SHERIFFDOM OF LOTHIAN AND BORDERS AT JEDBURGH
Court Ref A86/08
JUDGMENT OF
SHERIFF JANYS M SCOTT QC
in the cause
MANDY MITCHELL WINDRAM residing at Twenty Johns Road, Eyemouth, Berwickshire, TD14 5DX
PURSUER
against
MANDY MITCHELL WINDRAM residing at Twenty Johns Road, Eyemouth, Berwickshire, TD14 5DX Executor-dative qua guardian in the Estate of the late WILLIAM SOMERS GIACOPAZZI who latterly resided at Twenty Johns Road, Eyemouth, Berwickshire, TD14 5DX
DEFENDER
and
ALISON MARSHALL, Solicitor, Fifty five High Street, Hawick, Curator ad litem to the children S and G
THIRD PARTY
Act: Grant; Iain Smith & Partners, Duns
Alt: Marshall, Curator ad litem
Jedburgh, 21 October 2009
The sheriff, having resumed consideration of the cause, finds the following facts admitted or proved:-
1. William Somers Giacopazzi ("the deceased") died intestate on 24 July 2008. Immediately before his death the deceased was domiciled in Scotland and habitually resident in the sheriffdom of Lothian and Borders. The pursuer was decerned executor-dative qua guardian on the estate of the deceased on 22 August 2008 by the sheriff of this court.
2. The deceased died unmarried. Immediately before his death he was cohabiting with the pursuer. He and she commenced a relationship in 1982 when he was 20 and she was 18. At about the end of 1983 they decided to set up home together. They moved into a rented flat in Renton Terrace in Eyemouth. Three years later they moved to a flat at 20 Harbour Road, Eyemouth given to the deceased by his parents. The pursuer carried out work decorating the flat and assisted in making it a comfortable home. In 2004 the deceased and the pursuer moved to a three bedroom house at 20 Johns Road Eyemouth. They chose the house together. It was purchased in the sole name of the deceased, and was subject to a security in respect of a loan by Bank of Scotland. The pursuer and the deceased carried out work on the house to renovate and decorate it. They were living together in 20 Johns Road at the time of the deceased's death.
3. The deceased and the pursuer decided to have children together. Their son S was born on 26 October 1993 and their daughter G was born on 10 April 1999. The children were living in family with the deceased and the pursuer at the time of the deceased's death. They and the pursuer continue to live together at 20 Johns Road, Eyemouth where they are cared for by the pursuer. S is in S5 and intends to stay at school for a sixth and final year of secondary education. G is in P6.
4. Between the commencement of their cohabitation in 1983 and shortly before the birth of S in 1993 the deceased and the pursuer both worked and pooled their income to meet their outgoings. Initially they worked at the fish and chip shop owned by the parents of the deceased. In about 1985 the deceased started a business running an amusement arcade at 20A Harbour Road, Eyemouth. He worked long hours, particularly during the summer when the arcade required to be manned from 10am to 10pm. His hours in the winter were rather easier, from about lunchtime to about 8pm. The pursuer supported him in the running of the business. On occasion she would spend time with him there and would stand in for him should he require to go on errands. In September 1993 the pursuer stopped work to become a full-time mother and housewife. She and the family were supported by the deceased from the profits of the amusement arcade plus child benefit for the children. In 2004 when G went to school the pursuer resumed employment as a part-time classroom assistant. Her hours were confined to school terms leaving her free to care for the children full-time during school holidays. She contributed her wages to the household income. Throughout the cohabitation the pursuer attended to shopping, cooking, cleaning and washing for herself, the deceased and the children.
5. The deceased and the pursuer did not operate a joint bank account, but they did pool their income to meet their outgoings. The deceased organised their finances. All their assets were held in his name. The pursuer had nothing in her own name. There was a single asset in joint names, namely a policy for the benefit of S.
6. During a family holiday in Cumbria at Hogmanay 2007 the deceased fell ill. In January 2008 he was diagnosed as suffering from cancer. He was operated on and given a colostomy. He received chemotherapy but reacted badly to this. The pursuer devoted herself to nursing him. She attended to all his personal needs. The deceased and the pursuer discussed regularising their relationship by marrying. On 22 July 2008 the deceased and the pursuer attended a hospital appointment and were advised that there was no further treatment to assist the deceased. Thereafter the deceased's condition deteriorated very rapidly. He died on 24 July 2008 before he and the pursuer had time to put into action their proposal to marry. Neither he nor the pursuer had expected him to die so quickly. The pursuer has been devastated by the death of the deceased. S and G have also been very distressed.
7. The deceased's estate consisted of:
Item Value £
(a) Heritable property at 20 Johns Road, Eyemouth 175,000
subject to the Bank of Scotland's outstanding secured loan (54,506)
(b) Heritable property at Amusement Arcade, 20A Harbour Road
Eyemouth and flat at 20 Harbour Road, Eyemouth 170,000
(c) Fixtures, furnishings and personal possessions 2,000
(d) Royal Bank of Scotland account no 00110857 balance 14,067
(e) Royal Bank of Scotland account no 00160110
realised value 4,652
(f) Royal Bank of Scotland Bond realised value 8,735
The total value of the estate was about £374,454 before deduction of the secured loan of £54,506.
8. The executor has paid, or will require to pay to following debts and liabilities:
Item Value £
Inheritance tax 3,980
Funeral account 3,570
Fee for Bond of Caution 1,319
Fee for Counsel's opinion 411
Estimated solicitor's fee in winding up estate 5,750
These items total about £15,030.
9. The deceased had a pension fund with Pearl Assurance, from which a payment of £25,451 has been made to the solicitors acting for the defender as executor-dative. The pursuer is solely entitled to this sum in her own right. It does not form part of the deceased's estate. The sum has been retained by the solicitors acting in the executry, but they could release it immediately to the pursuer.
10. Since the deceased's death the pursuer has been surviving and supporting the children on her part-time income, child benefit and tax credits. She has no assets, save her entitlement to the sum from the deceased's pension fund. She wishes to remain in 20 Johns Road, Eyemouth and to keep the house as a home for herself and the children in the future. She also seeks to retain the contents of the house. It is not clear that she would be able to meet loan repayments due to the Bank of Scotland, nor that the bank would consent to transfer of the house to her while the secured loan remains outstanding.
11. Had the deceased been survived by a spouse, that spouse would have been entitled to prior rights consisting of the deceased's interest in the house at 20 Johns Road, Eyemouth, subject to the secured loan by the Bank of Scotland, the furniture and plenishings in said house, and the sum of £42,000, pursuant to sections 8 and 9 of the Succession (Scotland) Act 1964. A surviving spouse would also have been entitled to receive legal rights from the moveable estate, which in this case, following payment of the sum due as a prior right, would have amounted to just over £3,000.
12. Given that the pursuer is not a surviving spouse, unless an order is made in these proceedings she will receive nothing. S and G will each be entitled to half the estate of the deceased. Following his 16th birthday on 26 October 2009 S will be entitled to call for sale of 20 Johns Road and division of the net proceeds. G will not attain the age of legal capacity until 10 April 2015, but she then would be entitled to call for sale of the house.
Finds in fact and law that:-
1. The pursuer is entitled to make an application to this court for orders under the Family Law (Scotland) Act 2006, section 29.
2. Having regard to the terms of said section the court should make an order:
(a) for payment to the pursuer out of the deceased's net intestate estate of a capital sum of £34,000;
(b) for transfer to the pursuer of the deceased's interest in the heritable property at 20 Johns Road, Eyemouth, subject to the heritable debt secured thereon by the Bank of Scotland; and
(c) for transfer to the pursuer of the furniture and plenishings belonging to the deceased in said property at 20 Johns Road, Eyemouth.
Makes an order sustaining in part the pursuer's plea-in-law and repelling the pleas-in-law for the third party; ordaining the defender to transfer to the pursuer the sum of thirty four thousand pounds (£34,000) sterling from the residue of the estate of William Somers Giacopazzi who died on 24 July 2008; further makes an order ordaining the defender to transfer to the pursuer the deceased's interest in the property at Twenty Johns Road, Eyemouth, Berwickshire, being those subjects registered in the Land Register of Scotland under title number BER3385, subject to the heritable debt secured thereon by the Bank of Scotland; and further makes an order ordaining the defender to transfer the furniture and plenishings belonging to the deceased in the said property at Twenty Johns Road, Eyemouth to the pursuer; finds the defender liable qua executor-dative for the expenses of the pursuer and the third party.
Note:-
[1] The pursuer seeks orders for payment of a capital sum and for transfer of property pursuant to section 29 of the Family Law (Scotland) Act 2006. She herself is called as defender in the capacity of executor-dative of the deceased's estate, a position she holds as the legal representative of her son S and her daughter G. On 14 January the third party, Miss Marshall, was appointed by the sheriff as curator ad litem to represent the interests of the two children. Proof took place on 19 October 2009. Mr Grant, who appeared for the pursuer, led evidence from the pursuer herself, her brother Dougal Windram, the deceased's brother Lawrence Giacopazzi and the pursuer's friend Amanda Crombie. Miss Marshall appeared on her own behalf. There was no significant dispute about the facts. Parties entered into a joint minute in relation to most of the financial details. Miss Marshall did not in cross-examination seek to challenge the pursuer's evidence of the facts. She had no cross-examination for the other three witnesses.
Cohabitation
[2] Mr Grant submitted that the deceased was a cohabitant of the pursuer, having regard to the matters mentioned in section 25 of the 2006 Act. This section provides:
"25 Meaning of "cohabitant" in sections 26 to 29
(1) In sections 26 to 29, "cohabitant" means either member of a couple consisting of-
(a) a man and a woman who are (or were) living together as if they were husband and wife; or
(b) two persons of the same sex who are (or were) living together as if they were civil partners.
(2) In determining for the purposes of any of sections 26 to 29 whether a person ( "A") is a cohabitant of another person ( "B"), the court shall have regard to-
(a) the length of the period during which A and B have been living together (or lived together);
(b) the nature of their relationship during that period; and
(c) the nature and extent of any financial arrangements subsisting, or which subsisted, during that period."
[3] It was not in dispute that the deceased and the pursuer had lived together as if they were husband and wife. They had lived together for more than twenty years. They had two children. Their domestic situation could be described as 'normal' for a married couple. The pursuer carried out the shopping, cooking, cleaning and washing. The deceased and the pursuer decided to have children together. When their first child was born the pursuer gave up work to look after him and she did not resume work until their second child went to school. The deceased and the pursuer had a stable close relationship, that had been demonstrated by her care for him when he was unwell. He had been the main provider of financial support. She had contributed financially when she could, albeit her capacity to do so had been limited by the need for her to look after the children. None of this was disputed by Miss Marshall. I had no difficulty in reaching the conclusion that the deceased and the pursuer were cohabitants within the meaning of section 25.
Provision on intestacy
[4] Mr Grant went on to submit that the pursuer's claim fell within section 29 of the Family Law (Scotland) Act 2006. Section 29 is in the following terms:
"29 Application to court by survivor for provision on intestacy
(1) This section applies where-
(a) a cohabitant (the "deceased") dies intestate; and
(b) immediately before the death the deceased was-
(i) domiciled in Scotland; and
(ii) cohabiting with another cohabitant (the "survivor").
(2) Subject to subsection (4), on the application of the survivor, the court may-
(a) after having regard to the matters mentioned in subsection (3), make an order-
(i) for payment to the survivor out of the deceased's net intestate estate of a capital sum of such amount as may be specified in the order;
(ii) for transfer to the survivor of such property (whether heritable or moveable) from that estate as may be so specified;
(b) make such interim order as it thinks fit.
(3) Those matters are-
(a) the size and nature of the deceased's net intestate estate;
(b) any benefit received, or to be received, by the survivor-
(i) on, or in consequence of, the deceased's death; and
(ii) from somewhere other than the deceased's net intestate estate;
(c) the nature and extent of any other rights against, or claims on, the deceased's net intestate estate; and
(d) any other matter the court considers appropriate.
(4) An order or interim order under subsection (2) shall not have the effect of awarding to the survivor an amount which would exceed the amount to which the survivor would have been entitled had the survivor been the spouse or civil partner of the deceased.
(5) An application under this section may be made to-
(a) the Court of Session;
(b) a sheriff in the sheriffdom in which the deceased was habitually resident at the date of death;
(c) if at the date of death it is uncertain in which sheriffdom the deceased was habitually resident, the sheriff at Edinburgh.
(6) Any application under this section shall be made before the expiry of the period of 6 months beginning with the day on which the deceased died.
(7) In making an order under paragraph (a)(i) of subsection (2), the court may specify that the capital sum shall be payable-
(a) on such date as may be specified;
(b) in instalments.
(8) In making an order under paragraph (a)(ii) of subsection (2), the court may specify that the transfer shall be effective on such date as may be specified.
(9) If the court makes an order in accordance with subsection (7), it may, on an application by any party having an interest, vary the date or method of payment of the capital sum.
(10) In this section-
"intestate" shall be construed in accordance with section 36(1) of the Succession (Scotland) Act 1964 (c. 41);
"legal rights" has the meaning given by section 36(1) of the Succession (Scotland) Act 1964 (c. 41);
"net intestate estate" means so much of the intestate estate as remains after provision for the satisfaction of-
(a) inheritance tax;
(b) other liabilities of the estate having priority over legal rights and the prior rights of a surviving spouse or surviving civil partner; and
(c) the legal rights, and the prior rights, of any surviving spouse or surviving civil partner; and
"prior rights" has the meaning given by section 36(1) of the Succession (Scotland) Act 1964 (c. 41)."
[5] It was a matter of agreement that the deceased had died intestate and that immediately before his death he was domiciled in Scotland and cohabiting with the pursuer. Further he was habitually resident in the sheriffdom of Lothian and Borders at the date of his death. The application was made timeously within 6 months of the date of death. This was a competent application for orders under section 29.
[6] The issue in this case was whether orders should be made, having regard to the matters mentioned in section 29(3). The deceased's estate had a total value of £374,454, less a secured loan of £54,506. Provision required to be made for inheritance tax of £3,980 and other debts totalling £11,050. The net intestate estate was thus in the region of £304,918. Separately, the pursuer was to receive a payment of £25,451 from a pension fund established by the deceased. In the absence of any order in these proceedings S and G would be entitled under section 2(1)(a) of the Succession (Scotland) Act 1964 to the whole estate of the deceased.
[7] An order under section 29 could not result in an award that would exceed the amount to which a surviving spouse would have been entitled. In this case had the pursuer been a surviving spouse she would have been entitled, pursuant to the Succession (Scotland) Act 1964 section 8, to receive from the deceased's estate his interest in 20 Johns Road, subject to the heritable debt in favour of the Bank of Scotland and the furniture and plenishings in the house. She would also have been entitled to receive £42,000 under section 9 of the 1964 Act, with payment apportioned between the parts of the estate consisting of heritable and moveable property in proportion to the respective amounts of those parts. There would have been a small moveable estate from which she would have been paid legal rights, in the sum of just over £3,000. The pursuer's total cash claim from the estate, had she been a surviving spouse, would have been just over £45,000. None of this was in dispute.
[8] Section 29(3)(d) required the court to have regard to any other matter the court considered appropriate. Mr Grant submitted that when the pursuer and the deceased had commenced cohabitation they had no assets. They had divided responsibilities so that she provided most of the physical care, while he worked long hours and provided the bulk of the money. They had intermingled their finances. The deceased had been given the flat at 20 Harbour Road by his parents. There was no evidence as to how he had acquired the premises where he had operated the amusement arcade. The pursuer had helped out in the business, without pay. Her care included nursing while the deceased was dying. The pursuer had a continued obligation to care for the children. S would remain at school this year and one further year. G was likely to have eight more years of education. The pursuer wished to retain stable and secure accommodation. She was 45, had no pension provision and no resources of her own, save the £25,451 that came from the deceased's pension fund. As a single carer for G the pursuer was constrained in the time she had to devote to employment. Her commitment to the children would limit her opportunities for retraining in order to increase her earning capacity.
[9] The pursuer was seeking an order for transfer of the family home. She accepted that this would be subject to the loan secured over the property. The furniture and plenishings were of low value and a transfer to her of the house contents was unlikely to be controversial. Were she awarded a capital sum then it was likely that the property at Harbour Road would require to be sold, or used as security for a loan, in order to raise cash. In the event that a loan was taken out interest on the loan could be paid by letting the flat. An award to the pursuer would not denude the estate of assets. Mr Grant argued that this was a case for a maximum award.
[10] Mr Grant distinguished the one existing authority on the application of section 29. This is the case of Savage v Purches, 2009 FamLR 6, which was quite different on its facts in so far as it involved a short relationship, where the pursuer had already derived significant financial benefit during the relationship and was entitled to substantial payments as the result of the death of his partner.
[11] Miss Marshall's position as curator ad litem for the children was that the court should not disturb the status quo under the Succession (Scotland) Act 1964. The net intestate estate should remain with the children of the deceased. If cohabitants were intended to have the same rights as spouses, this could have been incorporated into the law. Miss Marshall accepted that it was competent for the pursuer to make a claim under section 29, and that the section gave the court a wide discretion as to the award it made. She accepted that the intention of Parliament must be taken to allow the court to distinguish between cases which merited no award or very little in the way of an award, to cases where a larger award was justified, up to a maximum of the amount a surviving spouse would receive. She insisted however that in this case the estate should pass in its entirety to the children.
[12] Miss Marshall pointed out that the flat at 20 Harbour Road was gifted. None of the property had been placed in joint names, save the one policy taken out for the benefit of S. She drew attention to the statutory requirement to take account of the £25,451 paid to the pursuer from the deceased's Pearl pension. The estate had sufficient resources to repay the secured loan over 20 Johns Road. The house could be held for the children, free of mortgage. S would be entitled to have title in his own name in a matter of days. Miss Marshall did not however have any answer to the consideration that the pursuer, and G, could be made homeless should Somers have an interest in the house, and should he seek to realise that interest, save to say that it was difficult to be fair to both the pursuer and the children. She did accept that Savage v Purches could be distinguished on its facts.
Decision on the pursuer's claim for provision
[13] Whether or not to make orders for provision on intestacy for a cohabitant is a matter that lies within the discretion of the court, having regard to the matters mentioned in section 29(3) of the Family Law (Scotland) Act 2007. Each case will turn on its own facts. I derive no guidance from Savage v Purches. I have reached the decision that in the circumstance of this case orders should be made, to the extent necessary to allow the pursuer to succeed to the deceased's interest in 20 Johns Road and its contents. I am aware that the orders I propose to make do affect the financial interests of the children, but it is my judgment that these orders strike a fair balance between their interests and those of the pursuer in the particular circumstances of the case.
[14] The deceased and the pursuer cohabited for 24 years. The pursuer was fully committed to that relationship. She surrendered own separate financial interests in course of relationship and allowed her financial interests to be merged with those of the deceased. She and he pooled their income. She and he decided to start a family and she gave up full-time work to care for children and deceased. For about 11 years she was a full-time mother and housewife. When their younger child started school she then took part-time work that left her free to care for the children during school holidays. She placed herself in a position of dependency on the deceased. He dealt with financial matters for the parties and he took care of the pursuer's financial interests. She took care of the home and the deceased's domestic circumstances. She was clearly and obviously devoted to him and took great care of him during his illness. Had he not died suddenly it is likely that the deceased and the pursuer would have married and rendered this action unnecessary.
[15] In these circumstances it would be unfair to the pursuer to leave her with no property, other than the modest pension payment she is to receive. It would be particularly unfair to leave her with no security in the home she shared with the deceased. If the home is not transferred to her, but held for the children, she is likely to be able to remain there in the short-term while the house is held for their benefit, but having foregone the opportunity to establish herself financially during her twenties and thirties and part of her forties, she would have no certainty of a home during her later middle years and beyond. Her children owe her no duty of support.
[16] In contrast she has a duty towards S and G. S will attain majority within a few days, but the pursuer will have a duty to aliment him while he is under the age of 25 and undergoing instruction or training. G is likely to remain in the pursuer's care for at least another five years and the pursuer's duty to aliment her is likely to extend beyond that time. If the pursuer has title to 20 Johns Road she will be able to provide a home for S and G, and better able to fulfil her legal obligations towards them. It is sensible and logical that she also receive the deceased's share of the furniture and plenishings, which are included in his estate as part of an item valued at £2000.
[17] In order to take transfer of 20 Johns Road the pursuer will require to take responsibility for the secured loan. Her income is limited to a part-time salary as a classroom assistant, child benefit and tax credits which to date has been absorbed in meeting the needs of the family. She would be hard-pressed to make loan repayments. Attempting to do so would deprive the family, including the children, of income to meet their daily needs. It is not in any event clear that the Bank of Scotland would consent to a transfer of the house subject to the secured loan. The pursuer has £25,451 to put towards repayment of the secured loan. There is a good argument that she should have a further sum of capital from the deceased's estate to allow her to repay the loan in full and to give her a modest amount of capital to maintain the house. This would benefit her and the children, by allowing them to live in a mortgage-free house, releasing such income as the pursuer has to meet their daily needs. In order to repay the loan in full the pursuer will need a further sum of just over £29,000.
[18] I have decided that the pursuer should receive £34,000 as a capital sum payable from the estate. This sum is designed to allow the pursuer to repay the secured loan in full and to have some funds to meet costs associated with repair and maintenance of the house. It is about £11,000 less than the pursuer would have received from prior and legal rights had she been a surviving spouse. The value of the net estate that will remain after the provision for the pursuer is about £148,500. This sum will be further depleted by expenses (to which I will turn below), but each of the children will remain entitled to about £70,000 from their father's estate. The orders I propose to make will leave each of the children with significant capital from the estate. The heritable property at 20A and 20 Harbour Road will require to be sold or used as security and let out at the discretion of the executor-dative, in order to fund payment of the sum due to the pursuer and the debts of the estate. The position in this respect is not dissimilar from that which would have prevailed had 20 Johns Road passed to the children as the executor-dative would have had to raise funds to repay the secured loan over the house or to meet loan repayments from the Harbour Road property.
[19] Section 29 of the Family Law (Scotland) Act 2007 allows the court to specify dates for payment of the capital sum and transfer of property. I was not asked to specify a date. The executor-dative will require to decide whether to sell the property at Harbour Road, or to let the property and secure a loan. She may require time to do so. I will not therefore specify any date, but will leave it to her to make arrangements and give effect to the orders in these proceedings.
Expenses
[20] Parties in this case were agreed that expenses should be met from the deceased's estate. They were under the impression that an interlocutor had already been pronounced requiring the curator's expenses should be met from the estate, but this appears to have been an understanding, justified by the circumstances, rather than there being any formal interlocutor. Mr Grant moved for payment of the pursuer's expenses from the estate. Miss Marshall conceded in her submissions that it was appropriate for the pursuer's expenses to be met from the estate and invited me to make an order for expenses accordingly. Both Mr Grant and Miss Marshall estimated that their expenses would not exceed about £5,000. In the circumstances I have found the defender liable qua executor-dative for the expenses of the pursuer and the third party.