Neutral Citation Number: [2014] EWCA Civ 1076

Case No: A3/2013/0452
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM The High Court of Justice, Chancery Division, Manchester District Registry.
His Honour Judge Hodge QC
1BC90002, 1BC90003, PR190103
Royal Courts of Justice
Strand, London, WC2A 2LL

Date: Tuesday 29th July 2014
Before :

LADY JUSTICE ARDEN
LORD JUSTICE McFARLANE 
and
LORD JUSTICE McCOMBE 
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Between :

	PHILIP RONALD JUSTINIANI LIM (An Infant) 	Claimant/ Respondent	
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	NAVPREET SINGH WALIA	Defendant/ Appellant	
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(Transcript of the Handed Down Judgment of
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Neil Vickery (instructed by Bar Pro Bono Unit) for the Defendant/ Appellant
Simon Charles (instructed by Roland Robinsons & Fentons) for the Claimant/Respondent

Hearing date: 1 May 2014
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Judgment
Lord Justice McCombe:
(A) Introduction 
1.	This is an appeal by Mr Navpreet Walia, from the order of 26 September 2012 of His Honour Judge Hodge QC (sitting as a Judge of High Court), in proceedings under the Inheritance (Provision for Family and Dependents) Act 1975, whereby the judge ordered that the following preliminary issue be determined in favour of the Claimant, Philip Lim (“Philip”), the son of the late Jocelyn Walia (“the Deceased”), who died on 15 March 2011 at the age of 38: 
“Was the Deceased, immediately before her death, beneficially entitled to a joint tenancy of the right under the policy to benefit from her death before the death of the Defendant and/or was the Deceased, immediately before her death, beneficially entitled to a joint tenancy of the right under the policy to benefit from her (assumed) terminal illness before her death.”
The judge ordered that the issue was determined on the basis that,
“…immediately before her death, the Deceased was beneficially entitled to a joint tenancy under the policy to benefit from her (assumed) terminal illness before her death.”
2.	The Deceased had married Mr Walia on 18 July 2003. On 21 May 2002 they had taken out a policy of fixed-term life insurance with Direct Line Life Insurance Company Limited. They lived together at a property at Thornton- Cleveleys in Lancashire. As the judge found, that property was purchased about a year after the policy was effected. There was one child of the marriage, a girl called Emma-Kaur, who was born on 8 November 2004. The Deceased and Mr Walia separated when the Deceased went to live in the Philippines, where she formed a relationship with a Mr Felipe Lim by whom she gave birth to a son, the Claimant who was born on 20 July 2009. At about the end of February 2011, the Deceased was diagnosed as having a cancer in a fatal form and (as I have said) she died in the following month. She died intestate and, given the size of her estate, her sole effective next of kin is Mr Walia, although at the time of the death he had begun divorce proceedings. A grant of Letters of Administration to the Deceased’s estate was made to Mr Walia out of the District Probate Registry at Winchester on 1 April 2011. On 19 May 2011 Mr Walia received the sum of £113,000 under the policy.
3.	Three separate applications under the 1975 Act for, provision out of the Deceased’s estate, were issued. The present claim on behalf of Philip was issued on 21 September 2011. Proceedings were issued in the same month by Mr Felipe Lim and on behalf of Emma-Kaur. All three claims have been handled together in the Manchester District Registry and the issue decided by the judge (slightly differently formulated) was directed for trial by order of District Judge Richmond of 23 May 2012.
4.	The judge gave permission to Mr Walia to appeal, but he failed to file his Appellant’s Notice in time. However, he was granted further permission to appeal, out of time, by Lord Justice Davis on 5 December 2013.
(B) The Policy
5.	The policy provided for an obligation on the part of the insurer as follows:
“We will pay the sum insured on the first death to occur of the two lives insured named in the insurance schedule.”
Those named were the Deceased and Mr Walia. The policy further provided this:
“On proof to the Company’s satisfaction that the life insured is suffering from a terminal illness we will bring forward the payment of the sum insured.
For joint lives first death policies the payment will be brought forward on proof to the company’s satisfaction that one of the lives insured is suffering from a terminal illness. No benefit will be paid on any subsequent occurrence.
No death benefit will be payable if a claim has been paid.”
6.	With regard to terminal illness claims, there was this provision:
“Terminal illness claims should be notified to the Company within three months of the occurrence of the insured event and at least 18 months before the policy expires. When making a claim for terminal illness benefits you must provide us with certificates from one or more medical practitioners, one of which must be the life insured’s hospital consultant confirming the terminal illness.”
	  Then, with regard to claims generally, there was this:
“A maximum of one claim under each policy will be paid. You or your legal representatives will be required to confirm the details of any claim by completing a claim form.”
7.	It was common ground that these were the only material policy terms for present purposes.
(C) Judge’s decision and the grounds of appeal
8.	The crux of the leaned judge’s decision can be found in paragraph 45 of his judgment in the following short passage: 
“45……..one is looking not at the position after the death, when we know that the claim that was made was one on death, but one is looking at the value of a chose in action immediately before the deceased’s death. The question I have to consider is whether, immediately before her death, the deceased was beneficially entitled to a joint tenancy of the right under the policy to benefit from her assumed terminal illness. It seems to me that, immediately before her death, the deceased was so entitled. She had an accrued claim with the defendant for a terminal illness benefit, on the assumed facts of the case. The fact that she could only pursue that claim jointly with the defendant does not seem to me to affect the nature and quality of the claim which she there had, jointly with the defendant.”
9.	On the appeal, Mr Vickery for Mr Walia argues that the judge’s conclusion was wrong and that he should have decided that, on the true construction of the policy, 
“(1) the benefit of the Policy would be paid out on the first death of one of the lives insured unless it had previously been paid on acceptance of a terminal illness claim;
(2) the benefit would only be paid out on a terminal illness claim if the insured suffering from the terminal illness was alive;
(3) Accordingly at the moment before the death of the deceased, and having regard to the imminent death as required by Powell v Osbourne [1993] 1 FLR 1001, the deceased was not beneficially entitled to a right under the Policy to benefit from her terminal illness: her death would cause the benefit to be payable by reason of her death and extinguish any prospect of the benefit being paid on account of her terminal illness;
(4) Alternatively, if the deceased was beneficially entitled at the moment before her death to a right under the Policy to benefit from her terminal illness then that right was valueless, because on her death the benefit would become payable by reason of her death.”
10.	Alternatively, it is submitted the judge should have held that the benefit of the policy would be paid out on the first death unless, at the very least, a terminal illness claim had been made. In fact no such claim had been made and the benefit was, therefore, paid on account of the Deceased’s death. Immediately before the death no claim was going to be made or could be made. Therefore, the deceased at that stage had no relevant beneficial entitlement.
11.	Further, it is said that Mr Walia’s entitlement on the death precluded any entitlement to benefit by reason of terminal illness. Any accrued claim immediately before death was valueless in view of the imminence of death. The assumed terminal illness was not a sufficient ground upon which to distinguish the decision in Murphy v Holland [2004] 1 FCR 1 (see below).
12.	These grounds of appeal were supplemented by the carefully presented oral and written arguments of Mr Vickery and were opposed by an equally attractive presentation of the Claimant’s case by Mr Charles.
(D) The 1975 Act
13.	Section 1 of the Act provides that where a person dies and is survived by any of a defined class of family members or dependants, a relevant person may apply to the court for an order under section 2: 
“….on the ground that the disposition of the deceased’s estate effected by his will or the law relating to intestacy, or the combination of his will and that law, is not such as to make reasonable financial provision for the applicant.”
Section 2(1) goes on to provide: 
“…the court may, if it is satisfied that the disposition of the deceased’s estate effected by his will or the law relating to intestacy, or the combination of his will and that law, is not such as to make reasonable financial provision for the applicant, make any one or more of the following orders-
(a) an order for the making to the applicant out of the net estate of the deceased of such periodical payments and for such term as may be specified in the order;
(b) an order for the payment to the applicant out of that estate of a lump sum of such amount as may be so specified;
(c) an order for the transfer to the applicant of such property comprised in that estate as may be so specified;
(d) an order for the settlement for the benefit of the applicant of such property comprised in that estate as may be so specified;…..”
Section 3 provides guidance on how the section 2 power should be exercised, conferring a wide discretion, but including reference to “the size and nature of the net estate” (section 3(1)(e)). The court is required to take into account the facts as known at the date of the hearing. The definition of “net estate” is to be found in section 25(1) in these terms: 
“….“net estate”, in relation to a deceased person, means-
(a) all property of which the deceased had power to dispose by his will (otherwise than by virtue of a special power of appointment) less the amount of his funeral, testamentary and administration expenses, debts and liabilities, including any inheritance tax payable out of his estate on his death;
(b) any property in respect of which the deceased held a general power of appointment (not being a power exercisable by will) which has not been exercised;
(c) any sum of money or other property which is treated for the purposes of this Act as part of the net estate of the deceased by virtue of section 8(1) or (2) of this Act;
(d) any property which is treated for the purposes of this Act as part of the nest estate of the deceased by virtue of an order made under section 9 of the Act;
(e) any sum of money or other property which is, by reason of a disposition or contract made by the deceased, ordered under section 10 or 11 of this Act to be provided for the purposes of the making of financial provision under this Act;”
The same section tells us that “property” includes any chose in action. 
14.	The section with which we are primarily concerned is section 9 which provides: 
“(1) Where a deceased person was immediately before his death beneficially entitled to a joint tenancy of any property, then, if, before the end of the period of six months from the date on which representation with respect to the estate of the deceased was first taken out, an application is made for an order under section 2 of this Act, the court for the purpose of facilitating the making of financial provision for the applicant under this Act may order that the deceased’s severable share of that property, at the value thereof immediately before his death, shall, to such extent as appears to the court to be just in all the circumstances of the case, be treated for the purposes of this Act as part of the net estate of the deceased.
(2) In determining the extent to which any severable share is to be treated as part of the net estate of the deceased by virtue of an order under subsection (1) above, the court shall have regard to any inheritance tax payable in respect of that severable share. 
(3) Where an order is made under subsection (1) above, the provisions of this section shall not render any person liable for anything done by him before the order was made.
(4) For the avoidance of doubt it is hereby declared that for the purposes of this section there may be a joint tenancy of a chose in action.”
(E) The Decided Cases
15.	There are three previous cases in this court to which I must refer. They are: Powell v Osbourne [1993] 1 FLR 1001 (“Powell”), Murphy v Holland (aka Murphy v Murphy) (supra) (“Murphy”) and Dingmar v Dingmar [2007] Ch. 109 (“Dingmar”).
16.	In Powell the court was concerned with a life policy on joint lives taken out to support a mortgage advance. The benefit under the policy was £47,175 (with bonuses), payable on the death of the first to die or on survival of both to the end of 15 years, but subject to a minimum of £85,000 on death. The lives assured were the deceased, (Mr Powell) and his domestic partner Mrs Osbourne. The claimant was Mrs Powell, the deceased’s widow. There had been a decree nisi of divorce before the death, but it had not been made absolute. The widow began proceedings under the Act and sought an order under section 9 in respect of the policy. The trial judge held that the deceased’s beneficial interest in the policy immediately before death was effectively zero as the policy had only been in force for two months and had no sale or surrender value. On appeal it was held that the judge was wrong in reaching this conclusion: value had to be determined immediately before death as that was the last moment when the deceased could have severed the joint tenancy. However, in order to value the severable share the court had to have regard to the imminence of death with the result that when the value of the property in issue depended upon death, as with the policy, the value immediately before death would be effectively the same as upon death. 
17.	Dillon LJ said this: 
“The object is to bring in what could have been severed immediately before the date of death. If the deceased had in fact severed, the beneficial joint tenancy immediately before his death, he would have thereupon become entitled to a half-share in the property subject to the mortgage but with the benefit of the half-share in the policy monies and, accordingly, on his death his net estate would have been left with the clear half-share of the property, half the policy monies having gone to discharge his half-share of the mortgage.
I find it slightly startling therefore, and anomalous, that the effect of s 9 should be said to be that, if the court is merely ordering that the deceased’s share of the joint property at the value thereof immediately before his death is to be treated as part of his net estate, the result is that the half-share of the policy monies is to be treated as of no value at all or at best merely a token value. One is looking at the moment immediately before the deceased’s death, which is the last moment for severing the beneficial joint tenancy, and to give effect to that it is necessary, to my mind, to keep in mind that the deceased is indeed about to die the very next moment or very soon, almost immediately thereafter. Therefore it cannot be right to value immediately before his death without regard to his assumed imminent death. On the actual facts, he died in hospital (where he had been admitted not long before) and the cause of death was cerebral haemorrhage and hypertension. That again seems to me to indicate that immediately before his death his actual prospects of surviving would have been virtually negligible.
Taking that into account, I conclude that the order should reflect that, though the property is subject to the mortgage, the half-share of the policy monies is also to form part of the net estate.”
Simon Brown LJ (as he then was) agreed and said this: 
“Although I had at first thought that, in directing the court to value the share immediately before death, Parliament was requiring the court to ignore utterly both the fact and imminence of death, I have come to think differently. I have concluded that the reason, and indeed the sole reason, why the value is to be determined immediately before death is because that is the last moment at which severance is possible and it is the severable share that is to be valued. No such consideration arises under s 8 and that is why by s 8(2) the value is to be taken there as at the date of death. The result is that when the value of the property in question depends upon death, and that will only be the case when, as here, the property is a life policy, the value immediately before death will be effectively the same as the value upon death. So be it. That seems to me both fair and to accord with the literal language.”
18.	I make just two further observations on that case. First, at page 1004H of the report Dillon LJ said,
“A policy of assurance and the right to the policy monies thereunder is, of course, a chose in action”. 
	Secondly, in that case, there was no right to terminal illness payment.
19.	Murphy was another case involving a life insurance on joint lives, but with the possibility of terminal illness benefit. The issue was whether the deceased, immediately before his death was beneficially entitled to a joint tenancy of the right under the policy to benefit from his death before the death of the other life assured. That is, was the right to death benefit under the policy a jointly held right in which the interests could be severed by notice of severance or whether the deceased and the other person insured had separate rights to death benefits? There was no issue about the terminal illness benefit; it was common ground that that was held jointly: see per Thomas LJ at paragraph 12. Further, there was no contention that the deceased in that case was suffering from any terminal illness that would have entitled him to claim terminal illness benefit. However, it was held that the deceased had not been entitled to a joint tenancy in the benefit payable if his death occurred first; the plain inference to be drawn was that the death benefit was intended by the parties to be payable to the survivor. It was a separate benefit which was not intended to be defeasible by service of a notice of severance. 
20.	In Murphy Chadwick LJ dissented from the result. He was the only member of the court to give consideration to the potential terminal illness benefit under the policy. At page 15d to 16a of the report (in paragraphs 38 to 40) the learned Lord Justice said this, 
“38……..It is, to my mind, impossible to construe the policy in such a way that the answer to that enquiry depends on the nature of the qualifying event which gives rise to the benefit becoming payable. I appreciate, of course, that there will be circumstances in which the separate interests of those named together as the policy holder are protected in the same composite policy-as Thomas LJ has pointed out- but I am not persuaded that this is such a case. It cannot be said that only the survivor has an interest in the life of the first to die.
39. The point may be illustrated by an example. Suppose that A and B have submitted a claim based on the terminal illness of A and that the company, after proper inquiry by its chief medical officer, is about to accept that claim. When the claim is accepted, the policy monies will be paid to A and B jointly, for the reasons which I have sought to explain. But suppose that, immediately before the claim is accepted, either A or B dies. The policy monies will be payable by reason of the death; it will be the death, rather than the acceptance of the terminal illness claim that will be the relevant qualifying event. And the policy monies will be paid by the company to the survivor, because (after the death of the first to die) it will be the survivor who will have become, by survivorship, ‘the Policyholder’, from whom alone the company can obtain a good receipt. But that will provide no answer to the question ‘which of A and B was entitled to the rights under the policy immediately before the first to die’?
40. I find it impossible to hold that the answer to the question ‘which of A and B is entitled to the rights under the policy immediately before the first to die?’ is ‘whichever of A and B is not the first to die’. As I have sought to explain, in a case where the policy provides for the payment of benefit during the joint lives of A and B, I take the view that the only answer that can be given to that question is that, during their joint lives, the rights under the policy are joint rights, and that remains the position at the time immediately before the first death.”
Chadwick LJ did not deal with a case like the present where (on the assumed facts) the parties might have made a terminal illness claim but had not done so in the period up to “immediately before…death”. However, as appears from paragraphs 39 and 40 of his judgment, Chadwick LJ emphatically rejected the notion that the answer to the question “which of A and B is entitled to the rights under the policy immediately before the death of the first to die” is “whichever of A and B is not the first to die”. Equally, in a terminal illness case, he did not consider that the fact of the payment of policy moneys to the survivor as a death benefit answered the question of which of the two policyholders was entitled to rights under the policy immediately before the first death.
21.	Dingmar is a case which was cited by Mr Charles in his written argument, but which was not referred to by either counsel in oral argument. It does, however, seem to me to be of importance for two reasons: first, for identifying what is the nature of the severable share of the deceased to which reference is being made in section 9; and secondly, for guidance on the meaning of the phrase, “at the value thereof immediately before his death”. After reserving our judgments we invited further submission from counsel upon the impact of this case. I am grateful to Mr Charles and to Mr Vickery for those submissions.
22.	Dingmar was a classic case of a house being held upon joint tenancy between the deceased and one of his sons. The transfer into joint names was effected shortly before the deceased married the claimant in the case. They were living in the property with her children. Seven years after the deceased’s death the son obtained an order for possession of the house in county court proceedings against the claimant widow. Thereupon, she obtained (for the first time) a grant of representation to the deceased’s estate and sought provision under the 1975 Act by way of a transfer to her of the deceased’s half share in the property. Between the date of death and the hearing the property’s value had increased from £40,000 to £95,000. The judge held that, if he had been able to do so, he would have transferred the deceased’s half share to the claimant, but found that he could do no more than order payment to her of half of the value of the house at the date of death, namely £20,000.
23.	Again, this court was divided on the appeal. The majority (Ward and Jacob LJJ) held that the “net estate” for the purpose of provision under the Act included any property treated as part of it by virtue of section 9. No valuation was required for this purpose. The proportionate share of the property which would have belonged to the deceased, had there been severance, is treated as the share which the court was entitled to treat as part of the net estate and the court was, therefore, empowered to order a transfer of that full half share to the claimant. Lloyd LJ dissented, taking the view that the words “at the value thereof immediately before his death” meant that the judge had been correct to hold that he did not have power to order the full half share of the house to be treated as part of the net estate. 
24.	In expressing his majority view, Jacob LJ began by saying that section 1 of the Act indicated that “the heart and object of the Act” was to enable reasonable financial provision for an applicant and that purpose should guide the construction of the Act. He said this, 
“57. This case is concerned with section 25(1)(d). This brings within the “net estate” “any property” the subject of a section 9 order. One may therefore reasonably approach section 9 on the basis that it will have the effect of bringing “property” into the net estate. And that is what it essentially says: for what the court is empowered to order under section 9 is that “the deceased’s severable share of that property” (i.e. property held on a joint tenancy before death) be treated as part of the estate.
58. This is subject to the qualification “at the value thereof immediately before his death”. This, read one way, does not make sense: although a share of property will have a value which can be expressed in monetary terms, that value is not itself a share in property. You cannot order “a value” to form part of the net estate. It is a share in property itself which is to be treated as part of the estate. So what is Parliament driving at by the words “at the value…?”
59. There are several possible candidates. (i) The property is valued at the date of death (which I shall call “£x”). The deceased’s proportionate share of the property if there had been a severance at death is then applied to that value. If there were n joint owners that share will £x/n. That sum of money, is then taken as the “property” somehow to be treated as part of the estate. This is achieved by ordering that the claimant shall have a fixed beneficial share in the property of £x/n, the property being held on a trust for sale between the claimant and defendant(s) or by a charge of £x/n over the property. That is what the judge did, halving the agreed at death value of £40,000, and ordering that the property be held on trust with the claimant having a fixed beneficial share of £20,000. (ii) One asks the valuer also to ascertain the value at the time of the hearing (“£y”). The fraction of the property which would have belonged to the deceased if there had been severance (1/n) is applied to £x/y. That is then taken as the share of the property to be treated as part of the estate. It is only that proportion which the court is empowered to treat as part of the estate. Here that is 40,000/95,000 divided by 2 – practically 21%. So the court has power to treat a 21% share in the property as part of the net estate. This is again achieved via a trust, but this time the claimant gets a proportionate share rather than a fixed sum. (iii) One does not call in a valuer at all for the section 9 exercise. One takes the proportionate share of the property which would have belonged to the deceased if there had been severance of joint ownership (1/n) and treats that proportion of the property as the share of the property which the court is empowered to treat as part of the estate. Here that would give a half share.
60. I see no logical reason for selecting candidate (i). It is the least satisfactory solution – it involves the court as in effect treating cash which is not there – a notional sum- as part of the estate when the court is actually only entitled to treat property as part of the estate. This solution does the most violence to the language used. Moreover given that property values can go up or down it produces the completely illogical result that the claimant loses out if property prices rise between death and the decision whereas his co-owner loses out if property prices fall in that period.
61. Solution (ii) also suffers from irrationality. If there is a rise in property values between death and the hearing, most of that rise would fall outside the net estate. In algebraic terms the figure is £(y-x/yn). If there is a fall, the net estate benefits at the expense of the other co-owners. Why should Parliament want to provide that? Particularly as the whole point of the Act is to make reasonable provision for applicants. Here, for instance, the judge quite rightly took the view that if it were possible the widow should have a half share in the property as she would have done if the question had been resolved at the time of death.
62. Solution (iii) is not merely the most rational, it is the only one which is rational. The happenstance of price movements and the dates of hearing is removed from consideration. The share of the property remains fixed. Of course its value at the date of the hearing is a factor which may be taken into account in the overall assessment of what is to be done (section 3(5)) but that is quite a different question from what property is to be treated as part of the net estate. The solution is even-handed between the other co-owner(s) and the net estate – if property prices rise then each gets a proportionate benefit and if they fall, each gets a proportionate loss.”
Jacob LJ offered alternative explanations of the meaning of the important phrase about “value” in section 9. I think I need only refer to one. At paragraphs 64 and 65 of the judgment, the Lord Justice said this, 
“64. First there may be more that two joint owners of a property, say n. If the deceased severed his interest just before death he would only get the appropriate proportion 1/n of an interest in the property. And it is only that proportion which can be treated as part of the net estate. On this basis the words are aimed at emphasising that. Strictly they are unnecessary but they are there out of caution to make the position clear.
65. On this analysis “value” is not speaking of a monetary value at all. It is speaking of a proportionate value of the property. This makes sense since, as I have said, “value” and “property” are different things and it is the property which is treated as part of the net estate. The solution fits with the purpose of the Act. The solution has the merit of avoiding several irrationalities. So it must be regarded as correct since Parliament cannot have intended the irrational. One is trying to arrive at the meaning a rational reader would think a rational writer had intended. Only solution (iii) achieves that.”
25.	In his judgment Ward LJ said (at paragraph 87), 
“87. ..…..In so far as the order must relate to “the deceased’s severable share of that property, at the value thereof immediately before his death”, the property there referred to must be the same property as that referred to in the opening clause, namely the property in which the deceased person was immediately before his death beneficially entitled to a joint tenancy. This is an important point. Even though a value has to be given to that share at a particular point in time, the subsection does not require that the sum of money representing that value be treated as part of the net estate. It is the property not a sum of money equal to its value which is clawed back into the net estate. The emphasis here is on the property, i.e. the severable share (or part thereof), not its monetary value. Giving the share a value is merely descriptive of the share. The words simply state the fact that immediately before the death of the deceased the value of that severable half share was £20,000.”
He approached his conclusion in this passage in paragraph 98: 
“98. To treat the value immediately before death as creating a cap is to give the element of value an importance it does not seem to me to deserve. It has the consequence that the value placed on the severable interest dominates and controls the property interest to the extent that it changes the nature of the severable share itself from something certain to something uncertain. If the value was to have such defining influence I would have expected “net estate” for section 9 purposes to be defined in section 25(1)(d) as “any sum of money, being the value of the share before death”, not “any property”. As already observed, when sums of money are intended to be part of the net estate, section 25 so provides: see section 25(1)(c) . As it is drafted, “property” is the dominant characteristic of the net estate, and it, not value, should be the predominant element. Property should be construed in accordance with its natural meaning as a fixed interest, not a fluctuating one.”
26.	It seems to me that Dingmar, therefore, is a decision of this court deciding that the phrase, “at the value thereof immediately before his death” is merely descriptive of the share which by virtue of an order under section 9 becomes property treated as part of the net estate out of which provision may be made under the Act.
(F) My Conclusions
27.	Guided by these authorities, it seems to me that the analysis is as follows.
28.	The focus is to be upon the time “immediately before [the Deceased’s] death”. It is, to my mind, irrelevant for the purpose of identifying “the severable share” under section 9 that the death occurred and that the death benefit was in fact paid to Mr Walia. The section requires the share to be identified before the death. In this respect, I consider that the judge was quite correct in what he said (in a passage criticised by Mr Vickery) at paragraph 44 of his judgment as follows: 
“44. At one stage, my mind was exercised by the consideration that the benefit actually paid was a benefit paid by reason of the deceased’s death and, because the terms of the policy documentation make it clear that only one form of benefit would be paid under the terms of the policy, that might provide a complete answer to the claimant’s case. No terminal illness benefit could be paid because death benefit had in fact been paid; but, it seems to me that that would ignore the provision within section 9(1) that one is directed to look to the position immediately before the death, and to the value immediately before that time.”
29.	As Dillon LJ said in Powell (at p. 1004H) a policy of assurance and the rights to the policy money are a chose in action. The deceased, therefore, had an interest in that policy from its inception. As was common ground in Murphy, and as seems to have been accepted by the court, terminal illness benefits of the type arising under this policy are held jointly. A jointly held asset can be the subject of a severance. One has to assume that the deceased had severed her interest under the policy, so far as capable of such severance. In the light of Murphy (as Mr Charles accepted) the separate contingent rights to death benefit probably could not have been so severed.
30.	Assuming a severance to have been effected, it is to be further assumed, under the terms of the preliminary issue, that the Deceased had a relevant terminal illness, giving rise to the right to claim the benefit under the policy. She and Mr Walia were entitled to claim that benefit. It was accepted by Mr Vickery that the fact that the claim had to be established to the satisfaction of the insurer must be taken to mean its reasonable satisfaction; the insurer could not have rejected a claim out of whim or caprice. It is to be assumed, therefore, that the entitlement existed. It would, in my view, be an artificial stultification of the Act to say that there was no “severable share” at the moment immediately before death simply because there was not the time in practice to go through the hoops of making the claim, perhaps even requiring proceedings to compel a reluctant joint policy holder to concur in the making of the claim in which he has the legal, if no longer the equitable, title. Having regard to the principle that Jacob LJ said should guide the construction of this Act, (namely, that the ability of make reasonable financial provision was “at the heart of the Act”), I cannot find that the clear object of section 9 can be frustrated by considerations of a mere mechanical quality such as these. It seems to me that on the assumed existence of the qualifying terminal illness the Deceased had an entitlement to a half share of the terminal benefit which amounted to a proprietary right that could be treated as part of the net estate by the combined operation of sections 9 and 25 of the Act.
31.	That right existed “immediately before [her] death”. It is, therefore, something which is capable of being treated as part of the net estate out of which provision could be made. In fact, the money was paid by the insurer for another reason, but that does not negate the existence of the right at the relevant time for the purposes of section 9. It is merely one of the facts existing at the date of the hearing of which the court would have to take cognisance under section 3(5). The fact that the Deceased’s severable share is represented by money paid by the insurer by another route cannot surely frustrate the section 9 exercise.
32.	Looked at in this way, it seems to me that the share represented by part of the policy money in the hands of Mr Walia can be used for provision for claimants in such manner as the court considers appropriate in all the circumstances.
33.	As Dingmar indicates, the phrase “at the value thereof immediately before his death” cannot be used to dictate what provision can be made out of the severable share. The concept of the value at the date of death cannot be used to negate a proper provision out of the share which is treated as part of the net estate. Nor is this a case, like Powell, where the value of the property in question depends upon the death. The property had a value, so far as it is necessary to ascertain it all, immediately before the death and independently of it. Having regard to the special considerations arising under this Act, as explored in the Dingmar case, it does not seem to me that cases such as Bwllfa and Merthyr Dare Steam Collieries (1891) Ltd. v The Pontyprydd Waterworks Co. [1903] AC 426, which we considered during the course of the hearing, have bearing upon the matter that we have to decide. The concept of “value” under this Act has come to have its own special treatment.
34.	In my judgment, the fallacy of the argument for Mr Walia is precisely the one identified by the judge, namely that it focuses not on the time immediately before the Deceased’s death, as section 9 requires, but on the fact of the death thereafter. The fact that the money was paid by the insurer as a death benefit is irrelevant. 
35.	Equally, with respect to the carefully compiled supplementary submissions of Mr Vickery, I do not accept the point made by him (in paragraph 11) that “the effect of Dingmar is to confirm that it is the value of the severable interest at the date of the hearing with which the court is concerned, notwithstanding the words “at the value thereof immediately before his death” in section 9(1)”. That proposition is the same as Jacob LJ’s “candidate (ii)” for what Parliament was “driving at” with those words, which the learned Lord Justice rejected as suffering from “irrationality”: see paragraph 61 of his judgment.
36.	In my judgment, what Dingmar shows is that what the court is enabled to do under section 9(1) is to order the “severable share” to be treated as part of the net estate; it is not the “value” of that share that becomes part of the net estate, either at the date of the death or at the date of the hearing. It is the proportionate share of the property, if there had been a severance, which the court is empowered to treat as part of the net estate- Jacob LJ’s “candidate (iii)”: see paragraph 59 of his judgment.
37.	As the decision in Dingmar shows, it is upon the severable share to which the deceased was entitled immediately before death that focus is directed. The “value” is a secondary matter. As Ward LJ said, it was merely descriptive of the share. Even under the new section 9(1A) of the Act, when it is in force, the focus on a value at the date of the hearing will only be a starting point, which will be subject to the court’s overriding discretion.
38.	The court’s means by which to make provision, once the severable share is treated as part of the net estate, is the asset representing the share at the date of the hearing. In all these cases, the deceased’s actual severable share has no value at all, either upon his death or any later date; it has simply ceased to exist. The same is true whether the jointly held property is a house or an insurance policy. In each case, the deceased’s severable share has in law ceased to exist; it is merely represented by the house in the ownership of the survivor or the proceeds of the policy paid to the survivor. The effect is the same whatever the nature of the jointly held asset. As in Dingmar, the court can, however, order provision to be made out of the assets representing the deceased’s former share, as if it were severed and did still exist.
(G) Conclusions
39.	For these reasons, I would dismiss the appeal.
Lady Justice Arden:
40.	I gratefully adopt the description of the facts set out in the judgment of McCombe LJ.  In respectful disagreement with his conclusion, I would allow this appeal for the following reasons, which I amplify below: 
i)	The judge had to decide two questions in order to grant any relief under the Inheritance (Provision for Family and Dependents) Act 1975 (“the 1975 Act”):  (1) whether the deceased had a severable interest in the terminal illness benefit payable under the life insurance policy and (2) the value of that interest immediately prior to the deceased’s death.
ii)	The judge correctly decided that the deceased had a severable interest in the terminal illness benefit payable under the policy.
iii)	However the judge did not determine the value of that interest in accordance with the decisions of this court in Powell and Dingmar.  That policy had to be valued taking into account the fact that that interest would by virtue of its terms cease to exist if (as happened) death occurred without a claim being made.
i)  Section 9(1) of the 1975 Act raises two questions
41.	Section 9 of the 1975 Act deals with property which is subject to a joint tenancy.  On the deceased’s death, the deceased’s share of such property will accrue to the survivor unless the deceased severed his share.  The effect of section 9(1) is to negate the effect of survivorship by treating the severable share as if it were part of the deceased’s estate for the purposes of determining any claim under the 1975 Act in respect of the deceased’s estate.  
42.	In this case, as can be seen from paragraph 14 of the judgment of McCombe LJ, section 9(1) of the 1975 Act requires the court to answer two questions: 
i)	 Did the deceased have, immediately before her death, a severable interest in the terminal illness benefit?
ii)	What was the value of that interest immediately before her death?  
ii) Deceased had a severable interest in the terminal illness benefit
43.	The preliminary issue in the court below was whether immediately before her death the deceased was entitled to a joint tenancy of the right under the policy to benefit from her assumed terminal illness.  It was common ground that the death benefit was not severable.  The parties assumed that they could establish that Mrs Walia had suffered from a terminal illness.  
44.	On the question of the nature of the deceased’s interest in the terminal illness benefit, Murphy v Murphy [2004] 1 FCR 1 provides assistance. In that case, the claimant sought to bring into the deceased’s estate for section 9 purposes what she claimed was the deceased's severable share in monies paid out to his estranged wife on his death under the terms of a life policy. The policy provided for benefit to be paid on either the death of the first to die of the lives assured (the deceased and his estranged wife) or the terminal illness of one of them. This court by a majority (Thomas and Pill LJJ) held that under the terms of the policy the death benefit was to be paid to the survivor and that therefore the claimant’s claim failed.  The death benefit could be distinguished from the terminal illness benefit which under the terms of the policy was to be paid to them jointly. It did not follow from the fact that the terminal illness benefit belonged to them jointly (which both parties accepted), that the death benefit was held jointly, as the claimant contended.  
45.	Chadwick LJ dissented on whether under the terms of the policy the deceased had a severable interest in the death benefit immediately prior to death, but he accepted that, if no claim was made for the terminal illness benefit and the death benefit was paid out, no terminal illness claim would exist (see paragraph 37 of his judgment).  
46.	I agree with the judge that the terminal illness benefit was held on a joint tenancy.  It was to be paid to them both as the policy made no provision for payment to be made to one only of them.  The deceased had a severable interest in the terminal illness benefit even though it was a contingent interest, because the right to receive the terminal illness benefit was dependent on an appropriate claim being made, and even though the death benefit was not held jointly.  
iii) Valuation of the severable interest: curtain does not come down immediately prior to death
47.	Powell decides that, under section 9(1), the valuation of a severable interest must take into account the imminence of death.  In that case, this court accepted a deceased's widow’s contention that, immediately before the deceased's death, his joint tenancy of a property he owned with a third party was severable. Accordingly, immediately prior to death, he was entitled to a half share in the property, plus the benefit of a half share of the benefit arising from an endowment policy supporting a mortgage on the property.  Dillon LJ held that the purpose of section 9 of the 1975 Act was to bring in what could be severed immediately before the date of death.  The moment before death was the last moment for severing a joint tenancy and it was necessary to keep in mind that the deceased was about to die in the next moment or almost immediately. Therefore his share of the policy should be valued taking into account his assumed imminent death. Simon Brown LJ agreed. Parliament's intention was that a jointly-owned share should be valued immediately before death but that did not mean that the court had to ignore the fact and imminence of death. He concluded that a severable share was to be valued at that time because that was the last moment at which severance was possible. In contrast, under section 8 (property which the deceased nominated a person to receive on his death and gifts in contemplation of death), the value was to be taken at the date of death.  Consequently, where the value of an interest depended on death, as it would when the interest was a life policy, the value immediately before death would effectively be the same as its value on death. Simon Brown LJ considered this outcome was both fair and consistent with the wording of section 9.
48.	This conclusion is consistent with well-established principles of valuation:  see Bwllfa and Merthyr Dare Steam Collieries (1891) Ltd v The Pontyprydd Waterworks Co. [1903] AC 426.  Moreover, any other conclusion could mean that the value of the severable interest might otherwise be taken into account at a value which the deceased could not on the facts himself have obtained for it. 
49.	Dingmar also confirms that, contrary to the respondent’s submission, the curtain does not come down at death or immediately prior to death so as to exclude any event occurring thereafter. That case concerns a joint tenancy of property.  One of the joint tenants died. The property had increased in value prior to the hearing of the claimant’s claim under the 1975 Act and the question was whether the court should treat the increased value as part of the estate.  The majority (Jacob and Ward LJJ) held that the court should do so on the basis that the effect of section 9(1) was to fix the percentage of the total value which was to be treated as belonging to the estate. Lloyd LJ, dissenting, held that only the value of the share immediately prior to death should be treated as part of the estate and that the subsequent increase in value should therefore be ignored.  
50.	The decision of this court in Dingmar is consistent with the imminence of death point established in Powell.  It confirms that the valuation must take into account events occurring after the date at which valuation is to occur – in that case, upwards movement in the value of the half share of the property to be valued.  
51.	The respondent contends that Dingmar is authority for the proposition that section 9 is to be read purposively so that survivorship does not preclude the making of financial provision.   In my judgment, that submission does not assist the respondent on this point because in this case it is not survivorship which precludes the making of financial provision but the terms of the asset in which the severable interest is held.  
52.	In this case no claim had been made for the terminal illness benefit before death.  In those circumstances, the insurer was justified in paying the death benefit to the appellant.  So the value of the severable interest in the terminal illness benefit immediately prior to death was nil. 
iii)  Judge did not apply the principles of valuation established in Powell 
53.	Unfortunately, the preliminary issue did not require the judge to determine the value of the severable interest. 
54.	The judge answered the preliminary issue in the affirmative and on that basis, he ordered the payment into court of one-half of the death benefit.  In my judgment he was wrong to do so without determining the value of the asset immediately prior to death.  As explained, that value was nil.
Conclusion
55.	The sequence of events which occurred in this case did not occur in previous cases, though it was envisaged by Chadwick LJ in his dissenting judgment in Murphy (see paragraph 6 above).  In this case, unlike any of the cases that I have mentioned in this judgment, the deceased had a contingent right, immediately before her death subject to proof, to have the benefit under a life policy brought forward because of her terminal illness, but her death brought that right to an end.  There was, therefore, no interest of any value to be treated as part of her estate under section 9(1). 
56.	I would allow this appeal. 
Lord Justice McFarlane
57.	I also respectfully disagree with the conclusion expressed in the judgment of McCombe LJ. For the reasons given in the judgment of Arden LJ, I too would allow the appeal.
58.	The insurance policy at the centre of this case established entitlement to the payment of ‘the sum insured’ on the first death to occur of the two lives insured. There was further provision, on proof of terminal illness, to ‘bring forward the payment of the sum insured’. There was therefore one sum that was to be paid and it was to be paid on one occasion, being either the first death or, if it was brought forward, prior to the first death on proof of terminal illness. There were not two sums, each with a realisable value. The ‘benefit’ that followed proof of terminal illness was the right to have the payment of the one sum brought forward. If payment of the sum insured was not brought forward to a time before the first death, then the deceased’s severable interest in the right to make a claim to bring it forward (the terminal illness benefit) evaporated and was of no value.