Miles v Shearer [2021] EWHC 1000 (Ch)

Two adult daughters claimed reasonable financial provision under the Inheritance (Provision for Family and Dependants) Act 1975 from their late father's estate, which passed mainly to his second wife. The High Court dismissed their claims, finding no failure to make reasonable provision for maintenance.

Facts

The claimants, Juliet Miles and Lauretta Shearer, were the adult daughters (aged 40 and 39) of the late Anthony Presley Shearer (‘Tony’), who died on 12 October 2017 aged 68. Tony had been married to the claimants’ mother Jennifer for 34 years before their divorce in 2007. Shortly afterwards he married the defendant, Pamela Shearer, his second wife. Tony’s will of 2 February 2015 left the residuary estate to Pamela, with no provision for either daughter or their children. Substitutionary provisions (operative only had Pamela predeceased Tony) would have left 25% to Juliet and 25% to her daughters. The net UK estate was valued at approximately £2,190,226.

In early 2008, following the sale of a flat in Holland Road in which the daughters had beneficial interests (ultimately derived from Tony), Tony gave Juliet £177,000 and Lauretta £185,000. The court accepted Pamela’s evidence that at the time of these gifts Tony made clear these were the claimants’ ‘legacy’ and that they could expect no further financial assistance. This was reiterated in a letter of 30 May 2008 to Lauretta stating she was ‘on her own financially’. Both claimants used the money towards property purchases.

The relationship between Tony and his daughters was troubled following the divorce, with periods of estrangement, particularly concerning Juliet’s refusal to accept Pamela and Lauretta’s marriage to Mark Stevens, of whom Tony strongly disapproved. Both daughters made significant lifestyle choices (marriage, divorce, property purchases) in the decade before Tony’s death without financial reliance upon him. Jennifer provided substantial ongoing financial support to both daughters, including purchasing the Old Vicarage in Wiltshire where Juliet and her daughters live with her, and paying school fees. Juliet’s younger daughter suffers from severe autism.

Issues

The court had to determine, under section 1(1)(c) and section 2 of the Inheritance (Provision for Family and Dependants) Act 1975:

1. Whether the disposition of Tony’s estate failed to make reasonable financial provision for either claimant for her maintenance; and
2. If so, what order ought to be made.

The claim was limited to ‘maintenance’ provision given the claimants were adult children, not spouses.

Arguments

Claimants

Mr Holland submitted that the claimants had enjoyed an affluent lifestyle until their parents’ divorce and had made lifestyle choices in reliance on Tony’s continued financial support. Juliet asserted financial precariousness, particularly given her younger daughter’s autism. Lauretta sought a lump sum to convert her interest-only mortgage into an affordable repayment mortgage and to buy out her former husband’s 11% equity. It was submitted Tony’s conduct towards his daughters (particularly surrounding Lauretta’s wedding and pregnancy) had been unreasonable and influenced by Pamela. Reliance was placed on In re Goodchild and In re Myers, and it was argued the court should draw adverse inferences from Pamela’s refusal to disclose her financial position or confirm whether she had altered her mirror will.

Defendant

Miss Rich submitted that Tony’s 2008 gifts were generous and accompanied by an unambiguous statement that no further financial assistance should be expected. The claimants had demonstrably made independent lifestyle choices and had significant ongoing support from their mother. Tony had disclaimed any continuing responsibility, so under section 3(1)(d) he owed no relevant obligations at the date of death (relying on In re Jennings and Baynes v Hedger). Lauretta’s mortgage reduction claim did not fall within the concept of maintenance.

Judgment

Sir Julian Flaux C dismissed both claims. He preferred Pamela’s evidence throughout, finding the claimants and Jennifer lacked objectivity and had a ‘sense of entitlement’. Pamela was described as ‘a straightforward and objective witness’.

Legal framework

The Chancellor applied the two-stage approach identified in Ilott v Mitson (No 2) [2017] UKSC 17, noting the substantial overlap between the two questions. He emphasised Lord Hughes JSC’s observation that ‘reasonable financial provision’ for non-spousal claimants is limited to maintenance, which ‘cannot extend to any or every thing which it would be desirable for the claimant to have’ but ‘must import provision to meet the everyday expenses of living’. He also cited Browne-Wilkinson J in In re Dennis, approved in Ilott, that maintenance connotes payments enabling the applicant ‘to discharge the cost of his daily living at whatever standard of living is appropriate to him’.

Application of section 3(1) factors

Financial resources and needs (s.3(1)(a)-(b)): Juliet’s claimed shortfall was assessed against the luxurious lifestyle at the Old Vicarage supported by Jennifer, rather than the more modest MOD accommodation she had accepted when married to Keith. Realistic alternatives existed without recourse to Tony’s estate, including potential earnings of around £15,000 per annum as a dog behaviourist. Regarding Lauretta, the Chancellor doubted that £244,000 to convert her mortgage constituted ‘maintenance’; In re Leach was distinguished on its facts. The contingent liability to buy out Mark’s 11% equity (only arising in 2034) could not be a foreseeable financial need within section 3(1)(a).

Pamela’s resources (s.3(1)(c)): The Chancellor accepted Mr Holland’s submission that, given Pamela’s refusal to disclose her means, the court should proceed on the basis her needs were met from other resources. However, he refused to draw adverse inferences that Pamela had revoked her mirror will or had lied, she having expressly denied revocation and affirmed she would respect Tony’s wishes. In re Goodchild was therefore of limited relevance.

Obligations and responsibilities (s.3(1)(d)): Applying In re Jennings, the Chancellor held that section 3(1)(d) concerns obligations existing immediately before death, not defunct past obligations. Tony had expressly disclaimed continuing responsibility from 2008 onwards and had refused financial assistance with both daughters’ divorces. In re Myers was distinguished; its broad statement about parental obligations could not stand as a general principle and, in any event, the factual circumstances (a 60-year-old claimant in parlous health and circumstances) bore no comparison.

Other matters (s.3(1)(g)): Tony’s testamentary wishes carried weight. The Chancellor rejected the contention that Tony’s conduct had been unreasonable or unduly influenced by Pamela. His concerns about Mark were genuine and, with hindsight, not unfounded.

Conclusion

The Chancellor concluded that Tony’s will did not fail to make reasonable financial provision for the claimants’ maintenance. The second statutory question accordingly did not arise.

Implications

This decision reinforces several important principles concerning claims by adult children under the 1975 Act:

• The ‘maintenance’ limitation in section 1(2)(b) is a deliberate legislative choice reflecting the significance of testamentary freedom; claims by adult children are not to be treated as equivalent to spousal claims.
• Where a deceased has made substantial lifetime provision for an adult child accompanied by a clear statement that no further assistance will be forthcoming, and where the adult child has thereafter made independent lifestyle choices without reliance on the deceased, the court is unlikely to find continuing obligations and responsibilities at the date of death for the purposes of section 3(1)(d).
• Following In re Jennings, section 3(1)(d) is concerned with obligations at the date of death, not historic obligations. Any broader approach in In re Myers was treated with scepticism.
• The existence of a surviving parent who provides substantial ongoing support, and whose resources were derived from the division of matrimonial assets on divorce, is a relevant factor weighing against a claim.
• A claim by an adult child to reduce mortgage debt to an affordable level does not automatically constitute ‘maintenance’ absent particular circumstances such as those in In re Leach or Espinosa v Bourke; payment of a contingent future liability is unlikely to be a foreseeable need within section 3(1)(a).
• A defendant beneficiary’s election to keep financial affairs private may lead the court to assume those needs are met from resources outside the estate, but this does not relieve the claimant of proving her own maintenance need.
• The court will not readily draw adverse inferences against a defendant or find that a witness has lied on the basis of a refusal to disclose private testamentary dispositions.

The case is a practical illustration of the importance of the factual matrix in claims by adult children and underlines the continuing centrality of testamentary freedom in English law. It will be of particular interest to practitioners advising adult children contemplating 1975 Act claims, or executors defending them, especially where lifetime provision has been made with an express disclaimer of future assistance.

Verdict: Both claims under the Inheritance (Provision for Family and Dependants) Act 1975 were dismissed. The court held that Tony Shearer’s will did not fail to make reasonable financial provision for the maintenance of either adult daughter.

Source: Miles v Shearer [2021] EWHC 1000 (Ch)