[2025] EWHC 2054 (Ch)

I have set out the applicable legal principles in respect of this claim at [236]-[239] of the liability judgment.

I concluded (at [240]) that Richard was financially dependent upon Alan and (at [241]) that Alan’s 2020 will failed to make reasonable financial provision for Richard. I concluded (at [242]) that it would be unwise to reach definitive conclusions about what would be reasonable financial provision for Richard until I had considered the question of what should be appropriate relief to be given to Richard on his proprietary estoppel claim. If my decision in respect of that claim is upheld on any appeal, it is not necessary to consider Richard’s alternative claim under the 1975 Act because his reasonable financial needs are met by the relief he has obtained in respect of his proprietary estoppel claim. It is only if my decision in respect of Richard’s principal claim is overturned on appeal that it is necessary to consider the appropriate relief to be given to him under his 1975 Act claim.

I am required by section 3 of the 1975 Act to have regard to the factors set out in [237] of the liability judgment which, for ease, I repeat here:

So far as the financial resources and financial needs of the beneficiaries of Alan’s estate (namely, Simon and George) are concerned, I have regard to the fact that Simon and George stand to inherit a valuable estate which I consider will be sufficient to provide for their financial needs for the foreseeable future. That remains the case even if they assume responsibility for the partnership debts.

The evidence suggests that Alan’s net estate is in the region of £5-6 million. The combined valuation of the two farms and the Marton land as at the date of Alan’s death was over £5.5 million and had risen to over £6 million by January 2024. It is necessary to deduct the combined Lloyds borrowing figure which in December 2024 stood at some £3 million.

The uncertainty as to the actual value of Alan’s net estate concerns the amount of the golf course monies to which the estate may be entitled (there being a credit balance of some £4 million currently held in escrow in a Santander bank account). Notwithstanding that uncertainty as to the likely amount of the golf course monies which will be received by the estate, I can safely conclude that making a fair award to Richard in respect of his 1975 Act claim will not have an unfair impact upon Simon and George as the other beneficiaries.

Simon gave some evidence as to his and George’s own personal circumstances (referred to in paragraph 18 above). Richard objects to this on the basis that there was no indication in Simon or George’s evidence at the liability trial that they wished to defend the 1975 Act claim with their own needs-based defence. In any event, Richard says that even if the court gave permission for Simon to rely on this evidence, it is not sufficiently supported by documentary evidence and cannot safely be relied upon. I take the view that Simon’s evidence is not sufficiently probative to dissuade me from the conclusion I have reached that making a fair award to Richard in respect of his 1975 Act claim will not have an unfair impact on Simon and George as the other beneficiaries.

There are three elements to Richard’s 1975 Act claim. First, he asks for relief from liabilities he may have in respect of the two farming partnerships in which he was a partner. Second, since he would no longer be entitled to live in the farmhouse at North Cowton, he asks for provision to be made in respect of his housing needs. Third, he asks for provision to be made in respect of his income needs.

Richard currently has unquantified liabilities in respect of his involvement in two farming partnerships, namely, the original partnership A&M Armstrong & Sons commenced in the early 1990s and the North Cowton partnership commenced on 1 November 2017. Since the creation of the North Cowton partnership, Richard has had no involvement with the original partnership which is concerned with the farming business at Allerton Grange. Since Alan’s death, as a result of Alan’s 2020 will, Richard has not been involved with the farming business at North Cowton. The extent of his liability in respect of both these partnerships is uncertain. No attempts have been made to dissolve either partnership or to enforce the debts for which Richard may be said to be responsible. Richard asks that whatever partnership liability he has is taken into account when assessing his 1975 Act claim.

The defendants’ principal submission is that provision directed towards relieving Richard from his liability for partnership debts is not properly to be regarded as maintenance. They submit the payment of those debts would not constitute maintenance unless it was shown that Richard’s bankruptcy would prevent him from earning his living and that this has never been suggested. They therefore submit that an award directed towards relieving Richard of liability for partnership debts would not constitute maintenance and should not be made.

I cannot accept the defendants’ submission on this point. I consider it is clear enough that if Richard was made liable to pay the partnership debt to the bank, he would be made bankrupt because he would not have the means to pay it. On the assumption that his proprietary estoppel claim has not been upheld, he will be left in a position where he has no entitlement to the capital value of North Cowton, is not involved in either farming business, has no property in which to live and is likely to have to declare himself bankrupt due to his inability to pay the partnership debt.

I prefer the defendants’ fallback submission that in order to ensure fairness between Richard on the one hand and Simon and George as the executors and beneficiaries of Alan’s estate on the other, Richard should be indemnified for any partnership liabilities that he may have.

I consider that the court has power to make such an order under section 2(4) of the 1975 Act which provides that “an order under [section 2] may contain such consequential and supplemental provisions as the court thinks necessary or expedient … for the purpose of securing that the order operates fairly as between one beneficiary of the estate of the deceased and another ...”. In circumstances where Simon and George would be farming at both Allerton Grange and North Cowton, it is fair that they should be required to indemnify Richard for the liabilities of those businesses to the bank.

The authorities indicate that, of all the needs of an applicant under the 1975 Act, the need for somewhere to live is likely to be especially important. Richard submits that although it was suggested by Lady Hale in Ilott v Mitson(at [65]) that an award of a life interest in a property may be considered to be more consistent with an award for an applicant’s maintenance, this is not an immutable rule. He relies on the obiter observation of Browne Wilkinson J in Re Dennis decd[1981] 2 All ER 140 at 145-6 that provision can be made by way of a lump sum to buy a house in which the applicant can be housed but, as Lord Hughes stated in Ilottat [15], it is necessary to remember that the statutory power is to provide for maintenance, not to confer capital on the claimant.

The defendants submit that, when the maintenance standard applies, the ordinary course is for the housing provision to be made by way of life interest rather than absolute ownership. They say that, given that Richard has never lived in a property held in his own name and has never had any real security of tenure, a life interest would be a significant improvement on the status quo for him. The fact that both Simon and George are younger than Richard (in George’s case by nearly 30 years) points in favour of any housing need for Richard being met by way of the provision of a life interest in a suitable property.

In my view, there are two significant factors in this case which justify the provision of a lump sum to Richard in such reasonable amount as will enable him to purchase a house in his own name which is necessary to satisfy his housing needs.

First, I consider it essential that there should be a clean break between these parties. Although it might in normal circumstances be thought that giving a life interest to Richard would give him sufficient security of tenure, I do not consider that in the circumstances of this case it would do so. Given the history between the parties, it would be most undesirable for Richard and Sarah to be living in a house owned by the defendants. Only by ensuring that Richard is able to buy a property in which the defendants have no interest will the necessary requirement that there is a clean break between these parties be satisfied.

Second, the fact that this is a valuable estate is an important factor which justifies more generous provision for Richard. The reason Alan’s estate is more valuable than it would otherwise have been is because approximately one quarter of the estate is derived from what would have been Richard’s inheritance from Margaret. Richard was persuaded by Alan to sign the deed of variation because he believed that he would be inheriting North Cowton (with the result that at the very least his inheritance from Margaret would be maintained). In my view, this factor increases the weight of Richard’s claim under the 1975 Act. I am entitled to take account of Alan’s conduct in this regard and the fact that he had moral obligations towards Richard. Margaret and Alan had made mirror wills. This was fully apparent to everyone present at the time of the deed of variation was signed. Alan knew that Margaret would have expected him to make substantial provision for Richard in any updated will. He also knew Margaret would certainly not have expected Richard to receive nothing.

If Richard had not executed the deed of variation, Alan’s estate would have been worth considerably less and, on taking his inheritance from his mother, Richard would have been considerably richer, instead of being in straitened circumstances. When the possibility of Richard ceasing to farm at North Cowton was discussed by Alan and Margaret (without Richard’s knowledge) in 2014 and 2017, it was always in the context that a house should be purchased for him in the village. Simon suggested in evidence that his parents intended to retain ownership of any house purchased for Richard. However, I do not accept that either of them ever expressed such an intention and find it is more likely than not that they intended Richard should be bought a house which he would own.

The farmhouse at North Cowton in which Richard and Sarah currently reside is worth about £600,000 and Richard submits this is the capital sum that should be awarded to him in order to allow him to purchase a property in the vicinity. The defendants say this is a flawed approach. They submit that the North Cowton farmhouse has four bedrooms and is too large for Richard and Sarah’s reasonable needs, given that they are a couple in their 60s with no minor children. They complain that Richard has failed to provide any particulars of suitable properties in the local area and rely on internet searches said to show that 2-bedroom freehold properties in the vicinity of North Cowton can be purchased for less than £225,000.

The defendants ask the court to have regard to the fact that in her evidence Sarah disclosed she had recently inherited £280,000 and submit that this capital sum should be taken into account when considering Richard’s housing needs. Indeed, they go so far as to say that, having regard to Sarah’s capital position, it would not be reasonable for Richard to be provided with any award referable to his housing needs.

I do not think that the 1975 Act permits me, when taking account of Richard’s housing needs, to have regard to Sarah’s recent inheritance of £280,000. In any event, even if the 1975 Act did enable me to have regard to this inheritance, I do not consider that it would be appropriate to do so. It is not Richard’s money and he is not entitled to make use of it. Sarah has Parkinson’s disease. It was clear when she and Richard gave evidence that her condition represents a real concern for them both. Sarah’s future care needs are a factor which need to be taken into account. Whilst the future in this regard is difficult to predict, it is likely that Sarah’s recent inheritance will be needed in whole or in part to meet those needs.

So with these considerations in mind, I need to decide what capital sum represents the fairest figure for Richard to be awarded in respect of his housing needs. I agree with the defendants that Richard and Sarah do not need to live in a house of equivalent size to North Cowton farmhouse, now said to be worth some £600,000. I consider that the sum of £350,000 should be sufficient to permit Richard to purchase a house of a sufficient size to meet his reasonable requirements.

Richard currently earns the net figure of £28,800 per annum as a machine operator but he is now 61 years old, working unsociable shifts and it is unclear for how long he will be able to maintain this employment. It is also not clear that he will be entitled to a full state pension at the age of 67. He has savings totalling some £45,000, an NFU pension worth about £66,000 and a pension from his current employer worth some £12,000. There is a dispute as to whether he is entitled to a share of the golf course monies and (on the assumption that his proprietary estoppel claim is not upheld and he does not therefore forego his claim to the Marton land) a further dispute as to whether he has a 25% beneficial interest in the Marton land.

Richard does not currently have a mortgage or pay rent. He produced a schedule which was not challenged at trial in which he estimated that his and his wife’s annual expenditure in a new home would be approximately £38,000, having deducted figures totalling £12,000 for pension and savings. He accepted that he may be able to call upon Sarah to contribute to their expenditure but, in light of Sarah’s medical condition, it is not clear how long such contribution might continue.

Richard has a life expectancy of another 24 or so years. I was referred by Richard’s counsel to the latest Duxbury Tables which show that a 60-year-old male in receipt of a full state pension with an income requirement of £40,000, £30,000 and £20,000 requires a lump sum of £537,000, £369,000 and £205,000 respectively.

The defendants submit that the income provision which Richard seeks is grossly exaggerated and has not been calculated with reference to Richard’s own evidence as to his current and likely future income needs. They submit that the maintenance standard is restricted to provision which is necessary to meet ordinary everyday expenses. They calculate that allowing Richard expenditure of £2,350 per month would still provide him with a monthly surplus of £50 taking account of his current salary. They say that when Sarah’s earnings of £2,000 per month and entitlement to a full civil service pension are taken into account, Richard and Sarah’s joint monthly income is £4,600 which produces a monthly surplus of £2,250 or £2,700 if the figure allowed for holiday and socialising is reduced by 50%. Accordingly, the defendants say that Richard has not demonstrated a need for any income provision to be made for his maintenance and no award should be made under this heading.

I do not accept the defendants’ submission that Richard has failed to demonstrate a need for any income provision to be made for his maintenance. Doing the best I can on the basis of the available estimated figures, I consider that, even without having to assume liability for partnership debt, Richard’s reasonable expenditure needs will not be matched by his modest income. He has little in savings or pension entitlements to show for his 37 years farming at North Cowton. I do not think that he will be able to look to Sarah for support, whether in terms of her earned income or her inheritance. For the same reasons that I have given in relation to Richard’s housing needs, I consider it essential that there is a clean break between the parties and that a lump sum is paid out of Alan’s estate in order to meet Richard’s reasonable current and future income needs. Taking account of the inheritance to which Richard would have been entitled but for Alan’s conduct in relation to the deed of variation, and the scope that this provides to be more generous to Richard than might otherwise have been justified, I consider that such lump sum should be a further £300,000.

I therefore consider that the remedy to which Richard is entitled on his 1975 Act claim is a total sum of £650,000 to be paid from Alan’s estate, being a fair amount in all the circumstances designed to meet his reasonable housing and income needs.