Probate law

Joint propertyA current 'hot' topic seems to be joint property, resulting trusts and related matters.

Such matters can be relevant, for example, where there is an argument after death as to the beneficial ownership of assets.

In the past few months we have had Aroso v Coutts, LTL 30 March 2001 and Davis v Davis, LTL 6 September 2001.

Now there is Trustee of the Estate of Lorraine Share v Lorraine Fisher (nee Share) and Others, LTL 29 Oct 2001; [2001] Gazette, 8 November, 33.The first respondent (S) was the registered owner of a flat in her sole name.

S conceded that the mortgage application form stated that she was the sole purchaser of the property, that she was providing the deposit from her own resources and that she would be solely responsible for the mortgage instalments.

She also conceded that following her bankruptcy in January 1996 she had made substantially similar representations to the trustee in bankruptcy, and in particular had advanced no case that the whole or any part of the property belonged beneficially to the second respondent ('F') whom she had subsequently married.However, she now claimed (as did F) that in 1993 they had been advised by the mortgagee that they would only be able to obtain a mortgage if S was the sole purchaser and mortgage applicant.

This was because, following the breakdown of his previous marriage, F was responsible for the mortgage on his former matrimonial home.

S and F contended they had agreed that F alone would provide the deposit of 7,000 and would pay all the mortgage instalments.

Therefore, he had paid 10,000 to S from which she had subsequently paid the deposit and certain conveyancing expenses.

He opened a new account, funded by his income alone, from which the mortgage instalments were paid.

Mr Justice Patten accepted that the evidence established that it was both the intention and agreement of F and S that the property should belong to F alone and that although the property was purchased in S's sole name, she should hold it on trust for him.

Such an agreement, where the parties had expressly agreed how they would hold the property, was generally conclusive.

Further, the fact that F had shouldered all the initial and continuing financial costs of acquiring the property was completely consistent with the agreement.

He made a declaration that F was the sole beneficial owner of the property.

Proprietary estoppelJennings v Rice WTLR 871 is a case on proprietary estoppel.

It follows the approach of the Court of Appeal in Gillett v Holt [1998] 3 All ER 917 and made an award on much the same basis as in Campbell v Griffin and West Sussex County Council, LTL June 28 2001.The applicant had worked as a carer and gardener for the deceased for many years without wages and had received promises that the deceased would provide for him on her death.

She did not and died intestate.

The claimant had expected to receive as a minimum the house and contents which would have been worth 400,000.

Judge Weeks QC held that while he was entitled to something, such an amount would be disproportionate.

He considered what the claimant could have earned and the amount he would need to buy a house and awarded 200,000.Unjust enrichmentIn Steele v Steele LTL 26 October 2001 a wife's claim for restitution based on the principle of unjust enrichment where money was paid out of joint accounts from a wife to her husband was unsuccessful.

Shortly after their marriage the wife had transferred her bank account into their joint names.

She continued to operate the account and made payments of over 50,000 on her husband's behalf (including the discharge of his liability to maintain and educate two children from a former marriage).In the absence of a contractual entitlement to recover the sums, the wife relied on the equitable principle of unjust enrichment, which has three ingredients: l One party has been enriched by receipt of a benefit; l The benefit had been gained at the other party's expense, and; l It would be unjust to allow the first party to retain the benefit.

Mr Justice Ferris rejected the wife's claim.

Both parties had paid into the joint account.

In the absence of contrary intention, the money in a joint account belonged to the husband and wife jointly.

The withdrawals would be regarded as made with the wife's consent.

In any event it was doubtful whether the husband had been enriched by the payments at all, as he had secured no permanent benefit from them and he certainly had not been enriched at her expense.

Undue influenceThe House of Lords gave judgment in Royal Bank of Scotland PLC v Etridge (No2) [2001] 3 WLR 1021 on the question of the correct procedure to be followed by banks which are seeking to take the matrimonial home as security for loans to one party.

Although primarily of importance to conveyancing practitioners and to mortgage lenders, the comments made by their Lordships on the correct approach to alleged undue influence are of relevance to probate practitioners who may have to deal with suspected cases.

According to Lord Nicholls, the general principle, even in lifetime cases, is that 'he who alleges a wrong must prove it'.

The burden of proof is on the complainant.

However, 'proof that the complainant placed trust and confidence in the other party in relation to the management of the complainant's financial affairs, coupled with a transaction which calls for explanation, will normally be sufficient, failing sufficient evidence to the contrary, to discharge the burden of proof.'Lord Nicholls, when talking about the duties of solicitors, said that a solicitor should explain the transaction to the wife at a face-to-face meeting in the absence of the husband.

This is obviously relevant to probate practitioners who may have to advise clients on the implications of proposed gifts.

On the issue of when a solicitor should refuse to act, Lord Nicholls said that in a normal case of the Etridge type, a solicitor who has fully advised a wife of the nature and consequences of a transaction is not required to refuse to act.

'A wife is not to be precluded from entering into a financially unwise transaction if, for her own reasons, she wishes to do so.' However, he also said that there may be 'exceptional circumstances where it is glaringly obvious that the wife is being grievously wronged.

In such a case the solicitor should decline to act further'.

Probate practitioners may well find themselves involved in cases where one party is being grievously wronged and should be prepared to refuse to act.

Failure to do so may well result in an action for the recovery of the costs of challenging the transaction.Confidentiality and disclosureCowell v The Law Society LTL 12 October 2001 is an unusual case involving a conflict between the solicitor's duty of confidentiality and the requirements of disclosure under the Solicitors Accounts Rules.The claimant was a solicitor who had established a secret trust on the instructions of a client.

He was instructed to keep all information concerning the trust quiet and confidential.

The Law Society's investigation accountant examined the claimant's books and wrote to the claimant asking for details of the trust.

The claimant refused to disclose any information and sought a declaration as to whether or not he had breached the Solicitors Account Rules by his refusal to comply with the requirement to produce documents relating to the accounts of the secret trust.Judge Levy QC held that a contractual duty of confidence was subject to a duty to comply with the law.

Parry-Jones v Law Society [1969] 1 Ch 1 followed.

The Solicitors Accounts Rules overrode any privilege or confidence that might subsist between a solicitor and client.

By Lesley King, College of Law, London