In Clarion Housing Association Ltd v Carter [2021] EWHC 2890 (QB) the High Court has underscored that a person entitled on intestacy cannot acquire an immediate equitable interest in the estate property.
Section 9 of the Administration of Estates Act 1925 as substituted by the Law of Property (Miscellaneous Provisions) Act 1994 provides that when a person dies intestate, his real and personal estate vests in the Public Trustee until the grant of administration. The Public Trustee does not acquire any beneficial interest or obligations in respect of the property.
Pursuant to section 18(1) of the 1994 Act, a notice affecting land that is required to be served on a person, but for his death, will be deemed to be sufficiently served before a grant of representation is filed if served on his personal representatives at the property or if the same is similarly addressed and served on the Public Trustee.
In the present case, an issue on appeal was whether the respondent could succeed to her late mother’s assured tenancy in circumstances where she could not rely on the automatic statutory succession rights under sections 17(1) and 17(1A) of the Housing Act 1988. This was due to the fact that the tenancy pre-dated 1 April 2012. The judge below found that she could.
On appeal, it was argued on behalf of Carter that under the provisions of the 1925 Act, an intestate’s estate was generally held on trust for sale by personal representatives. If the intestate died leaving children and no spouse, the residuary estate was held on trust for the benefit of the children. It was submitted that during this period “equity must contemplate that the person entitled on intestacy has a beneficial interest in the tenancy, provided that person meets the contractual conditions for succession”, which Carter did. At the material time she had an inchoate right to establish title to her late mother’s tenancy pending grant of administration. That right was only a chose in action, but was sufficient to immediately vest the assured tenancy in her, upon the death of her mother.
Clarion argued that a notice to quit had been validly served on the personal representatives and the Public Trustee in accordance with section 18(1) of the 1994 Act. Carter only afterwards obtained grant of letters of administration, and subsequently a deed of assent executed in her favour.
Clarion argued that the authorities supported the proposition that Carter did not become entitled to the benefit of the tenancy in equity until after the deed of assent had been executed, which only occurred after the grant of administration. By that date Carter’s late mother’s tenancy had been terminated following expiry of the notice to quit. The notice had been validly served on the Public Trustee, who was the only person who could receive it as Carter was yet to obtain grant of administration.
The High Court noted the attractiveness of the arguments advanced on behalf of Carter, but it found that the weight of the authorities was against the analysis advanced on her behalf. The general rule that a person entitled on intestacy did not acquire an immediate equitable interest in the estate’s property was settled and entrenched.
Clarion’s appeal, however, was ultimately dismissed. The High Court upheld the findings of the court below that Carter had a contractual right to succeed under the terms of her late mother’s tenancy and that she had fulfilled the necessary criteria for doing so.
Elizabeth Dwomoh is a barrister at Lamb Chambers
