. The policy behind section 1 (1) (e) was described by Stephenson LJ in Jelley v Iliffe (in a passage I have already quoted) as follows:
"Its object is surely to remedy, wherever reasonably possible, the injustice of one, who has been put by a deceased person in a position of dependency upon him, being deprived of any financial support, either by accident or by design of the deceased, after his death. To leave a dependant, to whom no legal or moral obligation is owed, unprovided for after death may not entitle the dependant to much, or indeed any, financial provision in all the circumstances, but he is not disentitled from applying for such provision if he can prove that the deceased by his conduct made him dependent upon the deceased for maintenance, whether intentionally or not." (Emphasis added)
207. It cannot, in my judgment, be said that Mary "put" Hetty in a position of dependency; or that Mary's conduct "made" Hetty dependent on her."
Lord Justice Longmore
Lord Justice Goldring