Contentious Trust and Probate Quarterly Round-Up: Q2 2020
This quarterly contentious trust and probate litigation update provides a summary of a cross-section of reported decisions handed down in the courts of England and Wales in the period October 2020 - December 2020.
The High Court has handed down judgment in a case that gave rise to an interesting issue of law on the burden of proof where an allegation is made that a will has been forged.
The claim arose in relation to the estate of the late Donald Face who died in October 2017. Since his death, there had been various disputes between Mr Face’s son, Richard, and daughters, Rebeca and Rowena concerning the estate. In this, the most recent judgment, Mr Justice David Hodge QC comments:
“If the late Sir Arthur Conan Doyle, or his worthy modern-day successor Mr Anthony Horowitz, were to write up the events which have led to this present, unhappy litigation, they would no doubt have titled the resulting chronicle "The Case of the Missing Original Will". Sadly, this is the fourth significant contested probate claim involving one or more self-representing warring siblings upon which I have had to adjudicate in the Business and Property Courts in Liverpool within the space of the last two years.”
The claim was bought by Rebeca who sought to propound an alleged lost will of her father dated 7 September 2017 (“the 2017 Will”). Mr Face’s original will could not be located but Rebeca asserted that she had found a photocopy under a bedspread at his home. This document, which amounted to the front and back of a single page, was purportedly executed by Mr Face in the presence of two witnesses both of whom lived at the same address. Both Rowena and Richard were expressly excluded from benefiting from their late father’s estate.
Rowena and Richard both disputed that the 2017 Will was genuine. Mr Justice Hodge referred to the 2017 Will as a “curious document” and later in his judgment describes the terms of the 2017 will as “utterly incredible” before concluding that he was satisfied that Rebeca had forged the 2017 will in collaboration with the two witnesses and dismissed her claim as totally without merit. Mr Justice Hodge directed that a transcript of the judgment be sent to the Crown Prosecution Service (for the purpose of determining if criminal charges should be pursued) and ordered that Rebeca pay indemnity costs.
In reaching his conclusion, Mr Justice Hodge questioned the well-established belief that the burden of proving forgery is on the person who alleges it. He said
“I can well understand that where a will is challenged on the grounds of fraud or undue influence, the burden is on the party asserting that; but where the forgery of a will is alleged, then the ultimate burden of proving that the will is not a forgery must rest on the party propounding the will, as part of the formal requirements of proving that the will was duly executed by the testator and was duly witnessed”.
A widow has been successful in the High Court in establishing a proprietary estoppel right to live in the her late husband’s home.
The factual matrix of this case was slightly unusual in that the widow, Alice Anaghara, was in fact one of three wives of the deceased, who was of Nigerian descent and known as “the Chief”. The matrimonial home was purchased in 1976 and at all material times was registered in the Chief’s name. Alice had lived at the property continuously since 1984 with each of her children also residing there up until the youngest, Ike Anaghara, moved out in 2004. The Chief died in 2007, at which point Ike and his wife and children moved back into the property.
In 2018, the son of another of the Chief’s wives, Obinna Anaghara, in his capacity as personal representative of the estate served notices to quit on Alice, Ike and his wife. Alice subsequently claimed that the property was held on constructive trust for her or in the alternative that pursuant to the doctrine of proprietary estoppel she was entitled to stay in the property for life. Alice was unable to rely on the Inheritance (Provision for Family and Dependants) Act 1975 in an effort to seek reasonable provision such that the Chief was not domiciled in England and Wales and therefore it did not apply.
At first instance, Alice’s constructive trust claim was dismissed but the judge found that the Chief had made multiple representations to Alice that amounted to a promise that the property was her house and that she was entitled to live there for as long as she wanted to and consequently determined in her favour with respect the proprietary estoppel claim. On appeal to the High Court, Mr Justice Zacaroli upheld the trial judge’s finding. The estate had sought to argue that Alice having lived in the property rent free for many years was a “countervailing benefit” which should eliminate, or seek to reduce the value, of the equity obtained by Alice. Mr Justice Zacaroli considered the description “rent free” to be unattractive in circumstances whereby Alice lived in the property as the Chief’s wife and found that her expectation that she would remain there after his death was not unclear, extravagant or out of proportion to her detriment.
The Court of Appeal has emphasised the importance of being able to demonstrate detrimental reliance when seeking to establish a common interest constructive trust.
Natalie O’Neill and Shaun Holland had lived together for 12 years at 53 Worsley Road (“the Property”). They had three children together. The legal title to the Property was held by Ms O’Neill’s father between 1999 and 2008 when he transferred it to Mr Holland for nil consideration (on the limited evidence available it seemed that the intention had been to transfer it to both of Ms O’Neill and Mr Holland but a mortgage offer in Mr Holland’s sole name had precluded this from happening). Ms O’Neill’s relationship with Mr Holland broke down in 2012 and she moved out of the Property.
Ms O’Neill issued proceedings in 2016 seeking a declaration that Mr Holland held the beneficial interest in the Property on trust for the two of them in equal shares. At first instance the District Judge had found that 53 Worsley Road was purchased by Ms O’Neill’s father to be a family home for his daughter and her family concluding that the circumstances gave rise to a common intention constructive trust in Ms O’Neill’s favour and that her beneficial interest was a half share in the Property.
On first appeal, the decision of the District Judge was overturned. Mr Justice Pelling found that detrimental reliance had not been sufficiently pleaded by Ms O’Neill and that it had not been established as a finding of fact by the District Judge.
The Court of Appeal upheld the decision of the District Judge. Lord Justice Henderson agreed with Mr Justice Pelling that detrimental reliance was “an essential ingredient of a successful claim to a beneficial interest in a residential property under a common intention constructive trust, in the class of case where the legal estate is in the sole name of the other party”. However, he considered that whilst the District Judge had misdirected herself concerning the requirement of detrimental reliance nonetheless it was sufficiently clear from her findings and the contemporaneous documents that the requirement had been satisfied. Lord Henderson said “… the question of detriment must …. be determined objectively, not by reference to the subjective perceptions of the parties at the time. I therefore think it is legitimately open to us to examine the District Judge’s findings of fact, and the documentary evidence relevant to the 2008 transaction, in order to form a view on whether, objectively, Ms O’Neill relied to her detriment on the assurances of Mr Holland and her father that she was to have a beneficial interest in the Property”. He went on to say that the detrimental reliance lay in Ms O’Neill’s agreement that the Property be transferred into Mr Holland’s sole name, when the intention had initially been that it be transferred into joint names, and the primary factor leading to that consent was Mr Holland’s false representation that he would otherwise not be able to obtain a mortgage.
The High Court has recently given judgment in a summary judgment application concerning the construction of a will.
Mr Barrie, a professional racing car driver, died on 8 September 2018. He was survived by his fiancé (and long term partner), Kathryn Marshall, and his 105 year old mother. Mr Barrie’s Will enabled Ms Marshall to live in his house for the rest of his life, left his mother a share in another property that he part owned and made a number of pecuniary legacies. The residue of Mr Barrie’s estate included bequests to “the British Racing Drivers Club Benevolent Fund” and to “the Cancer Research Fund” but neither organisation appeared to exist.
Ms Marshall had made a claim under the Inheritance (Provision for Family and Dependants) Act 1975, which could not progress until clarity had been obtained as to the identity of the “British Racing Drivers Club Benevolent Fund” and “the Cancer Research Fund”. Mr Barrie’s original will file was not available (believed to have been destroyed) and consequently there was no evidence as to his original instructions.
In reaching a determination Mr Justice Matthews looked to Section 21 of the Administration of Justice Act 1982 and the Supreme Court case of Marley v Rawlings  AC 129.
The British Racing Drivers’ Club Benevolent Fund did not exist. The British Racing Drivers Club (“the Club”) was a defendant to the Claim. The Club was not a charity however it administered a benevolent fund called the British Racing Drivers’ Club Motor Sport Charity (“the Motor Sport Charity”). It went unchallenged that Mr Barrie intended to benefit the latter. Mr Justice Matthews noted that the wording “the British Racing Drivers Club Benevolent Fund" linked the identity of the intended beneficiary to the Club and the Motor Sport Charity was the only benevolent fund administered by the Club and concluded that in this instance it was “a the simple case of construing the words in the will in the context in which the deceased used them” in order to ascertain the proper construction of the Will.
As to the intended recipient of the bequest to “The Cancer Research Fund”, there was no registered charity known by that name. Mr Justice Matthews considered the phrase to be ambiguous necessitating the application of section 21 of the Administration of Justice Act 1982. He concluded that the wording did not refer to a particular institution rather it referred to the general charitable purpose of cancer research and therefore it was for the executor of the estate to apply that part of the residue to that charitable purpose as he saw fit.
For more detail on this case see "Leaving a legacy to charity: avoiding a will construction claim"
The High Court has determined that the National Fund, a charity established in 1928 for the purpose of discharging the national debt, is a valid charitable trust.
In 1928, an anonymous donor (who has since been identified as Mr Gaspard Farrer) set up the charity with £500,000 of assets with the hope that by investing and accumulating the income, and combining that with other donations, it would be sufficient to one day pay off the national debt. The assets were settled by a deed of trust dated 9 January 1928 (“the Deed”) and now amount to approximately £400 million.
The Attorney General, acting pursuant to her functions and duties in relation to charities, issued proceedings seeking court approval to secure the funds in order that they be applied to the reduction of the national debt. The current trustee of the trust, Zedra Fiduciary Services (UK) Limited supported the Attorney General’s contention that the trust was a valid charitable trust but disputed that the court could order it be applied to the reduction of the National Debt. The other defendants, family members of Mr Farrer and another significant donor to the National Fund, disputed the validity of the Deed and submitted that the National Fund should be held on resulting trusts for the donors or their estates.
Mr Justice Zacaroli concluded:
a) the original purposes of the charitable trust cannot be carried out and have ceased to provide a suitable and effective method of using the trust property;
b) this constitutes a case of subsequent (and not initial) failure of the charitable purposes; and
c) GF intended to give the property out-and-out for the specific charitable purposes identified in the Deed;
the court has jurisdiction to make a scheme altering the charitable trust pursuant to its cy-près jurisdiction;
Katherine Pymont is a Senior Associate in our Dispute Resolution team. She specialises in Wills, Trusts and Inheritance Disputes. Katherine's experience includes challenging the validity of wills (including claims for lack of testamentary capacity, want of knowledge and approval, fraud, forgery and undue influence), claims under the Inheritance (Provision for Family and Dependants) Act 1975, removal of executors and trustees, breach of trust claims, fraud cases involving trust structures and professional negligence claims relating to wills and trusts.
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