Survivorship clauses and commorientes

The recent case of Jump and Jones v Lister [2016] EWHC 2160 has highlighted the unexpected issues which may arise from the construction of ‘survivorship clauses’ in mirror Wills and provides the latest edition of the courts approach to dealing with construction issues and Will drafting mistakes.

Survivorship Clauses   

A survivorship clause is a clause in a Will which states that a beneficiary must survive for a given period of time for the gift to take effect.  If the beneficiary dies within the prescribed survivorship period, the gift fails and  is distributed to the testator’s other beneficiaries pursuant to the terms of the Will.

It is common to see survivorship clauses in Wills because the testator may wish to avoid assets going through probate more than once in a short period of time and also to exert a level of control over the assets so that, if the intended beneficiary dies shortly after the testator, the assets do not pass in accordance with the beneficiary’s own Will or intestacy.

In Jump v Lister, the court held that spouses making mirror Wills which included a precedent survivorship clause that did not deal with what should happen should they die at the same time were construed to pass cash and chattels to the same beneficiaries twice.

Background

On 6 October 2011, Mr John Winson and Mrs Mable Winson were both found dead at their home in circumstances in which it had not been possible to determine who died first. As a result, Mr Winson was deemed to have survived his wife on the basis that he was three years younger in accordance with the ‘commorientes rule’ set out in section 184 of the Law of Property Act 1925.

Section 184 of the Law of Property Act 1925 states:

In all cases where, after the commencement of this Act, two or more persons have died in circumstances rendering it uncertain which of them survived the other or others, such deaths shall (subject to any order of the court), for all purposes affecting the title to property, be presumed to have occurred in order of seniority, and accordingly the younger shall be deemed to have survived the elder.

The Wills

Mr and Mrs Winson made mirror Wills on 17 August 2010, which broadly left their residuary estate to each other, but if that gift failed, they each:

  1. Provided for the disposal of their personal chattels;
  2. Left pecuniary legacies totalling £214,500 to the same 13 named individuals and charities; and

 

  1. Left the residue of their estates to their two nieces (who were the claimants in this case).

Clauses 6.2 and 6.3 of Mrs Winson’s Will contained the following:

6.2       To pay the residue to my husband John Raymond Winson; but if this gift fails

6.3       To divide the residue in accordance with clauses 6 [sic – it should be 7] to 11 hereof.

Clause 10 of Mr Winson’s Will and clause 11 of Mrs Winson’s Will contained the following survivorship clause:

11.2     My estate is to be divided as if any person who dies within 28 days of my death had predeceased me.

The net value of Mrs Winson’s estate according to the grant of probate dated 26 October 2012 was £797,024 and the net value of Mr Winson’s estate according to the grant of probate dated      3 September 2013 was £967,901.

The Issue

The problem which arose in the administration of the estates is whether the survivorship clause set out in clause 11.2 of Mrs Winson’s Will applied to the gift of her residuary estate to her husband because he was deemed to have survived her.  If the survivorship clause did not apply, then Mrs Winson’s estate would pass to Mr Winson and his estate would then pass in accordance with his Will.

If the survivorship clause in Mrs Winson’s Will did apply, then the gift made to her husband would fail on the basis that he did not survive her by 28 days and, as a result, neither estate would pass to the survivor and the specific gifts and the pecuniary legacies totalling £214,500 would have to be paid out twice.

The court was therefore required to determine the true meaning and effect of the two mirror Wills.

The Parties

The claimants are the executors named under both Wills who sought an order from the court as to how they should administer the estates in accordance with their duties, not least because they could be liable as executors to pay the specific legatees in respect of both Wills if the survivorship clause in Mrs Winson’s Will is effective.  The claimants are also residuary beneficiaries under both estates.

The claimants’ interpretation of the Wills is that the survivorship clause in Mr Winson’s Will is effective which results in the pecuniary legacies being paid twice over, despite it being contrary to their financial interest as residuary beneficiaries.  Interestingly whilst the claimants considered their interpretation of the Wills as objectively correct they would have preferred the defendants’ interpretation to be correct, and that the whole issue had been created by the defendants’ poor drafting of the Wills.

The first defendant is a solicitor and the draftsman who prepared both Wills for Mr and Mrs Winson (he was also appointed a substitute executors under both Wills but had been removed by the court pursuant to his own application).

The second defendant is the solicitors’ practice which employed the first defendant.  The defendants’ position is that the pecuniary legacies should be paid only once.

A number of charities who are named in the Wills made clear to the court that they believe the claimants’ interpretation of the Wills to be the correct one and that they would not accept the defendants’ interpretation unless the court so ordered.

The Law

The court considered the approach to the interpretation of Wills as explained by Lord Phillips in Sammut v Manzi [2008] UKPC 58 (reported at [2009] 1 WLR 1834), as follows:

“4. The starting point when construing any will is to attempt to deduce the intention of the testator by giving the words of the will the meaning that they naturally bear, having regard to the contents of the will as a whole. Sometimes it is legitimate to have regard to extrinsic evidence in order to show that words used had a special meaning to the testator, but it has not been suggested that this is such a case.

  1. Extrinsic evidence of the testator’s intention may also be admissible to resolve uncertainty or ambiguity…
  2. There were placed before their Lordships no less than 17 decided cases, some of which involved decisions on wording that bore some similarity with that used in the present case. Little assistance in construing a will is likely to be gained by consideration of how other judges have interpreted similar wording in other cases. Counsel rightly recognised that the starting point must be to look at the natural meaning of the wording of the will to be construed without reference to other decisions or to prima facie principles of construction.”

The court also considered the more recent case of Marley v Rawlings [2014] UKSC 2, reported at [2015] AC 129 (in the words of Lord Neuberger):

“19. When interpreting a contract, the court is concerned to find the intention of the party or parties, and it does this by identifying the meaning of the relevant words, (a) in the light of (i) the natural and ordinary meaning of those words, (ii) the overall purpose of the document, (iii) any other provisions of the document, (iv) the facts known or assumed by the parties at the time that the document was executed, and (v) common sense, but (b) ignoring subjective evidence of any party’s intentions…

The Defendants submitted that the following recent construction claims also provide a helpful illustration as to the flexible way in which the court seeks to give effect to a testator’s intention when construing a Will:

  1. In Reading v Reading the court ultimately construed a reference to “issue of mine” as including the testator’s stepchildren despite initially observing that:

“The ordinary and natural meaning of the word ‘issue’ does not in its ordinary and natural meaning include stepchildren;”

  1. In Slattery v Jagger, the court read the words “to my wife” into a specific devise of a property from which they had accidentally been omitted by a process of construction.

  1. In Royal Society v Robinson, the court construed a reference to “the United Kingdom” as including the Channel Islands and the Isle of Man despite initially observing that: “There is no doubt that the technical meaning of ‘United Kingdom’ would not include Jersey and the Channel Islands or the Isle of Man.”

The Arguments

The Claimants

Counsel for the claimants pointed out that the wording of the survivorship clause in Mrs Winson’s Will was neither meaningless nor ambiguous and therefore the question for the court was not what the survivorship clause meant so much as whether it applied to the gift to Mr Winson.

It was submitted that the ordinary and natural meaning of the survivorship clause is that anyone who is named in the Will must survive the testator by 28 days in order take under the Will (and there is nothing in the clause that excludes the relevant spouse from the ambit of “any person”).

The claimants sought to rely on Markey v Rawlings insofar as it is a fundamental principle of will interpretation that the document is to be interpreted (amongst other things):

“…in the light of (i) the natural and ordinary meaning of those words… (iii) any other provisions of the document…”

It was the claimants’ case that the survivorship clause is straightforward and simply created an unintended effect in the particular circumstances of Mr and Mrs Winson having died more or less simultaneously.

The Defendants

The defendants’ position was that the survivorship clause contained in clause 11.2 of Mrs Winson’s will does not apply to the gift of residue she made to Mr Winson and their counsel addressed the elements Lord Neuberger adopted in Marley v Rawlings (as cited above).

The Defendants argued the natural and ordinary meaning of the relevant words in the Will resulted in the gift to Mr Winson made by clause 6.2 of Mrs Winson’s will taking effect which meant that the survivorship clause was simply not engaged at all.

As to the overall purpose of the document: the defendants argued that the overall purpose of Mrs Winson’s Will was, in the first instance, to leave her estate to Mr Winson if she died first. There is no evidence that she intended her gift to Mr Winson to be conditional on him surviving her by 28 days.  Further, the first defendant stated in his evidence that he recalls Mr Winson asking him to confirm that the pecuniary legacies would only be payable once.

In relation to any other provisions of the document: it was submitted that by reason of clause 7.2 of Mrs Winson’s Will, amongst other things, making specific gifts of two paintings to named legatees and a painting to the first defendant which were also specifically gifted by Mr Winson’s Will, the gifts are prima facie given twice if the survivorship clause is engaged.  On the other hand, it was submitted that this oddity did not arise if Mrs Winson’s Will is construed as the defendants contend because the three specific gifts only take effect out of Mr Winson’s estate.

As to the facts known or assumed by the parties at the time that the document was executed, it was submitted Mrs Winson had no reason to make the gift to her husband conditional on him surviving the 28 days because the ultimate beneficiaries after both deaths would be the same even if he survived her by fewer than 28 days.  Similarly, Mr and Mrs Winson had received correspondence from the defendants which had been based on the premise that the pecuniary legacies left to charity would be paid only once, and not once out of each estate.  Furthermore, no reference was made to the possibility of Mr or Mrs Winson failing to survive the other by 28 days in correspondence from the defendants.  It was submitted that Mrs Winson can reasonably have inferred from this that the requirement to survive by 28 days applied only to beneficiaries other than her husband.

The first defendant explained in his evidence that he recalls that when he visited Mr and Mrs Winson to assist with the execution of the Wills, Mr Winson asked him to confirm that the pecuniary legacies (which totalled £214,500) would only be paid once, on the second death; and that the first defendant confirmed that this was the case. Mrs Winson is highly likely to have been aware of this exchange given that the execution of both Wills took place at Mr and Mrs Winson’s home on the same day and both executions were supervised by the first defendant, who had travelled to Mr and Mrs Winson’s home for that purpose, and were witnessed by the same witnesses.

Finally, Counsel for defendants suggested that it seems more likely than not, as a matter of common sense, that Mrs Winson did not intend that the legacies totalling £214,500 should be paid twice, once out of each estate. Rather, her intention is more likely to have been that if she died first, her estate (save for some specific legacies) should simply pass to her husband no matter how long he survived her.

The defendants sought to rely on the authorities in Reading v Reading, Slattery v Jagger and Royal Society v Robinson as illustrations as to the flexibility of the court’s approach to issues of Will construction and submitted that the court ought not to feel that its hands are tied in giving effect to a testator’s clear intentions and that the court can go beyond the prima facie meaning of the words of the Will if the circumstances warrant this.

The Judgment

In his judgment HHJ Hodge QC found in favour of the claimants and said that the wording of clause 11.2 of Mrs Winson’s Will is clear and there is nothing in the Will to exclude Mr Winson from the ambit of the description “any person” or to restrict the application of the survivorship clause.

The Judge remarked that clause 11.2 provides clear and unambiguous language for how Mrs Winson’s estate is to be divided if any person named in the Will, including any surviving spouse, died within 28 days of the death of the testatrix.

As part of his judgment, HHJ Hodge QC indicated that if an application to rectify the Will of Mrs Winson had been made rather than (or in addition to) a construction claim, he may have been inclined to insert the words “other than my husband” in the survivorship clause so that it did not apply to Mr Winson although no rectification claim was before the court.

Costs

HHJ Hodge QC ordered that costs should follow the event and on the basis that the Defendants (who defended the claim not for the benefit of the estate but for the benefit of the solicitors) must bear the consequential costs.

As at the date of trial the claimants had threatened to bring professional negligence proceedings against the second defendant in relation to the Will drafting and other matters arising in the administration of the estates and therefore further proceedings may follow.

Comment

This case is a stark reminder to practitioners of the unforeseen and unintended consequences which can arise with standard wording in mirror Wills. It is also an important case as to the courts willingness to correct mistakes made in Wills which do not necessarily reflect the testamentary wishes of the testator.

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