Judgment was handed down today in Cowan v Foreman and ors [2019] EWHC 349 (Fam), a widow’s application to extend the 6-month time limit for a claim pursuant to section 4 of the Inheritance (Provision for Family and Dependants) Act 1975. The testator settled the bulk of his estate on discretionary trusts with letters of wishes favouring his widow.
Mostyn J condemned the common practice of using stand-still agreements in 1975 Act claims and expressed a clear view as to the way in which the jurisdiction should be exercised.
1) Fundamentally, the court must be satisfied that the claimant has shown (a) good reasons justifying the delay and (b) that she has a claim of sufficient merit to be allowed to proceed to trial (para 6).
2) It is not the exercise of a discretion but the making of a qualitative decision or a value judgment (Lord Clarke in Abela & Ors v. Baadarani [2013] UKSC 44) (para 6). Once the facts are established the judge’s personal views about rightness and wrongness are far more tightly confined where the process is evaluative rather than discretionary (para 41).
3) A robust application of the extension power in section 4 is consistent with the spirit of the overriding objective and echoes the ever-developing sanctions jurisprudence exemplified by Denton & Ors v TH White Ltd & Ors [2014] EWCA Civ 906, [2014] 1 WLR 3926. The fact that the time limit is contained within the statute rather than in a procedural rule is also of significance (para 4).
4) The judge rejected the argument that a discretionary trust did not afford reasonable provision as it left the widow at the mercy of the trustees. He expressed the view the argument introduced a form of spousal forced heirship not known to the law (para 21).
5) The use of stand-still agreements should come to an immediate end. It is not for the parties to give away time that belongs to the court. If the parties want to agree a moratorium for the purposes of negotiations, then the claim should be issued in time and then the court invited to stay the proceedings while the negotiations are pursued (para 34).
Those interested in the standstill point might consider paragraphs 8 and 9 of Coulson J's judgment in Russell v Stone [2017] EWHC 1555 (TCC) which concerned the expiry of a limitation period under the Limitation Act 1980 and it will be remembered standstill agreements are expressly sanctioned by para 4.1 of the pre-action protocol for professional negligence.
The Judge dismissed the application, concluding that Mrs Cowan did not have a real prospect of success or a good reason for her 13 month delay.