Kingsley Napley’s Contentious Trust And Probate Quarterly Update

This quarterly contentious trust and probate litigation update provide a summary of a cross-section of reported decisions handed down in the courts of England and Wales in the period April 2018 – June 2019.

DAMIAN LINES V MAUREEN WILCOX, 2019 EWHC 1451 Ch

The High Court has refused an application by a professional executor for a Beddoe order in relation to a dispute as to the beneficial ownership of a property that historically belonged to the deceased. The administrator wished to issue a claim setting aside the transfer of the property by the deceased on the grounds that she lacked capacity or had been unduly influenced. Mr Justice Matthews determined that the matter should be categorised as a “hostile” trust dispute and highlighted therefore that the duty of the administrator was “not to take proceedings at the risk of the estate, but to remain neutral, and allow the various claimants to the house to fight it out between themselves, at their own risk as to costs”.

PQ AND ANOTHER V RS AND OTHERS [2019] EWHC 1643 (Ch)

The High Court has granted permission for a child born out of wedlock to be treated as a beneficiary of an £80 million discretionary trust made for the benefit of “the Settlor’s children and remoter issue and their respective spouses, widows, and widowers”.

The trust had been settled on 11 March 1968 and was therefore subject to the common law rules of construction that a child is legitimate only if the child is born or conceived in wedlock. The child in question was born shortly before her parents, one of whom was a grandchild of the settlor, were married.

All parties accepted that the child should benefit from the trust. Chief Master Marsh was asked by the trustees to confirm that they had the power to make an appointment that put the child’s status as a beneficiary beyond doubt and that they had the court’s blessing to do so. He confirmed that he was satisfied that the Trustees had the power to execute the proposed appointment and that to do so would be a proper exercise of their power.

HABBERFIELD V HABBERFIELD [2019] EWCA Civ 890

The Court of Appeal has upheld a decision to award lifetime compensation to Lucy Habberfield, the daughter of Frank Habberfield following a successful claim for proprietary estoppel. Her mother, Jane Habberfield, challenged the judgment at first instance on the grounds:

  • Lucy’s refusal of an offer made in 2008, which would have resulted in her ultimately receiving a viable dairy farm, meant that it was not inequitable or unconscionable for Frank and Jane to resile from their earlier assurances.
  • In the light of that refusal, the judge was wrong in principle in treating Lucy’s continued work on the farm as relevant detrimental reliance.
  • The judge’s award was disproportionate to the detriment that Lucy suffered.
  • The judge was wrong to order the cash sum to be paid during Jane’s lifetime.

Lord Justice Lewison concluded “The question is not whether I would have made the order that the judge made. The question is whether the order lay outside the ambit of his “wide judgmental discretion”. With some reluctance, because it is a hard outcome, I have been persuaded that it did not.”

PBM v TGT (2019 EWCOP 6)

The Court of Protection has ordered that a brain-damaged man must be given details of the extent of his assets before he married his partner of several years. PBM’s property and affairs deputy had concerns that he was financially vulnerable. Mr Justice Francis made clear that “Vulnerability is not enough to justify the withholding of the information” and concluded on the basis of the expert evidence as well as everything that he had read that PBM had the requisite capacity to be provided with the information in question.

ANITA MUSSELL & ANR V CHRISTOPHER PATIENCE & ANR

The High Court has classed a long-running dispute about the administration of the late Louis Patience’s estate as a trusts dispute as opposed to a beneficiaries dispute and emphasised the distinction between litigation costs principles and trust and estate costs principles.

Mr Justice Matthews determined that in circumstances whereby the claimants as executors had not yet distributed or purported to distribute the estate in accordance with the accounts it could not be a beneficiaries dispute. On the contrary, it was a trust dispute as to how and for whom the shares in the estate should be held.

Mr Justice Matthews said “Litigation costs orders are concerned largely with who has won, and then if there are reasons to depart from the general principles that costs follow the event. On the other hand, the entitlement of trustees and executors to an indemnity for their costs (or any other trust or estate expenses) is concerned largely with whether they have acted properly (or reasonably) or not”.

KINGSLEY V KINGSLEY (2019) EWHC 1073 Ch

The High Court has determined that the surviving partner to a sibling farm partnership should be given a two month option to purchase the farm land before putting it for sale on the open market. Roger and Sally Kingsley ran the generations-old family farm together up until his death in June 2015 when his interest passed to his widow, Karim Kingsley. Karim sought an order for sale of the farm under the Trusts of Land and and Trustee Act 1996 however, Sally wished to continue running the farm and therefore to be given the opportunity to acquire Roger’s interest before it was sold on the open market.

In exercising his discretion to make the order Deputy High Court Judge Lance Ashworth QC took into account various factors including that he was being asked to make an “unusual” order, only a sale on the open market would provide a definitive test as to the worth of the farmland, the purpose of the trust was so that the land could be farmed by members of the Kingsley family and Karim’s interest was now purely financial.

The judge acknowledged that it was “quite possible that other tribunals hearing the same evidence … might quite reasonably come to another conclusion”.

NAYLOR V BARLOW [2019] EWHC 1565 CH

The High Court has considered whether issue who succeed to the interest of a parent who predeceased the testator take the interest subject to any condition of the will that would have bound the parent.

The deceased had four children, one of whom had predeceased him leaving two children (the deceased’s grandchildren). Section 33 Wills Act 1837 applied meaning that the grandchildren would take their father’s share of the estate but it was necessary for the court to determine whether they should also be bound by a condition set out in the deceased’s will that they were unable to comply within the applicable time scale because they were not aware of the condition.

The court refused to accept that ignorance of the condition should be an excuse for not fulfilling it and therefore in circumstances whereby the grandchildren had not complied with the condition they would not receive their father’s entitlement.

Mr Justice Hodge said, “I should emphasise to the unsuccessful first and second defendants that the failure of their case is not simply due to a slavish adherence to nineteenth-century case-law precedents but to what I consider to be a principled application of the common-sense principles which they encapsulate”.

CLARKE V ALLEN AND SMITH [2019] EWHC 1193 AND 1194 (CH)

The High Court has given judgment in favour of the deceased’s spouse in a claims under the Inheritance (Provision for Family and Dependants) Act 1975 and for an order to rescind the transfer of the family home for mistake.

In April 2010, the deceased had transferred the family home from his sole name to himself and his two daughters as joint tenants. In July 2010 he executed a will leaving the family home to his daughters but expressing a wish that his wife should remain living there for the rest of her life. The residue of the deceased’s estate was to be split equally between his wife and daughters.

Deputy Master Linwood considered that it was “clear and obvious” form the contemporaneous documents (that were also unchallenged) that it was always the deceased’s intention that his wife be able to live in the property for the rest of her life and believed the steps he had taken (on advice) were sufficient to protect her right to occupy. The transfer of the family home was executed due to a serious mistake. As to the 1975 Act, in Deputy Master Linwood’s judgment, it was again “clear and obvious” that under the Act the deceased’s wife had a prima facie claim.

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