Contentious Trust and Probate Quarterly Round-Up Autumn/Winter 2019

Autumn / Winter 2019

23 December 2019

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 2019 - December 2019.
 

Alice Kahrmann (as administrator of the estate of Rainer Christian Kahrmann v Hilary Harrison-Morgan [2019] EWCA Civ 2094

The Court of Appeal has ordered that  in principle the ex-girlfriend of the deceased is liable to account to the deceased’s estate for the sum of £2.2 million plus interest being part of the proceeds of sale of two properties in the UK sold shortly after his death and paid over to her by a third party.

Dr Rainer Kahrmann died intestate unexpectedly on 3 July 2014. He had two sons with his long-term girlfriend, Hilary Harrison-Morgan, and two daughters with his former wife.

Just before Dr Kahrmann’s death he had been in negotiations concerning the sale of the leasehold on two London properties. Despite the relationship between the deceased and Mrs Harrison-Morgan having ended he still provided for her and their children and she was living in one of the properties at the time of his death. Difficulties had consequently arisen with respect ensuring vacant possession of the properties for the purpose of the sale. The various negotiations were continued by the deceased’s daughters, Louise and Alice, after their father’s death and it was agreed that £4.4 million from the sale should be split between them and Mrs Harrison Morgan on the condition that the latter moved out so that the properties could be sold with vacant possession.

At first instance Alice Kahrmann in her capacity as administrator of her late father’s estate was unsuccessful in her claim that the proceeds of sale of the properties were held on constructive trust for the deceased’s estate resulting from an agreement made between Dr Kahrmann and his business partner several years previous. Alice had submitted that the buyers of the London properties were consequently in breach of trust when they paid half of the proceeds to her, her sister and Mrs Harrison-Morgan rather than to the estate and the proceeds should be returned with interest (Alice and her sister having already done so). 

The Court of Appeal overturned the judgment at first instance concluding that it had been established that an express common intention constructive trust had arisen. It has been widely reported that Mrs Harrison- Morgan intends to appeal the decision to the Supreme Court.

 

Rea v Rea [2019] EWHC 2434 (Ch)

The High Court has decided that a will excluding three of the deceased’s four children from benefiting from the estate’s main asset is valid. 

Mrs Rea died on 26 July 2016 aged 85. She had four children, Rita, Remo, Nino and David. Mrs Rea had made a will in 1986 appointing Remo to be her executor and dividing her estate equally between her four children. In 2015 Mrs Rea made a will appointing Rita and her cousin Angela as executors and leaving her house (effectively the only asset in the estate) to Rita. The 2015 will included the following clause:

I declare that my sons do not help with my care and there has been numerous calls from me but they are not engaging with any help or assistance. My sons have not taken care of me and my daughter Rita Rea has been my sole carer for many years. Hence should any of my sons challenge my estate I wish my executors to defend any such claim as they are not dependent on me and I do not wish for them to share in my estate save what I have stated in this Will.”

Mrs Rea’s sons defended Rita’s claim to establish the 2015 will and obtain a grant of probate win solemn form on the grounds that their mother (i) lacked testamentary capacity (ii) did not know and approve the contents of the 2015 will (iii) the will was procured by the exercise of undue influence exerted by Rita over Mrs Rea  and (iv) the will was procured by a fraudulent calumny practiced by Rita on Mrs Rea. The sons counterclaimed for probate of the 1986 will.

In reaching his determination Deputy Master Arkush placed considerable weight on the evidence of the solicitor who prepared the will and Mrs Rea’s GP who had provided a contemporaneous capacity assessment prior to its execution. The sons had very little evidence to counter their views.

The judge concluded:

On one level it is understandable that the defendants feel disappointed, upset and resentful that they have not benefited from their mother’s will. In my judgment they have allowed these emotions to override a more considered reflection that Mrs Rea had reason to benefit Rita for all the care that Rita had given her for over six years and more as her principal carer … it is not my task to decide whether the 2015 Will was justified or far. I am only required to decide if it is valid …. I find that it is valid, and that it should be admitted to probate.”

 

Barnaby v Johnson [2019] EWHC 3344 (Ch)

The High Court has dismissed a validity claim pursued by the daughter of the deceased who was left just a token £100 legacy in her will.

Mrs Bascoe died on 29 August 2015. She had four children. One son predeceased her and one daughter died shortly after her. Her surviving son, Mr Barnaby, was an executor and residuary beneficiary of Mrs Bascoe’s will date 27 April 2005. 

The deceased’s daughter, Patricia Johnson (who was acting as a litigant in person) sought to challenge the will on the grounds of a lack of testamentary capacity, undue influence (by Mr Barnaby), forgery of the deceased’s signature and want of knowledge and approval.

Deputy Master Linwood found that:

The 2005 Will is rational and was read over … to Mrs Bascoe who had testamentary capacity at the time. It was properly executed … the strong presumptions in favour of validity are present … Mrs Johnson has come nowhere near establishing the basis for any proper challenge; there is no documentary evidence which supports her and in particular nothing from independent parties especially in contemporary documentary form. Her evidence has been contradictory, self-serving and deliberately misleading. That of her witnesses did not assist her in any respect”. 

A more detailed analysis of this case can be found here.

 

Begum v Ahmed [2019] 10 WLUK 397

The Court of Appeal has granted permission to the wife of the deceased to bring a claim 12 months out of time to apply for financial provision under section 4 of the Inheritance (Provision for Family and Dependants) Act 1975.

Mr Khan died in 2015 leaving a will dated 11 February 2014 which appointed his daughter as his personal representative and bequeathed his entire estate to her. Mr Khan’s only asset was his house where his wife had lived with him since 1993. No provision had been made for Mrs Khan. Probate was granted in April 2016 and the six month time limit for bring a claim pursuant to the 1975 Act expired in October 2016.

Mrs Khan initially issued a claim seeking possession of the property in November 2016. In April 2017 she alleged that the Will was invalid. It was not until October 2017 that an application was made by her seeking to apply for financial provision under the 1975 Act out of time.

The judge at first instance refused permission to bring the claim out of time on the basis that there was no reasonable explanation for the delay. The Court of Appeal found this refusal to be flawed. Lord Justice Floyd said that it was “just and proper” to extend the time in circumstances whereby:

There was an unexplained delay which caused no real prejudice to the Respondent, and in which it is tolerably clear that refusing permission will defeat a strong claim under the Act for the Appellant to retain her home”.

 

Lina Jakimaviciute v HM Coroner for Westminster and Rasa Stanevience [2019]

The High Court has been asked to determine to which of the deceased’s two daughters her body should be released for the purpose of burial or cremation.

The deceased died in September 2017 but as a result of the dispute between her daughters the body had been held in the possession of the Coroner since that time.

Ms Jakimaviciute wanted her mother to be cremated in the UK and for her ashes to be scattered or kept here. Ms Stanevience was content that her mother be cremated here but wished for her ashes to be taken to a particular graveyard in Lithuania to be buried on the basis that these were her mother’s wishes.

Ms Stanevience was the executor of her late mother’s estate and following her death started to make the necessary funeral arrangements to have her buried in Lithuania. Ms Jakimaviciute was subsequently granted an injunction preventing the Coroner from releasing the body to her sister. She also claimed that her mother’s will was invalid on the grounds of lack of capacity and consequently she had died intestate.

Mr Justice Cawson identified that the starting point was that it is the deceased’s designated executor who is entitled to dispose of the deceased remains but that the court has an inherent jurisdiction to give directions concerning the release of a body to persons other than the named executor. He noted several factors that may be considered in exercising the court’s discretion: (i) the deceased’s wishes; (ii) the reasonable requirements and wishes of the family who were left to grieve; (iii) the location with which the deceased was most closely connected and (iv) that the body be disposed of with all proper respect and decency and, if possible, without further delay.  

The judge considered there to be sufficient evidence to support the deceased having wanted to be buried in Lithuania. He made clear in this regard that he considered “that Mother’s wishes provide the surest and strongest guide as to the approach that the court ought to take as to who Mother’s body ought to be released to”. He went on to say that “giving effect to Mother’s wishes would be the best way of reconciling differences that there might be between members of the family as to how best they might grieve” and noted that the test with respect the location with which the deceased was most closely connected was particularly apposite in the circumstances of the case. Mr Justice Cawson said that he would have “grave concerns” about releasing the body to Ms Jakimavicute given her conduct and “embittered attitude" and directed that the body should be released to Ms Stanevience.

A more detailed analysis of this case can be found here.

 

Routier and another v HMRC [2019] UKSC 43

In a highly anticipated judgment the Supreme Court has determined that the charity inheritance tax exemption for a gift to a trust for charitable purposes does not require that the trust be subject to the jurisdiction of the UK courts.

The case centred on a testamentary gift of a UK property by Mrs Coulter, a Jersey domiciled and resident individual, to a charitable trust which was at the relevant time governed by Jersey law. The UK property was worth approximately £1.7 million and the ​inheritance tax charge subject to dispute approximately £600,000. HMRC formed the view that applicable inheritance tax relief for “gifts to charities” (section 23 Inheritance Tax Act 1984) did not apply because Jersey law was the proper law of trust. The deceased’s executors appealed HMRC’s determination but were unsuccessful in both the High Court and the Court of Appeal.

The Supreme Court found that a restriction on charity tax relief was unlawful as a matter of EU law. In order to comply with Article 56 of the Treaty Establishing the European Community, which prohibits restrictions on the free movement of capital between EY member states, and member states, and between member states and third countries, Section 23 IHTA 1984 should be applied without additional wording or conditions.

 

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