Applications under s4 Inheritance Act for permission to proceed out of time: In the estate of Kashinath Bhusate deceased

Chief Master Marsh has today handed down judgment in the matter of Mrs Shantabai Bhusate v Dr Mangala Patel and others [2019] EWHC 470 (Ch).  This is an application under s4 of the Inheritance (Provision for Family and Dependants) Act 1975 for permission to proceed out of time.  It was the second part of the litigation following earlier proprietary claims and I acted for the 2^nd – 5^th defendants in the Inheritance Act application but not in the earlier proceedings.

Chief Master Marsh has allowed permission for the Claimant to proceed over 25 years out of time – an extraordinary decision in any circumstances, but particularly in light of the recent judgment in Cowan v Foreman and others [2019] EWHC 349 (Fam).

The factual and legal background was complicated.  Essentially, the claimant was the widow of Kashinath Bhusate deceased – his third wife, and the mother of his youngest child (the 6^th Defendant).  The deceased lived in the UK from 1957 onwards.  The 1^st – 5^th Defendants were the children of his first marriage – his first wife sadly died in 1971.  His second marriage was short and ended in divorce.

The claimant and the deceased were married in 1979 when the deceased was 61 and the claimant was 28.  They were married in India, and the claimant moved to the UK in 1980.  The deceased died intestate on 28 April 1990 aged 72. A grant of letters of administration was taken out by the claimant and the first defendant on 12 August 1991.

At that time, the claimant was entitled to a statutory legacy and a one-half share of the residuary estate in trust for her absolutely.  The only asset in the estate (other than a very small sum in a bank account) was a property.  In order for the claimant to receive her legacy, the property would have had to be sold.  It was put on the market in the 1990s, but failed to sell and the claimant and her son (and later his family) continued to live there.  No further steps were taken to administer the estate by the claimant or first defendant.

On 29 November 2017 the claimant issued various proceedings, including a variety of proprietary claims relating to the property, a claim for payment of the statutory legacy and capitalised life interest (plus statutory interest), and permission to bring a claim under the Inheritance Act.  The 6^th Defendant also brought a proprietary claim relating to the property.   On 13 September 2018, Chief Master Marsh struck out the claimant’s proprietary claims on the basis that they were bound to fail and struck out her claim to her statutory legacy and capitalised life interest on the basis that her entitlement was statute barred. The claimant and first defendant were removed as executors because they had failed to progress the administration.  The judgment is reported at Bhusate v Patel and others [2018] EWHC 2362 (Ch).

The claimant’s application under s4 was held over, heard in February and judgment has now been given.  She has been given permission to proceed on the following grounds:

1. The merits of her claim under the Inheritance Act are very strong;

2. The delay in bringing the claim has been explained, and the claimant was powerless to do anything in the absence of agreement or engagement by her stepchildren. The breach of duty by her in failing to administer the estate, was sufficient basis for her to be removed as an administrator but her level of culpability is negligible.

3. The 2^nd to 5^th defendants obstructed the sale of the property by insisting on a sale at a price they agreed and having obstructed the sale they did nothing to break the impasse for a further 23 years. They have stood by until a claim was made and then taken a limitation point so as to deprive the claimant of her entitlement from the estate.

4. If the application under section 4 is not granted, the claimant will be left with no remedy at all and no benefit from her husband’s estate. She will be left homeless.

It is quite clear that Chief Master Marsh did not like the stance which my clients had taken in the earlier proceedings, but his reasoning raises all sorts of problems and questions.  In response to his four reasons for granting permission:

1. He notes in the judgment that the claimant had no claim at the date when the limitation expired because of her entitlement under the intestacy. She has only now got financial needs because of her failure to administer the estate – but Chief Master Marsh excuses these for a variety of reasons.  This leaves anyone advising executors in a very difficult position because it seems that if you have no claim at the date of limitation, but later have financial needs, you will be able to apply for provision under the Act.

2. The claimant, and first defendant, were administrators who took legal advice at the outset of the administration. There is no requirement on an administrator to get the agreement of the beneficiaries to the sale price of a property, and there is no reason that they could not have dealt with the administration.

3. As in (2), the beneficiaries of an estate have no power to insist on a sale price for an estate asset, and the property here could have been sold. In relation to the limitation point, Chief Master Marsh clearly felt that it was extremely aggressive to take that point – it is open to any defendant not to do so after all.  However, it also seems wrong to say that a party who takes action to enforce their legal rights is then to be criticised for having done so.

4. The fourth reason was correct – she will not get anything from the estate, and there is no-one else she could take action against.

This is an extraordinary judgment following an extraordinary delay.  It leaves private client lawyers and anyone advising on Inheritance Act claims in a real quandary – on one hand, Mostyn J says a delay of 17 months cannot be tolerated but on the other, Chief Master Marsh says 25 years is acceptable.  In light of this judgment, it has to be questioned whether there is any real limitation at all in Inheritance Act claims, particularly if claimants can wait until such time as they are in financial need before deciding whether to issue, even if the provision at the date of limitation was adequate.

An appeal is being considered.

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