Probate Mutual Wills and Costs 12th March 2012 The Royal College of Surgeons 35-43 Lincolns Inn

Fields London WC2A 3PE

CPD Provider Ref COL/FSTB, 1.5 hours

5.00pm 5.30pm

Registration and tea Chairs Introduction Mark Keenan

5.35pm

Challenges to Wills: an Update Penelope Reed QC

6.00pm

Costs and Contentious Probate Claims Tracey Angus

6.25pm

Mutual Wills Mark Blackett-Ord

6.50pm

Questions

These notes are intended as an aid to stimulate debate: delegates must take expert advice before taking or refraining from any action on the basis of these notes and the speaker can accept no responsibility or liability for any action or omission taken by delegates based on the information in these notes or the lectures. 2

Mark Keenan is a partner at Mishcon de Reya, specialising in trust and estate litigation with significant experience in advising charities, private individuals and trustees on will disputes, Inheritance Act 1975 claims, estate administration issues, breach of trust, proprietary estoppel claims and Court of Protection matters. Mark is recommended in both Chambers UK and by Legal 500. Penelope Reed QC has a wide Chancery practice with a special emphasis on trusts, wills, contentious probate, family provision claims and tax, with a growing offshore practice. She is recommended for her trusts, estates and personal tax work, and for her work in the Court of Protection in the current editions of The Legal 500, Chambers UK, and Legal Experts. Tracey Anguss practice focuses on trusts, probate, family provision, Court of Protection and professional negligence with a particular emphasis on contentious matters. In addition to representing individuals, trust companies and charities, Tracey is regularly instructed by the Official Solicitor and has also advised in relation to matrimonial finance disputes involving trusts. Tracey has represented clients both in England and Wales and overseas and is recommended in both Chambers UK and Legal 500. She was appointed Queens Counsel in March 2012. Mark Blackett-Ord is an advisor, arbitrator and advocate experienced in trusts, partnership, professional negligence, ecclesiastical law and general Chancery litigation. He is a leading authority on the law of partnership including venture capital funds and other limited partnerships and LLPs. He advises on trusts including family provision and proprietary estoppel and acts in cases of professional negligence and is recommended in both Chambers UK and Legal 500.

CHALLENGES TO WILLS: AN UPDATE Penelope Reed QC Introduction 1. It is impossible not to notice that the law reports remain full of contentious probate cases. With an ageing population and dementia sufferers likely to increase, these disputes are likely to proliferate. 2. I propose to look at the main challenges to wills through the medium of some recently decided cases. 3. The main ways in which wills can be attacked are: (1) (2) (3) (4) (5) (1) 4. lack of due execution lack of testamentary capacity want of knowledge and approval; undue influence forgery

Lack of due execution Section 9 of the Wills Act 1837 provides in respect of deaths after January 1983:4

No will shall be valid unless (a) it is in writing, and signed by the testator, or by some other person in his presence and by his direction; and (b) it appears that the testator intended by his signature to give effect to the will; and (c) the signature is made or acknowledged by the testator in the presence of two or more witnesses present at the same time; and (d) each witness either (i) (ii) attests and signs the will; or acknowledges his signature,

in the presence of the testator (but not necessarily in the presence of any other witness), but no form of attestation shall be necessary. 5. The will may be written on any material (a wall and an eggshell have sufficed1 and can be printed, lithographed or typed as well as holograph2. it must appear that the testator intended by his signature to give effect to the will. Therefore a signature that was a signature to an earlier will or different document will not
1 2

Re Slavisnkys Estate (1989) 53 SASR 221; Re Barnes (1926) 43 TLR 71 see Interpretation Act 1976, Schedule 1 as to what is meant by writing

suffice3 but a testator who writes his name (not his normal signature) before writing out the dispositive parts of the will has been held to be signing the will4. As to the form of the signature, a mark may suffice, as may an unfinished signature, or initials if it appears that that testator intended to sign. A recent case confirmed that an attesting witness could sign a will on behalf of a testator and at his direction5. 6. What is meant by at his direction was the subject of the extraordinary litigation in Barrett v Bem6. A testator made a home-made will on his deathbed in the presence of his sister and her daughter. The will was challenged as not having been duly executed and Mr Geoffrey Vos sitting as a deputy Judge found that the signature on the will had not been written by the deceased. After judgment new evidence emerged from one of the attesting witnesses who was not available to give evidence during the trial. She said either the deceaseds sister or niece steadied his hand so that he could sign. There was an appeal based on this new evidence and the Court of Appeal remitted the matter back for a further trial. 7. Trial 2 took place before Vos J (as he now was) and the niece changed her evidence to the effect that her mother had steadied the deceaseds hand so that he could sign. The mother was incidentally herself dead by the time of both trials and was the major beneficiary of her brothers will. On this occasion Vos J held that the sister had signed at the testators direction and upheld the
3

see Re White (deceased), Barker v Gribble and another [1991] Ch 1, [1990] 3 All ER 1 see: Wood v Smith [1993] Ch 90, [1992] 3 All ER 556 5 Re Marsden (unreported) 6th January 2006 6 [2012]EWCA Civ 52
4

will. Once again the case went to the Court of Appeal and the appeal was allowed. The court held that as nothing had been said by the deceased, his mere acquiescence in the process was not a direction within section 9. 8. Most problems seem to arise in respect of attestation of the signature of the testator which must be made or acknowledged in the presence of two witnesses and it is crucial that the witnesses see or have the opportunity to see the signature7 . The production of a signed will by the testator or someone on his behalf and a request to the witnesses to attest it may amount to an acknowledgement8 . The rules as to attestation are different for deaths before 1 January 1983 but the main change which has been made is that witnesses can now acknowledge their own signatures. The witnesses must both be present when the testator signs but not necessarily when they sign. However, the testator must be present when they sign or acknowledge their signatures. This has been construed as meaning that he must be able to see them sign if he wishes to9. While there is no form of attestation clause specified, a standard form should always be used to avoid any difficulties in applying for a grant of probate if it is not clear section 9 has been complied with. 9. A number of relatively recent cases have emphasised that when a will contains the signatures of the deceased and the witness and an attestation clause the presumption of due execution would prevail unless there was the strongest

7 8

Couser v Couser [1996] 3 All ER 256 see, Inglesant v Inglesant (1874) LR 3 P & D 172 9 see, for example, Todd v Earl of Winchelsea (1826) 2 C & P 488

evidence that the witness did not intend to attest that he saw the deceased sign.10. 10. However, these cases should not be seen as an indication that a plea of lack of due execution will never succeed. The question is whether the evidence is strong enough to rebut what is a clear presumption. In Ahluwalia v Singh11 it was contended by one of the witnesses that the other witness had not been present at the time that the will was signed. would have recalled him coming to his house. (2) 11. Testamentary Capacity Capacity may be lacking because of mental illness, or because the testator is under the influence of alcohol or drugs. Sometimes the issue arises where the testator is mortally ill when making the will and heavily dosed with painkillers such as morphine12. The test of capacity which is most often applied in practice is that set out eloquently by Cockburn CJ in Banks v Goodfellow13. Essentially to satisfy the test of capacity the testator: (a) Needs to have capacity to understand that he is making a will, and that it will have the effect of carrying out his wishes on death; The other witness wore a traditional Sikh turban and the Judge found that Mr Grantham the witness

Sherrington v Sherrington [2005] WTLR 587; Channon v Perkins [2006]WTLR [2012] WTLR 1 12 There have been some interesting recent cases in this area Adam deceased (2005) unreported except on Lawtel, Multiple sclerosis had prevented the testator making rational decisions; McClintock Deceased (unreported except on Lawtel 26/4/05) cognitive impairment was not enough to deprive the testator of capacity. 13 (1870) LR 5 QB 549 at 565
11

10

(b)

He must be able to understand the extent of the property he is disposing of;

(c)

He must recall those who have claims on him and understand the nature of those claims14 so that he can both include and exclude beneficiaries from the will;

(d)

No disorder of the mind should poison his affections, pervert his sense of right or prevent the exercise of his natural faculties and no insane delusions should influence his will or poison his mind.

The Court of Appeal recently stated that this was the appropriate test still and could not be better set out15. 12. One factor which must never be forgotten is the fact that the court is looking for capacity to understand the above matters, not proof of actual understanding16. The relevant time for assessing the capacity of the testator is at the date when the will is executed17. The exception to this general principle is where the testator has testamentary capacity at the time when he gives instructions for the preparation of the will to the will draftsman and the will is prepared in accordance with those instructions and the testator when he executes the will is capable of understanding that he is executing a will for which he has given instructions18. This exception was confirmed as being good
14 15

Boughton v Knight (1873) 3 P & D 64 Sharp v Adams [2006] WTLR 1059 para 82 16 Hoff v Atherton [2005] WTLR 99 17 Banks v Goodfellow (supra) 18 Parker v Felgate (1883) 8 P.D. 171; Clancy v Clancy [2003] WTLR

law by the Court of Appeal in Perrins v Holland19 which was an extraordinary case where there was a delay of 18 months between the giving of instructions and the execution of the will. Clearly, if reliance is to be placed on this exception, then it is important that the solicitor makes sure that the testator really does have testamentary capacity when instructions are provided. It has been pointed out that in cases where instructions are given to the solicitor through a lay intermediary, it is not safe to rely on this principle20: 13. It is an interesting question as to whether the new statutory test for capacity introduced by the Mental Capacity Act 2005 has affected the test for testamentary capacity. The test is as set out in section 2 of the Act: For the purposes of this Act, a person lacks capacity in relation to a matter if at the material time he is unable to make a decision for himself in relation to the matter because of an impairment of, or a disturbance in the functioning of, the mind or brain However in section 1 it is stated that: A person is not to be treated as unable to make a decision unless all practicable steps to help him to do so have been taken without success. The statutory test will henceforth have to apply but it will not differ from the Banks v Goodfellow test apart from the fact that in assessing whether a testator
19 20

[2011] Ch. 270 Battan Singh v Armichand [1948] AC 161, 168-169

10

lacked capacity the issue of whether all practicable steps have been taken to help him make a will will have to be taken into account. 14. The importance of keeping a clear and full attendance note cannot be stressed too much in this context. The will draftsman should have in mind that in any contentious probate claim each party is entitled to ask him to provide a statement21. The impressions of the solicitor who attended the testator on the taking of instructions for the preparation of the will, and on the execution of the will, are of vital importance in contentious probate proceedings where capacity is in issue. 15. There has been a considerable amount of judicial assistance on the way in which practitioners should approach the question of capacity, but the decision of Templeman J (as he was then) in Re Simpson22sets out what has become known as the golden rule: In the case of an aged testator or a testator who has suffered a serious illness, there is one golden rule which should always be observed, however straightforward matters may appear and however difficult or tactless it may be to suggest that precautions be taken: the making of a will by such a testator ought to be witnessed or approved by a medical practitioner who satisfied himself of the capacity and understanding of the testator, and records and preserves his examination and finding.

21 22

Larke v Nugus [2000] WTLR 1033 (1977) 121 Sol Jo 224, better recorded at (1977) 127 NLJ 487

11

There are other precautions which should be taken. If the testator has made an earlier will this should be considered by the legal and medical advisers of the testator, and if appropriate, discussed with the testator. The instructions of the testator should be taken in the absence of anyone who may stand to benefit, or who may have influence over the testator. These are not counsels of perfection. If proper precautions are not taken injustice may result or be imagined and great expense and misery may be unnecessarily caused. 16. In Key v Key23 the failure of a solicitor to observe the rule when taking instructions from an elderly and frail testator who had recently lost his wife was the subject of trenchant criticism by the court. That case raised an interesting issue with regard to capacity in that the effect of the testators recent bereavement was taken into account. 17. The case also highlights use of expert evidence in that the evidence of the doctor who had had the advantage of examining the testator when he was alive was preferred to the august evidence of Professor Jacoby. The issue of capacity is of course not one on which expert evidence will be determinative and the experts themselves fully appreciate that. It is a combination of anecdotal evidence, the evidence of the solicitor who took instructions for the will and the expert evidence assisting the court in assessing the mental state of the deceased24.

23 24

[2010] 1 WLR 2020 See Burgess v Burgess 12/12/11 reported on Lawtel

12

18.

The recent case of Cowderay v Cranfield perhaps illustrates the difficulties the court has in assessing capacity retrospectively. While there was some evidence of confusion on the part of the testatrix the court held that when she gave instructions for the will, she was having a good day.

19.

In essence a court assessing testamentary capacity has to do the best it can in difficult circumstances and such cases are inevitably highly fact sensitive.

(3) 20.

Want of knowledge and approval In the ordinary probate case if the propounder of the will establishes testamentary capacity and the due execution of the will, knowledge and approval will be inferred. However, in a case where the circumstances are such as to arouse the suspicion of the court the propounder must prove affirmatively knowledge and approval on the part of the testator so as to satisfy the court that the will represents the wishes of the deceased. All the relevant circumstances will be scrutinised by the court which will be vigilant and jealous in examining the evidence in support of the will25 but the suspicious circumstances have to relate to the preparation and execution of the will26. In Barry v Butlin it was said:The rules of law according to which cases of this nature are to be decided, do not admit of any dispute, so far as they are necessary to the

25 26

Barry v Butlin (1838) 11 Moo PC 480 at p. 483 per Parke B. Re Morgan, Griffin v Wood unreported, decision of Mark Herbert QC sitting as a deputy judge of the Chancery Division on 13/9/2007

13

determination of the present Appeal: and they have been acquiesced in on both sides. These rules are two; the first that the onus probandi lies in every case upon the party propounding a Will; and he must satisfy the conscience of the court that the instrument so propounded is the last Will of a free and capable Testator. The second is, that if a party writes or prepares a Will, under which he takes a benefit, that is a circumstance that ought generally to excite the suspicion of the court, and calls upon it to be vigilant and jealous in examining the evidence in support of the instrument, in favour of which it ought not to pronounce unless the suspicion is removed, and it is judicially satisfied that the paper propounded does express the true Will of the deceased. 21. However, succeeding on this ground is extremely difficult and the circumstances can be very suspicious but the court will not reject the will. A rare example of a successful challenge on this ground was Franks v Sinclair27 where the involvement of the testatrixs solicitor son in preparing his mothers will partially in his favour and which marked an unexplained change in testamentary direction was considered so suspicious that the will was not admitted to probate. 22. There has been something of a change of emphasis in how this challenge is run as a result of the decision of the Court of Appeal in Gill v Woodall and the RSPCA28. That case involved a surprising will executed by Mrs Gill in favour of the RSPCA. Evidence was called that she was agoraphobic and suffered
27 28

[2007] WTLR 785 [2011] Ch 380

14

severe anxiety disorder. The Judge at first instance had found against the will on the grounds of undue influence but the Court of Appeal held that Mrs Gill had not known and approved the contents. Neuberger MR stated that knowing and approving of the contents of one's will was traditional language for saying that the will "represented [one's] testamentary intentions". He also found that the traditional two-stage approach to want of knowledge and approval was not correct. He said:Where a judge has heard evidence of fact and expert opinion over a period of many days relating to the character and state of mind and likely desires of the testatrix and the circumstances in which the will was drafted and executed, and other relevant matters, the value of such a two-stage approach to deciding the issue of the testatrixs knowledge and approval appears to me to be questionable. In my view, the approach which it would, at least generally, be better to adopt is that summarised by Sachs J in In re Crerar (unreported) but see (1956) 106 LJ 694, 695, cited and followed by Latey J in In re Morris, decd [1971] P 62, 78, namely that the court should consider all the relevant evidence available and then, drawing such inferences as it can from the totality of that material, it has to come to a conclusion whether or not those propounding the will have discharged the burden of establishing that the testatrix knew and approved the contents of the document which is put forward as a valid testamentary disposition. The fact that the testatrix read the document, and the fact that she executed it, must be given the

15

full weight apposite in the circumstances, but in law those facts are not conclusive, nor do they raise a presumption. 23. This approach was applied by Norris J in Wharton v Bancroft29 where a testator made a deathbed will in favour of his partner of 32 years excluding his daughters. The will was made in contemplation of his marriage to his partner which took place shortly after the will was executed. Norris J observed that the Court of Appeal in Gill v Woodall had stated that as a matter of common sense and authority, the fact that a will has been properly executed, after being prepared by a solicitor and read over to the testator, raises a very strong presumption that it represents the testators intentions at the relevant time but proof of the reading over of a will does not necessarily establish knowledge and approval. Whether more is required in a particular case depends upon the circumstances in which the vigilance of the court is aroused and the terms (including the complexity) of the will itself. He did not find anything in the will making process in that case to invalidate the will. 24. The Gill approach was adopted by the Judge in the case of Burgess where a daughter had been instrumental in getting her mother (who was found in any event to lack capacity) to make a will excluding her brother with whom she had fallen out. The terms of the will made no sense in the factual context and contained a clause which stated the reason for excluding the brother was that lifetime provision had been made for him, which was simply not true. The solicitor had not sent a copy of the draft will to Mrs Burgess but had read it
29

[2012] EWHC 91 (Ch)

16

over to her before she executed it, and it was only afterwards that her daughter had spotted a mistake in it. 25. While the Court of Appeal in Gill made it clear the facts of the case were exceptional, one is left with a feeling that the different approach will make it easier in the right cases to plead want of knowledge and approval successfully. (4) 26. Undue influence The Court of Appeal did not need to go on in Gill to discuss whether it would also have set aside the will on the grounds of undue influence. While the law of late has seemed to make it easier to set aside lifetime gifts, it is still as hard as ever to set aside a will on the basis that it was procured by undue influence. There is no presumption of undue influence in relation to wills as Proudman J pointed out in Hubbard v Scott30. That case concerned a will made in favour of a carer, Mrs Kruk, by an elderly gentleman who seems to have been rather besotted by her. The evidence to support a plea of undue influence appeared to be almost non-existent. A case of undue influence also failed in Wharton v Bancroft31. 27. As was made clear in those cases, a contention of undue influence will only succeed if it can be shown that the mind of the testator has been so dominated that the will is not his own will at all but that of the person influencing him32. The major difficulty in establishing undue influence in respect of a will, is that

30 31

[2011] EWHC 2750 [2012] EWHC 91 (Ch); 32 Hall v Hall (1868) LR 1 P & D 481

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the influencing tends to take place behind closed doors and there has to be direct evidence of it. 28. The plea did however succeed in Re Edwards33 where Lewison J said: The burden of proving it lies on the person who asserts it. It is not enough to prove that the facts are consistent with the hypothesis of undue influence. What must be shown is that the facts are inconsistent with any other hypothesis. In the modern law this is, perhaps no more than a reminder of the high burden, even on the civil standard, that a claimant bears in proving undue influence as vitiating a testamentary disposition; There is therefore a very high hurdle to surmount. The facts of Edwards were extreme with a mother cutting out a much loved and helpful son to benefit her alcoholic son. (5) 29. Forgery Forgery of a will or the testators signature on it has to be proved on a balance of probabilities. However, it is a heavy burden to discharge because it is so serious an allegation to make34. Much will depend on the handwriting expert evidence and sometimes that can prove inconclusive.

[2007] EWHC 1119 (Ch) See the discussion of burden of proof in Re H (minors) (Sexual Abuse : Standard of proof) (1996) AC 563 applied in this context in Re Rowinska
34

33

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30.

Supple v Pender35 provides a very interesting illustration of a forged will case. The Judge rightly looked at all the evidence before taking into account the expert handwriting evidence which fortified the view he had already reached that the will was a forgery. His decision was greatly influenced by the fact that he found the major beneficiary of the disputed will (the testators daughter) to be a highly unreliable witness and he found the attesting witness who attended to give evidence unreliable. He therefore rejected probate for the will but interestingly he did not make findings as to how the alleged will came into existence which is somewhat unsatisfactory.

31.

In Re Gale36 a codicil was found as a result of forensic examination to have been backdated to a date on which the testatrix was likely to have had capacity. The expert evidence there proved conclusive. On the other hand in Salmon v Williams-Reid37 the fact that there was only inconclusive evidence from the joint expert and no supporting evidence was not enough.

Penelope Reed QC, 5 Stone Buildings, Lincoln's Inn

35 36

[2007] EWHC 829 [2010] EWHC 1575 (Ch) 37 [2010] EWHC 1315

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COSTS AND CONTENTIOUS PROBATE CLAIMS Tracey Angus 1. The general rule that costs follow the event which is set out in Part 44.3(2)(a) of the Civil Procedure Rules 1998 applies to contentious probate claims. However, in probate claims there are two well-established exceptions to this rule. 2. These exceptions were articulated by Sir Gorell Barnes P in Spiers v English1 as follows: In deciding questions of costs one has to go back to the principles which govern cases of this kind. One of those principles is that if a person who makes a will or persons who are interested in the residue have been really the cause of the litigation a case is made out for costs to come out of the estate. Another principle is that, if the circumstances lead reasonably to an investigation of the matter, then the costs may be left to be borne by those who have incurred them. If it were not for the application of those principles, which, if not exhaustive, are the two great principles upon which the court acts, costs would now, according to the rule, follow the event as a matter of course. Those principles allow good cause to be shown why costs should not follow the event. Therefore, in each case where an application is made, the court has to

[1907] P 122 at 123

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consider whether the facts warrant either of those principles being brought into operation. 3. More recently, the exceptions and the policy considerations which underlie them were considered in detail by Mr Justice Henderson in his costs judgment in Kostic v Chaplin and others2. Henderson J noted that the two rules were designed to strike a balance between two principles of high public importance, the first being that parties should not be tempted into a fruitless litigation by the knowledge that their costs will be defrayed by others, and the other being that doubtful wills should not pass easily into proof by reason of the cost of opposing them. Prior to the costs decision in Kostic, there had been some debate as to whether the exceptions had survived the introduction of CPR 1998. However, as Henderson J pointed out, the considerations of policy and fairness which underlie these two exceptions remain as valid today as they were prior to the introduction of the CPR and they will assist the court when deciding whether to depart from the general rule in CPR 44.3(2)(a) and make a different order under CPR 44.3(2)(b). 4. It is important to note that it is always for the unsuccessful party to show cause why the general rule should not apply. Without a positive case that the exception should apply in favour of the losing party, costs should follow the event. Moreover, the policy consideration that litigation should be a last resort
2

[2007] EWHC 2909

21

is likely to mean the court will lean in favour of applying the general rule. As Henderson J noted: the trend of the more recent authorities has been to encourage a very careful scrutiny of any case in which the first exception is said to apply, and to narrow rather than extend the circumstances in which it will be held to be engaged. There are at least two factors which have in my judgment contributed to this change of emphasis. First, less importance is attached today than it was in Victorian times to the independent duty of the court to investigate the circumstances in which a will was executed and to satisfy itself as to its validity. Secondly, the courts are increasingly alert to the dangers of encouraging litigation, and discouraging settlement of doubtful claims at an early stage, if costs are allowed out of the estate to the unsuccessful party. 5. The exceptions are (or, in my view should be) limited to contentious probate claims in the narrow sense: that is claims within the definition of probate claims in CPR 57.1(2)(a). These are claims for (i) the grant of probate or a will or letters of administration of an estate; (ii) the revocation of such a grant and (iii) a decree pronouncing for or against the validity of an alleged will. The origin of the exceptions is the probate courts inquisitorial jurisdiction in relation to wills. For this reason, they do not apply to claims where the Chancery Division is asked to enforce the law of trusts, such as a claim concerning alleged mutual wills.3 By the same token, they should not, in my
3

See Shovelar and others v Lane and others [2011] EWCA Civ 802, para 44

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view, apply to claims where relief is sought on the basis of an alleged testamentary estoppel4. However, the first exception has been applied by analogy to a testamentary estoppel case. In Re Basham5 the deputy judge (albeit, it seems, without hearing argument on the particular point) ordered that the unsuccessful defendants costs be paid from the estate. 6. However, if the claim is a probate claim in the narrow sense, it appears that both exceptions are capable of applying regardless of the grounds put forward to challenge a will. Thus the first exception could, in theory at least, apply so as to give a party making an unsuccessful claim of undue influence his costs from the estate6. testator. 7. It is also clear that the exceptions are highly fact sensitive. As Henderson J put it: the two great principles upon which the court acts are neither exhaustive nor rigidly prescriptive. They are guidelines, not straitjackets, and their application will depend on the facts of the particular case However, in practice, it is difficult to conceive of facts where a challenge based on undue influence could be said to have been caused by the

4 5

The court did not accept the RSPCAs submission that they should apply the costs of the estoppel issues in Gill (above) [1986] 1 WLR 1498 6 See Gill (above)

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This means that other factual matters which the court is used to taking into account in relation to costs including the parties conduct before and during the litigation (including its willingness to consider ADR), whether there are issues upon which the successful party has failed and any offers to settle can and often will cause the court to disapply the exceptions, at least for part of the period of the litigation. ADR 8. It might be thought that the all or nothing nature of probate claims would make them especially difficult to resolve at mediation. evidence suggests otherwise. However anecdotal Mediation is not only a quicker and cheaper

method of resolving a dispute over an estate but it offers a potential means of re-distributing the estate in a way which all the (living) interested parties regard as fair. Moreover, the origin of what has ended up as a probate claim is often to be found in ancient family history and the real grievances which the parties harbour against each other will often have little to do with the matters which the court is being asked to determine in the probate claim. In my experience, mediation can be particularly successful at addressing the underlying concerns of the parties. 9. Along with these carrots to encourage parties to mediate, comes a stick used to beat those who do not. The parties respective willingness to mediate is now highly relevant, as it is in other civil claims, to the question of who should pay the costs of probate litigation and/or on what basis those costs should be paid.

24

10.

In Shah and Anor v Joshi7 the court awarded indemnity costs against an unsuccessful defendant in relation to part of the trial as a result of its finding that she had scuppered any hope of mediation before [the] proceedings had even started. He did so even though the parties did, some two years later after it was first proposed by the claimant, participate in a mediation which failed to result in a settlement. The deputy judge observed that, in modern times, the court The court does not have to reach any expects the parties to participate in mediation which was described as a well established and well proven process. conclusion as to whether ADR would have succeeded before reflecting its disapproval of a particular partys unwillingness to take part in ADR by making an adverse costs order against that party or ordering that party to pay indemnity costs (although the chances that it would have succeeded will have some relevance to the precise form of adverse costs order it makes).

11.

In the Gill case, the RSPCAs failure to mediate was a significant factor in the courts decision to order the RSPCA to pay the majority of Dr Gills costs of the litigation on an indemnity basis. The deputy judge said this: Prior to and certainly since the introduction of the Civil Procedure reforms, consequent upon Lord Woolfs recommendations, the Court has expected and has sought to encourage parties to adopt ADR in an attempt to avoid lengthy and costly investigations before the Court the procedure of which is adversarial and formal in nature. It is quite apparent that the [RSPCA] was unwilling to adopt the ADR procedure

[2008] EWHC 1766

25

proposed by the Claimant and, in January 2008, was even unwilling to agree a direction for the parties to consider whether the case was capable of resolution by ADR. The attitude and stance adopted by the [RSPCA] are inconsistent with the Courts expectation of a willingness to participate in a well established procedure which is proven to result in improved quality of settlements and an increased incidence of settlements. The Claimant demonstrated a willingness to have recourse to mediation in an attempt to resolve the dispute between the parties and she persevered in her attempts to persuade the [RSPCA] to adopt such a course but despite those attempts the [RSPCA] displayed an attitude thereto which was somewhat unreasonable, out of step with the expectation of the Court and the underlying spirit of the modern procedure thereof. In my judgment the [RSPCA]s conduct and attitude in relation to the repeated proposals of the Claimant to adopt ADR is, in the circumstances of this case, sufficient by itself to take the case out of the norm but the appropriateness of indemnity costs in relation to the claim based upon proprietary estoppel is strengthened by the various offers of settlement made by the Claimant which were rejected by the [RSPCA], which offers, if accepted by the [RSPCA], would have resulted in lesser benefit to the Claimant then she has obtained in consequence of the Judgment of this Court secured by her.

26

12.

Shah and Gill are both cases where a challenge to the validity of the last purported will of the deceased failed. In both cases the unsuccessful partys failure to show a willingness to mediate meant it or she was deprived of the benefit of the probate exceptions and ordered to pay part of the successful partys costs on an indemnity basis. In a case where it is the successful party who has refused to participate in ADR, it is only to be expected that the court will be more willing to find one or both of the probate exceptions apply so as to deprive the successful party of the benefit of some or all of his costs.

CPR 36 13 It is clear that probate claims are within the ambit of CPR 36. However, it is sometimes difficult in practice to work out precisely how the provisions of Part 36 will impact on the costs order made by the judge following the trial of a probate claim. 14 One difficulty arises from the question of who is the claimant and who is the defendant for the purposes of CPR 36.14 in situations where Part 36 offers are exchanged prior to the commencement of litigation. Often the party mounting a challenge to the validity of the testators purported last will will behave like a claimant in the correspondence leading up to the probate claim but will end up as the defendant simply because the party who issues the claim form is the person who needs to remove a caveat.

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15

It is also unclear to what extent the court will take into account the fact that a party has succeeded in establishing the particular will for which he contends even if he has obtained no pecuniary advantage, or no definite pecuniary advantage, for himself by so doing when it comes to decide whether or not the judgment is more advantageous or at least as advantageous as any offer of settlement made for the purposes of CPR 36.14.

16

It is also unclear to what extent the second costs exception is capable of overriding the provisions of CPR 36.14(2). The court, when considering whether it would be unjust to make an order in accordance with CPR 36.14(2) is directed to consider, inter alia, the information available to the parties when at the time when the Part 36 offer was made. Although in Kostic Henderson J referred to a trend of narrowing the scope of the first exception, he did not make any similar observation in relation to the second exception. In Perrins v Holland8 Mr Justice Lewison noted that this was the case and expressed the view that: There is, I think, still a public interest that where reasonable suspicions are raised about the validity of wills they should be proved in solemn form. If, at the date a Part 36 offer was made, there are circumstances which reasonably called for an inquiry, is the public policy consideration that doubtful wills should not be admitted to proof simply by reason of the costs of

[2009] EWHC 2558 at para 17 (upheld on appeal)

28

opposing that will of itself sufficiently strong to make it unjust to make an order under CPR 36.14(2)? 17 The costs order which Lewison Js ultimately made in Perrins (which was upheld on appeal) would suggest not. Having held in that case that the second exception applied and all other things being equal he would have allowed costs to fall where they lay, he went on to order the losing party to pay costs on the sole ground that he had rejected a Calderbank offer which would have given him something from the estate. If Lewison Js approach is correct, it indicates that the fact that one or other of the probate exceptions would otherwise apply to assist the unsuccessful party could never be sufficient, of itself, to make it unjust to apply the full rigour of CPR 36.14(2). 18 Probate claims are notoriously expensive to litigate, their outcome is notoriously difficult to predict and, judging by the reported cases, a significant number of them end up before the Court of Appeal. In addition, there is a further layer of uncertainty as to whether the successful party will be able to recover his costs from the losing party. All of this means the case for making a Part 36 offer and/or a proposal of mediation as soon as possible in such claims an irresistible one. Tracey Angus 5 Stone Buildings, Lincoln's Inn
Tracey Angus 2012

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MUTUAL WILLS Mark Blackett-Ord 1. This talk concerns the equitable doctrine which is called (slightly misleadingly) the doctrine of mutual wills. 2. The doctrine evolved to meet the mischief which arose in such circumstances as this. 3. Imagine a couple who married late in life. Each has two children. Each has their own substantial assets. They agree that whoever dies first will leave all of his or her estate to the other for life. Then the joint property is to be divided between their four children equally. The wife dies, and her will conforms to the agreement. But the husband, having inherited his wifes estate, makes a new will leaving all his property to his own children alone, excluding hers. 4. In such circumstances a court of equity will require the husbands estate to be divided as if his will had in fact provided for all four of the children in accordance with the agreement. This is the doctrine of mutual wills. 5. Before examining this doctrine in more detail, I must say something about the essential qualities of wills. I can do no better than by quoting from Megarry & Wade9:

The Law of Real Property 6th Ed

30

A will is an instrument that both contains and is made with the intention that it should be a revocable ambulatory disposition of the makers property which is to take effect on death.10 6. Four matters will be recalled: (a) Certain formalities have always been required in the making of the will. The current requirements are set out in the Wills Act 1837 as amended.11 (b) A will speaks from death unless a contrary intention is apparent from the will. Section 24 of the Wills Act 1837 provides that the will shall speak and take effect as if it had been executed immediately before the death of the testator. (c) (d) A will is revocable, even if it states the contrary: Vyniors Case12. A will is ambulatory, which means that it is not binding until death. To quote Megarry again: Until the death of the testator a will has no effect at all, but operates as a mere declaration of his intention, which may be changed from time to time.13
10 11

Re Berger (1990)Ch 118 at 129, 132, Court of Appeal quoted Jarman on Wills The Act so disgusted Lord Eldon, that he made his dispositions under the old law, shortly before the new Act came into effect. 12 (1609) 8 Co Rep 81 13 Megarry & Wade Law of Real Property 6th Ed, para.11-010

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7.

We therefore start from the position that if a person makes a will in a certain way, but then makes the will in another way, his will is valid, even if he is in breach of contract for having done what he did.

8.

On the other hand, if a contract is made, such as if you give me your car I will leave you 10,000, and no will is made, then there has been a breach of contract which can result in an award of damages against the testators estate.

9.

We are therefore in uncertain waters where contractual obligations may be inconsistent with the rights of testamentary freedom in a testator.

10.

The example that I gave above was of an instance in which a man and a wife have made wills in identical terms, effectively for the benefit of the survivor and then for third parties. The identical nature of wills has resulted in the phrase mutual wills describing the equitable doctrine which applies. But it is of course the contractual arrangement which is crucial. Sometimes the agreement will merely be that an existing will should stand irrevocable. If such is the agreement, then the equitable doctrine will be enforced according to its terms.

11.

In the old case of Dufour v Pereira14 a husband and wife made dispositions which pooled their property into one common fund and left it to the survivor, with limitations over. The wife survived, and took the property, but made a new

14

1769 1 Dick 419

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will which disregarded the previous trusts. The beneficiaries under the original arrangement sued. Lord Camden, after delivering an energetic and eloquent judgment ordered that the surviving wife had bound herself to make good all the bequests in the original arrangement. He said, The instrument itself is the evidence of the agreement ... and he, that died first, does by his death carry the agreement on his part into execution. If she refuses, she is guilty of a fraud, can never unbind herself, and becomes a trustee of course. 12. In Stone v Hoskins15 the headnote, which is accurate, states, Where two persons have made an arrangement as to the disposal of their property and executed mutual wills in pursuance of that arrangement, the one of them who predeceases the other dies with the implied promise of the survivor that the arrangement shall hold good; and if the survivor, after taking a benefit under the arrangement, alters his will, his personal representative takes the property upon trust to perform the contract, for the will of the one who has died first has, by his death, become irrevocable. 13. I was personally involved in one of these cases which was called Olins v Walters16, and came before Norris J (formerly of these Chambers) into 2007. The case was unusual, because my client was a solicitor who was suing his own
15 16

[1905] P 194 [2007] EWHC 3060 (Ch), upheld on appeal [2009] Ch 212

33

grandfather. I shall return to that aspect of the case later. At present I merely quote from the judgment of Norris J17 In the course of giving judgment on an interlocutory appeal in this case Lord Justice Rimer described the doctrine of mutual wills as anomalous and unprincipled. I respectfully agree. This character is perhaps not surprising since the doctrine has developed out of the application to similar (but not identical) situations of ideas deriving from joint wills, covenants to make wills, and secret trusts, so that the authorities do not always speak with one voice as to what is truly essential to the doctrine or as to the mechanisms by which it operates or as to the consequences of its application. In my judgment its irreducible core is that there must be a contract between T1 and T2 that in return for T1 agreeing to make a will in form X and not to revoke it without notice to T2, then T2 will make a will in form Y and agree not to revoke it without notice to T1. If such facts are established then upon the death of T1 equity will impose upon T2 a form of constructive trust (shaped by the exact terms of the contract that T1 and T2 have made). The constructive trust is imposed because T1 has made a disposition of property on the faith of T2s promise to make a will in form Y, and with the object of preventing T1 from being defrauded.

17

at para.8

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14.

In the more recent case of Charles v Fraser18 the court was concerned with a case in which two very talkative old sisters made wills together in 1991, and referred thereafter to their wills as the will each leaving the whole of her estate to the survivor, and subject thereto to fifteen identified individuals. Mabel died in 1996, and the will took effect to leave the whole of her estate to Ethel. Ethel then made a new will in 2003, leaving the combined estate to strangers, and then she died. The residuary beneficiaries of the earlier will sued. The judge held: I therefore find as a fact that there was an agreement between the sisters in 1991 that: (i) (ii) the first sister to die would inherit the estate of the other; thereafter the cumulative estates would pass to 15 specific individuals in various shares on the death of the survivor; (iii) in the event of any beneficiary predeceasing the surviving sister their share would lapse and be taken by the remaining residuary legatees whose share would be increased proportionately; and (iv) the respective wills were not to be altered after the death of the first of the sisters.

18

2010 EWHC 2154 (Ch)

35

I therefore hold that the Defendant holds the proceeds of Ethels estate on trust to give effect to the provisions of Ethels will dated 22 January 1991. 15. It is easy enough to understand the merits of these cases but rather more difficult to understand the underlying principle. 16. It is probably convenient to deal first with the question when the doctrine is held to apply, and then to consider the difficulties. 17. For the doctrine to apply, three conditions seem necessary. First, there must have been an agreement between two people about their wills, to the effect that both wills are to be irrevocable: (a) The agreement must be proved, and must not be presumed for instance from the similarity of the two wills. In Re Oldham19 wills were made in identical terms by a husband and wife each giving the other an absolute interest and with identical alternative provisions in the case of lapse. One died, and the survivor made a fresh will in new terms. But it was held that they had never agreed with one another that their wills should be irrevocable, and so there was no implied trust preventing the survivor from disposing of her property as she pleased.

19

[1925] 1 Ch 75

36

(b) (c) (d)

The agreement can be made orally: Fry v Densham-Smith20 It must be a contract of sufficient clarity to be binding in law: Re Dale21; It will have to be a written agreement if it is a specific bequest of land: because of section 2 Law of Property (Miscellaneous Provisions) Act 1989 and the decision of Norris J in Olins v Walters.

18.

Secondly, the wills in question must have been actually made, and not merely agreed or proposed. In other words, the original agreement must have been acted upon. If the parties merely planned to make mutual wills but do not do so, the doctrine does not apply. An interesting question will arise if one or both of the testators make a will which they believe to be valid but is not valid. This point was touched upon by the Court of Appeal in Olins, but did not fall to be decided. In short, in all but the rarest cases, actual valid wills are requisite.

19.

Thirdly, one testator must die before the arrangement has been altered22 or at least before either has stated his intention not to be bound by the arrangement. Only when the first to die does die, is the successor bound by the arrangement. It is then that the arrangement crystallises.

20 21

[2010] EWCA Civ 1410 [1993] 3 WLR 652 at 655 22 Re Dale

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20.

In Re Olins Mr and Mrs Walters had two children, and several grandchildren, one of which was a solicitor, Andrew Olins.

21.

Andrew drafted for his grandparents wills and codicils in 1988, providing that each left the whole of their estate to the other if he or she survived for 30 days. In default, the estate would pass to their two children and to the grandchildren in certain shares. Each contained this statement: This codicil is made pursuant to an agreement made between my husband and me for the disposal of our property in a similar way by mutual testamentary dispositions. Mrs Walters died in 2006 aged 93, and her husband survived her for 30 days and so her estate passed to him absolutely. He then fell out with his grandson Andrew, and declared an intention to make a new will, and Andrew accordingly sought a declaration that Mr Walters held his wifes estate upon the trusts declared in the mutual codicils, with a consequential injunction restraining dissipation of her property.

22.

At trial, it occurred to me that although we might succeed on our application for declaratory relief, the terms of any injunction were difficult to imagine. After all, Mrs Walters will had left the whole of her estate to Mr Walters. His only obligation was to keep alive his own will which would leave the joint fund to the named beneficiaries. But during his lifetime, what obligation was there upon him to preserve the assets unspent? Should the property be available to 38

him for his own benefit, both as to capital and income, the only rights of the ultimate beneficiaries would be the right to whatever property was still in his estate when he died. On the other hand, he should surely not be allowed to defeat the purpose of the mutual wills arrangement by giving all his property away in his lifetime. But what injunction could cover all these eventualities? 23. 24. I took the tactical decision to abandon our claim for an injunction. Norris J observed23: A further claim for an injunction restraining Mr Walters from making any inter vivos dispositions intended to defeat the alleged mutual codicils was not pursued at trial (because of the frank recognition by Mr Blackett-Ord, who did not settle the Claim Form or the statement of case, of the extreme difficulty in formulating the terms of such an injunction). 25. On the main issue, Norris J held that The Deceaseds estate is certainly bound when in due course of administration it passes to Mr Walters or his executors24. 26. The Defendant, Mr Walters, appealed. One of the grounds of appeal was that the judgment had left uncertain what were the rights or obligations of Mr
23 24

para.6 para.41

39

Walters in relation to his wifes estate, the same question which had arisen in relation to the injunction. The Court of Appeal held that this undoubted difficulty did not prevent the claim succeeding: Mummery LJ held25 In this case the issues before the Judge were the validity of the codicil and the existence of the mutual wills contract, both of which were unsuccessfully contested by Mr Walters. The Judge determined those issues against him for sound reasons in an excellent judgment. He was not asked to rule on the possible legal consequences of the declaration for Mr Walters or for the beneficiaries arising on the death of the Deceased. The Judge prudently declined to be drawn into determining matters, such as the scope or extent of the constructive trust, which were neither raised in the pleadings nor in the submissions of the parties. 27. It is easy enough to see the merits of the application of the doctrine of mutual wills. But my experience in Olins v Walters persuaded me that there are some real difficulties with the doctrine. 28. First, there is the problem of the obscurity of the legal status of property which has been acquired by the survivor and is subject to the obligation that he preserve his will leaving it to the intended beneficiaries. If his obligation is only to leave his will intact, can he sell the property, which would defeat the ultimate bequest? If not, why not, since it has been left to him?

25

para.44

40

29.

Secondly, let us consider his position if his own circumstances completely change. Let us suppose that a young couple, each with money, marry, and make wills leaving their property to each other or in full to a cats home, and that they agree these to be mutual wills both irrevocable or at least irrevocable as to the survivor after the first has died. The wife dies and the husband acquires her estate. The doctrine of mutual wills requires him to keep his own will irrevocable, leaving all to the cats home. But then he marries again and has several children. Can he leave them nothing? Are the rights of the cats home to be supreme, against any to whom he might have new obligations? Will they even override an application against his estate after his death under the Inheritance (Provision for Family and Dependants) Act 1975?

30.

Thirdly, in some of the cases there seems to me an intimation that the constructive trust binds the property that he has inherited from his wife, but does not bind his own property, even if this may have been the subject matter of an original promise in favour of the wife. In other words, should a distinction be drawn between the property he has inherited and the property he has always owned? That might be a sensible approach. But it makes nonsense of a contractual basis for the whole doctrine. If his agreement had been that the whole mutual estate should be left to the cats home, then how can he say that this agreement is to apply only to the property he inherits and not to his own? And if the doctrine is not founded upon contract, how is it to be defined?

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31.

These are difficult waters indeed. They are so difficult that I believe there may be scope for an argument that the whole doctrine of mutual wills is heretical and inconsistent with the principles of the Wills Act 1837. But no court below the Supreme Court can decide that. It was fortunate that in Olins v Walters the point was never raised against us.

32.

I return to practicalities. As the law now stands, the doctrine of mutual wills is alive and well, although its full extent is obscure.

33.

The obscurity means that practitioners should at all costs avoid creating mutual wills. If testators wish to achieve the sort of result that mutual wills might crate, they can do so expressly. To do so by reliance on the doctrine itself (as Andrew Olins did in his case) is an invitation for litigation.

34.

Practitioners who are asked to draft wills in similar or identical terms by a husband and wife, must therefore be advised to warn the clients that their wills can be revoked at any time, and obtain from their clients recognition that this is the fact and that this is their intention.

35.

For the clients to be given mutual wills, or the possibility of believing that they have made mutual wills, is to invite negligence proceedings in the future.

Mark Blackett-Ord, 5 Stone Buildings, Lincoln's Inn.

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