Permission granted to bring a 1975 Act claim 25 years and 9 months out of time

March 7, 2019

Chief Master Marsh’s judgment in Bhusate -v- Patel [2019] EWHC 470 (Ch) might cause ripples amongst estates practitioners.

Mr Bhusate died intestate on 28 April 1990. The Claimant and one of her step-children extracted letters of administration on 12 August 1991 and on 16 March 1992 she gave notice to capitalise her life interest. The Claimant marketed the estate’s property for sale from 1992 until 1994 when she withdrew it from the market. She and her son have lived in it throughout.

In July 2017 the Claimant sent a letter of claim. In November 2017 she commenced proceedings. Her claim to the beneficial interest in the property and a statutory legacy was struck out (see Re Kashinath Bhusate [2018] EWHC 2362 (Ch))

The section 4 application was heard in February. In the judgment handed down today Chief Master Marsh concluded the Claimant had demonstrated compelling reasons why the court should exercise a discretion in her favour. The Chief Master summarised his reasons in 4 sub-paragraphs:

1)   The merits of the Claimant’s claim are very strong (this is a development from the arguable case threshold and practitioners will have in mind the analysis at para 34 of Sargeant v Sargeant [2018] EWHC 8 (Ch)).

2)   The delay in bringing the claim was because the Claimant was “powerless to do anything”. The Claimant’s culpability in failing to administer the estate for more than 26 years was negligible. This conclusion was founded on her limited education and the poor level of English she alleged in her witness statements (written in English).

3)   The opposing beneficiaries obstructed the sale in 1994 by insisting on a sale price they agreed on and did nothing to break the impasse for 23 years. They stood by until the Claimant commenced proceedings (claiming the entire beneficial interest in the estate’s principle asset) and then took a limitation point to deprive the Claimant of her entitlement. “That the Claimant has a claim, subject to her section 4 application succeeding, is due to their actions.”

4)   If the application is refused the Claimant will have no remedy, no benefit from the estate and will be homeless.  

The Chief Master refused permission to appeal.

 

Comment

The jurisdiction appears to be more flexible than many had believed, perhaps it is now to be treated with greater indulgence than procedural limits. Prior to Bhusate, the latest successful application was 5 years and 5 months in Stock v Brown [1994] 1 FLR 840, the next latest was 3 years and 7 months in McNulty v McNulty [2002] All ER (D) 150 (Jan).

The conclusion that delay is a factor weighing against the respondents may cause some difficulties in practice. It is grounded in two findings: a) the beneficiaries did not assist their estranged step-mother in either administering the estate or bringing a 1975 Act claim; and b) they succeeded in a limitation defence against her statutory legacy claim.

Some clients will have difficulty accepting the advice that they must assist their estranged relatives in administering an estate, particularly if they are seeking to do so in a way which does not favour the client; and that if they have a good defence to a claim brought against the estate they must not plead it. The position appears to be that if they do not follow that advice, they are exposed to 1975 Act claims indefinitely.

Bhusate follows shortly after Mostyn J’s judgment in Cowan v Foreman and ors [2019] EWHC 349 (Fam), the two approaches are not easy to reconcile.

Toby Bishop represented the respondents to the application, led by Richard Wilson QC and instructed by Clare Kelly from Anthony Gold.