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Appeal allows stand-still agreement on claim 17 months out of time

By: John Hyde

The Court of Appeal has overturned a decision to throw out a widow’s delayed application to claim from her late husband’s estate.

In Cowan v Foreman, Lady Justice Asplin said Mr Justice Mostyn was ‘plainly wrong’ to disregard the application as it was made 17 months after the six-month period, set out by the 1975 Inheritance Act, had expired.

The appeal judge said the time limit was not intended to have a disciplinary element and the judge was wrong to seek ‘good reason’ to justify a delay.

Mostyn J’s decision had also called into question the validity of so-called ‘stand-still’ agreements where parties come to an informal arrangement about not meeting deadlines. The appeal judgment appears to endorse these agreements.

The claimant had brought a claim against the £16m estate of her deceased husband, who had not made outright provision for her but made her the principal beneficiary of two discretionary trusts.

Mostyn J accepted that the relevant delay was 13 months, but concluded there was no justification for it and that the ‘in the modern era of civil ligation the limit of excusable delay should be measured in weeks, or, at most, a few months’.

That conclusion was muddied around the time of the judgment when, in another case about inheritance claim delays, a 25-year wait to make a claim was allowed by the court. In Bhusate, Chief Master Marsh had criticised the joint application of Inheritance Act claims with the sanctions regime characterised in the Denton judgment, saying that approach involved ‘conflating issues that, if they are related, are at best distant cousins’.

In her judgment on the Cowan appeal, Asplin LJ backed that view, stressing that unlike the provisions of the Civil Procedure Rules, the six-month time limit was not to be enforced for its own sake. She added it was necessary to decide whether an applicant’s claims has a real prospect of success rather than a fanciful one.

On stand-still agreements, Asplin LJ said that without prejudice negotiations between parties, rather than the issue of proceedings, should be encouraged.

‘Although the potential claimant will have to take a risk if an application is made subsequently to extend time in circumstances where negotiations have failed, if both parties have been legally represented, it seems to me that it would be unlikely that the court would refuse to endorse the approach.’

Lady Justice King, agreeing the claimant’s appeal should be allowed, distanced herself from the comments of Mostyn J, who had said the practice of stand-still arrangements should be ended.

But she added: ‘I should stress however, that if parties choose the ‘stand-still’ route, there should be clear written agreement setting out the terms/duration of such an agreement and each of the potential parties should be included in the agreement.’

(Courtesy: Law Society Gazette)