Ilott v Mitson: The Final Judgment

1. Over twelve years after the deceased’s death, the Supreme Court has finally put an end to this legal saga.

2. The Supreme Court has unanimously allowed the charities’ appeal from the Court of Appeal’s Order and restored the district judge’s Order. So, instead of receiving £163,000, the applicant Mrs. Ilott receives £50,000.

3. Much of what the Supreme Court states is a reaffirmation of earlier well-known decisions such as In re Dennis [1981] 2 All ER 140 (on the meaning of maintenance) and In re Coventry [1980] Ch. 461 (on the testator’s freedom of disposition provided that the disposition does not produce an unreasonable result.)

4. The Supreme Court restates the importance of maintenance as a significant limitation on awards to applicants. The purpose of an award is to provide income to the applicant (normally by an award of capital) so that he is able to discharge the cost of his daily living at whatever standard of living is appropriate to him.

5. Importantly, the Supreme Court indicated that an absolute interest in real property would be less appropriate than a life interest. This makes sense: if maintenance is about providing for the applicant’s day-to-day needs, then the right to reside in a property for as long as he wishes is plainly sufficient to meet those needs.  The applicant does not need, in addition to that right, to own the property outright.  That would be a luxury in most circumstances.

6. The other important point made by the Supreme Court is that a lengthy estrangement does matter. The court contrasted the facts of this case with the hypothetical facts of a dutiful daughter who ‘remained exceptionally and confidentially close to her mother throughout’ and reached the conclusion that ‘a judge ought in such circumstances to attach importance to the closeness of the relationship in arriving at his assessment of what reasonable financial provision requires.’

7. The two questions that the court must answer are:

1. Did the Will/ intestacy make reasonable financial provision for the claimant; and

2. If not, what reasonable financial provision ought now to be taken for him?

8. As I have indicated above, the Supreme Court has not radically altered the law in this judgment, save to the extent that it has emphasised the relevance of estrangement and deprecated (to some extent) awards of absolute interests in real property.  In other words, the fundamental questions have not changed, but there has been a shift of emphasis in a couple of respects.

9. The Supreme Court swatted aside the Court of Appeal’s judgment. It denied that the district judge had made two ‘fundamental errors’, namely (i) limiting the award because of the estrangement and (ii) making the award without knowing what the effect would be upon the benefits that the applicant and her family received.  Instead, the Supreme Court held that the first ‘fundamental error’ was in fact quite correct; ‘the estrangement was one of the two dominant factors in this case; the other was Mrs. Ilott’s very straitened financial circumstances.’  And as to the second, the Supreme Court held that the applicant would soon spend much of the £50,000 on necessary refurbishment and so forth and thereby soon revive her entitlement to Housing and Council tax benefits.  The district judge was fully aware of the consequences of his Order and did not fall into error.

10 So, the district judge did not fall into error and the Supreme Court, considering the matter afresh, determined that the district judge’s award of £50,000 was appropriate. And indeed, once one grasps the logic of the Supreme Court’s analysis of maintenance in relation to real property, the applicant’s entitlement to a substantial fund to purchase her own property falls away and with it, much of her award.