Our Inheritance and Trusts Disputes Team explain why it is so important for cohabitees to seek specialist legal advice when they begin to cohabit to ensure that their position is protected if their loved one dies, by exploring the case of Banfield v Campbell.

The recent case of Banfield v Campbell [2018] EWHC 1943 (Ch) is an interesting early example of how the Court appears intent upon applying the Ilott v Blue Cross decision in 1975 Act claims extending that application beyond adult children; in this case to the determination of a cohabitee claim.

 

The Facts

Mr Banfield was the long term cohabitee of the deceased, Mrs Campbell, of over 20 years as at the date of her death on 7th October 2015. Mrs Campbell left the residue of her Estate to her son and only child, James Campbell by the terms of her Will dated 6th August 2001; leaving Mr Banfield only £5,000 and referring to him as her “friend”.

Mr Banfield therefore pursued a claim under the Inheritance (Provision for Family & Dependants) Act 1975 (“the 1975 Act”) as a cohabitee of the deceased (alternatively as a financial dependant) for whom reasonable financial provision had not been made from the Will.

The main asset of the Estate was the family home which had been inherited by Mrs Campbell from her late husband, Mr Neil Campbell (James’ father) following his death in 1992 (when James was 10 years old). At the time of the trial James was 35 years old.

Mr Banfield had a number of health problems (including spinal decompression and diabetes) causing him to give up work in his early 50s and, from around 2011, forcing him to sleep downstairs in a reclining chair. Evidence was given to Court about the strain that Mr Banfield’s health problems, and Mrs Campbell needing to care for him, placed upon the relationship.

 

The Judgment

The Court found that Mr Banfield had been permanently cohabiting with Mrs Campbell from 2001 onwards (albeit staying with his elderly mother on occasion to care for her until her death in 2010) and that they had become engaged to be married.

The Court found:

  • Mr Banfield was an eligible applicant under section 1(1)(ba) of the 1975 Act (as a cohabitee).

 

  • In determining whether reasonable financial provision had therefore been made for Mr Banfield the Court applied Ilott v Blue Cross [2017] UKSC 17 (“Ilott”) the high profile Supreme Court decision determining an adult child’s claim under the 1975 Act against her mother’s Estate.

 

  • Of significance, the Court found that Ilott was not limited to the application of the 1975 Act to adult children only and that the principles in Ilott “are equally applicable to other classes of applicants whose claim is limited to maintenance” and in reaching this decision it relied upon Lewis v Warner [2017] EWCA 2182 (Civ), another post-Ilott decision applied to a cohabitee applicant under the 1975 Act.

 

  • The Court found that when making a value judgment the length of the relationship between Mr Banfield and Mrs Campbell should lean towards more generous provision for maintenance. To have only left Mr Banfield £5,000 after a 20 year relationship was therefore found not to be reasonable financial provision.

 

  • The Court found that private rental accommodation did not comprise reasonable financial provision for Mr Banfield at his age and with his health problems. It was also not found to be reasonable to expect Mr Banfield to utilise his capital to purchase an over-55s or over-60s property. The Court found Mr Banfield’s housing preferences to be reasonable however, the Court found a lump sum was less likely to be appropriate where the deceased had a child by an earlier marriage or relationship to whom she wants (and reasonably expected) to be able to pass on capital to provide or start in life. The Court also commented that a particular feature of this case was that “the main asset of the estate was a pre-owned asset owned and inherited by the deceased before the start of her relationship with Mr Banfield”.

 

  • The Court also found that “where a lump sum sought involved 50% or more of the Estate it is much more likely to be appropriate to make provision for housing by way of a life interest to avoid conferring capital and to avoid depriving the Defendant of capital which would otherwise pass to him”.

 

  • The Court therefore ordered that the family home should be sold and that Mr Banfield should be granted a life interest in one half of the net proceeds of sale to be used in or towards providing alternative accommodation for him. In addition, a lump sum of £20,000 was to be “kept available within the estate in case the property purchased needs specific adaptation to meet Mr Banfield’s needs”.

 

  • The Court was not satisfied that a breakdown in the relationship between Mr Banfield and James was sufficient to make a lump sum order here even though it recognised that this argument had succeeded in Martin v Williams [2017] EWHC 491 (Ch). The Court found the arrangements it had ordered were not “over-complicated” and expected the parties to work together once the litigation, and its costs consequences, were resolved. The Court found Ilott’s subsequent decision (to Martin) strengthened that approach.

 

The Wider Implications

This further post-Ilott case sheds more light upon the extent to which the Courts seem keen to apply the principles laid down there to additional types of applicants than just adult children.

Traditionally cohabitees have been considered to be in one of the stronger positions of applicants under the 1975 Act even though they are subject to the lesser “maintenance” standard to which spouses and civil partners are not subject.

This judgment therefore acts as a reality check for practitioners and claimants alike that even with cohabitees a life interest appears to be the Court’s preferred outcome to satisfy housing needs for all applicants subject to the “maintenance” test. However, all cases turn upon their own individual facts and it is clear from this judgment that if the parties had perhaps had children of their relationship, had there been no competing interests of children from a previous relationship and had there been no pre-owned asset then the outcome may have been different.

One issue is very clear, however, and this was even expressly commented upon by the Court in this case – that “the circumstances of the present case provide an example of the vulnerable position in which cohabitants find themselves if they unexpectedly survive their partner”. This makes it all the more important that cohabitees seek to protect themselves before the worst happens by preparing appropriate Wills and, where appropriate, entering in to Cohabitation Agreements.

 

Stephens Scown’s specialist Inheritance and Trusts Disputes Team can help with all aspects of 1975 Act claims or Cohabitation Agreements as well as referring you to our specialist Private Client department to update your Will where appropriate.