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Difficulties Encountered With The Wills And Successions (Jersey) Law, 1993

Timothy Hart

The Wills and Successions (Jersey) Law, 1993 ("the 1993 Law") has not (perhaps to the disappointment of some) completely re-written the law of Jersey relating to testate and intestate succession. Indeed, the time taken for the reforms to appear on the statute book perhaps results from the fact that what was sought was not the establishment of a wholly new regime but rather the less straightforward objective of adapting a law centred on the "conservation du bien de la famille" to the perceived needs of a modern society far removed from its Norman roots. Nevertheless, whilst basically working within the existing conceptual framework, the 1993 Law has effected a wide-ranging reform of the law in this area and can properly be characterised as a radical piece of legislation, if not perhaps a revolutionary one. There is widespread acknowledgement that it has generally helped to make the law of testate and intestate succession simpler and more equitable. The position of women, and of those not having the good fortune to be their parents' first born, for example, has been much improved, and the complexity of partage replaced by simple devolution of immovable property which is the subject of an intestacy upon those entitled.

I shall be considering in this article some of the provisions of the 1993 Law which give rise to uncertainty or anomaly. It will be noted that the provisions in question are all to be found in Part III of the 1993 Law. This part of the Law, which, admirably and largely successfully, seeks to establish a clear regime for the protection of surviving spouses (of either sex) and issue, is central to its reforming programme. That such ambitious legislative provisions should throw up points of difficulty is perhaps not surprising, and the following observations are not intended to be other than constructive in spirit.

Article 5: Right of surviving spouse to life enjoyment of the matrimonial home

Article 5 of the 1993 Law accords to a surviving spouse a usufruct of the "matrimonial home" (as defined in Article 1(1)) in circumstances where the deceased spouse has died intestate as to the matrimonial home and the surviving spouse is not absolutely entitled to it, i.e. where the deceased has left issue. This is clearly desirable. Indeed it is so desirable that one is tempted to ask why the same rule should not apply where the deceased spouse dies testate as to the matrimonial home; it is not entirely clear what the rationale was for leaving the customary law concepts of dower and viduité‚ which lack complete clarity in their practical application, in place for testate immovable successions.

The legislature has made provision for the fact that the matrimonial home may have been occupied pursuant to a contract lease, or pursuant to the ownership of shares in a company owning the freehold of the property (or holding it on contract lease), rather than pursuant to freehold ownership.

The drafting of the definition of "matrimonial home" in Article 1(1) appears, however, rather to lose its way when attempting to extend the definition of "matrimonial home" to include 'share transfer' flats. If one follows the wording through, from the opening section of the definition, which governs each of sub-paragraphs (a), (b) and (c), to sub-sub-paragraph (ii) of sub-paragraph (c), there is produced the following:-

""matrimonial home" means a dwelling place situate in the Island occupied as their principal residence by a person and that person's spouse which is ... a bien-fonds owned, or held under a lease for a term of years exceeding at its commencement nine years, by a corporation of which that person holds or that person and that person's spouse hold ... a share or shares the holding of which, whether or not coupled with the grant of a lease or licence, confers an exclusive right to occupy the dwelling place".

According to this definition a flat would be "a dwelling place ... which is a bien-fonds ..." . This must be a mistake. The matrimonial home in such a situation would be a dwelling place forming part of a bien-fonds, but it would not be a bien-fonds itself. It is, I would suggest, inconceivable that the intention can have been to effect the radical alteration to the concept of a "bien-fonds" which would otherwise have to be inferred from the wording.

Article 5(2) is also confusing. It reads:-

"Notwithstanding any provision in a lease requiring consent to the transfer of such lease, the surviving spouse shall not require such consent to take a transfer of the lease of demised premises in pursuance of paragraph (1)".

It will be noted that, by referring to "any provision in a lease requiring consent" the statutory wording does not deal with the case where the lease is silent on the matter of transfer or assignment. In such circumstances, transfer or assignment would, by virtue of customary law, be prohibited, but there would not be in the lease (at least not expressly) any provision requiring the landlord's consent. I have some doubt as to whether the court would be particularly keen to entertain an argument that such cases fell outside the scope of the provision, but the matter is perhaps open to some doubt.

What seems to be a more serious difficulty arising from Article 5(2) is the lack of clarity as to precisely what, if anything, needs to be done in order to perfect a surviving spouse's usufructuary entitlement. The wording refers to the surviving spouse taking a "transfer" of the lease. Does this mean that it is envisaged that a contract of assignment would need to be passed before the Royal Court, as would be required generally for transfers or assignments of contract leases? Since the consent of the landlord is stated, under Article 5(2), not to be required, presumably the landlord would not have to be party to such a contract. Leaving aside the question of landlord's consent, what would be the nature of the "transfer"? Since all that the surviving spouse would be acquiring would be a usufruct, a contract in the nature of an absolute assignment of the leasehold interest would not be appropriate. Perhaps what is envisaged is a contract between the reversionary owner(s) of the lease and the surviving spouse. The matter is, unfortunately, far from clear.

Moreover, Article 5 of the 1993 Law does not deal adequately with the potential impact of the Housing (Jersey) Law, 1949, as amended (and the regulations made thereunder) upon the occupation of property by a surviving spouse pursuant to the statutory entitlement to a usufruct of the matrimonial home. If a contract of assignment were really required upon the death of a deceased spouse who held the matrimonial home pursuant to a contract lease, what would be the position if the surviving spouse did not have residential qualifications? What, also, of the situation where the matrimonial home was a flat forming part of company-owned property where, as is usual, the company's property could only be occupied by persons with residential qualifications? It would surely be anomalous if a surviving spouse who lacked such qualifications stood to be deprived, in practice, of the statutory usufructuary entitlement because of the fact that the matrimonial home was held on lease or through share ownership rather than by way of a freehold interest.

Article 7: Devolution of movable estate

Article 7 of the 1993 Law sets out the entitlement of a deceased's surviving spouse and issue on an intestacy of movable estate, and also sets out statutory légitime rules, applicable in testate successions of movable estate, in substitution for the customary law rules. The rules set out in Article 7 are generally clear and simple but some queries and anomalies do arise.

One of the matters which was immediately picked up by practitioners was the effect which is produced by the interaction of paragraphs (1) and (2) of Article 7 insofar as the entitlement of a surviving spouse is concerned. On an intestacy, where the deceased leaves a surviving spouse and issue, the spouse is entitled to take the "household effects" (as defined in Article 7 (4) and discussed further below), other movable estate to a value of £30,000 (this figure being able to be varied by the States from time to time by regulations) and one-half of the rest of the net movable estate. If, on the other hand, the deceased were to die testate, and the issue were to benefit from their full entitlement by way of légitime, whether under the will or following a reduction of the will ad legitimum modum, the surviving spouse would be entitled to the household effects together with two-thirds of the rest of the net movable estate.

A situation thereby arises whereunder the surviving spouse would be better off, if the value of the net movable estate (excluding the household effects) of the deceased spouse amounted to less than £90,000, if the deceased spouse were to die intestate. Would it be appropriate, however, to advise a client who wished to ensure that his or her spouse benefited to the fullest extent possible, deliberately to choose intestacy? Such a course might be unwise if there was the possibility of the net movable estate going over the threshold of £90,000 (or the relevant figure resulting from any change in the £30,000 figure). Even in situations where the client's net movable estate was well below the threshold, the possibility of an unexpected windfall (such as a bequest or even a lottery win) would have to be taken into account. There has been some suggestion that one might attempt to deal with the problem by providing for the will to be revoked automatically if the estate exceeded the relevant figure, but there may be some doubt as to the effectiveness of drafting along such lines.

Reference has already been made to the new concept, introduced by Article 7, of "household effects". Subject to the statutory exclusions "household effects" are defined as "articles of household or personal use or ornament normally situate in or around the matrimonial home". The definition expressly excludes any motor vehicle, any article used wholly or principally for business purposes, money or securities for money, any single article or any single group of similar or related articles forming a set having in either case a value of over £10,000 (and, again, this figure is able to be varied from time to time by regulations), and any article of personal use or ornament which is the subject of a specific bequest under the will of the deceased spouse.

There will no doubt be scope for dispute as to the effect in particular cases of the statutory words. The reference to relevant articles being "normally situate in or around the matrimonial home" presumably means that one looks at the particular matrimonial home in question, whatever unusual articles the married couple in question might choose to have with them at home. But does the use of the word "normally" allow one to include articles which were usually kept in or around the matrimonial home but which, at the time of the deceased's death, happened to be elsewhere? One might conceive of circumstances in which relatively valuable items were, say, temporarily on loan to other family members. It will be interesting to see, as and when the Court is asked to deal with such situations, how flexible it is prepared to be in this regard.

Another area where there is potentially scope for dispute is the exception in Article 7 (4)(e) relating to "any article of personal use or ornament which is the subject of a specific bequest under the will of the deceased spouse". How generic, if at all, could a valid "specific bequest" be in its formulation? A bequest of "all the contents of my home" would presumably not work. But what about "all my silver" or "all my hi-fi equipment"? Perhaps, since the Article 7(4)(e) exception refers to articles of "personal use or ornament" unlike the general definition which speaks of articles of "household or personal use or ornament" (my italics) such bequests might be effective in relation to "personal", but not "household", articles. But the prospect of having to divide up the contents of a house along such lines would appear fraught with practical and conceptual complications.

Article 7 (5) is an attempt to ensure that proceeds of a life assurance policy enabling a mortgage to be reduced or paid off entirely will not form part of the net movable estate of the deceased for the purposes of the intestacy and légitime rules. Article 7 (5) reads as follows:-

"For the purposes of this Article, moneys received under a policy of insurance taken out by the deceased spouse on the deceased spouse's life for the sole purpose of repaying or reducing indebtedness which is secured either by a simple conventional hypothec or a judicial hypothec against immovable property owned by the deceased spouse alone or with another or others, shall not be deemed to form part of the net movable estate to the extent that they are used to repay or to reduce such indebtedness or interest accruing thereon to the date of repayment."

The use of the words "for the sole purpose of" might be seen as potentially problematic in that they appear to import subjective considerations, requiring a decision as to what the deceased spouse's intention was at the time the policy of insurance was taken out. Another potential difficulty with this paragraph is that it would not seem to cope with the situation where such a policy of insurance had been taken out for the purpose of repaying or reducing indebtedness secured against shares by way of security interest, in a case where the deceased held property through ownership of shares. However, the scope for problems arising from this Article is, perhaps, relatively limited, as life insurance policies taken out for the purpose of paying off mortgages upon death are generally required by the lending institution to be assigned at the outset to the lender, with the result that the proceeds of the policy will not form part of the deceased's estate in any event.

Article 8: Spouses living apart

Article 8 of the 1993 Law is headed "Spouses living apart" and is an attempt to ensure that estranged spouses shall not be able to benefit from the various entitlements in respect of the other spouse's estate which would otherwise apply. If the conditions set out in Article 8 apply then none of the provisions of Articles 5, 6 and 7 operating to confer property or any usufruit, interest, right or title in or to property on a surviving spouse (defined together as "the surviving spouse provisions") shall apply. The Article 8 conditions are that at the date of the death of the deceased spouse the deceased spouse and the surviving spouse were not residing together and either (i) the surviving spouse had deserted the deceased spouse without cause and such desertion was continuing or (ii) a decree of judicial separation in respect of the surviving spouse had been granted by a court to the deceased spouse.

It will be noted immediately that only a decree of judicial separation, and not an order under the Separation and Maintenance Orders (Jersey) Law 1953, as amended, will count under limb (ii). It is not entirely clear why this should be so. Perhaps it was thuoght that such an order need not necessarily signify a breakdown in the matrimonial relationship of sufficient gravity to justify the surviving spouse being deprived of benefit under the deceased spouse’s estate (although such an order made on the grounds of desertion could presumably be relied upon to prove the fact of desertion, if not its continuation up to the date of death, for the purposes of Article 8). Nevertheless, the position is clear. What is less clear, and potentially likely to cause dispute, is the wording of (i). Although the phrase "desertion without cause" is the same terminology as employed in the Matrimonial Causes (Jersey) Law, 1949, as amended, ("the 1949 Law") thus presumably allowing the Court to look to matrimonial law authorities for guidance, no period of desertion is specified in the 1993 Law, unlike the position under the 1949 Law. All that is required under Article 8 (b) (i) is that there be desertion without cause, which at the date of death is continuing. Does this mean that the Court is able, or indeed required, to take any account of the duration of such desertion? Would desertion for a mere week prior to the deceased spouse's death really have the effect of shutting the deserting spouse out from any entitlement to the deceased spouse's estate?

The 1993 Law has now been in force for over five years and it would appear that its reforms have been assimilated relatively easily into the practice of law in this area. Those studying for the local professional examinations have certainly welcomed its simplifying effect, even if the ghost of partage will not finally be able to be laid to rest for some years to come. But whether or not any further substantive changes to the law of wills and succession are intended, consideration should, I consider, be given to the amendment of the 1993 Law in the near future in order to iron out the points of difficulty, such as those highlighted above, which are to be found in this generally effective, and commendably concise, statute. The momentum for law reform in the matter of wills and succession generally has led to the overhaul of the Probate legislation by the enactment of the Probate (Jersey) Law, 1998, and this would seem an opportune time to seize the opportunity.

Timothy Hart is a solicitor of the Royal Court with Bailhache Labesse, 14/16 Hill Street, St. Helier, Jersey.