Private Clientline Yearbook Vol 2

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PRIVATE CLIENTLINE YEARBOOK VOLUME 2

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“ Remember me in your Will” If pets have a place in your heart, please find a place for them in your Will. A gift in your Will can help secure the future for thousands of pets.

Order your FREE information pack on making or amending a Will and leaving a gift to Blue Cross online at www.bluecross.org.uk/gift-your-will Or complete the coupon and send to: Freepost BLUE CROSS FOR PETS Title:

Sick, in ju and ho red meless pets ha ve r on us s elied ince 1897

First name:

Surname: Address:

Postcode: Telephone:

Alternatively, call or email and quote: L729 Telephone: 0300 777 1757 Email: legacy@bluecross.org.uk

www.bluecross.org.uk

Thank you for your continued support.

Blue Cross is a charity registered in England and Wales (224392) and in Scotland (SC040154). *From time to time we may wish to communicate with you by phone with news about the pets you are helping and ways you can help in the future. If you are happy for us to do this, please fill in your details above.

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18105 Solicitors Group 190 x 190 - L729.indd 1

12/05/2017 10:59

Childhood Cancer

Research and Support for Children with Cancer 3600 children in the UK are diagnosed with Cancer each year.

Help us to help them!

Childhood Cancer Research.

We fund original non-animal tested Research into Childhood Cancers, their Causes, Treatment, Cure and Prevention.

We target Cancer, not animals!

Kids2Go Healing Holidays for Children with Cancer.

Our Healing Holidays re-ignite their selfconfidence, self-esteem and passion for life after the trauma of their life-threatening Cancer and damage to their young bodies from radiation, chemotherapy, and surgery, at such a tender time in their lives.

Paediatric Oncology Ward Support for childhood cancer in-patients.

We provide comforts and amenities for children with cancer and support for their caring families and siblings.

• Caring Cancer Trust is wholly run and managed by unpaid Volunteers.

• Members of the University of Manchester President’s Beyer Circle of Philanthropy.

Research and Support. Reg.No: 1052205

caringcancertrust.com

Head Office: 162 High Street, Ryde, PO33 2HT. Tel: 07805441234 Email: support@caringcancertrust.com

2

BUILD YOUR KNOWLEDGE AND ADVANCE YOUR SKILL SET WITH A STEP QUALIFICATION Completing a STEP qualification enables you to become a STEP Member; joining the largest network of trust and estate professionals in the world, with over 20,000 members across 100 jurisdictions.

STEP offers a range of qualifications enabling you to build upon existing knowledge, develop your skill set and advance your career, including: Certificate in AntiMoney Laundering

Advanced Certificate in Cross-Border Estates

Advanced Certificate in Will Preparation

Protect your firm with your enhanced insight as to how to identify and prevent money laundering

Enabling you to deal more effectively with complex issues of estate administration across multiple jurisdictions

Certificate in Compliance for Professional Advisors

Advanced Certificate in Family Business Advising

Completion allows you to differentiate your level of service by displaying the Will Writing Code logo

Principles and best practice outcomes for regulatory compliance

Skills to assist practitioners in analysing a family business; advising on governance and making recommendations for action

Certificate in Foundations Understand, administer and establish Foundations

Advanced Certificate in Advising Vulnerable Clients For professional advising those with issues of mental and physical incapacity

STEP Diploma in Trusts and Estates Diploma available in England & Wales, Scotland and Northern Ireland and leads to Full STEP Membership

Advanced Certificate in UK Tax for International Clients

Professional Postgraduate Diploma in Private Wealth Advising

Demonstrate expertise in UK Tax Planning for international clients

An Advanced level programme designed for senior industry practitioners

Advanced Certificate in Trust Disputes Anticipate and avoid the pitfalls of Trust Disputes

For course dates and further information visit

www.step.org/findacourse 3

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Contents...

1

November 2015 Can someone who lives abroad be appointed as deputy? ...... 12

What happens if an award is made in divorce proceedings, and one party dies

very shortly thereafter?.......................................................................................................... 12

8

June 2016 Is a lump sum payable under a pension scheme an asset which can be used to satisfy an order under the Inheritance (Provision for Family and Dependants) Act 1975?.......................................................... 76

Donatio mortis causa............................................................................................................. 14

Rectification of wills................................................................................................................ 77

What constitutes a gift?......................................................................................................... 16

Statutory wills........................................................................................................................... 78

Inheritance (Provision for Family and Dependants) Act 1975........................................... 20

Lasting powers of attorney - Can the Court cancel the registration of one attorney?.79

Proprietary estoppel............................................................................................................... 24

9 July 2016 Estoppel..................................................................................................................................... 80

2

December 2015 CGT and main residence exemption.............................................................. 26

Council houses/flats and right to buy.................................................................................. 28

Knowledge and approval of wills......................................................................................... 83

Proprietary estoppel............................................................................................................... 30

IHT and reservation of benefit............................................................................................... 84

Purchase by trustees of trust assets...................................................................................... 36

What is a nuptial settlement?................................................................................................ 85

Does a beneficiary have a right to live in a house forming part of the trust assets?..... 86

3

January 2016 In what proportions do cohabitees own the family home? ........ 38

What costs is a trustee entitled to?....................................................................................... 83

Payment to carers.................................................................................................................. 40

10 August 2016 Statutory wills......................................................................................................................... 88

Removal of trustees................................................................................................................ 45

Who owns what in a business/partnership?........................................................................ 92

Mistakes by settlors................................................................................................................. 92

Setting aside gifts.................................................................................................................... 93

Inheritance (Provision for Family and Dependents Act 1975............................................ 93

4

February 2016 Removal of executors................................................................................................... 48

Forfeiture.................................................................................................................................. 49

5

March 2016 Capacity and the Mental Capacity Act 2005.......................................... 54 Quistclose trust........................................................................................................................ 55

Equity’s darling - the bona fide purchaser of the legal estate without notice of an ....

equitable interest.................................................................................................................... 56

Film partnerships and estates of partners............................................................................ 58

Inheritance (Provision for Family and Dependants) Act 1975 and domicile.................. 60

Insolvency Act s 423............................................................................................................... 65

What is required to give a person an interest in a property vested in the name

of another?.............................................................................................................................. 70

Interpretation of wills.............................................................................................................. 71

Can a settlement which has disastrous tax consequences be set aside?...................... 72

Disputes about funeral arrangements................................................................................. 97 Inheritance (Provision for Family and Dependants) Act 1975........................................... 99

Revocability of an agency agreement/does an agent hold money received

on behalf of the principal on trust?...................................................................................... 100

12 October 2016 Capacity to make a will and

knowledge and approval of the contents................................................... 104

Duties of administrators.......................................................................................................... 106

Negligence.............................................................................................................................. 107

May 2016 Cost in contentious probate – Should the losing party pay all the costs?................................................... 68

Illegality.................................................................................................................................... 100

April 2016 Burns and others v Burns [2016] EWCA Civ 37........................................... 60

7

11 September 2016 Conveyancing frauds.................................................................................................... 96

When will the Court of Protection appoint a personal welfare deputy?........................ 50

6

Who is the father?................................................................................................................... 108

13 November 2016 Capacity to make a will.............................................................................................. 110

Equitable estoppel................................................................................................................. 112

Professional conduct.............................................................................................................. 115

14 December 2016 Challenges to wills and costs.................................................................................. 118

Don’t miss out on the latest updates...

Disputes about chattels......................................................................................................... 120

Inspection of trust documents.............................................................................................. 120

► Visit the website: www.thesolicitorsgroup.com ► Select ‘Publications’ from the top navigation

Sign up today

► Select ‘Property Publication’ ► Enter your name and email address It’s that simple, you will be emailed when further updates are available.

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Sylvia strikes back Medical Secretary gives something back to research and treatment

Sylvia’s friends remembered her for her kind heart, and her strong desire to help others. Even though she suffered lifelong poor health, while also caring for her critically ill mother.

But Sylvia did more than put on a brave face: she struck back against illness by working as a medical secretary, and following medical advances keenly. That’s how she found out that with conditions such as stroke, the right treatment and back-up can make all the difference when given promptly.

So it’s not surprising Sylvia decided that one of the best things she could do would be to strike back again, by supporting the work of the Stroke Association – and leave us a generous gift in her Will.

Today, we take time to remember her. Because Sylvia is still playing an important part in helping us create a future free of stroke, and turn around the lives of thousands of stroke survivors each year.

Call

Together we can conquer stroke.

020 7566 1505 email legacy@stroke.org.uk or visit stroke.org.uk/legacy

Registered office: Stroke Association House, 240 City Road, London EC1V 2PR. Registered as a Charity in England and Wales (No 211015) and in Scotland (SC037789). Also registered in Northern Ireland (XT33805), Isle of Man (No 945) and Jersey (NPO 369). Stroke Association is a Company Limited by Guarantee in England and Wales (No 61274)

6

HELP US BUILD A BRIGHTER FUTURE People who left a gift in their Will to the GLFB in the past are playing a significant Doorstep fundraising team part in the lives of people dealing with sight loss.

Doorstep fundraising team

Our team of door to door Although some of these supporters foresight in leaving a fundraisers would likemay to sayhave a big passed on, their Our team of door to door ‘Thank you!’ to everyone who legacy is making a real and lasting difference to visually impaired children andto adults fundraisers would like say a big opened their door to them and ‘Thank you!’ to everyone who today. This is because gifts areabout helping to provide services that reduce took the left time in to Wills learn more opened their door to them and theso charity and brings, start up aenabling new the isolation sight loss often people to live happier, more tookmuch the time to learn more about regular gift to the GLFB! the charity and start up a new

fulfilling and independent lives.

regular gift to the GLFB!

Isn’t that the kind of legacy we would all love to leave?

Please accept our heartfelt thanks if you have already remembered the work of the GLFB in your Will.

Thank you for supporting the Greater London Fund our for If you haven’t already done so, please do consider whether you could support the Blind.

Ourloved work is only work in this very special way once you have made provision for your ones.

All legacies, be they large or small, help to change lives. made possible because of committed friends like you.

If you would like more information about gifts in Wills, please call us on telephone number 020 7620 4918 or by writing to us at the address below: Every donation you make

another blindRoad, or Greater London Fund for the Blind, 12 Whitehorse Mews, 37means Westminster Bridge London, SE1 7QD. Email: info@glfb.org.uk Website: www.glfb.org.uk partially sighted person has an increased chance of a The Greater London Fund for the Blind was established in 1921 tobetter providequality blind welfare services in of life.

Greater London Fund for the Blind

London. Today, the services weMills fund, Sir John Housemade possible through voluntary donations including gifts in Wills, Greater London Fund for the Blind Mewsvulnerable people in society. enable us to reach some 12ofWhitehorse the most Sir John Mills House 37 Westminster Bridge Road London SE1 7QD

Every day 100 people in the UK start losing their sight – that’s one person every 15 minutes.

Sight loss affects people of all ages and it can strike at any time. A legacy gift to the GLFB will help ensure that we can provide specialist from the Registered Charity No.care 1074958 point of diagnosis. Thank you.

7

12 Whitehorse Mews 37 Westminster Bridge Road London SE1 7QD

Registered Charity No. 1074958

Thank you Greater Lo the Blind. made poss committed

Every don means ano partially si an increas better qua

PARAMOUNT PARAMOUNT LEGAL LEGALCOSTS COSTS High Highquality qualitywork workat ata apersonal personallevel level

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COURT OF PROTECTION MATTERS PROBATE SEE OUR PRIVATE CLIENT SERVICES INFOGRAPHIC FOR A MORE DETAILED OVERVIEW

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I have used Paramount as Law Cost Draftsmen for several years and have years’ experience in a range of areas, including found their service first class.

Alan Pickard Pickard has over has over 15 years’ 15 years’ experience experience in in Private Client work, civilAlan litigation and legal Not only are they efficient aid. Julie takes pride inlegal providing a personal legal costs. costs.

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Paramount Paramount andand have have never never Client matters as well. Christine running Email I was put in contact with and coaching netball in her spare time as well info@paramountlegalcosts.co.uk looked looked back. back.

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Paramount and have never DX looked back.

They are hard-working, hard-working, efficient efficient andand a a Melanie Melanie Pearson Pearson 63314 PENRITH hard-working, efficient and a Melanie Pearson pleasure pleasure to work to work with. with.

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PARAMOUNT LEGAL COSTS LIMITED

Rural Enterprise Centre Redhills, Penr ith Cumbria C A11 0DT DX: 63314 Penrith T: 01768 213072

F: 01768 213073 PARAMOUNT PARAMOUNT LEGAL LEGAL E: info@paramountlegalcosts.co.uk

likes to find time to exercise and travel as much as possible.

time,time, Melanie Melanie is a busy is a busy mummum to hertotwo her children two children and and likes likes to find to time find time to exercise to exercise and and traveltravel as much as much as possible. as possible.

8

PRIVATE CLIENT EXPLAINED

PRIVATE CLIENT SERVICES

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I have used Paramount as Law Cost Draftsmen for several years and have found their service first class.

Not only are they efficient but their expert advice has resulted in my increasing fee income substantially.

I have no hesitation in recommending them.

GET IN TOUCH

See our guide below for an overview of each Private Client service

COURT OF PROTECTION

Annual general management bills

Costs of appointing a deputy

Statutory will applications

Short form (where costs do not exceed ÂŁ3000 plus VAT) or detailed bills.

Advice on outcomes of assessment at SCCO

Estimates of costs with form OPG105

Advice with regards to how costs are likely to be assessed, or whether it is worth appealing assessment.

Advice on completion of Section 3

Telephone 01228 819131

Email

PROBATE

info@paramountlegalcosts.co.uk

DX 63314 PENRITH

Mail Atlantic House, Parkhouse, Carlisle, Cumbria, CA3 0LJ

Visit our website paramountlegalcosts.co.uk

Inheritance Act Claims

Bills and advice on contentious probate

Detailed bills for assessment by the court, and negotation if required.

Detailed schedule or bill, and negotiation if required.

9

Non-contentious bills Schedule of costs with detailed narrative.

For legacies For Cancer, Prevention is Key DO!

DON’T!

P Be physically active

O Smoke

P Practise safe sex

O Expose yourself excessively to the sun

P Eat five to nine servings of fruit and vegetables daily

O Consume excessive amounts of red meat

P Drink green tea

O Drink excessive amounts of alcohol

P Maintain a healthy body weight

O Use talcum powder

P Avoid job-related chemical exposures

O Consume excessive amounts of animal fats

We eagerly await the day when people don’t wait until they have cancer before giving up smoking

Our sacred mission: the prevention of cancer For donations, in memoriam gifts, legacies

Cancer Prevention Research Trust 231 Roehampton Lane, London SW15 4LB Tel: 020 8785 7786 Fax: 020 8785 6466 E-mail: cprt45@yahoo.co.uk Registered Charity No. 265985

www.cancer-prevention-research.co.uk 10

HEIRS LOCATED WORLDWIDE Family Tree Check

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Missing Beneficiary and Will Insurance

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Overseas Assets Department

Dormant Client Account Services

Flexible Fee Options

Property Management and Sale

(Grants, Medallion Guarantees, Properties, etc.)

Head Office Bank Chambers 1 Library Street Wigan, WN1 1NN 01942 826 500

London Office 150 Minories London EC3N 1LS 020 7347 5140

info@estateresearch.co.uk www.estateresearch.co.uk

11

8289

Certification No.207217

8289

Certification No.206915

November 2015 Can someone who lives abroad be appointed as deputy?

John Thurston, TEP, Solicitor, LL.B The answer given in the next case was yes.

Re DGP Law v. DGHP and Ors [2015] EWCOP 58.SG Lush SJ confirmed the decision of Judge Bellamy that a daughter who lived in the USA should be appointed as deputy for her mother. The principal objection to mother’s appointment was that she lived abroad, but this was rejected.

What happens if an award is made in divorce proceedings, and one party dies very shortly thereafter?

A court will be prepared to modify the order if it was based on the needs of the deceased spouse.

WA v The Executors of the estate of HA deceased [2015] WTLR 1471.

WA was a very wealthy heiress who married HA who brought modest assets of his own to the marriage. There were three children of the marriage, and the couple lived on a very large estate. The marriage broke down, and a substantial award was made in favour of the husband. He then committed suicide.

It was held that the suicide of a husband was neither foreseen by the wife, nor foreseeable. The award in favour of the husband was primarily based on his needs, and was varied because of his death.

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Foundation for Liver Research

Animals in Distress is a local animal welfare charity and Rescue Centre that cares for and rehomes over 600 cats, dogs, rabbits and guinea pigs in South Devon every year.

We are passionate about the welfare of the animals in our charge and always treat them with dignity and kindness. We are committed to keeping them healthy and secure until they are in their new, forever homes.

1 in 10 people will suffer from some form of liver disease Unfortunately that is likely to include someone you know and love and you may have already experienced the distress and heartache of someone who has faced the pain of liver disease.

Animals in Distress receives no government funding thus relies on the generosity of supporters to care for the animals who are in such desperate need.

Our scientists are working to improve methods of diagnosis and treatment for a variety of liver conditions including liver cancer, alcoholic liver disease, fatty liver disease and viral hepatitis. Earlier diagnosis often means that treatments will have a better chance of success; newer treatments will hopefully be more effective and with less side effects. We would love to cure liver disease but for now we have a more immediate aim - to improve diagnosis and treatments for those affected.

One third of Animals in Distress’ work is funded by gifts left in Wills. Without the incredible generosity of our legacy supporters we simply wouldn’t be able to provide the animals with the care and accommodation that they need and deserve.

For more information about how you can remember Animals in Distress in your Will, please contact Rowana Rowan on: 01803 812121 or: rowana@animalsindistress.uk.com

The Foundation depends on donations to fund this research.

A donation in your Will helps us continue our work.

www.animalsindistress.uk.com

Help us fight liver disease Institute of Hepatology Foundation for Liver Research 111 Coldharbour Lane London SE5 9NT Tel: 020 7255 9832 www.liver-research.org.uk

Give a horse like blind Boo a lifetime of happiness A legacy gift is life-changing

Call 01508 481030 or email legacies@redwings.co.uk to request a legacy pack today. Thank you.

13

solicitors group ebook.indd 1

7/28/2015 11:24:20 AM

Donatio mortis causa.

King v TheChiltern Dog Rescue and anor [2015] WTLR 1225.

The Court of Appeal has overturned the decision of the judge at first instance that there was a donatio mortis causa on the ground that the deceased should be contemplating impending death. It was held that the deceased was not contemplating her impending death at the relevant time as she was not suffering from fatal illness, nor was she about to undergo a dangerous operation.

Gifts and disclosure to HMRC-penalties.

The next case is one where the deceased transferred just under £500,000 to his son in an offshore account shortly before he died.

Although he was asked verbally and in a letter if he had received any gifts from the deceased in the seven years prior to the date of death, he did not disclose this money.

The Revenue received an anonymous tipoff about the account, and sought to impose a penalty on the appellant.

He used various arguments to resist this, but the main ground was that it was all the fault of the executors.

This was rejected.

Hutchings v. The Commissioners for Her Majesty’s Revenue and Customs [2015] WTLR 1359.

The deceased owned a farm in West Sussex, and also operated a number of businesses, which were valued at his death at about £3 million. He also had an offshore bank account, and about six months before his death, he authorised the balance of £443,669 to be transferred to the appellant.

He died leaving a will pointing a solicitor and a land agent as his executors. The met the family, and requested them to disclose any lifetime gifts they had received from the deceased. A letter was also sent explaining that the executors were under

14

Lower Winstone Farm Wroxall Isle of Wight PO38 3AA 01983 852693 www.iowdonkeysanctuary.org

Charity Number 1159886

HELP OUR DONKEYS

Isle of Wight Donkey Sanctuary CIO There will always be old, unwanted, neglected and sometimes abused donkeys in need of a home. Here at the sanctuary we have over 90 such donkeys in our care. Their lives really do depend on us.

Large or small a legacy, donation or 'in memoriam' gift will make a big difference and help us to continue our work. Thank you.

A Charity registered with the Charity Commission for England & Wales

15

a duty to ascertain the gifts made by the deceased in the seven years prior to the date of his death for inheritance tax reasons. The appellant did not respond to this letter.

The executors submitted an IHT 400 which did not disclose the gift of money in the offshore bank account. The Revenue received anonymous information about this account. As a result, the appellant was chargeable to £46,995.90p inheritance tax on the money in this offshore account. It also had the effect of increasing the inheritance tax payable on the rest of the deceased’s estate.

The Revenue wrote to the appellant indicating that they intended to charge a penalty of 35% of the potential lost revenue, but later this was revised to 65%, but then reduced to 50%. This amounted to £87,533.80, and the calculation included the extra inheritance tax payable on the rest of the estate of the deceased.

The appellant deployed various arguments against the penalty. The main argument was that it was the fault of the executors that this offshore account not be disclosed to the Revenue. All the appellant’s arguments were rejected.

What constitutes a gift?

The next case is concerned with whether there had been an effective gift of some paintings.

In order for there to be an effective gift as far as English law is concerned, there must be a change of possession and an intention to make a gift.

Scott v. Commissioners for Her Majesty’s Revenue & Customs [2015] WTRL 1461.

This case is concerned with three groups of paintings, Group 1, Group 2 and Group 3.

The Revenue alleged that they were part of the estate of Dr Olive Scott.

The Group 1 paintings had originally belonged to Dr Olive Scott and her husband Prof James Scott. The evidence was that in 1985 Dr Scott and Professor Scott had purported to make a gift of the paintings in Group 1 their sons Malcolm and Alistair by removing them from the wall of the family home, handing them individually to their son Malcolm and rehanging them at his direction. Neither Alistair nor Malcolm had a permanent address at that time.

16

The Heartbeat Home for Horses Limited is a registered charity, whose aim is to care for horses who otherwise would face a very uncertain future.

Inform, Inform, aim is to provide a lifeline for these needy, enlighten Our enlighten homeless animals, allowing them to relax in comfortable surroundings in retirement, with lots of and inspire and inspire tender loving care.

The British Museum The British Museum • cares for over cares 8 million for over 8 million objects which objects are which are studied and enjoyed byand enjoyed by• studied visitors and scholars visitors and scholars from all over the world.

Heartbeat horses are often large, 16hh+ - it can be difficult to find a retirement home for them

You can help protect Younation’s can help protect • and conserve the and conserve the nation’s • collection for future generations bycollection leaving for future generations by leaving a donation to the British a donation to the British• Museum in your will.

Heartbeat will not put a healthy horse to sleep

Heartbeat Horses are NOT re-educated, or re-homed, or adopted

from all over the world. • Heartbeat Horses retire to enjoy a good quality of life

Museum in your will.

For more information: +44 (0)20 7323 8421 For more information: legacymanager@ +44 (0)20 7323 8421 britishmuseum.org

legacymanager@ britishmuseum.org

17

We need to expand, due to the long waiting list of horses waiting to retire, or worse We have CCTV in the stables, to monitor horses who are unwell

Many of Heartbeat guests would not be alive today, if they had not been able to retire to the Heartbeat Home for Horses. www.retiredhorses.org.uk Telephone 01986 798387 (Home) 01728 602 739 (Shop) Email woodyates@hotmail.co.uk Registered Charity No.1106722

EVENTS FROM STEP COMING UP IN 2017...

STEP is the global professional association for practitioners who specialise in family inheritance and succession planning. We are the largest network of trust and estate professionals in the world, with over 20,000 members across 100 jurisdictions.

June

September

November

Canada Conference - The latest trends and developments in wealth management 12-13 June

Private Client Awards 2017/18 6 September

Jersey 15th Annual International Conference 2 November

Toronto, Canada

Israel Conference 20-21 June Tel Aviv, Israel

Guernsey Conference 22 June St Peter Port, Guernsey

Employer Partnership Programme Summer Forum - Thriving in times of change: The skills agenda for the modern workplace 27 June

London, UK

Annual Tax Conference 14 September, Newcastle, UK 21 September, Manchester, UK 29 September, London, UK Wyoming Conference - the latest topical issues and developments impacting the international and US based private client 15-16 September

St Helier, Jersey

Arabia Conference - Asset holding & legacy planning in the Islamic world 5 November Dubai, UAE

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August

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Annual Tax Conference 12 October, Belfast, UK 18 October, Bristol, UK

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Isle of Man Conference 19 October Douglas, Isle of Man

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18

Rome, Italy

Europe Conference 24-25 November Rome, Italy

Special Interest Group Spotlight Sessions 30 November London, UK

Last year we helped over 80,000 wild birds and animals like Rudolph

Please help me get better Not only do we treat more hedgehogs than any other wildlife hospital, but our caring team saves lives every day.

Our aim is simple; to treat injured British wildlife, then return them to the wild - like Rudolph, who arrived badly injured at just five days old. Our specialist care saved this little deer and he is now facing a brighter future. But it is only with your support we can help casualties like Rudolph. Please remember Tiggywinkles in your Will.

Our late friend Dame Thora Hird actively encouraged others to help us secure funding for our lifesaving work. In her words "All the little wild creatures and I thank you so very much".

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is the busiest wildlife hospital in the world.

Charity Begins at home, and justice begins next door.

Charles Dickens THE BARRISTERS' BENEVOLENT ASSOCIATION

THE BARRISTERS' BENEVOLENT ASSOCIATION 14 Gray's Inn Square London WC1R 5JP Tel: 020 7242 4761 Fax: 020 7831 5366 www.the-bba.com Registered Charity No: 1106768 Company limited by guarantee: 5284271

The Barristers’ Benevolent Association exists to support, help and comfort those members of the Bar in England and Wales and their families and dependants who are in need, in distress or in difficulties. During the recent past we have helped barristers and their families in every circuit, often saving not only dignity but careers.

Please do not hesitate to bring potential cases to our attention and remember us when things are going well and you can afford to make a gift.

The BBA office staff will be more than happy to answer queries, either by telephone or by email – details are given on the Contact Us page of our website.

We are not nearly as well-known in the profession as we would like, and there are possibly people who qualify for our help but aren’t aware of our existence… we also feel that there are other people who would be willing to contribute to the welfare of their less fortunate colleagues but who are also unaware of us.

Terence Mowschenson QC Chairman

19

The Group 2 paintings had originally belonged to Dr Janet Steel, who was Malcolm’s great aunt. She had declared an intention to make a gift of her paintings to Malcolm and Alistair in 1986, but the paintings had remained in her house until 1991 when she went into a care home. The paintings were then delivered to James.

With regard to the paintings in Group 3, it was held that it was irrelevant whether they were retained in the estate of Dr Olive Scott, or whether she had retained a benefit.

Whichever applied, the paintings would be subject to inheritance tax.

With regard to the Group 1 paintings it was held that as a matter of English law there had been an effective gift. Judge Kenneth Muir QC said: “Following the decision in We Call it is clear that delivery involves a physical transfer, essentially putting the donee in control of the property.”

With regard to paintings in Group 2, it was held that there had been an effective gift as far as Scottish law was concerned.

Inheritance (Provision for Family and Dependants) Act 1975.

The next case is concerned with a claim under the 1975 Act where there was considerable acrimony between the parties, and an attempt at mediation had failed.

The legal representatives of the parties suggested that the best way forward was for the court to undertake an early neutral evaluation of the case.

Seals & Anr v. Williams [2015] WTLR 1265.

The claimants had applied under the Inheritance (Provision for Family and Dependants) Act 1975 for reasonable financial provision out of the estate of their father. There was considerable acrimony between the claimants and the defendant, who was the sole executrix and beneficiary. Mediation had not been successful, and the legal representatives of the parties proposed that the court should undertake an early neutral evaluation of the case. Norris J agreed. He said: ‘’The advantage of such a process over mediation itself is that a judge will evaluate the respective parties cases in a direct way and may well provide an

20

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Butterworth.”

Over 40 40 people people in in the the UK UK lose lose their their sight sight each each day day Over The gift of sight is precious.

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Your Your gift gift today today and and aa legacy legacy when when the the time comes will help fund vital time comes will help fund vital research research into the the causes causes of of blindness blindness and and into treatments for for eye eye disease. disease. treatments Please make make a a donation donation today. today.

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legacy, of ofof enormous help to to AA legacy, ofwhatever whateversize, size,will willbebe enormous help NEDDI’s work caring for rescued donkeys in our sanctuary.

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We also also work conditions for donkeys in Britain, We worktotoimprove improve conditions for donkeys in Britain, Europe and Africa. Established in 1990 we are based in UK, Europe and Africa. Established in 1990 we are based in and operate a sanctuary in northern France. We also support UK, and operate a sanctuary innorthern France. We also road-side clinics for working donkeys in Kenya. support road-side clinics for working donkeys in Kenya.

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Focus Birmingham relies on the support of selfless legacy givers, who choose to leave us a donation in their will. Such support enables us to continue providing essential services to those receiving the devastating news of incurable sight loss.

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Our vision and values are to ensure that no one living in Birmingham and the surrounding areas face sight loss alone and are able to access our professional advice and support. We offer practical support and rehabilitation to ensure independence. Specialist counselling to strengthen emotional well-being. Peer support and social/leisure opportunities to help combat isolation. We also offer valuable IT solutions to visually impaired children to ensure they reach their potential in those vital early years.

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www.focusbirmingham.org.uk 21

25/10/2013 25/10/2013

authoritative (albeit provisional) view of the legal issues at the heart of the case and an experienced evaluation of the strength of the evidence available to deploy addressing those issues. The process is particularly useful where the parties have very differing views the prospect of success and perhaps an inadequate understanding of the risks of litigation itself.”

Issue - does it include stepchildren?

In the next case the question was whether the word issue in a will included the stepchildren of the testator.

Reading & Anr v. Reading & Ors [2015] WTLR 1245.

The testator died leaving a will creating a nil rate band discretionary trust. The class of beneficiaries included the issue of the testator. He had two children, and three stepchildren. The evidence was that he was closer to his stepchildren than to his own children, and that the will instructions clearly contemplated that his step children would be within the class of beneficiaries. In addition, a letter of wishes clearly contemplated that his stepchildren would benefit from the will.

It was held that on the basis of the available facts, word issue included the step children.

Section 21 of the Administration of Justice Act 1982 provides: (1)

this section applies to will –

(a)

insofar as any part of it is meaningless:

(b)

insofar as language used in any part of it is ambiguous in the face of it:

(c)

insofar as evidence, othe than evidence of the testator’s intention,

shows that the language used in any part of it is ambiguous in the light

of surrounding circumstances.

(2)

Insofar as this section applies to a will extrinsic evidence, including evidence

of the testator’s intention, may be admitted to assist in its interpretation.

Although it was not necessary for the decision it was held that the word issue was not ambiguous within section 21 (1) (b) but that it was ambiguous within section 21 (1) (c).

22

“This is the first place I have ever described as home, the first place I have ever felt safe in.�

A resident of The Sheppard Trust

Please consider a legacy to help us continue to provide a home for elderly ladies.

Today, investment income just covers basic maintenance costs.

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23

It was also stated that if rectification has been required, it would not have been available because the draughtsman had not made a clerical error with regard to the meaning of the word ‘issue’.

Proprietary estoppel.

Preedy and Anr v. Dunne and others [2015] EWHC 2713 (Ch).

Mrs Montgomery owned a public house, and left a will giving her second husband a life interest in the public house, and the remaindermen were her three children of her first marriage, Sarah, Peter and Jonathan. It was accepted that the trustees owned the freehold, but Jonathan argued that he had spent money on the property having been led to believe by the trustees that he would be entitled to occupy the premises either alone or together, or through or by licensing corporate trading vehicles as long as he wished.

On the facts, it was held that one of the trustees had not made the promises alleged, and had no authority to bind the other trustee. It was also held that Sarah and Peter did not make any such promises.

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24

Conferences / Webinars / CDs / DVDs / E-Publications / InHouse / Consortium

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Prostate cancer is the most common cancer for men in Scotland with one in ten men at risk of it and nearly 1 in 2 men may be affected by prostate disease.

Prostate Scotland works to develop awareness of prostate cancer and disease, providing information, advice and support to men and their families affected by it, as well as promoting research and treatment developments.

Please help us continue our good work. For further information please call 0131 603 8660 or email info@prostatescotland.org.uk

www.prostatescotland.org.uk Registered Scottish Charity No: SC037494

25

020 7592 1855 andrew.h@passage.org.uk passage.org.uk

December 2015 CGT and main residence exemption

There have been several cases in recent years as to when a house can become the main residence of a taxpayer when the period of residence is short. The next case is yet another one.

Richard James Dutton-Forshaw v. The Commissioners for HMRC [2015] KFTT0478 (TC).

The appellant occupied 32 Cornwall Gardens London SW7 from 5 August 2006 until 26 September 2006. The property was thereafter let, and then sold. He was divorced, but there was a child of the marriage, Emily. His ex-wife had expressed the wish to move to Spain with her second husband, and he was opposed to this. After moving out of Cornwall Gardens, he lived in Lymington so that he could be with Emily when he looked after her.

It was argued that any gain was covered by private residence relief, and that lettings relief also applied as well.

The Tribunal held that Cornwall Gardens had been his main residence, so that private residence relief applied.

The judgment states: “What is a “residence” 39.

Section 222 TCGA 1992 is headed “Relief on disposal of private residence”.

The section applies to the disposal of a dwelling house which is, or has at any time in 25 an individual’s period of ownership, been his only or main residence.

Unfortunately, TCGA 1992 does not provide any guidance as to the circumstances in which a dwelling house should be treated as a residence.

26

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27

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40.

The issue was addressed by the Court of Appeal in Goodwin v Curtis [1998]

STC 475. The leading judgment was given by Millet LJ. There are a number of 30 general principles which can be drawn from this judgment: (1)

The word “reside” is an ordinary word of the English language.

(2)

It is necessary to look at the nature, quality, length and circumstances of a

taxpayer’s occupation of a property in deciding whether it qualifies as

a residence.

(3)

Temporary occupation at an address does not make a person resident there.

(4)

There must be some degree of continuity or some expectation of continuity to

turn mere occupation into residence.

(5)

The question of when occupation becomes residence is one of fact and

degree for the Tribunal to decide.

41.

These are the principles which have been applied by the First Tier Tribunal

in the numerous cases which have addressed this question over the last

few years. In particular, there has been significant emphasis on the need

for some degree of continuity or some expectation of continuity to turn mere

occupation into residence.

45.

Put in this way (i.e. distinguishing a resident from a visitor) it seems clear that

the question of permanence or continuity should not be overstated. It is simply

one of the factors to be taken into account in weighing up whether the

property in question is a “residence”.”

Council houses/flats and right to buy Tenants of council houses or flats who can buy them may not be able to do so, and so a relative may help them. There may be a declaration of trust – how binding is it?

This was one of the issues in the next case.

The judge was also critical of the solicitor who had drafted the declaration of trust.

Crosfield v. Jackson [2015] WTLR 1519.SG

28

C E L E B R AT I N G

YEARS (1917-2017)

“ I want to help provide a safety net for future seafarers and their families.”

As an island nation, we rely on seafarers who risk their lives, put food on our plates and carry vital supplies to and from our shores.

Leave a lasting legacy to our seafarers FIND OUT MORE… To find out more about our work or to request our legacy pack, please call 020 7932 0000 or email seafarers@seafarers-uk.org

By leaving a gift to Seafarers UK in your will, you will help to support seafarers and their families who find themselves in need of essential support at difficult times. Last year Seafarers UK gave £3.6m in funding

to more than 80 maritime charities and organisations. Seafarers UK receives no government funding and is heavily dependent on public donations and legacies to maintain its grant-making programme.

Seafarers UK (King George’s Fund for Sailors) is a registered charity, number 226446, in England and Wales, incorporated under Royal Charter, and registered in Scotland under number SC038191.

29

The appellant had become the tenant of a four bedroom London apartment In 1987 under a secure tenancy with the London Borough of Lambeth. She exercised her right to buy, and by a lease dated 26 of August 2003 the property was demised to her for a term of125 years In consideration of a premium of ÂŁ109,500.There was a right to buy discount valued at ÂŁ38,000.

The premium was paid by the Respondent, who was the brother of the appellant.

There was a declaration of trust under which the appellant declared that the property would be owed beneficially by the respondent. Both of the appellant and the respondent were advised by the same solicitor about the declaration of trust The appellant sought to set the deed aside on three grounds: 1.

Undue influence, unilateral mistake or misrepresentation.

2.

If the deed was set-aside, that the true nature of the agreement was that the

payment of the purchase price by the respondent amounted to a loan which

had been paid off by the appellant.

3.

If the payment of the purchase price by the respondent was not a loan, what

were the interests of the appellant and respondent In the property.

The judge at first instance rejected all the challenges, and confirmed that the respondent was the sole owner of the property. His decision was confirmed on appeal.

The judge at first instance was also critical of the solicitor who had drafted the declaration of trust. The solicitor maintained that he was only acting for the appellant, but that he had fallen short of best practice on a number of occasions, for example there was no note of his instructions, no express authority from the appellant authorising the respondent to instruct a solicitor and no retainer letter. In addition, there was no detailed note on the file of the advice given to Monica.

Proprietary estoppel If parties are negotiating, and intend to make a formal agreement setting out the terms, but there are still terms remaining to be agreed, can one party sue on it relying on the doctrine of proprietary estoppel?According to the next case, the answer is no.

30

31

Herbert v. Doyle [2015] WTLR 1573.

This is a complicated case which had resulted in in several hearings at enormous cost. The main issue from a legal perspective was that if there was agreement relating to the land, but there had been non-compliance with the formal requirements, could either party rely upon the doctrine proprietary estoppel or the doctrine of constructive trust to make the agreement binding on the other party if there were still terms to be agreed?

Arden LJ said “... If the parties intend to make a formal agreement setting out the terms on which one or more of the parties is to acquire an interest in property, or, if further terms for that acquisition remain to be agreed between them so that the interest in property is not clearly identified, or if the parties did not expect their agreement to be immediately binding, neither party can rely on constructive trust as a means of enforcing their original agreement In other words, at least in those situations, if their agreement (which does not comply with section 2 (1)) is incomplete, they cannot utilise the doctrine of proprietary estoppel or the doctrine of constructive trust to make such agreement binding on the other party by virtue of section 2(5) of the 1989 Act..�

Rawlings v. Chapman & Ors [2015] EWHC 3160 (Ch).

The claimant alleged that she had paid substantial amounts of money towards the cost of building and fitting out a new house on farmland owned by the deceased.

She alleged that he had made promises to her that the property would be hers. She had had an intimate relationship with the deceased, and at one time they had been engaged and planned to marry.

The deceased was always smartly dressed, and was always the first one to the bar.

However, he lived in squalor, and his personal hygiene was poor. His house had become infested by rats, and he would obtain out of date food from supermarkets bins and shops for his own consumption.

On the facts, it was helps that the deceased had not made any promises to the claimant.

32

Cruelty Free International • 16a Crane Grove, London, N7 8NN • Tel: 0300 003 0577 (calls charged at local rate) • Fax: 020 7700 0252 • Email: legacy@crueltyfreeinternational.org • Website: www.crueltyfreeinternational.org Cruelty Free International, previously known as the BUAV, works to create a world where nobody wants or believes we need to experiment on animals.

Through undercover investigations, political lobbying, the promotion of cruelty free products, legal and scientific expertise and media activities, Cruelty Free International campaigns tirelessly and peacefully to end animal testing.

Cruelty Free International works alongside its charitable arm, Cruelty Free International Trust (registered charity number 1081183). Cruelty Free International Trust exists to educate people about animal testing, research alternatives to animal testing and ensure that laws controlling animal experiments are properly enforced in the UK and globally.

Cruelty Free International receives no government or lottery funding and relies solely on the generosity of supporters to continue its work. Legacy gifts are especially vital, constituting around 50% of Cruelty Free International’s total income. Our dedicated and experienced Legacy Officer provides a professional, sensitive and strictly confidential service to Executors, extracting solicitors and bereaved family and friends.

33

HHJ David Cooke said: “Counsel were largely in agreement on the law relevant to proprietary estoppel in cases such as this, Mrs Preston accepting that it was accurately summarised in Ms Shea’s skeleton and closing submissions, from which the following summary is mainly derived: i)

A proprietary estoppel arises where a) the owner of land induces

encourages or allows the claimant to believe that she has or will enjoy some

right over the owner’s property; b) in reliance on this belief, the claimant acts

to her detriment to the knowledge of the owner; c) the owner then seeks to

take unconscionable advantage of the claim by denying her the right or

benefit which she expected to receive.

ii)

Whilst it is convenient to examine these three elements as separate

components, in fact they often interrelate and “the court must look at the

matter in the round” (Gillett v Holt [2001] Ch 210 at 225).

iii)

There need be no promise of a specific right or identification of specific land,

provided the promise is “clear enough” in the circumstances (Thorner v Major

[2009] UKHL 18).

iv)

The belief of the claimant that she would obtain an interest in the property

regardless of whether or not the owner meant to encourage that belief may

found an equity but only where such belief was reasonable in the

circumstances (Thorner v Major).

v)

The court has a discretion as to how any equity found should be satisfied, and

does not necessarily do so by satisfying the terms of any promise found to

have been made. The essence of the jurisdiction is to avoid an

unconscionable result, and the court may conclude that it would not

be unconscionable to renege on a promise if some lesser form of relief (such

as monetary compensation for any detriment suffered) is given to the

claimant. There was of course substantial disagreement as to whether that

was appropriate in this case.

vi)

In considering what detriment the claimant has suffered, the court must take

into account any countervailing benefits that she has received, such as

residing in the owner’s property rent free.

vii)

The claimant need not have acted in sole reliance on the promises made, as 34

Pain Relief Foundation

R E L I E V I N G CA N C E R A N D O T H ER P A I N T H RO U GH R E S E A R C H

CH RO N I C PA I N DO ES N O T KI LL – BU T I T LEA DS T O A LI FET I M E O F SU FFERI N G

Pain is a vital alarm bell to the brain, telling us that we have damaged ourselves and that something

is wrong. So, when the damage is treated, the pain has normally done its job and usually goes away.

But then there is chronic pain, and that is very, very different. No matter how much treatment you give the painful area it doesn’t go away; painkilling drugs often don’t work; even opioids often don’t kill the pain, it is relentless and sufferers are subject to a lifetime of agony!!

Here are just a few hard facts to consider: • 1 in 7 people in the UK suffer from chronic pain – which does not go away.

• Chronic pain is a desperate debilitating pain bringing a life sentence of agony.

• Over half of sufferers endure chronic pain all day, every day of their lives.

• Many sufferers say they can’t remember what it is like not to be in pain.

• 1 in 5 chronic pain sufferers say their pain is so bad that they just want to die.

• Pain stops sufferers from enjoying simple activities like walking, shopping, sleeping, or just playing with their children.

• Many thousands of chronic pain sufferers lose their jobs because the pain is so bad that they cannot work.

• When a chronic pain sufferer lose their job, they are often on the downward spiral to poverty.

• A quarter of chronic pain sufferers are diagnosed with depression.

We obviously pursue active research on Cancer Pain, because many cancer charities and research organisations are prevented from funding work on cancer pain. Their Trust Deeds specify ‘research into the cause and cure of cancer’ and this, of course, excludes pain. Yet, for every £10,000 donated to cancer research, chronic pain research receives a donation of less than one (1p) penny.

The Pain Relief Foundation in Liverpool is a research charity working to find the causes of chronic pain; seeking new ways of improving the available treatments; educating all doctors and all other medical professionals on treatment methods to ease the pain; providing information packs for patients, sufferers and carers. If you need help, don’t hesitate to contact us.

Research costs money, and there is always an urgent need for more and more research. The Pain Relief Foundation DOES NOT receive funding from the NHS or any other Government body. Instead, our vital work depends entirely on donations and the generosity of people like you. Will you please help?? – each and every £1 counts!!

Please help us to end the suffering!! There is a serious lack of funding for chronic pain research and you can help to change that!!

You can make a donation in many ways - making a subscription monthly, quarterly or yearly is usually the easiest way!!

You can also help to defeat chronic pain by leaving a Legacy in your will.

For help and advice on how to pledge a Legacy and what you need to do, we are here to help and advise you – just contact us!!

Pain Relief Foundation Clinical Sciences Centre University Hospital Aintree Liverpool L9 7AL

Telephone: 0151 529 5820 Fax: 0151 529 5821 Email secretary@painrelieffoundation.org.uk Website www.painrelieffoundation.org.uk Charity No 1156227 35

long as they formed a substantial element of her motivation. If it is shown

that the claimant has in fact acted to her detriment and was encouraged

to do so by the owner, the court will readily infer that she did so in reliance on

his promise. However if it is shown that the claimant would have acted as she

did in any event, no equity will arise.�

Purchase by trustees of trust assets Practitioners will no doubt be aware of the self dealing rule under which trustees are not allowed to purchase the trust assets. In what circumstances will the court authorise such a purchase? This was the issue in the next case.

Mills & anr v. Mills & anr [2015] WTLR 1631.

In 1983 trustees purchased a piece of freehold land on which there was a family run plant nursery business which was operated through a limited company. There were issues with regard to the interpretation of trust documents, but in 1993 a small plot in the corner of the site was sold by the trustees to the claimants who built a house on the site. There was also a proposal that the trustees should sell their remaining interest land to the claimants for ÂŁ1 million.

The 1993 sale was in breach of the self dealing rule which prevents any trustee from purchasing the trust property. The proposed sale would also be a breach of the self-dealing.

It was held that a court could always authorise a sale in breach of the self-dealing rule, and that could be done after sale had taken place. The judge stated that if the court had been asked to approve the sale in 1993, he would have required valuation evidence in order to establish that a proper price was being paid and also evidence that the sale was desirable in the interests of the trust and its beneficiaries. However, there was no evidence that the sale was undesirable.

The judge approved the proposed sale, and also ratified the 1993 sale, which was a sensible conclusion.  

36

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37

January 2016 In what proportions do cohabitees own the family home?

Yet another case where there was litigation about the shares in which cohabitees owned a property. Of course, if a marriage or civil partnership breaks down, then the courts have wide statutory powers to rearrange the beneficial interests of the parties, but there is no statutory power to rearrange the beneficial interest between cohabitees unless it is for the benefit of children.

The judge at first instance split it 85:15, and this was confirmed by the Court of Appeal.

The Court of Appeal stated that the correct procedure was for the judge to endeavour to ascertain the express intention of the parties as to the shares in which they owned the property.

If this Could not be done, the judge should endeavour to infer the intention objectively.

If that failed, the judge could then impute the intention.

Barnes v Phillips [2015] EWCA Civ 1056.

The relationship between the appellant and respondent began in about 1983, and they had two children, one born in November 1993, and the other in July 2000.

They purchased the property in January 1996, and used about ÂŁ 25,000 from their savings as the deposit. There was a joint repayment mortgage for the balance. The respondent worked full-time as a nurse except when the children were small when she worked part-time. The appellant was a self-employed businessman, and he paid the mortgage and some the bills. The respondent paid the rest.

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The appellant purchased three buy to let properties, but by late 2004 and early 2005 he was having financial problems. They remortgaged the property, and after repaying the original mortgage, the balance was used to pay off the debts of the appellant.

In June 2005 the relationship broke down. The appellant left the family home, but he continued to pay the mortgage for eight months. The respondent then paid all the mortgage instalments, and was responsible for the children, although the appellant did make some contribution to child support.

The judge at first instance held that the respondent was entitled to 85% of the beneficial interest in the property, and that the appellant was only entitled to 15%.

The appellant appealed to the Court of Appeal who confirmed the decision of the judge at first instance.

Lloyd Jones LJ stated that following Stack v, Dowden and Jones v. Kernott, the correct procedure was to endeavour to ascertain the express intention of the parties as to the shares in the property. If this could not be done, then the court should endeavour to infer what was the intention of the parties objectively. If that could not be done and the court could impute the intention.

Payment to carers.

The question in the next case was how the court calculated, the amount of a gratuitous allowance payable to a family member who was caring for another relative. It was held that the appropriate rate was commercial rate less 20%.

Re HNL, ATL v Public Guardian [2015] EWCOP 77.

The question in this case was what should be the amount of a gratuitous care allowance for a brother who was looking after his sister.

Lush SJ said: The law relating to gratuitous care payments In Re HC [2015] EWCOP 29, which was published on the BAILII website on 23 April 2015, I summarised the principles relating to gratuitous care payments as follows:

40

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“When it calculates a ‘gratuitous’ care allowance for family members who provide care to someone with an acquired brain injury, the Court of Protection broadly applies the criteria applied by the Queen’s Bench Division of the High Court in quantifying this head of damages in personal injury litigation. Accordingly, as long as such an allowance is affordable, the court will take the commercial cost of care as the ceiling and reduce it by 20%.” 28. In Housecroft v Burnett [1986] 1 All ER 332, at 343e, Lord Justice O’Connor held that: “In cases where the relative has given up gainful employment to look after the plaintiff, I would regard it as natural that the plaintiff would not wish the relative to be the loser and the court would award sufficient to allow the plaintiff to achieve that result. The ceiling would be the commercial rate.”

The 20% reduction from the commercial rate largely reflects the fact that no income tax is payable in respect of a gratuitous care allowance. HM Revenue & Customs’ Employment Status Manual describes the tax status of such an allowance as follows: “ESM4016 – Particular occupations: care workers – payments under Court of Protection Order or from trust fund Payments towards the cost of maintenance of a husband, wife or other close relative or dependant out of the income of a severely incapacitated person who receives funds under an order of the Court of Protection are regarded as voluntary payments and not as income of the recipients. Therefore, there will be no tax or National Insurance Contributions consequences on such payments made for caring duties. Similarly, where payments emanate out of a Trust Fund set up for this purpose there is unlikely to be an enforceable contract, therefore, there should be no question of tax being assessable as employment income or of a liability for Class 1 NICs. Caring activity under these circumstances would not be gainful employment so there will be no liability for Class 2 NICs. The services provided are unlikely to be regarded as commercial in nature or amount to valuable consideration so there will not be a charge to tax on trade profits or on income not otherwise charged to tax.”

In Re HC I also referred to the index-linking of gratuitous care payments in the following terms: “Earnings are usually affected by inflation and, to avoid the need for repeat applications to the court to recalculate a care allowance, there needs to be an appropriate form of indexation. Traditionally, in personal injury litigation, a carer’s allowance was linked to the Retail Prices Index (‘RPI’). However, in Thompstone v Tameside and Glossop Acute Services NHS Trust [2008] EWCA Civ 5, [2008] 2 All

42

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ER 553, [2008] WLR 2207, the Court of Appeal held that the periodical payments payable to the claimant in respect of his care costs should be calculated by reference to the actual cost of care, as set out in the Annual Survey of Hours and Earnings (‘ASHE’), rather than the RPI. The ASHE data are broken down into numerous Standard Occupational Classifications (‘SOCs’). ASHE 6115, which was approved by the Court of Appeal in Thompstone, was formerly the SOC relating to the earnings of care assistants and home workers. In 2012 the Office for National Statistics reclassified the SOCs and split ASHE 6115 into two new codes: ASHE 6145 – care workers and home carers; and ASHE 6146 – senior care workers.”

Section 19(7) of the Mental Capacity Act 2005 provides that: “The deputy is entitled - (a) to be reimbursed out of P’s property for his reasonable expenses in discharging his functions, and (b) if the court so directs when appointing him, to remuneration out of P’s property for discharging them.”

I believe that section 19(7) relates solely to the functions performed by the deputy as a deputy, rather than to the functions performed by him in any other capacity, such as a carer or case manager.

The court has broader powers under sections 16(5) and 18(1) of the Act, which enable it to set a level of remuneration for carer or case management services.

If a deputy were to remunerate himself without obtaining a court order authorising him to do so, there would be a conflict with his fiduciary duty, which is described in paragraph 8.58 of the Mental Capacity Act Code of Practice in the following terms: “A fiduciary duty means deputies must not take advantage of their position. Nor should they put themselves in a position where their personal interests conflict with their duties. … Deputies must not allow anything else to influence their duties. They cannot use their position for any personal benefit, whether or not it is at the person’s expense.”

Because of this conflict of interests, a deputy should always apply to the court for authority to pay himself or herself a gratuitous care allowance. A lay or nonprofessional deputy should also apply to the court for approval if he or she intends to pay a gratuitous care allowance to any other member of the family.”

44

Removal of trustees.

In what circumstances will the court order the removal of trustees?

This was the issue in the next case.

The mere fact that the beneficiaries under trust have lost confidence in the trustees will not justify removal by itself.

It may be that the beneficiaries will want the trustees to do something which possibly is not the best interests of the trust as a whole.

However, if there is a conflict of interest, that may justify the removal of trustees.

In addition, trust should be administered as harmoniously as possible, so the appointment of trustees who will endeavour to minimise conflict is desirable.

In the matter of the estate of Thomas Edward Weetman deceased [2015] WTLR 1745.

The deceased owned shares in a company Weeetman (Haulage and Storage) Ltd. He also owned Pasturefields Enterprise Park which was occupied mainly by Weetmans. His estate was valuable, but was illiquid.

He left a will which provided that 50% of the shares in the company should go to employees as long as they were working for the company at the date of his death. If that was not the case, the shares were to be distributed amongst the grandchildren.

The remaining 50% of shares were left amongst family members apart from 10% which were to be held upon trust for Elaine Beeston for life and then to her children.

The will also appointed the deceased’s sister, his solicitor and his accountant as executors. The sister renounced probate, but his solicitor and accountant jointly took out the grant. The accountant had acted as a de facto director of company.

There was tension between the family members and the employees of the company, and an application was made the removal of the deceased’s accountant and solicitor as executors and trustees.

45

It was held: 1.

If there was a conflict between the employees and the family members, the

accountant’s position was impossible, or at least seriously compromised.

2.

The deceased solicitor had joined with the accountant in taking out the grant

probate, and could not now be seen as being totally independent.

3.

A loss of confidence by itself would not justify the removal of trustees.

4.

It was desirable that trust should be administered in a harmonious manner,

and this could best be achieved by appointing family members as trustees

with a probate solicitor of their choice.

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February 2016 Removal of executors

The next case is concerned with the circumstances in which executors should be removed. The writer has no doubt that a court should be very reluctant to interfere with a testator’s or testatrix’s choice of someone as an executor unless there is good reason for doing so.

Mother dies leaving a will appointing her two children has executors, and devising her estate equally between them.

Daughter agrees that her brother can deal with the estate, but he will not answer any correspondence.

There is a complete breakdown in the relationship – both will be removed as executors.

The Judge suggests that the long-term partner of the son and the son of the daughter should be appointed as administrators if both sides agreed.

Wilby v Rigby [2015] WTLR 1845.

The testatrix died on 30 November 2011 leaving a will appoint her two children, Ian Rigby and Janice Wilby, to be her executors and trustees, and gave her estate equally between the two.

Janice initially agreed that Ian could administer the estate himself, but he would not answer any correspondence. Although there was no challenge to the validity of the will, a caveat was entered preventing the sale of the deceased’s house to Carl Abbott who was the grandson of Ian’s partner, Ronnie Abbott. Carl had moved into the property, paid the council tax and maintained it.

It was held that there had been a complete breakdown of trust and confidence

48

between Ian and Janice, and that both should be removed as executors. The judge suggested that it would be appropriate to appoint Ronnie Abbott and Daniel Wilby, the son of Janice as administrators, if both sides agreed. If there was no agreement, then an independent solicitor should be appointed, and the judge suggested that the mechanism for doing this would be to make application to the Chief Executive Officer of the Society of Trust and Estate Practitioners.

It was all also held that Carl Abbott was entitled to a rent-free period until October 2012 as he had put the property into a more habitable state. However, he should be paying an occupational rent from November 2012.

Forfeiture Unfortunately relatives sometimes kill each other. Frequently the perpetrator will be suffering from some form of mental illness. Of course, it would be contrary to public policy for the perpetrator to take under the will or intestacy of the victim, but the perpetrator can apply for relief against forfeiture.

In the next case the claimant was convicted of the manslaughter’s mother.

This meant that he could not take under the will of his mother.

He sought relief against forfeiture, but this was refused because although he had a low IQ, he knew what he was doing was wrong.

He was also a beneficiary under a lifetime trust.

It was held that he could still benefit under the trust as he had not acquired his interest by reason of the manslaughter of his mother.

Henderson v Wilcox and others [2015] EWHC 3469 (Ch).

The claimant was convicted of the manslaughter of his mother. He was sentenced to be detained in hospital under the Mental Health Act 1983 as the judge was satisfied that he suffered from a mental disorder such as to make his detention and treatment in hospital appropriate.

The claimant was the sole beneficiary under his mother’s will, and he was also a beneficiary under a ‘Family Protection Trust’.

49

It was held that the forfeiture rule did not prevent him taking under the Family Protection Trust as he was not acquiring a benefit in consequence of the killing.

However, the forfeiture rule meant that he could not take under his mother’s will.

The judge accepted that the claimant had a relatively low IQ, and struggled to look after his mother when she became too old to look after him. However, the judge held that the claimant knew that he had done was wrong. It was held that the forfeiture rule should not be modified.

When will the Court of Protection appoint a personal welfare deputy?

The next case is mainly of interest because Lush SJ did talk about the circumstances in which the court would appoint a personal welfare deputy as the normal rule is that a decision of the court is to be preferred.

There was also an application for the cancellation of the registration of lasting powers of attorney.

Re SH, The Public Guardian v RL,FJ and KLC [2016] EWCOP 2.

Sybil was born in 1922, and came to live in England in 1960. She had worked in hospitals and a care home, and she had been married to a man from Trinidad from whom she had been separated for many years. She had three sons, Karl, Rex, who had converted to Islam and lived in Trinidad, and was the father of Fatima, and Ray. She lived with Fatima, Fatima’s husband and three daughters aged 16, 13 and 5 in a two-bedroom first floor flat in Walthamstow.

In April 2002 Sybil bought her flat from Waltham Forest Community – Based Housing Association for £29,000. Ray paid the entire purchase price, and she executed a declaration of trust stating that Ray owned the property, but Ray gave Sybil the right to live in the flat was long as she wished, provided that she paid all the outgoings.

In April 2008 Sybil executed property and affairs and personal welfare lasting powers appointing Ray to be her sole attorney. These were duly registered in 2008 and 2009 respectively.

She also made a will in 2008 under which she appointed Ray her sole executor, and left her entire estate to him.

50

Complaint was made to the Office of the Public Guardian about the conduct of Ray, and Lush SJ cancelled the registration of both lasting powers of attorney.

He said: “As Rebecca Stickler noted in her position statement, Ray: (a) failed to monitor the money transferred to Trinidad; (b) failed to monitor Sybil’s accounts generally; (c) did not receive and scrutinise her bank statements; (d) didn’t even register the LPA for property and affairs with her bank until very recently; (e) failed to demonstrate financial prudence in ensuring that all relevant benefits were obtained on Sybil’s behalf (for example, she has been paying Council Tax at a rate of £129 a month, in circumstances in which she may be entitled to an exemption); and (f) failed to provide the agreed allowance for Fatima to care for Sybil.”

Sybil’s assets were of minimal value, and it was held that it would not be in her interest to appoint a professional deputy who would expect to be remunerated for his or her services. Waltham Forest Council was not prepared to act as deputy, and Fatima was appointed as property and affairs deputy.

Lush SJ also declined to appoint a personal welfare deputy. He said: “There is usually no need to appoint a deputy for personal welfare because of the provisions of section 5 of the Mental Capacity Act 2005, which were described by Professor Peter Bartlett, the author of Blackstone’s Guide to the Mental Capacity Act 2005, as “the least formalistic and most innovative of the legal devices in the Mental Capacity Act.” The gist of these provisions is that people who provide care for someone who lacks capacity are protected from liability for so doing, provided they act in the best interests of the person concerned and provided they don’t act negligently.

In addition, section 16(4) of the Act provides that when deciding whether it is in a person’s best interests to appoint a deputy, “the court must have regard to the principles that: (a) a decision of the court is to be preferred to the appointment of a deputy, and (b) the powers conferred on a deputy should be as limited in scope and duration as is reasonably practicable in the circumstances.”

Generally speaking, it is impracticable to apply section 16(4) in property and affairs cases, but in personal welfare cases, the court can and does apply section 16(4) quite rigidly.

51

The Mental Capacity Act 2005 Code of Practice says, at paragraph 8.38, that: “Deputies for personal welfare decisions will only be required in the most difficult cases where: (a) important and necessary actions cannot be carried out without the court’s authority, or (b) there is no other way of settling the matter in the best interests of the person who lacks capacity to make particular welfare decisions.”

Paragraph 8.39 of the Code goes on to give the following examples of instances in which the appointment of a personal welfare deputy might be appropriate: (a) Someone needs to make a series of linked decisions over time and it would not be beneficial or appropriate to require all of those decisions to be made by the court. For example, someone (such as a family carer) who is close to a person with profound and multiple learning disabilities might apply to be appointed as a deputy with authority to make such decisions. (b) The most appropriate way to act in the person’s best interests is to have a deputy, who will consult relevant people but have the final authority to make decisions. (c) There is a history of family disputes that could have a detrimental effect on the person’s future care unless a deputy is appointed to make necessary decisions. (d) The person who lacks capacity is felt to be at risk of serious harm if left in the care of family members. In these rare cases, welfare decisions may need to be made by someone independent of the family, such as a local authority officer. There may even be a need for an additional court order prohibiting those family members from having contact with the person.

In G v E and Manchester City Council and F [2010] EHWC 2512 (COP) (Fam); [2010] COPLR Con Vol 470, Mr Justice Jonathan Baker considered in great detail whether it was necessary to appoint a personal welfare deputy, and said at paragraphs [56] and [57] that: “[56]. The vast majority of decisions about incapacitated adults are taken by carers and others without any formal general authority. That was the position prior to the passing of the MCA under the principle of necessity: see Re F (Mental Patient: Sterilisation) [1990] 2 AC1, and in particular the speech of Lord Goff of Chieveley. In passing the MCA, Parliament ultimately rejected the Law Commission’s proposal of a statutory general authority and opted for the same approach as under the previous law by creating in section 5 a statutory defence to protect all persons who carry out acts in connection with the care or treatment of an incapacitated adult, provided they reasonably believe that it will be in that person’s best interests for the act to be done. Crucially, however, all persons who provide such care and treatment are expected to look to the Code. Certain categories of person are required by the statute, under section 42(4), to have regard to the Code (for example, anybody

52

acting in relation to the incapacitated person in a professional capacity). In addition, however, as the Code itself makes clear, the Act applies more generally to everyone who looks after incapacitated persons, including family carers. Although not legally required to have regard to the Code, the Code itself stipulates that they should follow the guidance contained therein insofar as they are aware of it. [57].

The Act and Code are therefore constructed on the basis that the vast majority of decisions concerning incapacitated adults are taken informally and collaboratively by individuals or groups of people consulting and working together.

It is emphatically not part of the scheme underpinning the Act that there should be one individual who as a matter of course is given a special legal status to make decisions about incapacitated persons. Experience has shown that working together is the best policy to ensure that incapacitated adults such as E receive the highest quality of care. This case is an example of what can go wrong when people do not work together.”

And at paragraph [61] Mr Justice Baker went on to comment that: “It is axiomatic that the family is the cornerstone of our society and a person who lacks capacity should wherever possible be cared for by members of his natural family, provided that such a course is in his best interests and assuming that they are able and willing to take on what is often an enormous and challenging task. That does not, however, justify the appointment of family members as deputies simply because they are able and willing to serve in that capacity. The words of section 16(4) are clear. They do not permit the court to appoint deputies simply because “it feels confident it can” but only when satisfied that the circumstances and the decisions which will fall to be taken will be more appropriately taken by a deputy or deputies rather than by a court, bearing in mind the principle that decisions by the courts are to be preferred to decisions by deputies. Even then, the appointment must be as limited in scope and duration as is reasonably practicable in the circumstances. It would be a misreading of the structure and policy of the statute, and a misunderstanding of the concept and role of deputies, to think it necessary to appoint family members to that position in order to enable them better to fulfil their role as carers for P.”

53

March 2016 Capacity and the Mental Capacity Act 2005

Practitioners will no doubt be aware of the test for capacity under the MCA - a person lacks capacity if he or she cannot make a decision and that is due to an impairment or disturbance in the functioning of the mind or brain.

It is also clear that a person may have capacity to make some decisions but not others.

The next case is concerned with whether a young lady had capacity to make various decisions.

On the facts of this particular case, it was held that she did.

WBC (Local Authority) v Z (by the Official Solicitor as her litigation friend), X and Y [2015] EWCOP 4.

The question in this case was whether Z, who had Asperger’s syndrome, and a borderline learning disability lacked capacity under the Mental Capacity Act 2005.

The local authority for the area where Z lived applied to the Court of Protection for declarations as to whether Z had capacity to: 1. Choose a residence.

2. Make contact with others: 3. Deal with her care: 4. Litigate in these proceedings.

Cobb J was initially critical of some procedural aspects, particularly the time it had taken for a case to come before the court. In a careful and full judgement, he held that Z did have capacity to make all these decisions. He said: 54

“There is no dispute in this case that Z does suffer from an “impairment of … the mind” within the meaning of the MCA 2005, namely her autistic spectrum disorder, with a secondary component being her learning difficulty. The issue as to her capacity focuses in this case on the functional element of the test. At the heart of the dispute is the assessment of Z’s ability to ‘use or weigh’ information (section 3(1)(c)) about risk to herself, and her ability to keep herself safe in independent living, and in her social contacts. Only if I were to find that Z is “unable” (section 3) (and I emphasise ‘inability’ rather than ‘impairment’ – see again [15] above) to process information relevant to risk (in the ways defined in section 3(1)) could I find her incapacitous in relation to the matters in dispute. As the wording of the statute makes clear, the point in time at which I must capacity is to be tested is now (i.e. “at the material time”).”

Quistclose trust There is no question that money in solicitors’ client account is held on trust.

A Quistclose trust arises when money is paid to a bank or solicitor for a definite purpose. If it is misapplied then, the bank or solicitor will be liable for breach of trust.

The next case is concerned with a property investment scheme which failed.

Investors were invited to subscribe, and to pay money into a solicitors’ client account.

When the scheme failed, and subscribers’ money was lost, they sued alleging that there was a Quistclose trust or a resulting trust.

The Court of Appeal held that for there to be a Quistclose trust then it had to be made clear that the transferee could not freely dispose the money.

On the facts of this particular case, it was held that the solicitors were entitled to part with money.

It was also argued that there was a resulting trust in favour of the investors.

However, it was held that the subscribers had paid the money into the solicitors client account knowing full well that it would be paid to a company involved in the property investment scheme, so this argument failed as well.

55

Bellis & ors v Challinor & ors [2016] WTLR 43.

Investors were invited to subscribe to a property investment scheme which failed.

E-mails were sent to prospective investors, who paid money into a solicitors’ client account. It was argued that there was a Quistclose resulting trust in favour of the investors.

The Court of Appeal held that a Quistclose type trust arises where property which is usually money is transferred on terms which do not leave it at the free disposal of the transferee. On the facts of this particular case, it was held that this was not case.

It was also argued that there was a resulting trust in favour of the subscribers. It was held that as subscribers had paid their money into a solicitors’ client account with the objective of making immediate loans to a company involved in the scheme, there was no resulting trust.

Equity’s darling - the bona fide purchaser of the legal estate without notice of an equitable interest Notice obviously includes actual notice, but it also includes constructive notice.

What is meant by constructive notice?

Circumstances which should make the purchaser aware that there may be an equitable interest will amount to constructive notice.

The issue in the next case was whether bank should have made enquiries about the commercial purpose of a transaction, and if they had done, they would have discovered that it was fraudulent.

The facts were that an art dealer sold some art deco furniture which he did not own without the consent of the owner.

Some of the proceeds were paid into the appellant bank.

The bank did not have actual notice, but the question was should they have investigated the commercial purpose.

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It was held that they should have investigated the commercial purpose, and if they had done so, they would have realised that it was fraudulent.

Credit Agricole Corporation and Investment Bank v. Papadimitriou [2015] WTLR 109.

This case is concerned with an appeal to the Privy Council from the Court of Appeal of Gibraltar.

In 2000 a Mr Robin Symes, an art dealer, sold a collection of art Deco furniture belonging to the respondent for US$15 million. The respondent did not give her consent to the sale. US$10.3 million was paid into an account with the appellant bank in Gibraltar.

The respondent sued the appellant claiming dishonest assistance and knowing receipt of the money, but these claims were rejected by the judge at first instance.

The respondent also asserted a proprietary claim, and it was accepted that she could trace the proceeds of sale into the hands of the appellant unless the appellant could establish that it was a bona fide purchaser for value without notice.

The judge at first instance held that the appellant could rely on this defence, but the Court of Appeal of Gibraltar allowed the respondent’s claim.

On appeal to the Privy Council, the decision of the Gibraltar Court of Appeal was confirmed.

Lord Clarke reviewed earlier cases, and stated: ‘The position has however been resolved in Lord Neuberger’s para 109. (Sinclair Investments (UK) Ltd. v. Versailles Trade Finance Ltd [2011] WTLR 1043) As he indicates, it is important for these purposes to distinguish between three different circumstances. The first is where the bank in fact appreciates that a proprietary right in the property probably exists, so that the bank had actual notice of the right. That is not the case. The second is where a reasonable person with the attributes of the bank should have appreciated based on facts already available to it that the right probably existed, in which case the bank has constructive notice of the existence of the right.

The third is where the bank should have made enquiries or sought advice which would have revealed the probable existence of such a right. Here too, the bank would have constructive notice of the right. The question is in what circumstances and to what extent it can probably be said the bank should have made enquiries or 57

sought advice....

Thus, on the one hand, the bank’s knowledge of facts indicating the mere possibility of a third party having a proprietary right would not be enough to put the bank on enquiry but, on the other hand, it is not necessary for the bank to conclude that it probably had such a right. The test is somewhere in between. It may be formulated in this way. The bank must make enquiries if there is a serious possibility of a third party having such a right or, put in another way, if the facts known to the bank would give a reasonable banker in the position of the particular bank serious cause to question the propriety of the transaction.’

It was held that the bank should have endeavoured to ascertain the commercial purpose of the arrangement, and if it had done so, would have realised that the arrangement was improper.

The decision of the Court of Appeal of Gibraltar was confirmed.

Film partnerships and estates of partners You may have to deal with estates where the deceased has entered into film partnership schemes which are being challenged by the HMRC. Therefore there are clearly contingent liabilities.

Do the personal representatives have to wait until all contingent liabilities have been quantified?

This would not be fair to the beneficiaries as they might have to wait years before they received anything from the estate.

That was the issue in the next case.

It was held that the court had to balance the interests of the beneficiaries with the interests of contingent creditors.

It was held that a charge for £2 million would be adequate to cover the contingent liabilities in this case.

It was also held that £90,000 should be retained, costs and liabilities of the estate.

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Ingrey v King [2015] WTLR 131 The deceased had entered into three film partnership investment schemes which are being challenged by HMRC. He died on 16th of October 2010, and his executor obtained a grant probate to his estate on 26 July 2004. There had been a claim by son of the deceased under the Inheritance (Provision for Family and Dependents) Act 1975 which had been compromised. The defendant in the proceedings was another son of the deceased, and the sole beneficiary of the deceased’s estate.

The claimant was the executor of the deceased, and wish to wind up the estate. He sought directions as to how to proceed with the administration of the estate.

It was held that the duty of the executor is to distribute assets in order priority so that debts and liabilities have priority. If there is a possibility of some contingent liability, then the executor can retain a sum out of the estate or seek security from the beneficiary. That will protect the executor even if the retention or security is inadequate. The Court has to hold the balance fairly between the beneficiaries and the possible creditors.

On the facts of this particular case, it was held that the charge over property for £2 million was the correct way to proceed. It was also held the cash sum of £90,000 should be retained to cover costs.

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April 2016 Burns and others v Burns [2016] EWCA Civ 37

The deceased made two wills, one in 2005 dividing her estate between her sons AB and CB, and one in 2003 in which she gave her interest in her home to AB and divided her residuary estate equally between AB and CB. AB challenged the validity of the 2005 will on the ground that the deceased lacked capacity and knowledge and approval of the will. The 2005 will was upheld both by the judge at first instance and the Court of Appeal.

However, there was some criticism of the solicitor who drafted the f2005 will for not having followed the “Golden Rule�, although it was accepted that it was not a rule of law.

Traditionally with allegations of lack of knowledge and approval, there was a two stage approach – firstly was there anything to excite the suspicion of the judge, and if there was, then the burden was on the propounder to dispel that. It was held that where the judge had heard all the evidence, it was appropriate for the judge to consider whether the deceased had the necessary knowledge and approval without going through the first stage.

Inheritance (Provision for Family and Dependants) Act 1975 and domicile In order to succeed in a claim under the 1975 Act, it is necessary to prove that the deceased died domiciled in England and Wales. The issue in the next case was where was the deceased domiciled at the date of his death.

Kebben v Farmer & Ors [2016] EWHC 3827 (Ch) The deceased had two daughters by his first marriage which had ended in divorce.

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He had married the claimant, and there was a daughter of that marriage. He had an English domicile of origin, but he moved to Gambia by no later than 1994. He built a rather splendid home, and spent majority of his time there.

The claimant applied under the Inheritance (Provision for Family and Dependents) Act 1975 on the basis that he had not made reasonable financial provision for her.

She could only succeed if the deceased died domiciled in England and Wales, but it was held that had died domiciled in Gambia.

Judge Purle said: “I was also referred to Barlow Clowes International Ltd. & Others v. Peter Steven William Henwood [2008] EWCA (Civ) 577 for a useful summary of the relevant principles of the law of domicile. The relevant passages, taken from the judgment of Arden LJ, are as follows: “Relevant principles of the law of domicile General principles 8.

The following principles of law, which are derived from Dicey, Morris and

Collins on The Conflict of Laws (2006) are not in issue:

(i)

A person is, in general, domiciled in the country in which he is

considered by English law to have his permanent home. A person

may sometimes be domiciled in a country although he does not have

his permanent home in it (Dicey, pages 122 to126).

(ii)

(No person can be without a domicile (Dicey, page 126).

(iii)

No person can at the same time for the same purpose have more than

one domicile (Dicey, pages 126 to128).

(iv)

An existing domicile is presumed to continue until it is proved that a

new domicile has been acquired (Dicey, pages 128 to 129).

(v)

Every person receives at birth a domicile of origin

(Dicey, pages 130 to 133).

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(vi)

Every independent person can acquire a domicile of choice by the

combination of residence and an intention of permanent or indefinite

residence, but not otherwise (Dicey, pages 133 to138).

(vii)

Any circumstance that is evidence of a person’s residence, or of his intention

to reside permanently or indefinitely in a country, must be considered in

determining whether he has acquired a domicile of choice (Dicey, pages 138

to143). (viii)

In determining whether a person intends to reside permanently or indefinitely,

the court may have regard to the motive for which residence was taken

up, the fact that residence was not freely chosen, and the fact that residence

was precarious (Dicey, pages 144 to151).

(ix)

A person abandons a domicile of choice in a country by ceasing to reside

there and by ceasing to intend to reside there permanently, or indefinitely,

and not otherwise (Dicey, pages 151 to153).

(x)

When a domicile of choice is abandoned, a new domicile of choice may be

acquired, but, if it is not acquired, the domicile of origin revives

(Dicey, pages 151 to 153).

9.

I need to amplify two of these principles at this point.

The intention required for a domicile of choice ((vi) above) 10.

The intention of residence must be fixed and must be for the indefinite future.

It is not enough for instance that at any given point in time its length has not

been determined.

11.

In the leading case of Udny v Udny (1869) LR 1 Sc & D 441, the issue was as

to the domicile of the respondent’s father at the time of his (the respondent’s)

birth. His father had been born in Scotland but had left Scotland and taken a

lease of a house in London. He had a castle in Scotland but that was not

habitable. He visited Scotland frequently but had no residence there. In 1844,

he sold the lease and his personal possessions and left London for France to

avoid his creditors. But he did not intend to reside permanently in France. His

first wife died in 1846, and he formed a liaison with the respondent’s mother

who, in 1853, gave birth to the respondent in London. He married her and

went back to Scotland thinking that he would thereby legitimise the 62

respondent, avoid his creditors and bar the entail on his estates. He intended

to stay in Scotland because he thought he would be safe from his creditors.

12.

The House of Lords held that the respondent’s father had lost his domicile of

choice in England and that his domicile of origin had revived. One of the

issues was whether revival of his domicile of origin was precluded by the fact

that he had a possible intention to leave Scotland again if his creditors

pursued him there. At 449, Lord Hatherley L.C. held that this possible intention

did not mean that he could not have a domicile in Scotland if he had

decided that Scotland would be ‘his chosen and settled abode’. Lord

Hatherley held that the acquisition of a domicile of choice was best described

as ‘settling’ in a place:

‘A change of [a person’s domicile of choice] can only be effected animo et

facto - that is to say, by the choice of another domicile, evidenced by

residence within the territorial limits to which the jurisdiction of the new

domicile extends. He, in making this change, does an act, which is more

nearly designated by the word ‘settling’ than by any one word in our

language. Thus we speak of a colonist settling in Canada or Australia, or of a

Scotsman settling in England, and the word is frequently used as expressive

of the act of change of domicile in the various judgments pronounced by

our Courts.’

13.

At 458, Lord Westbury made the following observations about the acquisition

of a domicile of choice which also emphasise the fixed nature of the

requisite intention:

‘Domicile of choice is a conclusion or inference which the law derives

from the fact of a man fixing voluntarily his sole or chief residence in a

particular place, with an intention of continuing to reside there for an

unlimited time. This is a description of the circumstances which create or

constitute a domicile, and not a definition of the term. There must be a

residence freely chosen, and not prescribed or dictated by any external

necessity, such as the duties of office, the demands of creditors, or the relief

from illness; and it must be residence fixed not for a limited period or particular

purpose, but general and indefinite in its future contemplation. It is true that

the residence originally temporary, or intended for a limited period, may

afterwards become general and unlimited, and in such a case so soon as

the change of purpose, or animus manendi, can be inferred the fact of

domicile is established.’ (emphasis added).

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14.

Given that a person can only have one domicile at any one time for the same

purpose, he must in my judgment have a singular and distinctive relationship

with the country of supposed domicile of choice. That means it must be his

ultimate home or, as it has been put, the place where he would wish to spend

his last days. Thus, in Bell v Kennedy (1868) LR 1 Sc and Div 307, 311, Lord

Cairns, having held that it was unnecessary for him to examine the various

definitions that have been given of the term ‘domicile’, held that the question

to be considered was in substance whether the appellant:

‘had determined to make, and had made, Scotland his home, with the

intention of establishing himself and his family there, and ending his days in

that country?’ (emphasis added)

15.

In my judgment this test by its reference to ending one’s days usefully

emphasises the need for the subject to have a fixed purpose that he will live in

the country of his domicile of choice.

All the facts which throw light on the subject’s intention must be considered ( (vii) above) 16.

A finding as to domicile requires a careful evaluation of all the facts. This point

is illustrated by a memorable passage from the judgment of Mummery LJ in

Agulian v Cyganik [2006] EWCA Civ 129 at [46(1)]:

‘Positioned at the date of death in February 2003 the court must look back at the whole of the deceased’s life, at what he had done with his life, at what life had done to him and at what were his inferred intentions in order to decide whether he had acquired a domicile of choice in England by the date of his death. Soren Kierkegaard’s aphorism that ‘Life must be lived forwards, but can only be understood backwards’ resonates in the biographical data of domicile disputes.’

17.

Some commonly occurring facts call for special mention. The fact that

residence is precarious or illegal is a circumstance that is relevant to

the question of intention (but the fact that presence is illegal does not prevent

residence): Mark v Mark [2006] 1 AC 98.

18.

A person can acquire a domicile of choice without naturalisation. (Dicey,

page 136.). On the other hand, citizenship is not decisive: Wahl v Wahl [1932]

147 LT 382. An intention to be buried in a particular place has in some

circumstances been treated as an important factor, but in other cases

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discounted (Dicey, page 140). If a person leaves a country to evade his

creditors, he may lose his domicile there, unless he plans to return as soon as

he had got rid of his debts.

19.

Frequently the subject of a dispute as to domicile (often called ‘the

propositus’) will make statements or declarations as to what he intends.

But the court should not rely on these statements unless corroborated by

action consistent with the declaration. Thus Dicey states:

‘The person whose domicile is in question may himself testify as to his

intention, but the court will view the evidence of the interested party with

suspicion. Declarations of intention made out of court may be given in

evidence by way of exception to the hearsay rule. The weight of such

evidence will vary from case to case. To say that declarations as to domicile

are ‘the lowest species of evidence’ is probably an exaggeration. The present

law has been stated as follows: ‘Declarations as to intention are rightly

regarded in determining the question of a change of domicile, but they must

be examined by considering the persons to whom, the purpose for which, and

the circumstances in which they are made and they must however be

fortified and carried into effect by conduct and action consistent with the

declared expressions.’. Thus in some cases the courts have relied to some

extent on declarations of intention in deciding issues as to domicile; indeed,

in one case, the declaration was decisive. But in other cases the courts

have refused to give effect to the declarations on the ground that they were

inconsistent with the conduct of the propositus: a domicile cannot be

acquired or retained by mere declaration. The courts are, in particular,

reluctant to give effect to declarations which refer in terms to ‘domicile’ since

the declarant is unlikely to have understood the meaning of the word.

Declarations which are equivocal have little effect: thus a declaration of

intention to reside permanently in the United Kingdom is no evidence of

acquisition of a domicile of choice in any of the countries which are included

in the United Kingdom; although it may be evidence of the abandonment of

a domicile elsewhere.’ (pages 142 to 143)”

Insolvency Act s 423 The next case is concerned with section 423 of the Insolvency Act. Under this section, gifts can be set aside if they have been made with the motive of prejudicing the interest of creditors, or putting assets beyond the reach of creditors.

65

If a gift is made to put assets beyond the reach of one creditor, can another creditor apply to set aside the gift under section 423?

The answer given in the next case was yes.

Local authorities have been know to invoke this section to obtain payment of care home fees, but now they will probably invoke s 70 of the Care Act 2014, and bill the trustees directly. S 70 provides: Transfer of assets to avoid charges (1)

This section applies in a case where an adult’s needs have been or are being

met by a local authority under sections 18 to 20 and where—

(a)

the adult has transferred an asset to another person (a “transferee”),

(b)

the transfer was undertaken with the intention of avoiding charges for

having the adult’s needs met, and

either the consideration for the transfer was less than the value of the

(c)

asset or there was no consideration for the transfer.

(2)

The transferee is liable to pay to the local authority an amount equal to

the difference between—

(a)

the amount the authority would have charged the adult were it not for

the transfer of the asset, and

(b)

the amount it did in fact charge the adult.

(3)

But the transferee is not liable to pay to the authority an amount which

exceeds the benefit accruing to the transferee from the transfer.

(4)

Where an asset has been transferred to more than one transferee, the

liability of each transferee is in proportion to the benefit accruing to

that transferee from the transfer.

(5)

“Asset” means anything which may be taken into account for the purposes of

a financial assessment.

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(6)

The value of an asset (other than cash) is the amount which would have been

realised if it had been sold on the open market by a willing seller at the time of

the transfer, with a deduction for—

(a)

the amount of any incumbrance on the asset, and

(b)

a reasonable amount in respect of the expenses of the sale.

(7)

Regulations may specify cases or circumstances in which liability under

subsection (2) does not arise.

Ali v Bashir and anr [2016] WTLR 187 The first and second defendants were married, and purchased the matrimonial home in 1997. The husband executed a declaration of trust in January 1998 transferring his beneficial interest in the property to his wife. He admitted that the purpose of the declaration of trust was to protect his wife and children from claims against arising out of litigation he was involved in.

The husband was elected to the local council in May 2012, but the claimant successfully challenged the outcome of the election on the ground that there had been corrupt and/or illegal practices on the part the husband. The husband was also ordered to pay the costs of the claimant, who applied under the Insolvency Act 1986 section 423 to set aside the declaration of trust.

It was held that the declaration of trust would be set aside. It was irrelevant that the claimant was not contemplated by the husband when he executed the declaration of trust.

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May 2016 Cost in contentious probate – Should the losing party pay all the costs?

The next case is concerned with who should bear the costs of contested probate proceedings.

It is a myth that they should come out of the estate of the deceased.

In litigation the judge has the discretion as to who should bear the costs, but will normally order the losing party to pay the costs of the winning party.

However, there are some exceptions to the rule in contentious probate.

Breslin v Bromley [2016] WTLR 219 The question in this case was who should bear the costs of contested probate proceedings.

NeweyJ said: ‘The normal role in civil litigation is, of course, that costs follow the event....

In the context of probate proceedings, however, the court may make an order for costs to be paid out the estate where the testator, or a principal beneficiary, is to be viewed as ‘really the cause of the litigation’. Further, the court may leave the parties to bear their own costs if the circumstances reasonably led to an investigation of the matter...

Mrs Lockwood is in a different position. She sought to avail herself of Civil Procedure Rules 57. 7 (5), which provides: (a)

A defendant (to a probate claim) may give notice in his defence that he

does not raise any positive case, but insists on the will being proved in solemn

form and, for that purpose, will cross-examine witnesses who attested the will.

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(b)

If a defendant gives such a notice, the court will not make an order for costs

against him unless it considers that there was no reasonable ground for

opposing the will.’

A solicitor executor falls out with a lay executor and beneficiary.

He is removed as executor but it is made plain that there is no criticism of what he has done.

The Judge takes the view that the first defendant has behaved unreasonably.

It is ordered that he should pay the solicitor’s costs on the standard basis, and in so far as they were not paid, they should come out of the state on an indemnity basis.

Jones v Longley & ors [2016] WTLR 317 The claimant, a solicitor, had been appointed along with the first defendant as the executors of the deceased. The relationship between the executors had broken down, and the claimant had been removed as executor, although it was made plain that there was no criticism of his conduct.

The question of who should bear the costs of the proceedings then arose. Master Matthews stated that under the Civil Procedure Rules costs are in the discretion of the court, but the normal order was to order the unsuccessful party to pay the costs of the successful party. He then said: ‘However, trust and estate litigation is subject to special provisions.

Rule 46. 3 is as follows: (1)

This rule applies where –

(a)

A person is or has been a party to any proceedings in the capacity of trustee

or personal absences: and

(b)

Rule 44.5 does not apply.

(2)

The general rule is that that person is entitled to be paid the costs of those

proceedings, insofar as our not recovered from or paid by any other person,

out of the relevant trust fund or estate.

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(3)

Where that person is entitled to be paid any of those costs out of the fund or

estate, those costs will be assessed on the indemnity basis...

Paragraph 1 of the Practice Direction to Part 46 is as follows: ‘1.1

A trustee or personal representative is entitled to an indemnity out of the

relevant trust fund or estate for costs properly incurred. Whether costs were properly incurred depends on all the circumstances the case including whether the trustee or personal representative (‘the trustee’) – (a)

Obtained directions from the court for bringing or defending the proceedings

(b)

Acted in the interests of fund or estate or in substance for a benefit other than

that of the estate, including the trustee’s own; and

(c)

Acted in some way unreasonably in bringing or defending, or in the conduct

of, the proceedings.

1.2

The trustee is not to be taken to have acted for the benefit other than that

of the fund by reason only that the trustee has defended a claim in which

relief is sought against the trustee personally.

It was held that the first defendant had acted unreasonably, and should pay the claimant’s costs of the claim on the standard basis if not agreed. if the claimant’s costs were not paid by the first defendant, then they were recoverable from the estate on the indemnity basis.

What is required to give a person an interest in a property vested in the name of another?

In the next case, the appellant and respondent were in a relationship, and bred Airedale Terriers.

The respondent had falsely claimed that she could not have share in various properties because it would be too expensive.

There was no evidence that the appellant had contributed financially to the properties.

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It was held that she did not have an interest in them.

Curran v Collins [2016] WTLR 235 The appellant and the respondent were in a relationship from about 1978 until 2010, but the appellant did not move into live with the respondent until 2002.

During the relationship, the respondent owned three properties. The couple bred Airedale Terriers, and the last property purchased by the respondent had a kennels business which the respondent ran. The appellant did do some work in the business, and was paid a low wage.

When the relationship broke down, the appellant claimed that she was entitled to share in the properties on the basis of a common intention constructive trust. When she raised the question of having a share in the properties with the respondent in about 1986, she was told that it would be too expensive for her name to be on property as it would be necessary to pay the premiums on two life insurance policies.

Both the judge at first instance and the Court of Appeal rejected the claim. It was also held that the appellant and the respondent were not partners.

Interpretation of wills What is the position if there is a latent ambiguity in a will? Extrinsic evidence is admissible to resolve that ambiguity.

In the next case a will contained gift of property, but the deceased did not own that property. There was also another gift of the property which was correctly described.

It was held that the deceased intended to give another property which he owned.

Guthrie v Morel & ors [2016] WTLR 273 The deceased had written a letter to a solicitor which was accepted as being his will, and probate had been obtained.

The will contained the following bequest:

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‘My property 87 Loma Del Ray, Alcadesa, Spain I bequeath to Carol Guthrie.’

Immediately after, there was the following bequest: ‘My property 33 Loma Del Ray, Alcadesa, Spain I bequeath equally to my three sons.’

The deceased never owned number 87, but he did own number 81 Loma Del Rey. It was held that the deceased intended that the claimant should have 81 Loma Del Rey. There was also some discussion as to whether it was appropriate for the judge to give summary judgement. John Baldwin QC was of the opinion that it was if a short point of law or construction was involved, and the court was satisfied that it had before it all the necessary evidence, and that the parties had adequate opportunity to address the court.

Can a settlement which has disastrous tax consequences be set aside?

In the next case a settlement was created on 27 March 2006 when the parties were unaware of the changes to the inheritance tax treatment of trusts effective from 22 March 2006. This meant that inheritance tax was payable on the creation of the settlement, and they would also be 10 yearly charges and exit charges as well.

Application was made to the court to set aside the settlement.

HMRC resisted that application.

It was accepted that if there was a contract, it could not be set aside. However, it was held that it was a gift and could be set aside. The judgment contains a useful summary of the law regarding mistake.

The application was seriously contested by HMRC. However, in the opinion of the writer, tax law is so complicated that if a mistake is made which has disastrous taxation consequences, then the parties should be allowed to set it aside.

De Merwe v Goldman and HMRC [2016] EWHC 790 (Ch)

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The claimant and the first defendant were the joint owners of the family home, a substantial house in Oxford. On 24 March 2006 the claimant and first defendant executed a transfer of the house to the claimant alone. No consideration was stated. On Monday, 27 March 2006, the claimant executed a settlement appointing the first defendant and himself as trustees settlement. In addition, on the same day he executed a transfer of house to the first defendant and himself as trustees of the settlement. Both parties were unaware of the changes to the inheritance tax treatment of trusts effective from 22 March 2006 which meant that inheritance tax was payable on the transfer of the family home to the trustees, and there would be 10 yearly charges and exit charges. The claimant applied to set aside the transfer and settlement ground of mistake.

Morgan J said: “The law as to mistake There are two quite distinct sets of rules dealing with setting aside, or declaring to be void, transactions on the ground of mistake. Later in this judgment, I will attempt to describe the two different types of case where the different rules apply. For present purposes, it is sufficient to say that one set of rules applies to contracts and the other set applies to gifts.

In a case concerning a contract entered into as the result of a mistake, the relevant legal principles are those expressed in Great Peace Shipping Ltd v Tsavliris Salvage (International) Ltd (“The Great Peace”) [2003] QB 679. This case established that there is no equitable jurisdiction which allows a court to order rescission of a contract for common mistake in circumstances that fall short of the circumstances in which the common law would hold the contract to be void. The grounds on which a contract could be declared void for mistake at common law are very narrow. They were described in The Great Peace at [76] as follows: “the following elements must be present if common mistake is to avoid a contract: (i) there must be a common assumption as to the existence of a state of affairs; (ii) there must be no warranty by either party that that state of affairs exists; (iii) the nonexistence of the state of affairs must not be attributable to the fault of either party; (iv) the non-existence of the state of affairs must render performance of the contract impossible; (v) the state of affairs may be the existence, or a vital attribute, of the consideration to be provided or circumstances which must subsist if performance of the contractual adventure is to be possible.”

It was common ground that if the contract rules apply in this case, the Claimant cannot satisfy them.

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In a case concerning a gift made as the result of a mistake, the relevant legal principles are those which were recently restated in Pitt v Holt [2013] 2 AC 108.

These principles apply even if the transaction is under seal: see at [115]. For present purposes, the principles can be summarised as follows (references in square brackets are to the paragraphs in Pitt v Holt): (1) a donor can rescind a gift by showing that he acted under some mistake of so serious a character as to render it unjust on the part of the donee to retain the gift: [101], quoting Ogilvie v Littleboy (1897) 13 TLR 399 at 400; (2) a mistake is to be distinguished from mere inadvertence or misprediction: [104]; (3) forgetfulness, inadvertence or ignorance are not, as such, a mistake but can lead to a false belief or assumption which the law will recognise as a mistake: [105]; (4) it does not matter that the mistake was due to carelessness on the part of the person making the voluntary disposition unless the circumstances are such as to show that he deliberately ran the risk, or must be taken to have run the risk, of being wrong: [114]; (5) equity requires the gravity of the mistake to be assessed in terms of injustice or unconscionability: [124]; (6) the evaluation of unconscionability is objective: [125]; (7) the gravity of the mistake must be assessed by a close examination of the facts which include the circumstances of the mistake and its consequences for the party making the mistaken disposition: [126]; (8) the court needs to focus intensely on the facts of the particular case: [126]; (9) a mistake about the tax consequences of a transaction can be a relevant mistake: [129]-[132]; (10) where the relevant mistake is a mistake about the tax consequences of a transaction, then: “[i]n some cases of artificial tax avoidance, the court might think it right to refuse relief, either on the ground that such claimants, acting on supposedly expert advice, must be taken to have accepted the risk that the scheme would prove ineffective, or on the ground that discretionary relief should be refused on grounds of public policy.� [135]; (11) it is not pointless, nor is it acting in vain, to set aside a transaction and to remove a liability to pay tax, even where that is the principal, or the only, effect of the setting aside: [136]-[141].

It was held that a gift had been made here, and that it could be set aside because of mistake.

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June 2016 Is a lump sum payable under a pension scheme an asset which can be used to satisfy an order under the Inheritance (Provision for Family and Dependants) Act 1975?

The question in the next case was whether a death in service benefit paid under the National Health Service Pension Scheme Regulations 1995 was part of the estate of the deceased, who was a doctor who committed suicide.

This all depends on section 8 (1) of the 1975 Act which provides that ‘where a deceased person has in accordance with the provisions of any enactment nominated any person to receive a sum of money or other property on his death and that nomination is in force at the time of his death, the sum of money... or that other property, to the extent of the value thereof at the date of the death of the deceased... shall be treated for the purposes of this Act as part of the net estate of the deceased subject to deductions of tax.’

It was held that ‘enactment’ included secondary legislation, and as the nomination has been made under 1995 Regulations, it was part of the estate the deceased.

However, if the payment had been discretionary, and had been made under a private scheme, presumably it would not be an asset which could be used to satisfy an order under the 1975 Act. Goenka v Goenka [2016] WTLE 417 The claimant and the deceased, who was employed by the National Health Service as a doctor, had been married for 15 years, and there were three sons of marriage.

The marriage broke down, and a decree nisi of divorce was granted on 15 August 2012. On 7 September 2012, the deceased made his last will, which did make provision for the claimant. He committed suicide on 17th of September 2012.

The claimant applied under the Inheritance (Provision for Family and Dependents) Act 1975 on the grounds that the will of the deceased did not make reasonable financial provision for her.

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The deceased had nominated his father to receive the payment of a death in service benefit of £201,000 under the National Health Service Pension Scheme Regulations 1995. The claimant argued that the death in service benefit was to be treated as part of the net estate of the deceased because of section 8 (1) of the 1975 Act which provides that ‘where a deceased person has in accordance with the provisions of any enactment nominated any person to receive a sum of money or other property on his death and that nomination is in force at the time of his death, the sum of money... or that other property, to the extent of the value thereof at the date of the death of the deceased... shall be treated for the purposes of this Act as part of the net estate of the deceased subject to deductions of tax.’

It was held that the word ‘enactment’ in section 8 (1) included secondary legislation.

As the nomination had been made pursuant to a rule made by way of statutory instrument under a power conferred by statute, it was within section 8 (1).

Rectification of wills.

The next case is one where a will gave a life tenant a life interest in a share in a house, with remainder absolutely to the life tenant thereby rendering the life interest trust otiose. This was clearly not the intention of the testator, and rectification of the will was ordered.

The writer has seen at least on other will like this (not drafted by him!).

Gledhill v Arnold [2016] WTLR 653 The testator made a will in 2006 under which she gave the defendant a life interest in his half share in a house, and after the death of the defendant, the house was to go to such of her children as should be living at the date of her death and if more one in equal shares absolutely. The residuary estate was given to the defendant absolutely.

In 2011 the testator made another well giving the defendant a life interest in his half share in a house, with remainder upon the trusts declared with regard to the residuary estate. The defendant was given the residuary estate absolutely, but if she failed to survive the testator, then it went to such of her children and her daughter-inlaw as should be living at his death and if more than one in equal shares absolutely.

This meant that the life interest was irrelevant.

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Proudman J said: ‘As to construction, the court is concerned... To find the meaning of words used in the world in the light of: (a) the natural and ordinary meaning; (b) the overall purpose of the document; (c) any other provisions of the document; (d) the facts known to or assumed by the parties at the time of execution: and (e) common sense.’, It was held that there had been a clerical error, and that will failed to carry out the intentions of the testator. It was held that the 2011 will should be rectified so that the house passed on the death of the defendant to her children and her daughter-inlaw in equal shares absolutely.

Statutory wills.

The Court of protection can order the execution of a statutory will on behalf of the person lacking capacity. What factors should be taken into account?

In the matter of Peter Jones [2016] WTLR 661 Mr Jones suffered from dementia, and did not have the capacity to make a will or to make lifetime gives. His estate was worth about ÂŁ2.3 million, and he did not have a will. He had a daughter from his first marriage, but that marriage had broken down when she was a child. She had gone with her mother to live with her stepfather in Canada, but she did not get on with him. She had left home at the age of 16, and had led a chaotic life, had suffered from drug addiction, had had mental health problems, and had been made bankrupt twice. There was clear evidence that Mr Jones felt affection for her.

Mr Jones had been married to his second wife for 40 odd years, and had provided for her.

On application for a statutory will, it was held that Mrs Jones should have about 75% of the estate, and his daughter about 25%. It was also held that the daughter should have an immediate gift to ensure that she had decent accommodation.

District Judge Eldergill reviewed earlier cases, and stated that each case turns on its own facts and a factor which is of magnetic importance in one case may be relatively insignificant in another case. For many people, he was of the opinion that they would want to be remembered as having done the right thing by their will. The judge must also consider the past and present wishes of the relevant person.

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Lasting powers of attorney Can the Court cancel the registration of one attorney?

The next case is one where court ordered the partial revocation of a property and affairs lasting power of attorney.

Roy had appointed his wife and his two children to be joint and several attorneys.

His wife had died, and there was considerable hostility between the two children.

It was held that there should be a partial revocation of the lasting power of attorney limiting it to his son.

The Public Guardian v PM and SH [2016] EWCOP 25 Roy was born on 23 August 1925. His wife had died in 2015. There were two children of the marriage, a son, Philip, who was born in 1952, and Susan, who was born in 1954. In January 2014 he executed a property and financial affairs lasting power of attorney in which he appointed his wife, son and daughter jointly and severally to be his attorneys. In May 2014 he executed a health and welfare lasting power of attorney in which he appointed Susan to be his sole attorney.

Five days after the death of his wife, the Office of Public Guardian received a complaint about the conduct of Susan. It was alleged that she was behaving in an irrational and uncontrolled manner, to such an extent that there were concerns about her own mental capacity.

Lush SJ said that he did not need to know whether Susan was suffering from a mental disorder, personality disorder or behavioural disorder. The evidence about her behaviour mainly related to less than three months after the death of her mother which had clearly caused her stress. He stated that he had to be satisfied that Susan had behaved in a manner that contravened her authority, or would not be in the best interests of Roy. He was of the view that Susan loved her father deeply, and would never dream of acting other than in his best interests. Accordingly, he did not order that the registration of the health and welfare lasting power of attorney should be cancelled. However, it was clear that there was considerable hostility between Susan and Philip, but the judge stated that Philip had acted reliably and sensibly in difficult circumstances. It was ordered that there should be partial revocation of the property and financial affairs lasting power of attorney limiting the registration to Philip acting as sole attorney.

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July 2016 Estoppel

The next case contains a useful statement of the law relating to proprietary estoppel and the the calculation of any award.

Davies v Davies [2016] EWCA Civ 463 In previous proceedings, it had been held that respondent was entitled to some equitable relief under the principles of proprietary estoppel. This case was concerned with how that equity was satisfied. At first instance, the judge had awarded the respondent £1.3. On appeal, this was reduced to £500,000. Lewison LJ said: “Inevitably any case based on proprietary estoppel is fact sensitive; but before I come to a discussion of the facts, let me set out a few legal propositions: i.

Deciding whether an equity has been raised and, if so, how to satisfy it is a

retrospective exercise looking backwards from the moment when the promise

falls due to be performed and asking whether, in the circumstances which

have actually happened, it would be unconscionable for a promise not to be

kept either wholly or in part: Thorner v Major [2009] UKHL 18, [2009] 1 WLR 776

at [57] and [101].

ii)

The ingredients necessary to raise an equity are (a) an assurance of sufficient

clarity (b) reliance by the claimant on that assurance and (c) detriment to the

claimant in consequence of his reasonable reliance: Thorner v Major at [29].

iii)

However, no claim based on proprietary estoppel can be divided into

watertight compartments. The quality of the relevant assurances may

influence the issue of reliance; reliance and detriment are often intertwined,

and whether there is a distinct need for a “mutual understanding” may

depend on how the other elements are formulated and understood: Gillett v

Holt [2001] Ch 210 at 225; Henry v Henry [2010] UKPC 3; [2010] 1 All ER 988 at 80

[37]. iv)

Detriment need not consist of the expenditure of money or other quantifiable

financial detriment, so long as it is something substantial. The requirement must

be approached as part of a broad inquiry as to whether repudiation of an

assurance is or is not unconscionable in all the circumstances: Gillett v Holt at

232; Henry v Henry at [38].

v)

There must be a sufficient causal link between the assurance relied on and

the detriment asserted. The issue of detriment must be judged at the moment

when the person who has given the assurance seeks to go back on it. The

question is whether (and if so to what extent) it would be unjust or inequitable

to allow the person who has given the assurance to go back on it. The

essential test is that of unconscionability: Gillett v Holt at 232.

vi)

Thus the essence of the doctrine of proprietary estoppel is to do what is

necessary to avoid an unconscionable result: Jennings v Rice [2002] EWCA

Civ 159; [2003] 1 P & CR 8 at [56].

vii)

In deciding how to satisfy any equity the court must weigh the detriment

suffered by the claimant in reliance on the defendant’s assurances against

any countervailing benefits he enjoyed in consequence of that reliance:

Henry v Henry at [51] and [53].

viii)

Proportionality lies at the heart of the doctrine of proprietary estoppel and

permeates its every application: Henry v Henry at [65]. In particular there must

be a proportionality between the remedy and the detriment which is its

purpose to avoid: Jennings v Rice at [28] (citing from earlier cases) and [56].

This does not mean that the court should abandon expectations and seek

only to compensate detrimental reliance, but if the expectation is

disproportionate to the detriment, the court should satisfy the equity in a more

limited way: Jennings v Rice at [50] and [51].

ix)

In deciding how to satisfy the equity the court has to exercise a broad

judgmental discretion: Jennings v Rice at [51]. However the discretion is not

unfettered. It must be exercised on a principled basis, and does not entail

what HH Judge Weekes QC memorably called a “portable palm tree�: Taylor

v Dickens [1998] 1 FLR 806 (a decision criticised for other reasons in Gillett

v Holt).

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There is a lively controversy about the essential aim of the exercise of this broad judgmental discretion. One line of authority takes the view that the essential aim of the discretion is to give effect to the claimant’s expectation unless it would be disproportionate to do so. The other takes the view that essential aim of the discretion is to ensure that the claimant’s reliance interest is protected, so that she is compensated for such detriment as she has suffered. The two approaches, in their starkest form, are fundamentally different: see Cobbe v Yeoman’s Row Management Ltd [2006] EWCA Civ 1139, [2006] 1 WLR 2964 at [120] (reversed on a different point [2008] UKHL 55; [2008] 1 WLR 1752). Much scholarly opinion favours the second approach: see Snell’s Equity (33rd ed) para 12-048; Wilken and Ghaly Waiver Variation and Estoppel (3rd ed) para 11.94; McFarlane The Law of Proprietary Estoppel para 7.37; McFarlane and Sales: Promises, detriment, and liability: lessons from proprietary estoppel (2015) LQR 610. Others argue that the outcome will reflect both the expectation and the reliance interest and that it will normally be somewhere between the two: Gardner: The remedial discretion in proprietary estoppel – again [2006] LQR 492. Logically, there is much to be said for the second approach. Since the essence of proprietary estoppel is the combination of expectation and detriment, if either is absent the claim must fail. If, therefore, the detriment can be fairly quantified and a claimant receives full compensation for that detriment, that compensation ought, in principle, to remove the foundation of the claim: Robertson: The reliance basis of proprietary estoppel remedies [2008] Conv 295. Fortunately, I do not think that we are required to resolve this controversy on this appeal.

In Jennings v Rice at [45] Robert Walker LJ referred to a class of case in which the assurances and reliance had a consensual character not far short of a contract. In such a case “both the claimant’s expectations and the element of detriment will have been defined with reasonable clarity.” In that kind of case the court is likely to vindicate the claimant’s expectations. Although Robert Walker LJ does not say so in terms, it is implicit that in such a case the claimant will have performed his part of the quasi-bargain. At [47] he referred to another class of case in which: “… the claimant’s expectations are uncertain (as will be the case with many honest claimants) then their specific vindication cannot be the appropriate test. A similar problem arises if the court, although satisfied that the claimant has a genuine claim, is not satisfied that the high level of the claimant’s expectations is fairly derived from his deceased patron’s assurances, which may have justified only a lower level of expectation. In such cases the court may still take the claimant’s expectations (or the upper end of any range of expectations) as a starting point, but unless

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constrained by authority I would regard it as no more than a starting point.”

What is not entirely clear from this passage is what the court is to do with the expectation even if it is only a starting point. Mr Blohm suggested that there might be a sliding scale by which the clearer the expectation, the greater the detriment and the longer the passage of time during which the expectation was reasonably held, the greater would be the weight that should be given to the expectation. I agree that this is a useful working hypothesis.”

What costs is a trustee entitled to?

Mason & Ors v Coleman & ors [2016] WTLR 869 This is a complicated case concerning trustee costs. Behrens J said: ‘A trustee is entitled to be reimbursed out of trusts or may pay out of trust funds expenses properly incurred by him when acting on behalf of the trust.

The right of a trustee to indemnity in respect of costs extends only to costs properly incurred in the execution of the trust. By this is meant costs which have been both honestly and reasonably incurred. The right can be lost or curtailed by such inequitable conduct on the part of the trustee as amounts to a violation or culpable neglect of his duty as trustee.’

Knowledge and approval of wills The traditional way of dealing with allegations about lack of knowledge and approval of a will would be two stages – was there anything to excite the suspicion of a judge, and if there was, the burden of proof was on the person applying for probate to dispel that suspicion.

It was held that a judge could go directly to consider knowledge and approval.

Burns v. Burns [2016] WTLR 755.

The deceased executed a will in 2005 dividing her estate equally between the appellant and the respondent. The appellant challenged the validity of this will on

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the grounds that the deceased lacked capacity to make the will, and the necessary knowledge and approval of its contents.

There was some evidence that the deceased was suffering from some mental impairment. However, at first instance it was held that she did have capacity to make a will, and also the necessary knowledge and approval.

On appeal, the Court of Appeal confirmed the decision of the judge at first instance.

With regard to knowledge and approval, it was held that the judge did not have to use a two stage approach – suspicion, and the burden of dispelling it – but could proceed directly to consider whether the deceased knew and approved of contents of the will.

It was also stated that the “Golden rule” was only guidance.

IHT and reservation of benefit The next case is concerned with whether there had been a reservation benefit in the grant of a sub-lease.

The deceased was the tenant of a property in Chelsea, and granted a sub-lease in favour of her sons.

The sons covenanted directly with the deceased to observe the covenants in the head lease.

It was held that the reservation of benefits rules applied as she was getting a benefit from the sub lease.

Buzzoni was distinguished on the ground that the sub-lessees had covenanted directly with the head landlord.

Of course, if the deceased had still occupied the property, there would have been reservation of benefit in any event.

Viscount Hood as executor of the estate of Lady Diane Hood v Commissioners for HMRC [2016] WTLR 835 The deceased was the lessee of a property in Chelsea. This contained a covenant by the deceased not to transfer underlet or part with possession of part of the demised premises without the consent of the landlord. There was also the usual forfeiture 84

clause for breach of condition or covenant. The head lease did not require any sublessee to enter into covenants directly with the head lessor.

In June 1997, the landlord provided a pro forma consent to a proposed sublease of the property to the three sons of the deceased. The sublease was duly granted, and the sons covenanted with the deceased to observe the provisions of the head lease.

HMRC argued that this infringed section 102(2)(b) of the Finance Act 1986 which provides that there is a reservation benefit where at any time in the relevant period the property is not enjoyed to the entire exclusion, or virtually to the entire exclusion, of the donor and of any benefit to him by contract or otherwise.

It was held that the reservation of benefit rules did apply. Buzzoni was distinguished on the grounds that the sub-lessees had covenanted directly with the head landlord.

It was also stated by Court of Appeal that it was well established that a person can give away an interest property and derive no benefit from it as long as the benefit is referable to a proprietary interest retained by the donor.

What is a nuptial settlement?

Whether a settlement is a nuptial settlement or not can be very important if a marriage or civil partnership breaks down because if it is, a divorce court can vary it.

The next case is concerned with what is a nuptial settlement.

The husband is a beneficiary under a trust which indirectly owns the matrimonial home.

There are negotiations about the terms of tenancy agreement, but these take some years to resolve.

Eventually, two tenancy agreements are signed, but not much rent is paid.

It was held that it was a nuptial settlement and capable of variation by a divorce court.

HN v AN and F Trust [2016] WTLR 825.

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The F Trust was created by the grandparents of the first respondent, and he was a beneficiary under the trust. The claimant and the first respondent married in 2001, but had found a property in July 2000 and decided that should be the matrimonial home. This property was purchased by a Bahamian company owned by F Trust. The trustees had discussions with the first respondent about the terms a tenancy and the rent which should be paid, but it took three years for agreement to be reached.

Eventually, two tenancy agreements were signed in March 2004, but not much rent was paid.

The marriage broke down, and the question arose as to whether there was a nuptial settlement. It was held that it was. Coleridge J said: ‘My task is to consider what the real substance of the arrangement was which governed this property. The authorities make it clear that I should consider the question broadly and ask myself whether or not it was an arrangement which made ongoing provision for the husband, wife and/or child in those capacities.

Motive is Irrelevant.’

Does a beneficiary have a right to live in a house forming part of the trust assets?

In the next case the question was whether a beneficiary under a trust had the right to live in a house owned by the trustees.

Under section 12 of the Trusts of Land and Appointment of Trustees Act 1996 the answer is yes provided the purposes of the trust include making land available for the occupation by beneficiary, and a house is available.

On the facts of this particular case, it was held that purposes of the trusts did not include making a house available for occupation by the beneficiary.

In addition, no house was available.

Smith & anr v Herbert & ors [2016] WTLR 897 A beneficiary under a settlement alleged that he had the right to live in houses owned by the trustees. Section 12 of the Trusts of Land and Appointment of Trustees Act 1996 provides:

86

(1)

A beneficiary is beneficially entitled to an interest in possession in land subject

to a trust of land is entitled by reason of his interest to occupy the land at any

time if at that time

(a)

the purposes of the trust include making the land available for his occupation

(or for the occupation of beneficiaries of a class of which he is a member or of

beneficiaries in general), or

(b)

the land is held by the trustees so as to be so available.

The trustees did own various properties which were let on assured short hold tenancies, and the trustees had a long established policy of not evicting any tenant as long as there were no arrears of rent. The trustees did have power to provide residences for a beneficiary.

It was held that there was no evidence that purposes of the trust included making a residence available to beneficiary. In addition, no house was available.

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August 2016 Statutory wills

The next case is one where a child suffers serious injury as a result of medical negligence.

He was awarded damages of ÂŁ3.1 million as result.

He is cared for by his mother.

His father has had nothing to do with him 20 years.

If he dies intestate, then his mother and his father will be entitled to share in his estate equally.

Application is made for the execution a statutory will, and for an order dispensing with service of notice of the application on his father.

Council for the Official Solicitor producers some draft guidance as to when notice should be dispensed with.

This draft guidance is approved by Lush SJ. Normally the cost of everyone come out of the assets of the person the subject of the application in this type of case.

However, there is an application that mother should pay the costs on the grounds that she had behaved unreasonably in making the application to dispense with service on the father.

This application was rejected by Lush SJ. I v D (by his litigation friend, the Official Solicitor [2017] EWCOP 35 88

Duaine is 30, and lives with his mother. He has an older brother of the whole blood, and two younger brothers of the maternal half blood. He has had no contact with his father, Keith, for over 20 years, and he has siblings of the paternal half blood, but the court has no information regarding their identities and whereabouts.

As a result of complications at the time his birth, he suffers from athetoid cerebral palsy. He sued the relevant health authority, and was awarded damages of £3.1 million.

His mother stated in her witness statement: “Duaine cannot talk and uses a communication board with pictures and an iPad for very basic communication. He cannot walk but can mobilise a little by crawling.

He is completely dependent on others for feeding, bathing and all personal care matters. He is incontinent and wheelchair dependent. He is also severely cognitively impaired and during the litigation it was said that his understanding is zero. He also has epilepsy but this has been well controlled on medication for the last seven years.

During the litigation it was stated that he has a normal life expectancy.”

If Duaine died intestate, then his parents would be entitled to share in his estate equally.

Application was made to the Court of Protection for the execution of a statutory will and for an order dispensing with the service of the application on Duaine’s father.

Counsel for the Official Solicitor produced some guidance which was approved by Lush SJ. This provides:

“(1)

A decision by the court to dispense with the service of an application on a

person who would otherwise be entitled to it is not “an act done, or decision

made, under [the Mental Capacity Act 2005] for or on behalf of P” within the

meaning of section 1(5). It is therefore not a decision which is to be

determined only by reference to an assessment of P’s best interests.

(2)

The court’s decisions on procedural matters should be considered with

regard to the obligation to give effect to the overriding objective set out at

rule 3 of the Court of Protection Rules 2007. This makes clear that dealing with

a case justly includes:

89

(a)

ensuring that it is dealt with expeditiously and fairly

(b)

ensuring that P’s interests and position are properly considered.

Although P’s best interest may be relevant to the court’s decision to

dispense with service, unlike a decision which is being taken for or on

behalf of P, they are not determinative;

(c)

dealing with the case in ways that are proportionate to the nature,

importance and complexity of the issues;

(d)

ensuring that the parties are on an equal footing;

(e)

saving expense; and

(f)

allotting it an appropriate share of the court’s resources, while taking

account of the need to allot resources to other cases.

(3)

The court should recognise that a decision to dispense with service on an

individual otherwise entitled to it may engage that individual’s rights under

the European Convention on Human Rights, especially articles 6 and 8. In

any event, P’s own Convention rights are certainly engaged. More broadly,

even if Convention rights are not engaged, issues of procedural fairness arise.

(4)

A decision to dispense with service on an affected party will mean that

the court may have to decide the substantive application without all

the relevant material before it.

(5)

Any decision to dispense with service on an individual will be taken by

the court on the basis of untested evidence. The apparent merits of the

substantive application should not be used to justify dispensing

with service.

(6)

Fears about the consequences to P or the applicant of service on the

individual in question can in many ways be ameliorated by the use of

the court’s powers under rule 19 to redact relevant details, such

as addresses.

(7)

The consequences of the application succeeding to the individual who

is not to be served should also be considered.

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(8)

Before a decision is taken to dispense with service because of practical

difficulties, consideration should be given to the possibility of effecting

service by means of an alternative route under rule 34.

(9)

Matters of procedural fairness should be given a high regard, and it is

submitted that cases where it is appropriate to dispense with service on

an individual who is directly and adversely affected by an application

are likely to be exceptional.

(10)

Different factors may apply in cases where the application is to

dispense with service on P or where there is genuine urgency and there

is a need to balance the prejudice of proceeding in the absence of an

affected party against the prejudice to P or another party of not

proceeding at all.”

Lush SJ held that this was not an urgent case, and he was not impressed with the efforts which had been made to find Keith. Accordingly, he refused to dispense with service on Keith.

Normally, in cases dealing with the property and affairs of someone lacking capacity, the costs come out of the assets of the person the subject of the application. However, there was an application that the costs of the mother should be borne by her on the ground that it was unreasonable for her to have applied to dispense with service on Keith. Lush SJ rejected this application. He stated: “In my judgment, it would be unfair to order Irma to pay her own costs in respect of the application because:

(a)

two judges considered that her application to dispense with service

was appropriate in the circumstances;

(b)

having succeeded thus far, she had no option other than to respond to

the Official Solicitor’s appeal;

(c)

she received no warning whatsoever that she may have to pay her

own costs; and

(d)

though I have no idea of her financial circumstances, I suspect that,

like many parents who care full-time for their profoundly disabled child,

she is dependent on Duaine’s damages award, and has relatively little

in the way of personal savings.”

91

Who owns what in a business/partnership?

In the estate of Edith May Mcguiness (deceased) [2016] EWHC 1518 (Ch) This case concerns a dispute about the ownership of some 11 acres of land in Staffordshire. The facts are complicated, but there was a claim by one of the sons of the deceased based on proprietary estoppel and constructive trust. On the facts, the claim failed.

The lesson to be learned from this case is that where parents begin a business, and the children become involved in the business, it should be made clear who owns what. In addition, family companies cannot always provide a decent living for the children of the founders.

Mistakes by settlors The next case is an application to set aside three transfers of farms to a settlement which had disastrous CGT consequences.

It was held that they should be set aside.

Two of the farms had been sold.

It was held that this did not matter.

The purchasers were Equity’s darling.

The settlors were deemed to have ratified the transactions.

Bainbridge v Bainbridge [2016] WTLR 943 The claimants were father and son, and farmed in partnership. In three separate transactions, they transferred Seamer Grange, Harker Hill which was vested in the sole name of the second claimant but was a partnership asset, and Fox Covert to trustees. They were unaware that the transfers resulted in a large bill for CGT, interest and penalties. Harker Hill and Fox Covert had subsequently been sold.

It was held that all the transfers could be set aside on the ground of mistake. It did

92

not matter that two of the properties had been sold. The purchasers were bona fide purchasers of the legal estate without notice of the right to rescind, and therefore took free from it. The plaintiffs had elected to ratify the sale.

Setting aside gifts The next case is an application to set aside a trust under s 423 of the Insolvency Act 1986.

This is a Draconian section – no time limit, but motive of putting assets beyond the reach of creditors or otherwise prejudicing their interests has to be proved.

The trust was set aside.

Swift Advances plc v Ahmed and anr [2017] WTLR 1059 Mr Ahmed purported to transfer two properties he owned to a trust in 2006 which replaced another trust made in 1996. No alteration was made at the Land Registry to show the change of ownership. In 2007 the claimant made two loans to Mr Ahmed.

He defaulted, and the claimant applied to set aside the transfer under s 423 of the Insolvency Act 1986.

The application succeeded.

Inheritance (Provision for Family and Dependents Act 1975 The next case is one where a claim by a cohabitee succeeded.

The male cohabitee was still married, and his wife alleged that he was still living with her.

The judge rejected this, but if he had accepted it, the question which arises is whether spouses who are living together can cohabit.

Possibly not – the 1975 Act requires cohabitees to be living together as husband and wife which implies monogamy.

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Williams v Martin [2016] WTLR 1075 The deceased and the defendant married in 1967, and twin daughters were born in 1974. He had a brief affair with the claimant in 1970, and rekindled the relationship with the claimant in 1992. He gave his wife a month’s notice that he was moving out on 2 July 1992 which he duly did. He them lived with the claimant until he died unexpectedly in 2012.

The estate of the deceased included a one half interest in the property he occupied with the claimant, cash of about £20,000 and a small share of another property. The deceased and the defendant had given various properties to their daughters.

The claimant alleged that she had cohabited with the deceased and/or was being maintained by him. The defendant alleged that the deceased had been living with her as husband and wife. On the facts, it was held that this was not the case, and that the deceased had been living with the claimant as husband and wife. The judge attached considerable importance to what outsiders would have thought – outsiders considered that they were married, and she wore a wedding ring given to her by the deceased. He was also maintaining her.

She was given his interest in the property he occupied with her.

It was not necessary for the judge to decide if the deceased was still living with his wife, whether he could also be cohabiting.

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September 2016 Conveyancing frauds

Increasingly, fraudsters are pretending to be fictitious firms of solicitors, or pretending that they are a real firm. Solicitors hold money in client a/c on trust, and if it is paid to the wrong person, it can be a breach of trust.

The next case is concerned with a conveyancing fraud.

Both firms involved admitted that they were guilty of breach of trust.

Were they entitled to be relieved from liability under s 61 Trustee Act 1925?

It was held that the answer was no.

Neither had acted reasonably – they should have realised that the vendor was a fraudster.

Purrunsing v A’Court & Co snd House Owners Conveyancers Limited [2017] WTLR 1027 The claimant agreed to purchase a property from a fraudster who claimed to be the owner of a property but in fact was not. The claimant’s conveyancer paid the purchase price to the fraudster’s solicitor who transferred the money to an account in Dubai on the instructions of the fraudster. The money was lost.

The fraudster completed a form for his solicitor stating that he had not done any building work on the property, whereas searches indicated that building work had been completed during the fraudsters purported ownership. He had also notified his solicitor that his address was different from the address of the property and the address for service shown on the register. He had produced proof of that address and what appeared to be a valid British passport. The claimant’s solicitor requested

96

confirmation from the fraudster’s solicitor that they were familiar with the fraudster and would verify his identity. They stated that had no personal knowledge of the fraudster, but had met him, seen his passport and utility bill. The purchase was never completed. that both firms had been guilty of a breach of trust.

The question was whether the defendants should be relived from liability under s 61 of the Trustee Act 1925 on the ground that they had acted honestly and reasonably and ought fairly to be excused. It was held that neither firm had acted reasonably, and should not be excused. In addition, it was relevant to consider the position of each party and whether there was insurance to cover any loss.

It was also held that each firm should be responsible for 50% of the loss.

Disputes about funeral arrangements The next case is one where there was dispute about whether the deceased should be buried in the UK or in Jamaica.

On the facts, it was held that he should be buried in Jamaica.

It was also held that section 116 of the Senior Act 1981 did not authorise the judge to select one of several people who might be entitled in the same degree to a grant of probate or letters of administration to be entitled to the grant.

All it did was to entitle the judge to pass over someone who might otherwise be entitled.

The factors which were important in deciding where someone should be buried were also listed.

Anstey v Mundle & anor [2017] WTLR 931 The deceased was born in Jamaica in 1935, but came to the United Kingdom in the 1960s. He did own property in Jamaica, but he had last visited there in 1998 for the funeral of his sister. There was a rumour that he would be in danger if he went to Jamaica.

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The deceased had three daughters, Valerie, Sonia, and Stephanie. Sonia also had a cousin, Cynthia.

The deceased had made a will in 2014 under which Valerie and Sonia were appointed his executors. There was also a direction by the deceased that he was to be buried in Jamaica beside his mother. It was not accepted that this will was valid.

Cynthia and a friend of the deceased gave evidence that he wanted to be buried in Jamaica. Valerie was of the view that he should be buried in the United Kingdom.

Valerie had obtained an urgent interim injunction forbidding the removal of the body of the deceased from the jurisdiction. She sought a limited grant in her favour for the purpose of disposing of the body.

Section 116 the Senior Courts Act 1981 provides: (1)

If by reason of any special circumstances it appears to the High Court to be

necessary or expedient to appoint as administrator some person other than

the person who, but for this section, would in accordance with probate

rules have been entitled to the grant, the court may in its discretion appoint as

administrator such person as it thinks expedient.

(2)

Any grant of administration under this section may be limited in any way the

court thinks fit.

It was held that this section entitled the court to pass over someone who would otherwise be entitled to a grant. It did not authorise the court to select one of the persons who would otherwise be entitled to grant to take a limited grant.

However, it was held that it did have an inherent jurisdiction to make a limited grant in these circumstances.

The judge, Jonathan Klein QC, quoted previous cases, in particular Hartshorne v Gardner, where Ms Sonia Proudman QC, sitting as a deputy High Court judge, identified the factors to be taken into account in deciding funeral arrangements.

These are: the wishes of the deceased, the reasonable requirements and wishes of the family, the location with which the deceased was most closely collect connected, and the most important, that the body be disposed of with all proper respect and decency and if possible without further delay.

98

On the facts of this particular case it was held that the most appropriate place for the deceased to be buried was in Jamaica, and it was ordered that this duty should be imposed on Cynthia.

As this was hostile litigation, it was ordered that Valerie should be ordered to pay Cynthia’s costs.

Inheritance (Provision for Family and Dependants) Act 1975.

In the next case the issue was whether a cohabitee could claim against the estate of his or her deceased cohabitee when will he or she was considerably wealthier than the deceased.

It was held that they could.

The judge at first instance had held that the property in which the defendant had lived with the deceased should be transferred to him on payment of ÂŁ385,000.

It was held that he did have power to make such an order.

Lewis v Warner 2016] EWHC 1787 (Ch) The defendant had cohabited with the deceased for 20 years, and there was no question that the defendant and the deceased had lived together as husband and wife. The deceased died on 6 May 2014 leaving left a will giving her estate to her only child, the claimant. The original will had not been found, but a reconstituted version had been admitted to probate.

The main asset of the estate of the deceased was her home, Green Avon. The claimant took possession proceedings against the defendant, and the defendant then applied under the Inheritance (Provision for Family and Dependants) Act 1975 on the grounds that the will did not make reasonable financial provision for him. He accepted that he was considerably wealthier than the deceased.

Recorder Christopher Gardner QC held that the deceased and the defendant had been living together as husband and wife, and ordered that the defendant should have an option to have Green Avon transferred to him for ÂŁ385,000.

99

On appeal, it was held that although the defendant was much wealthier than the deceased, she was still maintaining him. It was also held that it was within the powers of the judge to make the order he did.

Illegality The next case is a Supreme Court case about when illegality makes it impossible to enforce a contract.

Mr Patel had paid money to Mr Mirza for insider information.

The Court held that Mr Patel could recover the money he had paid All their Lordships were agreed that restitution was possible, but there was a difference of opinion about when illegality should render a contract unenforceable.

Patel v Mirza [2016] UKSC 42 It was held that Mr Patel could recover the money which he had paid to Mr Mirza, but their Lordships disagreed on the principles to be applied when a contract had an illegal purpose. Two alternative approaches: 1.

The court should not enforce a contract if the person seeking to do so is

relying on an illegal act.

2.

Whether to enforce a claim would be harmful to the integrity of the legal

system when various factors would have to be taken into account.

However, restitution was possible as it would not give effect to the illegal act or any right to derived from it. It returned parties to the status quo.

Revocability of an agency agreement/does an agent hold money received on behalf of the principal on trust?

Two questions arose in the next Supreme Court case – if there is an agency agreement, can it be revoked, and is there a trust?

100

There was an agency agreement, but the agent was insolvent, and the question was whether the agency was irrevocable, and if so, whether money collected by the agent for the principal were held on trust.

The normal rule is that any agency agreement is revocable unless there is some term in the agency agreement, or if the agency is coupled with an interest.

On the facts of this particular case, the agreement made it plain that it was terminable, and it was not coupled with interest.

Although it was irrelevant, the Supreme Court went on to consider if there was a trust of money.

The mere fact that an agent receives money which is due to the principal does not impress that money with a trust.

However, there is a suggestion in Lewin on Trusts that a trust could arise if it was unconscionable for the agent to hold on to the money.

Both the Court of Appeal and the Supreme Court rejected this.

It was pointed out by the Supreme Court that this could have a serious effect on who was entitled to the money.

If there was a trust, then it would be the principal.

If there was no trust, then money is available for distribution to all creditors.

However, as the agency had been terminated, the agent had no authority to collect the monies due to the principal, and so they could not be used to pay creditors.

Bailey and ant v Angove’s PTY Limited [2016] UKSC 47 Angove’s is an Australian winemaker, who employed an agent in England to sell wines on its behalf. There was an Agency and Distribution Agreement which provided that it was terminable by either side on six months’ notice, or by notice with immediate effect on a number of events, including the appointment of an administrator liquidator.

101

The agent went into administration, and Angove’s gave notice terminating the Agency and Distribution Agreement. This notice provided that Angove’s would collect any monies due directly from the customers and would account to the agents for its commission. The liquidators objected to this on the grounds that the agents were entitled to collect money.

It was argued that the agency agreement was irrevocable, and also that there was a trust of the money in favour of Angove’s.

It was held that normally any agency can be revoked, unless coupled with an interest, for example where a mortgagee of a property is given power of attorney to sell that property. On the facts of this particular case, it was held that the authority conferred on the agent had not been to secure interest, and was therefore revocable.

It was also argued that there was a trust of any monies paid to the agent. This issue was strictly irrelevant as it had been held that the agency had been revoked.

The Supreme Court expressed the view that whilst an agent has a duty to account to his principal for money received on his behalf, that does not necessarily give rise to a trust of money. There will be a trust if that was the intention of the parties derived from the contract, or in some cases from their conduct. The Court of Appeal had referred to Lewin on Trusts where there is a suggestion that a constructive trust would arise in this situation if it would be unconscionable for the agent to assert a title to money. The Supreme Court did not accept that this was correct.

102

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103

October 2016 Capacity to make a will and knowledge and approval of the contents

The next case is one where the deceased makes a home made will substantially benefitting his carer and cutting out his brother, It is a home made will prepared by the carer.

The witnesses to the will change their minds about whether they were both present when the will was signed by the deceased.

It was held that you need very strong evidence of non-compliance with section 9 of the Wills At before court hold will invalid.

Whilst the judge held that the deceased did have capacity to make the will, he held that he did not have the necessary knowledge and approval.

Undue influence means that a person knew and approved of the contents of the will but had been coerced into making the will.

Poole and anr v Everall and anr [2016] EWHC 2126 (Ch) The mother of the deceased had three children by different fathers. She had left the father of the deceased because was violent to her, and the three boys had been taken into care. The deceased had been involved in two motorcycle accidents when he was a teenager, and as result of the second accident when he was a pillion passenger, he had suffered serious head and physical injuries which reduced the use of his limbs on one side. Afterwards, he had a history of serious cannabis abuse, and had been admitted to hospital under the Mental Health Act on several occasions.

He had received damages in excess of ÂŁ1 million, and a receiver (later renamed deputy) has been appointed to manage this financial affairs.

104

After his discharge from hospital, he was placed by Worcestershire County Council with Mr Everall who looked after the deceased. The Public Guardian, who had been appointed as his receiver, assessed the services provided by Mr Everall and approved payment from the deceased’s funds of £825 per week.

The deceased developed a relationship with Susan White, and ultimately moved in with her. Mr Everall was then being paid £935 per week to the care for the deceased, and a solicitor who had been appointed as deputy became concerned about whether this was excessive.

It was alleged that Sean, one of the brothers of the deceased, was harassing him, and ultimately a limited injunction was obtained against him.

There was evidence that Mr Everall was pressing for a will in his favour.

The deceased made a will in February 2012 under which brothers of the deceased were beneficiaries. This will had been prepared by the solicitor who had been appointed as the deputy of the deceased. He then executed a home-made well in December 2012 in which he left 95% of his estate to Mr Everall and 5% to Susan White.

The witnesses to the signature of the deceased in the December 2012 will changed their minds about whether they were both present when the deceased signed the will. It was held that the court needed the strongest evidence of non-compliance with section 9 of the Will Act 1837 before it can hold hold that there had been noncompliance. On the facts of this particular case, the judge was satisfied that there had been compliance with section 9.

It was also held that the deceased did have capacity at the time he executed the December 2012 will.

However, it was held that the court must be satisfied that the time of execution the deceased understood what he was doing and the effects of the will. It was held that the deceased did understand that he was executing a will. However, It was held that the burden of proof that the deceased knew and approved of the contents of the will was on Mr Everall, and that he had failed to discharge that burden. Master Matthews said: ‘The vigilance of the court is plainly engaged by the circumstances in which a vulnerable and suggestible person such as David, whose capacity was impaired in

105

significant respects, makes a will in which the great bulk of his estate is given to a person upon whom he has been dependent for his care in many aspects of his dayto-day life, when the terms of the will have been drafted by that same person and not apparently discussed with anyone else except the carer’s partner. The concerns that would have to be assuaged are magnified when the terms well are such that previous gifts to members of his family and charities whose interest he had previously wished, over a long period, to advance are removed altogether and a gift in favour of the person regarded as his partner is reduced by half.’ With regard to undue influence, this presupposes that the deceased knew and understood the terms will, but his agreement to those terms was produced by coercion. If the deceased did not know and understand the terms of the will, then the doctrine did not apply.

Duties of administrators The next case is one where several people claimed to be entitled to a grant of letters of administration to the estate of the deceased. Caveats were entered, but notwithstanding the grant was issued to the defendant. She was a qualified accountant. It was alleged that she had been plundering the estate of the deceased.

Lyons and anr v Andrene Kerr-Robinson [2016] EWHC 2137 The deceased was born in Jamaica in 1927, and died in 2011 domiciled in England.

She had been married but was divorced. She died without issue, and obviously her parents had pre-deceased. She did not leave a will, and she had assets both in Jamaica and in England. More than one person was entitled to a grant of Letters of Administration to the estate of the deceased, and caveats were entered.

Notwithstanding, the defendant did obtain grant in February 2012. The Principal Registry realised that a mistake had been made, and wrote to the defendant requiring the grant to be returned. This was not done.

Application was made that Janet Atkinson, the interim administrator of the estate, should be appointed to administer the estate fully. Such an order was duly made.

The defendant was born in Jamaica, but had moved to the United Kingdom in 1998.

She was a qualified accountant.

106

The claimants claimed to be entitled to an interest in the estate under the intestacy rules, or as having a right to make a claim under the Inheritance (Provision Family and Dependants) Act 1975.

The defendant paid away money from the estate which was subsequently lost.

It was held that this was in breach of an undertaking the defendant had given.

Alternatively, it was held that the money had been paid to resist a claim by the claimant that the defendant had been plundering the estate of the deceased. It was held that this was not a proper administration expense.

The judge also refused to grant the defendant relief under section 61 the Trustee Act 1925.

Negligence.

The next case is one where a financial adviser was sued for negligence over preparation of a will for a client.

The adviser and had very little to do with the will, and on the facts it was held that there was no liability in negligence.

The judge reviewed earlier cases.

He was of the view that you had to have regard to all circumstances in deciding if there was a duty to the care owed by the adviser to the beneficiaries.

Herring and Hartley v Short’s Financial Services LLP [2016] WTLR 1203 S, an employee of the defendant, had been the financial adviser of the deceased, who was a widow with no children or close relatives. On his advice, the deceased had formed two trusts in order to mitigate inheritance tax.

The deceased instructed W to draft a will for her so that the claimants would each receive ÂŁ200,000 after allowing the amounts they would receive from the trusts. This did not in fact happen. S was asked to attend the meeting with W, but at the request of the deceased left shortly after WH arrived.

107

W was sued, and the claim against him was compromised. The claimants then sued the defendant for the shortfall.

Behrens J reviewed earlier cases when duty of care arose in this situation. He said: “Both counsel referred me to the decision of Customs and Excise v. Barclays (2007) 1 AC 181 as the most recent case where the House of Lords considered the question of establishing a duty of care in cases involving negligence for pure financial loss. I was in particular referred to the masterly analysis in paras 4 – 8 of the speech of Lord Bingham: “(4) The parties were agreed that the authorities disclose three tests which have been used in deciding whether the defendant sued as causing pure economic loss to the claimant owed him a duty of care in tort. The first is whether the defendant assumed responsibility for what he said and did vis ... vis is the claimant, or is to be treated by the law as having done so. The second is commonly known as the threefold test: whether loss to the claimant was a reasonably foreseeable consequence of what the defendant did or failed so to do; whether the relationship between the parties was one of sufficient proximity; and whether in all the circumstances it is fair, just and reasonable to impose a duty of care of the defendant towards the claimant.

Counsel for the claimants drew the attention of the judge to the three tests, to the fact that there is no simple formula or touchstone to which recourse can be had and the need to pay close attention to detail circumstances of the case and the relationship between the parties in the context of their legal and factual situation as a whole On the facts of this particular case, it was held that the claim against the defendant failed.

Who is the father?

The next case is concerned with who is entitled to succeed to a baronetcy. Whilst most practitioners will not be involved in disputes of this nature, there can sometimes be doubts about whether a beneficiary is really the son or daughter or grandchild of a testator or intestate.

108

In the matter of the Baronetcy of Stichill [2016] WTLR 1117 Charles II granted the Baronetcy of Stichill to Robert Pringle and the male heirs of his body in 1683. The eighth baronet, who was born in 1871 and died in 1919, married Florence Vaughan on 16 October 1902. On 13 May 1903 she gave birth to a son, Norman Hamilton Pringle. She subsequently had three further children, the first born of whom was Ronald Steuart Pringle who was born on 26 April 1905. Ronald Pringle was the father of the claimant, Norman Murray Archibald McGregor Pringle, who was known as Murray.

Norman Hamilton Pringle had been enrolled as the ninth baronet, and after his death in 1961 his son, Sir Steuart Robert Pringle, was enrolled as the 10th baronet. Sir Steuart died in 2013, and his son, Simon Robert Pringle claimed the baronetcy.

Murray obtained a DNA sample from Sir Steuart Pringle, and this was analysed.

The expert’s view was that Sir Steuart Pringle was not related through any male line to Murray.

Murray claimed the baronetcy, but this was resisted by Simon on various grounds – Murray’s claim had been extinguished through the passage of time, Murray and Murray’s father had failed to mount a challenge sooner, Murray had breached an obligation of confidentiality or misused private information and in using the DNA had acted in breach of the Data Protection Act 1998.

The Judicial Committee of the Privy Council rejected all these arguments, and held that Murray was entitled to succeed to the baronetcy of Stichill.

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November 2016 Capacity to make a will

In the next case there was an allegation that the testatrix lacked capacity to make a will and knowledge and approval.

The will was upheld.

The testatrix did have delusions, but they did not affect the validity of the will.

Loyd v Jones and ors [2016] EWHC 1308 (Ch) The testatrix made a will under which she gave a legacy of £10,000 to her daughter, the claimant, the residue equally between her son and his wife. The claimant challenged the will on the ground of lack of capacity and lack of knowledge and approval. David Cooke HHJ went through the evidence, and upheld the will, He said: “Drawing all of this evidence together, the conclusions I reach are as follows. Firstly, I am satisfied as I said above that (as the defendants acknowledge in their pleading) Mrs Harris began to suffer from dementia from about May 2004. This would have been detectable by Dr Parry Jones as a qualified doctor, and I think it likely that she would have discussed it with members of the family as Sian described. I do not accept therefore that family members such as Ioan and Sally Jones were unaware of it.

Further, I think it likely that Mrs Harris did from time to time suffer from delusions of the type reported by Sian and Mick and occasionally got up and wandered in the night, and I accept their evidence that these matters were known about and discussed with Ioan and Kathy on the one hand and with Dr Parry Jones on the other.

The alternative would be that these were entirely an invention on Sian’s and Mick’s part, in which case it would be remarkable that a similar invention would have been made by Sally Jones in completing the attendance allowance form. I think it much 110

more likely that these incidents were real, but that their extent and effect were grossly exaggerated in the attendance allowance form.

The fact of these delusions however is not it seems to me of significance in relation to the question of Mrs Harris’s testamentary capacity. Both counsel accept that under the test in Banks v Goodfellow, delusions are only relevant if they affect the testamentary dispositions made. In this case, however bizarre the delusions were, it is not suggested that they could have had any such effect.

Nor does wandering of itself necessarily indicate a loss of understanding such that Mrs Harris would have fallen below the threshold of capacity set out in Banks v Goodfellow. Taking account of the evidence a whole, and giving particular weight to the evidence of the non-family witnesses of their conversations and other dealings with Mrs Harris, I am satisfied that until at least the middle of 2006, and probably into 2007, she retained capacity to understand, and did understand, the matters essential to an effective testamentary disposition. There can be no real doubt for instance that she knew that she owned a farm, which was the principal asset in her estate. Further, she knew that she had a son and a daughter and that they both had children and was therefore able to appreciate that they had claims on her bounty, to use the language of the old cases which means no more than that they were persons she might normally be expected to consider when making a will.

I am satisfied that she was able to read print of the size in which the will was prepared with or without reading glasses, and given her general level of functioning and her determined character as testified to by many of the witnesses, I do not believe that she would have signed a document which, as I have found, she knew was a will, unless she had in fact read it. Further, I am satisfied that her level of understanding was such that if she had read it, she would have understood its provisions, which were short, simple and clear.

There is nothing in the terms of the will, in my view, to cause the court to be especially concerned about whether Mrs Harris in fact understood them. Mr Rees suggested that the terms should not be regarded as rational, because of the disparity in provision as between Sian and Ioan and because the money bequest to Sian effectively made little or no provision for the future of Sian’s son Jacob.

But the farm is not large and there is no challenge to the submission that it could not effectively have been split in two and could not have supported borrowings sufficient to enable chance to have been paid an amount equal to half its value.

Nor is it rendered irrational by the fact that Kathy was to inherit jointly with Ioan,

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or might even be the sole inheritor if Ioan predeceased her. Kathy was a member of the farming partnership and had been involved in running the farm for many years. Some may have considered it inappropriate to put family by marriage in a position potentially better than that of an immediate blood relation, but it is not necessarily irrational to do so. There was a suggestion based on the estate papers that the executors had considered selling the farm, but there is no evidence at all that Mrs Harris contemplated that, and ample evidence from the documents and the independent witnesses that her intention was that Ioan would continue to farm it after her death, supporting the statements made by him, his wife and daughter to similar effect. Not everyone would make the distribution chosen, but it cannot be said to have been irrational.

It follows from these findings that Mrs Harris had both the necessary capacity to make a will, that she did read it and understood its terms and that she knew and approved of the contents of the will. It is not the function of the court to form any judgment about the appropriateness of the distribution she chose to make, but only to be satisfied that Mrs Harris was capable of making a will and that its contents do reflect her intentions in accordance with the tests I have set out above. However disappointing the result is to Sian, the will made by her mother was valid and her claim must be dismissed.�

Equitable estoppel Yet another case concerned with estoppel. It is not a new doctrine, and there are more and more reported cases about it.

Moore v Moore and Till Valley Contracting Ltd [2016] EWHC 2202 (Ch) Manor Farm Stapleford is a 650 acre arable farm. It had been run by the Moore family for four generations, and since 2008 the farm had been run by Stephen Moore, his father Roger and Till Valley Contracting Limited as a partnership.Stephen already owned 1/2 interest in the farm.

Roger was married to Pamela, and in addition to Stephen, there was also a daughter of the marriage, Julie.

Stephen alleged that Roger had told him that the farm and the farming assets of the partnership would be his one day. The judge, Mr S Monty, stated that he had to determine five questions: 112

14.1. Were promises made by Roger to Stephen to the effect that Stephen would one day have Roger’s share of the Farm and the Assets? 14.2. Did Stephen rely on those promises? 14.3. If so, did he rely on them to his detriment? 14.4. If the promises were made, and there was detrimental reliance, would it now be unconscionable for Roger to resile from that position? 14.5. If so, how should Stephen’s interest be satisfied?

He continued: “The principals of an equitable estoppel claim are, to my mind, best set out by Lewison LJ in Davies and another v Davies[2016] EWCA Civ 463 at [39]: “i)

Deciding whether an equity has been raised and, if so, how to satisfy it is a

retrospective exercise looking backwards from the moment when the promise

falls due to be performed and asking whether, in the circumstances which

have actually happened, it would be unconscionable for a promise not to be

kept either wholly or in part: Thorner v Major [2009] UKHL 18, [2009] I WLR 776 at

[57] and [101].

ii)

The ingredients necessary to raise an equity are (a) an assurance of sufficient

clarity (b) reliance by the claimant on that assurance and (c) detriment to the

claimant in consequence of his reasonable reliance: Thorner v Major at [29].

iii)

However, no claim based on proprietary estoppel can be divided into

watertight compartments. The quality of the relevant assurances may

influence the issue of reliance; reliance and detriment are often intertwined,

and whether there is a distinct need for a “mutual understanding” may

depend on how the other elements are formulated and understood: Gillett v

Holt [2001] Ch 210 at 225; Henry v Henry [2010] UKPC 3; [2010] 1 All ER 988

at [37].

iv)

Detriment need not consist of the expenditure of money or other quantifiable

financial detriment, so long as it is something substantial. The requirement must

be approached as part of a broad inquiry as to whether repudiation of an

assurance is or is not unconscionable in all the circumstances: Gillett v Holt at

232; Henry v Henry at [38].

v)

There must be a sufficient causal link between the assurance relied on and

the detriment asserted. The issue of detriment must be judged at the moment

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when the person who has given the assurance seeks to go back on it. The

question is whether (and if so to what extent) it would be unjust or inequitable

to allow the person who has given the assurance to go back on it. The

essential test is that of unconscionability: Gillett v Holt at 232.

vi)

Thus the essence of the doctrine of proprietary estoppel is to do what is

necessary to avoid an unconscionable result: Jennings v Rice [2002] EWCA

Civ 159; [2003] 1 P & CR 8 at [56].

vii)

In deciding how to satisfy any equity the court must weigh the detriment

suffered by the claimant in reliance on the defendant’s assurances against

any countervailing benefits he enjoyed in consequence of that reliance:

Henrv v Henry at [51] and [53].

viii)

Proportionality lies at the heart of the doctrine of proprietary estoppel and

permeates its every application: Henry v Henry at [65]. In particular there must

be a proportionality between the remedy and the detriment which is its

purpose to avoid: Jennings v Rice at [28] (citing from earlier cases) and [56].

This does not mean that the court should abandon expectations and seek

only to compensate detrimental reliance, but if the expectation is

disproportionate to the detriment, the court should satisfy the equity in a more

limited way: Jennings v Rice at [50] and [51].

ix)

In deciding how to satisfy the equity the court has to exercise a broad

judgmental discretion: Jennings v Rice at [51]. However the discretion is

not unfettered. It must be exercised on a principled basis, and does not entail

what HH Judge Weekes QC memorably called a “portable palm tree”: Taylor

v Dickens [1998] 1 FLR 806 (a decision criticised for other reasons in Gillett

v Holt).”

Pamela was unhappy that the daughter, Julie, was not getting anything from the farm.

It was held that the promises had been made to Stephen, and for various reasons that he had acted to his detriment relying on these promises, for example by not getting a better paid job, and working long hours.

With regard to unconscionability, there was an allegation of bad behaviour by Stephen, but it was held that this was so trivial as to be irrelevant.

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It was held that Stephen was entitled to an equitable interest in Roger’s share in the farm and farm assets, which included Roger’s current and capital accounts, Roger’s share of the company cash and profits, and Rogers director’s loan account.

However, it was also held that Roger and Pamela should remain at Manor Farmhouse as long as that met their needs, with Stephen responsible for maintaining and repairing it. Roger and Pamela should continue to receive a weekly sum of £200, and Stephen should be required to pay from partnership funds for all reasonable health and care cost for Roger and Pamela should the need arise.

Professional conduct If you are acting for spouses, civil partners, cohabitees, when do they need to have independent advice about the terms of a trust affecting the family home?

This was the issue in the next case.

On the facts, it was held that there had been no breach of duty or negligence.

Even if the female cohabitee had had independent advice about the terms of the trust, she would have signed it.

Turner v Bromets Jackson Heath and ors [2016] A80LS536 The defendant, a firm of solicitors, prepared a declaration of trust with regard to the home of cohabitees. The female cohabitee did not have independent advice about the terms of the trust, and sued the defendants for negligence and for not having advised her to seek independent advice.

Behrens J said: “Mr McCue referred me to Chapter 15 of the Guide to the Professional Conduct of Solicitors (1999 Edition) where the following appears: A solicitor or firm of solicitors should not accept instructions to act for two or more clients where there is a conflict or a significant risk of a conflict between the interests of those clients.

He also referred me to the passage on cohabitees in the Law Society Conveyancing Handbook – 2005 Edition where the following guidance appears:

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9.8.1 All co-habitees whether they are spouses, civil partners, co-habitees or joint

purchasers may need to be advised independently about their respective

rights in the property to be purchased. Solicitors should be alert to the

possibility of a conflict of interests arising in this situation.

9.8.2 It is advisable for cohabitees who are to be co-owners to enter into a

separate deed of trust ‌which sets out their respective interests in the

property 9.8.4 In Oxley v Hiscock [2004] EWCA 546 the Court of Appeal provided guidance

on the steps to be taken when acting for cohabitees:

The solicitor should always enquire about the source of funds for the purchase and the future liability for the mortgage.

If there is evidence that the purchase is actually a joint acquisition or that others may be acquiring rights under a potential constructive trust, the client(s) should be advised either to purchase the property as legal co-owners and/or to record their arrangement in a trust deed When drafting the transfer and/or trust deed decisions have to be made as to whether the equitable interest is to be held as joint tenants or tenants in common I also consider that it is not possible to give definitive guidance as to whether there is a duty to advise the clients on the merits of an agreement relating to the beneficial ownership of a home occupied by cohabiting couples. The agreement may be so one sided or contrary to what might be considered to be fair that one or other of the parties needs to be advised as to this and to take separate independent advice. All will depend on the facts of the individual case.�

On the facts of this case, it was held that there was no breach of duty. If the judge was wrong, he was of the view that the claimant would have signed the deed of trust even if she had had independent advice.

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December 2016 Challenges to wills and costs

The next case is one where there was a challenge to a will on the grounds that the testator lacked mental capacity, knowledge and approval of the will, and that there was undue influence.

The first defendant claimed that a will by her father benefiting his partner was invalid on all these grounds.

She had entered a caveat, but did not pursue the matter.

The claimant applied for probate in common form, and the first defendant intimated that she insisted on probate in solemn form which meant that she could ask questions of witnesses about whether the deceased had mental capacity, knew and approved the contents of the Will, but not about undue influence.

It was held by the judge that the will was valid.

However, the judge was critical of the solicitor who had drafted the will as he was unaware of the ‘Golden rule’.

Elliott v Simmonds & anor [2016] WTLR 1355 The deceased was estranged from his wife, and there were two children of the marriage. The first defendant was a daughter from a relationship prior to his marriage. The claimant had been his partner during the last years of his life.

In 2012 he executed a Will giving his whole estate to the claimant. The will was drafted by his brother-in-law who was a solicitor.

After his death, the first defendant instructed solicitors who challenged the will on the grounds that it was invalid for lack of capacity, want of knowledge and approval

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and/or undue influence by the claimant. A caveat was entered, but the first defendant did nothing further.

The claimant then applied seeking a decree of probate in common form, and an order that the caveat should cease to have effect. The first defendant gave notice that she insisted that the will be proved in solemn form, which meant that questions could be asked as to the execution, testamentary capacity or knowledge and approval, but not about undue influence.

It was held that there was evidence that the will had been properly executed, and that the deceased had mental capacity. Once it was found that the deceased had mental capacity, there was a presumption that he knew and approved of the contents of this will. This presumption had not been rebutted. It was held that the will was valid.

The judge was critical of the solicitor who had drafted the will as he was unable to give a summary of the ‘Golden Rule’.

It was then litigated as to whether the first defendant should pay the claimant’s costs.

The normal rule in litigation is that costs usually follow the event, but the judge has a discretion to make a different order.

In addition, the rules of court say that if someone insists on a will being proved in solemn form, no order for costs shall be made against them unless they have behaved unreasonably.

Elliott v Simmonds & anor [2016] WTLR 1375 CPR 57.7 (5) provides that a person can insist on a will being proved in solemn form, and if notice was given to the court of this, the court would not make an order for costs against him unless it considered there were no reasonable grounds for opposing the will.

On the facts of this particular case, it was held that there were no reasonable grounds for opposing the will, and the first defendant should pay the claimant’s costs from 3 June 2013.

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Disputes about chattels The issue in the next case is what order the judge could make under section 188 Law of Property Act 1925 which deals with disputes about chattels.

It was held court had a complete discretion to make whatever order it considered appropriate in all the circumstances.

Butler & anr v Butler & anr [2016] WTLR 1519 This case is concerned with 502 items of 17th-century Chinese porcelain, the Butler Family Collection, given to the claimants and the defendants by their father. After his death, the claimants and defendants disagreed about the future of the collection.

The claimants wanted it to be distributed, but the defendants wanted to keep it intact so that it was available for scholarly study and the commercial exploitation of certain items. The claimant sought an order for the division of the collection on the basis that the children took turns in selecting a part until there was none left. The defendant opposed this claim.

Section 188 of the Law of Property Act 1925 provides: ‘Where any chattels belong to persons in undivided shares, the persons interested in a moiety or upwards may apply to the court for an order for the division of the chattels or any of them, according to valuation or otherwise, and the court may make such order and give any consequential directions as it thinks fit.’ It was held that the court had a complete discretion to make whatever order it considered appropriate in all the circumstances. This could include making no order, but it was held that the appropriate order was that sought by the claimants.

Inspection of trust documents The next case is concerned with what documents the beneficiaries under a trust are entitled to see.

Clearly they are not entitled to see all trust documents.

RNLI and ors v Headley &anr [2016] WTLR1433

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The deceased left a will benefiting 10 charitable remaindermen. One of the life tenants was still alive. The defendants were the executors and trustees of the estate of the deceased.

In 2007 the defendants sent interim accounts for the year ending in September 2007 to the claimants, but despite requests, provided no further information.

It was held that the court could order the disclosure of trust documents, but that did not mean that all trust documents had to be disclosed to the beneficiaries. On that basis, the defendants were entitled to (a) accounts of capital and a breakdown of trustees fees and expenditure (in so far as the trustees sought to deduct such fees and expenditure from trust capital); (b) lists of investments; (c) confirmation of the identity of the present trustees and deeds of appointment etc; and (d) confirmation that the daughter-in-law of the testatrix, the life tenant, was still alive.

The second defendant was ordered to pay the claimant’s costs because of their refusal to engage with the claimants.

Erceg v Erceg &ors [2016] WTLR 1575 The appellant was a member of a class of beneficiaries under a discretionary trust, and he had been made bankrupt, but had been discharged. It was argued that his right to information about the trust vested in the trustee in bankruptcy, but it was held that this was not the case.

It was held that a beneficiary did not have an entitlement as of right to disclosure of trust documents, and Foreman v, Kingstone (see below) was criticised on the grounds that the judge had stated that a beneficiary does have a right to be informed unless there exists exceptional circumstances.

It was suggested that the factors set out in Schmidt v. Rosewood Trust Ltd were an excellent guide. These are: (a)

Whether there are issues of personal or commercial confidentiality.

(b)

The nature of the interests held by the beneficiary or beneficiaries

seeking disclosure.

(c)

The competing interests of – and therefore the impact on – the beneficiary or

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beneficiaries seeking disclosure, the trustees themselves, other beneficiaries and any affected third parties. (d)

Whether some or all of the documents can be withheld in full, or disclosed

only in a redacted form.

(e)

Whether safeguards should be imposed on the use of the disclosed trust

documentation (for example undertakings or professional inspection) to avoid

illegitimate use.

(f)

Whether (in the case of a family trust) disclosure would be likely to embitter

family feelings and the relationship between the trustee and applicant

beneficiary to the detriment of the beneficiaries as a whole.

To this list can be added:

(g)

The nature and context of the application for disclosure.

Foreman v Kingstone [2005] WTLR 823 This is a decision of the High Court of New Zealand.

The trustees of several family trusts sought directions as to what documents they should disclose to the plaintiffs.

It was directed that the trustees should disclose the following: Financial statements.

Accounts and details of beneficiaries to whom assets had been provided.

Copies of all deeds appointing trustees.

Details of all distributions of income and capital.

Information as to the amount and state of the property in trust funds.

Information about the management of trust property.

Details of changes in the structure of the trusts.

Memoranda of wishes or like communications from the settlor The following did not have to be disclosed: Information as to their change of policy with regard to the application of provisions in the trust document regarding distributions made to one beneficiary.

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Legal opinions obtained by the trustees, but not necessarily all communications between the trustees and their legal advisers.

Information as to the basis on which they had made their decision.

As far as English law is concerned, the letter of wishes is normally confidential, and should be disclosed to beneficiaries.

In the matter of the Avalon Trust [2007] WTLR 1693.

A member of a class of beneficiaries under a discretionary trust became involved in divorce proceedings. He was ordered to produce various documents relating to the trust, which were not in his possession. The trustee was prepared to comply with the requirements of the court, but sought an order from the Jersey Royal Court (Family Division) approving the disclosure.

It was held that it was in order for the trustee to disclose the trust accounts, the trust deed, any supplemental deeds of appointment, and details of any distributions.

With regards to the letter of wishes, normally this was confidential between the settlor and the trustee. However, the wife of the beneficiary had a copy of the draft of the letter of wishes, and it was better if she had a copy of the final document.

The court also approved the disclosure of correspondence between the beneficiary and the trustees, but it was stated that correspondence between the trustees and other beneficiaries should not be disclosed.

Breakspear v Ackland [2008] WTLR 777 The deceased created a settlement and then appointed the defendant, his second wife, as a trustee. By deeds dated the same day, he also added the defendant, her children and remoter issue as beneficiaries, and appointed a reversionary life interest to the defendant. He also executed a letter of wishes.

The settlement permitted self dealing provided the transaction was approved by at least one of the trustees who was not interested as a beneficiary.

It was held that letters of wishes were confidential, and should not be disclosed to the members of the class of beneficiaries. However, it should be disclosed if it was in

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the interest of the sound administration of the trust and the discharge of their powers and discretions. As the trustees had intimated that they did not intend to exercise their powers without obtaining the sanction of the court, the court would have to look at the letter of wishes, and accordingly it should be disclosed.

On the face of it, the deed of appointment infringed the self dealing rule. However, it was clear from the terms of the settlement that the settlor intended trustees who were beneficiaries to benefit, but this did not apply to beneficiaries who were not the original beneficiaries. However, two trustees who were not interested in the deed had approved the transaction, and accordingly it was held to be valid.

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