Court of Appeal Reviews Beneficiaries’ Rights

Court of Appeal Reviews Beneficiaries’ Rights

 

In the recently well publicised case of Ilott v Mitson,  Mrs Ilott successfully appealed to the Court of Appeal and received £163,000 from her mother’s estate despite not being named as a beneficiary under the Will.  The circumstances of this case are further surprising as Mrs Ilott had been estranged from her mother for the majority of her adult life despite three attempts at reconciliation.

Family Circumstances

Louisa Shailes of our Private Client team explains; “ Mrs Ilott was brought up solely by her mother following the death of her father before her birth.  At 17 Mrs Ilott left home to live with Mr Ilott without her mother’s approval.  She later married and had 5 children with Mr Ilott but her relationship with her mother never improved.  Mrs Ilott lives in a housing association property and her family is supported by various benefits.

Mrs Ilott’s mother passed away leaving a Will, supported by two side letters explaining her reasoning, leaving nothing to her daughter or wider family but leaving her estate valued at £486,000 equally between three charities.

Judgment from Court of Appeal

Peter Hastings of our litigation team comments “The claim was brought by Mrs Ilott under the Inheritance (Provision for Family and Dependents) Act 1975 which allows, amongst other categories, children of the deceased to bring a claim upon the estate for reasonable provision.
It was found that Mrs Ilott should not be penalised for a lack of expectation of receiving anything from her mother’s estate as the charities had no expectation either as the deceased had no previous connection with the charities in her lifetime. It was also found that the estrangement between the parties should not deprive the appellant of an award.

The testamentary wishes of the deceased has been limited by Parliament as they have “entrusted the courts with the power to ensure, in the case of even an adult child, that reasonable financial provision is made”. The court felt that the limitation on the award for an adult child being limited to provision by way of maintenance was enough to balance the testamentary wishes of the deceased with the needs of the appellant.

The appellant’s income, earning capacity and lack of pension contributed to the court’s reasoning that despite Mrs Ilott being an independent adult child she survived on such a basic level of resources that she was awarded £143,000 to purchase her local authority house. She was also given the option to receive a further award of £20,000 from the estate to provide extra income without affecting the benefits she receives”.

Conclusion

Louisa Shailes adds “Despite the somewhat surprising outcome of the case, it is important to remember that the award made was specific on the facts of this case.  It is clear from the judgment that the court considered all factors set out in Section 3 of the Inheritance (Provision for Family and Dependants Act) 1975 in making their award and therefore there is no new law in the case.  It does, however, appear to show that the court will consider family members claims despite testamentary wishes and consider their maintenance needs”.

It is always important to consider any potential claims upon your estate despite the general rule that you can leave your estate as you wish.  If you would like to discuss your Will and any of the above issues with one of our private client team, please contact Louisa Shailes (louisa.shailes@rogers-norton.co.uk) and for advice on seeking to challenge a Will, please contact Peter Hastings (peter.hastings@rogers-norton.co.uk).

Estate Agents’ Sole Agency Commission

The Court of Appeal has just handed down what can only be described as a mixed decision on the effect of the Estate Agents Act 1979 and the associated 1991 Regulations.

These require agents to explain terms such as “sole agency” and to provide details of when “remuneration” is payable. There is a useful definition of sole agency in the Regulations for agents to adopt in their contracts.

In this case the agreement did not include the statutory information in full. Significantly it did not include the necessary express reference to an obligation to pay remuneration if a sale contract were exchanged with a purchaser introduced by another agent during the period of the sole agency. Furthermore, despite being described as a “sole agency”, it included no express prohibition on dealing with another agent during the period of the contract.

The agent came up with three offers but the seller sold elsewhere using another agent. He paid their commission and was reluctant to meet the first agent’s claims under their “sole agency agreement”.

The Court’s decision

The agent’s claim failed in the High Court and failed again on appeal.

• The majority found it unnecessary to decide whether the seller had acted in breach of his obligations under the contract, and was therefore liable to pay damages.
• They held instead that “remuneration” in the statutory scheme covered damages in lieu of commission and that the agent had failed to comply with the requirement to give adequate particulars about the seller’s obligation to pay this. Merely to include the words “sole agency” was not sufficient.

In view of the breach of the statutory requirements, the sole agency agreement could not be enforced without a Court Order, and the Court had power to dismiss or reduce the agent’s claim. In this case the claim was dismissed as the Court was satisfied that the seller was prejudiced by the absence of the information required by statute.

The message

Agents who wish to act on a sole agency basis should, if they are not already doing so, ensure compliance with the statutory requirements by using the full statutory wording wherever possible, or otherwise ensuring that their agreements comply with the information requirements in full.

If you would like to discuss this article, or any other matter relating to disputed agency or other contract issues please contact John Cadywould on 01603 675629, or e-mail jbc@rogers-norton.co.uk.