Probate law

By Lesley King, College of Law, London

Proprietary estoppel

Since the Court of Appeal decision of Gillett v Holt [1998] 3 All ER 917, there have been several cases exploring the way in which the doctrine of proprietary estoppel should work in practice.

In Jennings v Rice (2002) LTL, 22 February; [2002] EWCA Civ 159 the claimant (J) had cared for his elderly employer (R) for many years and had received assurances that one day 'this will all be yours'.

R's estate was worth about 1.3m net, of which 435,000 consisted of the value of her house and its contents.

His Honour Judge Weekes QC had at first instance awarded J 200,000.

J argued that his expectation was that he would receive the whole of R's estate, or at least the house and, therefore, 200,000 was not sufficient to satisfy the equity in J's favour.

The Court of Appeal dismissed the appeal.

The trial judge had found that J had had no idea what R owned apart from the house and so could not have expected to receive anything more.

Once the elements of proprietary estoppel are established, the value of the equity to be satisfied depends upon all the circumstances, including the expectation and the detriment.

The task of the court is to do justice.

The most essential requirement is that there must be proportionality between the expectation and the detriment.

The judge had been right to look at the expectation, the detriment, the financial position of J, and the amount available to achieve a proportionate result.

Choice of law

Professor Sir Derek Harold Richard Barton, deceased sub nom Mark Niebuhr Tod v Judith Cobb Lady Barton and others (2002) LTL, 26 February

There are relatively few cases on choice of law so a new one is welcome.

In this case the deceased was domiciled in Texas and made two wills.

The first disposed of all his assets in the US to his widow 'W'.

The other was expressed to take effect in accordance with English law.

It left some minor legacies and his remaining assets to The Royal Society of Chemists subject to an annuity of 20,000 per annum to B.

The society and B entered into a deed commuting the annuity to a lump sum.

One of the executors (T) and the widow (W) opposed the commutation as being contrary to T's expressed wishes.

They contended that the will was governed by the law of the testator's domicile (Texas), and that Texas law prevented a will trust from being modified or terminated even with the consent of all the interested beneficiaries.

Mr Justice Lawrence Collins held that the declaration that the will was to take effect in accordance with English law, was an express choice of English law as governing law within article 6 of the Hague Convention on the Law Applicable to Trusts and their Recognition 1985 and the Recognition of Trusts Act 1987.

That express choice could not be impugned by reference to the testator's alleged desire that B should only receive an annuity and not a lump sum.

Even if there had been no express choice of English law, the court would have held that there was an implied choice of that law.

Inheritance claims

McNulty v McNulty (2002) LTL, 22 January

This is a useful case on Inheritance Act claims.

H and W were married for more than 37 years.

H died in 1994 when W was 70.

The executors of H's will, and the only other persons interested in his estate, were the two children of the marriage, both of whom were self-supporting adults.

H left his share in a partnership business to his children in equal shares, subject to a small annuity to W for life or until remarriage; and the residue to W absolutely.

The matrimonial home worth 120,000 and contents worth 5,000 passed to W by survivorship.

The residuary estate was worth about 56,000 net.

After H's death, the children stopped paying the annuity to W and became estranged from W (although they resumed payments before the hearing of W's Inheritance Act claim).

The partnership premises, which had been valued at a low figure for probate purposes, were sold to a building developer for 1.6m.

W did not bring her claim until nearly four years after the expiry of the six-month time limit and so she needed leave of the court to apply out of time.

The court held that it was appropriate to consider the merits of W's substantive application, since they would influence the decision whether to grant leave.

W's monthly expenditure was about 858, while her gross monthly income including her state pension was 1,150.

He found that the will did not provide reasonable income particularly as there was no provision for any increase in the amount of the annuity.

The capital provision might have been reasonable at H's death but section 3(5) of the Act required the court to consider the facts at the date of the hearing.

W should share in the increased value of the partnership business and, given the continuing estrangement between W and her children, a clean break would be preferable.

The court awarded W a lump sum of 175,000, which, when added to the other capital available to W, would provide her with a reasonable income.

The fact that the estate had not yet been distributed influenced the court in allowing W leave to apply.

Testamentary capacity

Brown v J Mott & Others (2002) LTL, 20 February

This refers to a short Lawtel report of a case involving lack of testamentary capacity.

The testator's will was not irrational but there was evidence of a real mental decline around the time that the will was executed.

The person propounding the will was not able to satisfy the court that the testator had the necessary testamentary capacity.

Arguments as to testamentary capacity seem to be increasing all the time.

Though turning on its own facts, the Court of Appeal decision in Lumley v Riddell Robinson (2002) LTL, 25 January is worth a look for lawyers with cases involving liability for joint mortgage repayments as between estate and surviving co-owner.