ILOTT V MITSON (NO. 2) REVISITED

1. At long last, 18 months after the judgments were delivered, Ilott v Mitson has reached the Law Reports – [2018] AC 554. It gives an opportunity to look again at some of the

John M. Collins

views expressed by the Supreme Court in what was and may well remain the one and only time that the interpretation of the Inheritance (Provision for Family and Dependants) Act 1975 was considered by the Supreme Court. As a Counsel for the Respondent, Mrs Ilott, I am of course not exactly impartial. However, I remain of the view that the decision of the Supreme Court runs to a considerable extent counter to the general approach by the courts up to that time.

2. In this blog I am not going to enter into a detailed analysis of the reasoning of the Justices of the Supreme Court, but I shall just deal with one particular issue raised by none other than Lady Hale, who is now President of the Supreme Court. She gave the supporting judgment, which is well worth reading for its careful survey of learned studies of the Act. However, she concludes:

“I have written this judgment only to demonstrate what, in my view, is the unsatisfactory state of the present law, giving as it does no guidance as to the factors to be taken into account in deciding whether an adult child is deserving or undeserving of reasonable maintenance”.

3.   But is that really so? If so, it is very surprising that over a period of now well over 40 years the Act has been able to be administered with comparatively little difficulty.

4.   Lady Hale expands her point by arguing that there were three possible ways of deciding Mrs Ilott’s application.

“A respectable case can be made for at least three very different solutions:

(i) The District Judge] might decline to make any order at all…

(ii) He might decide to make an order which would have the dual benefits of giving the Applicant what she most needed and saving the public purse the most money.  That is in effect what the Court of Appeal did, by ordering the estate to pay enough money to enable her to buy the rented home which the Housing Association was willing to sell to her and a further lump sum to draw on as she saw fit.  Housing is undoubtedly one of the first things that anyone needs for her maintenance….   This was benefits-efficient from her point of view, because it preserved the family’s claims to means-tested income benefits.  It was benefits-efficient from a public’s point of view, because it saved substantial sums payable in housing benefit….  It is difficult to reconcile the grant of an absolute interest in real property with the concept of reasonable provision for maintenance: buying the house and settling it upon her for life with reversion to the estate would be more compatible with that.   But the Court envisaged her being able to use the capital to provide herself with an income to meet her living costs in future.

(iii) He might have done what he in fact did for the reasons he did”.

She agreed with the main judgment of Lord Hughes that it was entirely open to the District Judge to make the order that he did.

5.   It is clear from her judgment that Lady Hale recognised the strong arguments in favour of the decision of the Court of Appeal.  Those arguments in my submission are strengthened by the actual words of the Act.  The first matter under s.3 to which the Court has to have regard is “the financial resources and financial needs which the Applicant has or is likely to have in the foreseeable future”.  The Court of Appeal recognised – as it does appear the Supreme Court did not – the importance of the words “or is likely to have in the foreseeable future”.  The whole point of Mrs Ilott’s claim was that she needed provision for the foreseeable future.  By scrimping and saving she had a tiny sum by way of savings, but the reality of her situation was that she would not have any sums beyond bare state benefits when she reached retirement age, nor had she any means of raising money to provide for her needs.  The Court of Appeal provided for her income not simply at the time of their judgment but for the future.

6. The problem created by the District Judge in his award of £50,000 was that until Mrs Ilott spent all but £16,000 of that sum, she would be deprived of her social security benefits and so would in fact be losing by the payment unless she made a swift and not necessarily prudent financial expenditure.  Yes, she would be able to take a holiday, but the object of the once for all award under the 1975 Act is to ensure that provision is also made for the foreseeable future.  Lord Hughes argued that she could have used the money to provide the various items of furniture which were desperately in need of replacement.  She could also have acquired a new car.  These would undoubtedly have been benefits, but entirely transient benefits.  That is not the purpose of the Inheritance Act.  It is primarily to make provision for the Claimant because the testator – or the effect of intestacy – has failed to make reasonable financial provision for the particular Applicant.  The Act was not designed to set aside the deceased’s will; it was to provide for maintenance.

7.   Once that is understood, the consequence must indeed follow that if a claimant is not in need of maintenance, then the Court has no power to make a provision for maintenance for that claimant.  Similarly, because Parliament has said so, the Court must look at any other matter, including the conduct of the Applicant or any other person, which in the circumstances of the case the Court may consider relevant.  It is relevant that Mrs Ilott for most of the 25 years preceding her mother’s death, was living in isolation from her mother.  However, it was also relevant to ascertain why.  The District Judge expressly came to the conclusion, having regard in particular to the considerable efforts made by Mrs Ilott to secure a reconciliation with her mother in the period shortly before her death by a humiliating apology and indeed at her mother’s request putting the apology in writing, that the ultimate failure to achieve a reconciliation was because of the “harsh and unreasonable” attitude of the mother.

8.   Once again the Act does give guidance to judges in the provisions which are made.  It further gives guidance in the provisions which are not made.  It is significant that in the Inheritance (Family Provision) Act 1938 s. 1(7) it was provided that

 “The Court shall also….. have regard to the testator’s reasons, so far as ascertainable, for making the dispositions made by his Will or for not making any provision or any further provision as the case may be, for a dependent and the Court may accept such evidence of those reasons as it considers sufficient, including any statement in writing signed by the testator and dated”.

That was expressly abolished by the 1975 Act.  One would not have thought so if one reads the judgments of the Supreme Court.  By abolishing that provision, the Act was making it quite clear that the views of the testator were not intended to guide the Judge in coming to a conclusion whether or not in all the circumstances reasonable provision had been made for the Claimant.  The Court is entitled to look at all the circumstances and obviously the Court can see what is said in any document prepared by the testator, but in the end the direct question which has to be asked is, assuming that in all the circumstances there is no good reason for preventing the Claimant from receiving provision for his or her maintenance, what is the reasonable sum or other provision to provide for maintenance out of the estate?  The question is objective and should not in the normal case be over-difficult to answer.

9.   I emphasise “in the normal case”, because over the many years that I have practised in this field – and I recollect that one of my earliest cases was against “that rising junior Mr Browne-Wilkinson” – some cases present very considerable problems.  Those problems may be such that by no legislative provision could a fair outcome be achieved. They may require not merely common sense, but also a degree of lateral thinking and ingenuity.   So long as the District Judge – and it nearly always is the District Judge – pays due regard to the objectivity of his or her task in discerning what in all the circumstances would be reasonable provision for the Claimant, having regard to the provisions of the Act, in my respectful view – and in this respect I would seem to be in agreement with the Supreme Court, the District Judge will not go far wrong.