The Time Limit for Inheritance Act claims

In January this year the case of Sargeant v Sargeant [2018] offered insight on limitation matters for claims under the Inheritance Act.

The Act 

The Inheritance Act provides that without the permission of the Court no application may be made under that Act after a period of six months from the date of the grant of representation. (The document obtained by the executors confirming their authority to administer the estate).

Limitation period

“The period within which a person who has a right to claim against another person must start court proceedings to establish that right. The expiry of the period may be a defence to the claim.”

Facts of Sargeant v Sargeant 

Mary Sargeant’s husband, Joe made a Will in 2002. He died in 2005 and in March 2006 a grant of probate was issued to Mary, Jane (daughter of Mary and Joe) and family solicitor Mr Thomson.

The total value of Joe’s estate was £3.2m in 2005. Mary received a life policy worth £75,000. The majority of the estate went to the executors as trustees on a discretionary Trust. The potential beneficiaries under the Trust were Mary, Jane and Jane’s issue.

In addition to the £75,000 Mary received three properties out of the Trust in 2006/7. She also benefited from a salary of £20,400 p.a. as a partner in an ongoing family farming business (she did no work for the salary). From 2009 onwards Mary identified her income did not fully cover her expenditure and she had need to rely on savings. On various subsequent dates the Trustees of Joe’s Will Trust (Mary, Jane and Mr Thompson) considered sale of some Trust farm land but could not agree as Jane was opposed. In 2015 Mary’s salary was increased to £30,000 p.a.

The Trust included farm land and with property developer interest and planning permission obtained in 2016 the land values increased significantly.

In the years after Joe died, Mary came to the view that the 2002 Will did not make reasonable financial provision for her. Eventually in July 2016 she issued a claim under the Inheritance Act 10+ years after the grant of probate –well over the six month time limit. Mary required and so duly requested permission from the Court for her claim to proceed.

The question of permission was tried as a preliminary issue.

The Law

Cases concerned with the Court exercise of discretion to permit a claim to proceed outside the six month time limit invariably reference the six considerations identified in Re Salmon [1981]:

1. The discretion is unfettered and to be exercised in accordance with what is just and proper
2. The onus is on the claimant to establish a substantial case for the claim to proceed despite the normal rule, which said to be “no triviality”. The rule is a substantive provision, not a mere procedural time limit imposed by rules of court which might be treated with indulgence
3. How promptly and in what circumstances the claim has been brought outside the time limit
4. Whether negotiations were commenced within the time limit, or whether any delay after the expiry of the limit may be accounted for by negotiations
5. Whether the estate has been distributed before a claim under the Act has been made or notified
6. Whether the claimant has any other redress, for example against advisers, if permission is refused.

Additionally the Court should also consider whether the claimant has an arguable 1975 Act claim if permission to proceed with the claim were to be granted.

Decision

Mary argued that she was prompted to consider a claim only when her income no longer covered her expenditure, she had previously not realised her position or that she could possibly make a claim. She also initially sought to allege the solicitor, Mr Thompson had failed over the years to recommend she obtain independent advice on her personal position. That criticism was withdrawn when the written records showed the suggestion Mary take independent advice had been made.

The Judge found on the evidence that Mary was fully aware of the reality of her financial position by at least 2011 (five years before the court claim was started). Accordingly given the very extensive delay and considering all the Re Salmon factors permission was not given for the claim to proceed.

Conclusions

It is often said that each case turns on its own facts. The Sargeant case can be contrasted with others such as Stock v Brown [1994] in which permission to claim was granted even after a period of six years had elapsed. In the future hopeful Claimants are well advised to carefully consider the Sargeant case as permission to proceed with a late claim it is not a straightforward matter of simply showing previous ignorance of the right to bring a claim under the Act.  Meanwhile, Defendants will have been encouraged by the Sargeant decision.