The late Michael Cowan, who introduced black bin liners into the UK, left an estate of £30m in the control of a charitable foundation when he died in April 2016. He left a letter of wishes stating that his wife, Mary, was the principal beneficiary. However, the trust structure left her dependent on the goodwill of trustees to pay certain living and uninsured medical expenses, and not owning her Californian home.
Following negotiations and a failed mediation, Mrs Cowan pursued a claim for reasonable financial provision under the Inheritance (Provision for Family and Dependants) Act 1975. Despite having agreed a standstill, the trustees argued the claim was out of time as it was more than six months since the grant of probate.
Mr Justice Mostyn refused the claim on the grounds it was bound to fail and the delay in bringing it was not excusable. He condemned the common practice of agreeing a standstill to avoid the cost of issuing proceedings as ‘cocking a snook at Parliament’ and suggested Mrs Cowan could sue the trustees for breach of trust if they failed to follow the letter of wishes.
Giving the lead judgment in Cowan v Foreman [2019] EWCA Civ 1336 last week, however, Lady Justice Asplin described Mostyn J’s decision as ‘plainly wrong’, ‘erroneous’ and incorrectly ‘disciplinary’, and said the claim had a real chance of success. Asplin LJ said: ‘Mrs Cowan acted promptly once her true position was appreciated and advice had been taken, and the negotiations, quite properly encouraged by the will trustees, were a significant factor.’
Lady Justice King clarified that solicitors should feel able to standstill agreements.
Paul Hewitt, partner at Withers, which acted for Mrs Cowan, said: ‘The Court of Appeal has comprehensively rejected the idea that leaving a widow at the mercy of trustees (who are on the other side of the world) is a reasonable approach.
‘And it has made very clear that trying to resolve claims without rushing to court is to be encouraged.’
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