McCarthy, F.

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       McCarthy, F. (2009) Rights in succession for cohabitants: Savage v Purches. Edinburgh Law Review, 13 (2). pp. 325-329. ISSN 1364-9809  http://eprints.gla.ac.uk/37979/  Deposited on: 03 April 2012   Enlighten – Research publications by members of the University of Glasgow http://eprints.gla.ac.uk Vol 13 2009 analysis 325D. CONCLUSIONThis is a rather odd paper because one might have expected a fuller and betterinformed discussion of the issues. While I appreciate the need to make suchconsultations accessible to the public, there is surely a duty to present some kindof reasoned analysis of the issues and the evidence.Peter DuffUniversity of AberdeenEdinLR Vol 13 pp 325-329DOI: 10.3366/E1364980909001504Rights in Succession for Cohabitants:Savage v PurchesIn the eighteen months since they came into force, the provisions of the FamilyLaw (Scotland) Act 2006 introducing financial rights for unmarried cohabitants1 haveseen little in the way of judicial illumination. The first reported case was disposedof on a point of jurisdiction.2 Two subsequent cases on financial provision followingbreakdown of cohabitation suggested a disinclination on the part of the courts towardsa munificent application of the legislation.3The decision in Savage v Purches4 appears to apply a similarly parsimoniousapproach in the area of cohabitants’ rights in succession. Here, the pursuer, JamesSavage, had cohabitated with Graham Voysey for around two years and eight monthsprior to Voysey’s unexpected death in April 2007. The deceased left no will. Underthe general law of intestate succession, the entire estate would have fallen tothe deceased’s closest living relative, his half-sister Sandra Purches.5 However, thepursuer sought to assert his rights as a cohabitant, seeking payment of a capital sumin terms of section 29 of the 2006 Act.A. LEGAL ARGUMENTSFor section 29 of the 2006 Act to operate, an applicant must first establish title tomake a claim, following which the court exercises its discretion in determining the1 Family Law (Scotland) Act 2006 ss 25-29. Section 28 of the Act makes provision for cohabitants to applyto the court for financial provision where cohabitation ends otherwise than by death, while section 29provides for a surviving cohabitant to apply to the court for financial provision on intestacy.2 Chebotareva v Khandro 2008 Fam LR 66, on which see C Roodt, “Cohabitation: Chebotareva vKhandro” (2009) 13 EdinLR 147.3 M v S [2008] CSOH 125, 2008 SLT 871; Jamieson v Rodhouse 2009 GWD 3-54.4 Falkirk Sheriff Court, 19 Dec 2008. The sheriff’s judgment is available at http://www.scotcourts.gov.uk/opinions/savage.html.5 Succession (Scotland) Act 1964 s 2(1)(c).326 the edinburgh law review Vol 13 2009level of any award. The requirements of title are that the applicant and the deceasedwere cohabitants as defined in section 25 of the Act, that the deceased was domiciledin Scotland and that the cohabitation was brought to an end by death.6 None of theseissues was in dispute in Savage, although the factors specified in section 25(2) as beingrelevant in establishing cohabitation – the duration and nature of the relationship,and the extent of any financial arrangements between the parties – proved to be thesubject of some discussion later in the judgment.With title established, the court is directed to consider four factors in determiningwhether a payment should be made, namely:7(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 netintestate estate; and(d) any other matter the court considers appropriate.Each of these factors was treated to detailed discussion from both sides of the bar.(1) The size and nature of the deceased’s intestate estateThe net total of the intestate estate was agreed to be £186,113.8 It was noted that,had the pursuer been the civil partner of the deceased, the entire sum would havebeen paid over to him in terms of his prior rights claim under sections 8 and 9 of theSuccession (Scotland) Act 1964.9(2) Any benefit received in consequence of the deceased’s deathThe deceased had been a member of an occupational pension scheme which providedfor a discretionary lump sum payment on death, in addition to a discretionary pensionfor dependents. The trustees of the scheme split the lump sum equally between thepursuer and the defender, resulting in payment of £124,840 each. The pursuer, as anadult dependent of the deceased, was also awarded payment of an annual pensionof £9,530 gross, subject to inflationary increases. The defender’s argument, acceptedby the sheriff, was that this benefit should be valued on the basis of “replacementcost” – in other words, the price of purchasing an annuity from an insurance companythat would provide the same annual income. The replacement cost was assessedat £298,900.10 In total, therefore, the pursuer was considered to have received anaggregate of £420,000 in consequence of the pursuer’s death before payment of any6 Family Law (Scotland) Act 2006 ss 25 and 29(1).7 Family Law (Scotland) Act 2006 s 29(3).8 Para 8. For the purposes of this note, figures are given in pounds only, disregarding pence. Precisefigures are given in the sheriff’s judgment.9 Finding in fact 9.10 Findings in fact 6 and 7.Vol 13 2009 analysis 327award under section 29:11 a substantial sum, particularly relative to the net value ofthe estate as a whole.(3) The nature and extent of other rights against the deceased’s estateThe only other claim on the estate came from the deceased’s half-sister, the defender.The nature of the relationship between the deceased andMrs Purches was the subjectof some debate at proof, with the pursuer arguing the two had been “distant” or even“estranged”,12 while the defender gave evidence of a close and loving relationship,beginning with a shared difficult childhood and continuing with regular contact untilthe defender scattered the deceased’s ashes on the beach.13 The sheriff found thepursuer’s evidence on the point to be of “limited credibility and reliability”, havingformed the view that Mr Savage deliberately downplayed the deceased’s relationshipwith the defender in order to further his own claim. Sheriff Arthurson detected“a distinct whiff of avarice about the whole action raised by the pursuer”.14It may be worth noting that under section 2 of the Succession (Scotland) Act 1964,a half-blood collateral (sibling) would inherit in preference to a surviving spouse orcivil partner. This provision would only come into play, however, after payment ofprior rights to the surviving spouse or partner had already been made.(4) Any other matter the court considers appropriateIt was this factor which caused the greatest debate in the case. What exactly would itbe appropriate for the court to consider under this head?The pursuer contended, in the first place, that the factors determinative undersection 25 of the existence of cohabitation – length and nature of the relationship,together with the nature of financial arrangements between the parties – could notbe relevant. Once the section 25 test had been passed, as it had in this case, thesefactors had served their purpose and could play no further part.15 The pursuer alsocontended that factors such as any economic disadvantage suffered by one party tothe relationship or the position of any children – essentially the principles by whichthe court is guided in making an award of financial provision on divorce16 – shouldnot be relevant here. There was no scope in the legislation for what pursuer’s counselreferred to as the “worthy” beneficiary.17 Instead, it was argued, the court would beentitled to consider only matters which affected the estate or the survivor after thedeath, for example, if the survivor would be left destitute without payment undersection 29.1811 Para 14.12 Para 4.13 Finding in fact 14.14 Para 5.15 Para 11.16 Family Law (Scotland) Act 1985 s 9. These provisions have been extended to cover dissolution of civilpartnership by the Civil Partnership Act 2004 Sch 28. References to divorce in this note should betaken to encompass dissolution.17 Para 7.18 Para 11.328 the edinburgh law review Vol 13 2009There is something attractive about the purser’s argument when one considers thegeneral law of intestate succession. Unlike the rules for financial provision on divorce,the Succession (Scotland) Act 1964 does not allow for consideration of what might betermed the equity of the situation when providing for payment of prior rights.19 Asurviving spouse is entitled to a set amount, provided the estate contains sufficientfunds to pay it. This is true regardless of whether the parties were estranged, or ifthey had married only two days previously, or if the deceased left behind numerousimpecunious student children.However, the point strongly taken by the defender was that the regime of the 2006Act was not designed to provide cohabitants with automatic rights equivalent to thoseof a surviving spouse.20 Prior rights are an entitlement; a payment under section 29 isat the discretion of the court. Section 29(4) establishes an upper limit, by providingthat a surviving cohabitant is not to receive more than a surviving spouse would beentitled to in prior rights, but sets no lower limit on an award. On what basis is thecourt expected to exercise its discretion, if not by taking into account factors such asthe duration and nature of the cohabitation, or the other resources available to thesurvivor?B. DECISION AND ANALYSISAlthough satisfied that the pursuer had established title to make a claim undersection 29, the court assessed the value of the claim at nil.21 The decision turnedprimarily on the factors covered by sections 29(3)(b) and (d). The sheriff pointed outthat the benefits the pursuer had already received as a result of the death, which wereundoubtedly relevant for consideration under section 29(3)(b), were sufficient inthemselves to militate against payment of anything more. This conclusion is difficultto argue with given the sums of money involved.Usefully, however, the sheriff made further observations in respect of the matterswhich could appropriately be taken into account under section 29(3)(d). With regardto the duration and nature of the cohabitation, Sheriff Arthurson noted that thecourt “cannot close its eyes to such factors within the contextual hinterland in whichthe claim . . . presents itself”.22 This assertion is somewhat Delphic, but in essenceit appears that the court accepted the defender’s position. The court was clearlyconcerned by the fact the deceased had previously been in a cohabiting relationshipof 15 years duration with a different partner. During that period the deceasedhad made a will with his then partner named as sole beneficiary, and that willbeen destroyed without replacement. Taken together with the fact the pursuer andthe deceased did not share a bank account, a picture was painted of the nature19 For proposals for reform of the law of intestate succession, see Scottish Law Commission, DiscussionPaper on Succession (Scot Law Com DP No 136, 2007), discussed by K McK Norrie, “Reformingsuccession law: intestate succession” (2008) 12 EdinLR 77, and D Reid, “From the cradle to the grave:politics, families and inheritance law” (2008) 12 EdinLR 391.20 Para 12.21 Para 14.22 Para 15.Vol 13 2009 analysis 329of the cohabitation from which the sheriff found an inference could be drawn aboutthe deceased’s testamentary intentions towards the pursuer.The sheriff specifically stated that he was not seeking to categorise the pursueras “unworthy”,23 which appears to suggest that factors used in determining financialprovision on divorce should not form part of the court’s considerations under section29(3)(d). This interpretation is backed up by the notable absence of any referencein the sheriff’s note to the financial situation between the pursuer and the deceased.This is, however set out in the sheriff’s findings in fact, from which it appears that thepursuer’s standard of living improved considerably after commencing cohabitationwith the deceased, who provided free accommodation and several foreign holidays ayear in addition to a car, two dogs and the ultimate romantic gesture of having theironing “sent out”. The pursuer, it was conceded, sometimes paid for the dogs to begroomed.The sheriff did go on to say, however, that his view of the pursuer (as, it wouldappear, an unworthy beneficiary) bore directly on his assessment of the pursuer’scredibility.24 In other words, the economic advantages the pursuer enjoyed incohabiting with the deceased may have lead to the “avarice” the sheriff detectedin assessing the pursuer as an unreliable witness. Although there is some scopefor confusion in the wording of the sheriff’s note here, it is not thought that thesheriff intended to assert that the pursuer’s personal characteristics should be takeninto account under section 29(3)(d). There would not appear to be any precedentfor “good character” considerations in the law either of succession or of financialprovision between cohabitants, and a move in that direction would seem to go directlyagainst, for example, the trend in divorce law by which the concept of “blame” in thebreakdown of a relationship is largely discounted.25Overall, the decision continues the cautious approach adopted so far by the courtsto interpretation of the provisions on financial rights for cohabitants. The guidancegiven on matters relevant to the exercise of the court’s discretion suggests that claimsby cohabitants in succession may straddle something of a middle ground between thetraditional law of intestate succession and financial provision on divorce. The qualityof the relationship will have some bearing on the value of any award ultimately made.Whether an unmarried cohabitant will ever receive an award equivalent to the claimof a surviving spouse or civil partner on intestacy is as yet unknown. In the interestsof clarity, it is hoped that the provisions of the 2006 Act see another day in the judicialsun sooner rather than later.Frankie McCarthyUniversity of Glasgow23 Para 16.24 Para 16.25 Section 11(7)(d) of the Family Law (Scotland) Act 1985 provides that conduct of the parties will onlybe relevant to financial provision on divorce where their actions have directly impacted on the financialresources of the household, or where it would be manifestly inequitable to leave it out of account.

Rights in succession for cohabitants: Savage v Purches

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Rights in succession for cohabitants: Savage v Purches

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