England and Wales Court of Appeal (Civil Division) Decisions

IN THE SUPREME COURT OF JUDICATURE
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT
CHANCERY DIVISION
(MR JUSTICE CARNWARTH)

		Royal Courts of Justice Strand London, WC2A 2LL
		7 February 2005

1. LORD JUSTICE WARD: This is an appeal against an order made by Carnwath J, as he then was, on 31 July 1998 when he pronounced for the force and validity of the last Will and testament of the deceased dated 24 October 1990. A not insignificant consequence of that order was that the judge also made an order for the costs of the disputed probate action in favour of the legally aided defendant. Those costs, we are now told, with interest added, exceed £200,000. Permission to appeal was given for reasons fully set out by the court, which consisted of Waller LJ, Hale LJ and myself, on 27 May 2004, reported under neutral citation number [2004] EWCA (Civ) 676, to which reference should be made as if it were annexed to this judgment.
2. The dramatis personae, an apposite phrase (for this is, as I said, the stuff of drama), are first Mrs Alice Adam, cast on these shores by the vicissitudes of war, the testatrix who died on 10 October 1991 aged 91. Mrs Barbara Couwenbergh is her niece. She is resident in the Netherlands; so, too, is her former husband, the appellant Mr Piet Couwenbergh. He was appointed the executor of Mrs Adam's Will made on 12 September 1978, under which she bequeathed the substantial residue of her estate to her niece, Barbara, and to Piet her husband at the time.
3. Enter left, Dr Bilyana Valkova, a Bulgarian lady by origin, a medical practitioner who met Mrs Adam when Mrs Adam received treatment in the hospital where she worked. A friendship developed thereafter with the result that some time in or after 1984 Dr Valkova, the respondent to this appeal, began to reside in the home of Mrs Adam and became her friend.
4. Relations between Mrs Adam and her Dutch family seemed amicable for some time, but events took a different turn in August 1990 when Barbara and her father, the deceased's brother, visited on the occasion of the deceased's 90th birthday. They were distressed by what they saw. There was undoubted family difficulty, the detail of which is set out in short form in the judgment we gave last year. The detail is immaterial for present purposes, but it did lead to the events which are directly relevant to this appeal.
5. Dr Valkova made strenuous efforts at or about that time, in the knowledge of the approaching visit and with knowledge of its aftermath, first to obtain an enduring power of attorney, which was granted in August 1990 and which was signed by an Italian gentleman called Orazio Di Gregorio.
6. Then comes the making of Mrs Adam's Will. That took a slightly unusual course. Three firms of solicitors were instructed. The first would not act without being able to see the testatrix, given her age and her frail state of health (physical, if not mental). Instructions were being given by Dr Valkova, which aroused a natural concern. In the result a second firm of solicitors was instructed. They did visit the deceased and the solicitor gave evidence that he thought she had sufficient capacity to make a will. But he was disinstructed and a third firm actually drafted the Will, again on the instructions of Dr Valkova, without ever seeing the deceased.
7. A Will dated 19 October 1990 was apparently executed by the deceased and witnessed by her neighbours, the late Mr and Mrs Doyle. Mrs Doyle signed first on the single sheet of paper which contains the testamentary disposition leaving no room for her husband's signature. The original of that document has apparently been destroyed. We have a photocopy which shows Mr Doyle signing on a separate, or different, sheet of paper. It may be, but we are not totally clear, that this may have been a sheet of A3 paper folded so that on the first page would appear the words "Will of Mrs A L Adam"; page 2 would be blank; page 3 would contain the testamentary disposition; and page 4, which would be the back of the document, may have contained Mr Doyle's signature. All of this is interesting speculation. It troubled the solicitor who was concerned that the witnesses had not signed the same page as the deceased. Instructions were given for the Will to be re-executed.
8. Dr Valkova sought help for this from members of her church. She approached Orazio Di Gregorio and asked him to oblige. He spoke reasonably good English and brought with him his brother, Lorenzo, whose knowledge of English then was superficial. The Will bears the signatures of Mrs Adam and the Italian brothers, but more of that anon.
9. As the judge was to find, there is deep hostility between the Dutch family and Dr Valkova. It has not only poisoned their relations, but it has apparently poisoned their evidence and the judge seemed hard pressed to believe either of them. He had several issues to resolve. The first was the mental capacity of Mrs Adam at the time of the execution of the Will which was being sought to be admitted to probate, namely the Will executed in the presence of the Italian brothers, ("the Italian Will"). There was a second, but separate, issue as to her want of knowledge and approval of that Will. There had been an issue on the pleadings, which got nowhere at trial, as to the due execution of that Will. The question of due execution deemed to be of such inconsequence at the trial that Mr Blackett-Ord, who appeared then for Dr Valkova as he does for her here, even forgot (I hesitate to embarrass him by reminding him of it) to ask about the due execution of the Will. It was left to Mr Chapman, for the claimant Mr Couwenbergh, to ask a few most desultory questions about the signing of these two October Wills.
10. The result is far from satisfactory, as appears from the transcript of the evidence at page 56. At first the questions were asked about the Doyle Will. Mr Chapman then says:

"Q. Then can we look at the other Will at page 121. Do you remember it came back again from the solicitors. They were not happy that it had a signature on the wrong piece of paper. Can you explain to his Lordship how this was one was signed by Mrs Adam and the two witnesses?

A. Yes. She has been even waiting for a short while. They came with a small delay and again she signed when they have come in their presence and after her they have signed."

11. That is virtually all the evidence of attestation by the Italian brothers. In the result, the issue on the pleadings was conceded and the trial concentrated on the mental capacity and want of knowledge and approval, both of which the judge found in the defendant, Dr Valkova's, favour, and he pronounced for the Italian Will.
12. I have described this case as being "the stuff of drama". Perhaps I should also say that it is the "stuff of nightmare" because, pursuing its dramatic twists and turns, the torrid tale continues with an investigation by the police into the circumstances of Mrs Adam's death. Those police inquiries led to their tracing the Italian brothers and taking various statements from them. Those statements came to light in the course of the protracted proceedings that followed in connection with the costs order made by the judge against Mr Couwenbergh.
13. Dr Valkova was legally aided. The Legal Aid Board, as I think still existed then, took very active steps to enforce the costs order against the foreign claimant, to the point even of obtaining a freezing order against his major asset, his home; there being some complaint that he has not even been able to sell that house and transfer the charge into some other property. The detail of that is a little obscure and need not trouble us.
14. As I have said, it emerged in the course of a hearing before the costs judge that the police had conducted these inquiries and that set in train the story which brings us to this court.
15. Those enquiries revealed that Lorenzo gave three statements to the Metropolitan Police. Those statements are not entirely consistent, a fact heavily relied on by Mr Blackett-Ord. His memory may not be perfect; for example, in a statement of 31 March 2000, he was to say of the signature of Mrs Adam that:

"I do not remember it being on the paper when I signed it and I don't remember the old woman signing it."

16. He was then asked about a letter which was disclosed by Dr Valkova. That is the letter dated 16 January 1993 addressed "To Whom it May Concern". It reads as follows:

"On 24 October 1990 I Di Gregorio Lorenzo and Orazio Di Gregorio witnessed Mrs Adam's signature on her Will at 11 Dunster Gardens, NW6. We stayed together with Mrs Adam. Mrs Adam signed first. We signed immediately after her. Mrs Adam appreciated and enjoyed our visit and we had a friendly conversation."

That document has two signatures on it, one apparently by Gregorio Lorenzo, and the second below it being what Mr Ferris accurately describes as a squiggle.

17. He explained to the police that he had been telephoned by Dr Valkova. She was insistent that he signed a letter confirming that the deceased had duly executed her Will. He was saying of that letter that he did not remember seeing it. He said in a further statement:

"The signature at the top is similar to mine, but the first part is not as I would normally sign or write it. The second signature seems similar to mine but I can confirm that I did not sign anything in 1993."

18. In a third statement, he said that, having thought more of the matter, it was clear to him that the Will was not signed in the room where the old lady was:

"When we arrived at the address the Bulgarian lady opened the door and invited us into the hallway. We waited there, my brother had introduced me to the lady, I did not understand much of what was being said, my brother was explaining it to me. The Bulgarian lady then gave us something to sign. I cannot remember if it is one or more documents. We signed where the lady pointed to, I could not read what I was signing. Before going to the house my brother had explained to me that the document I had to sign related to the fact that the Bulgarian lady was looking after the old lady. I did not know I was signing a will. I have been asked if the will had already been signed by anybody but I cannot remember. After signing the document we went into the living room to see the old lady and once in that room I did not sign any other document."

19. It is said that brother Orazio signed a letter dated 20 January to similar effect to his brother's letter. He was to tell the police that:

"When Dr Bilyani [the respondent] gave me the document she indicated where to sign, and I signed it whilst at the same time she was commenting about the health of the old lady. That evening was the only time I signed any document for Dr Bilyani. I should also like to add that the light was very poor in the hall where we were signing the document, we were also in an uncomfortable position when we were signing this document and we signed in a hurry. Dr Bilyani then invited us to meet the lady, she showed us in a bedroom on that same floor. Dr Bilyani introduced myself and my brother by name to the old lady, but I do not remember the name of the old lady. The old lady was sitting up in bed, propped up by pillows. During the time that we were there she showed signs that she was taking care of the old lady. Dr Bilyani told the lady that we were the people who had signed the document without specifying. Whilst we were there she didn't show any document to the old lady and the old lady did not sign anything in front of us. I do not know what she did with the document as I did not see it again. Apart from the usual pleasantries, I did not speak to the old lady nor did my brother. Dr Bilyani was the person who spoke the whole of the time, the old lady just agreed or nodded to what she was saying. In my view she was not fully aware of what was going on."

20. As for the letter of 20 January, he says that he never signed it. He admitted signing the enduring power of attorney, but he denied signing the letter of 20 January.
21. On learning of that evidence, Mr Couwenbergh has sought permission from this court to appeal. He had a difficulty confronting him because he had already appealed against the order of Carnwath J on the grounds that the judge erred in his treatment of knowledge and approval, and he lost. This was, therefore, a second appeal, which had to overcome the hurdle set by Taylor v Lawrence [2002] EWCA Civ 90; [2003] QB 258. It is that which concerned us in May last year. For the reasons we gave, we were satisfied that this was a proper case for a second appeal and we gave permission accordingly. So, we have before us today a fully constituted appeal regularly brought, although unusually so.
22. The first question for this court is whether the fresh evidence in the witness statements of the Italian brothers should be admitted. It is, in my judgment, important to be sure of what that fresh evidence really is. The fresh evidence goes to the question of due execution. The fresh evidence from both brothers is that they were not in the presence of the deceased when she signed, nor were they given a document which was later vouched by her. Their case is that they signed a document in the hall and they did not see the deceased sign at all.
23. The evidence about the letters signed by them in 1993 is therefore peripheral to the real question of due execution; peripheral in the sense that, if it is true that they did not sign those letters, then, arguably, there has been a monstrous fraud perpetrated by Dr Valkova on the court. Correspondingly, of course, if they did sign those letters, their credibility is significantly, if not fatally, undermined. But the evidence which is sought to be admitted is evidence not of a forgery having taken place, but of a failure of due execution.
24. Having made that point, I turn to the three well-known requirements of Ladd v Marshall [1954] WLR 1489 for the admission of further evidence. The first is that the evidence could not been obtained with reasonable diligence for use at the trial. We have dealt with this and the other two points in our earlier judgment, and I summarise the effect as the case is presented to us today.
25. For the appellant, Mr Ferris submits that, in the circumstances prevailing at the time of the trial, there was no reason to suspect that the Will had not been validly executed. Disclosure contained the two letters of 1993. There was some evidence of the difficulty in tracing the Gregorio brothers. Mr Ferris submits that no reasonable solicitor or barrister, advising on evidence in the days leading up to the trial, would have gone on a wild goose chase, here and abroad, for the brothers to confirm an issue which seemed, on their written documents, to be fairly obvious. Also disclosed had been the instructions given by the solicitor who drafted the Will, giving express instructions as to signing in each other's presence and not leaving the room until it was completed.
26. Mr Blackett-Ord submits that that is fine and well, but there is no evidence to support that submission. In my judgment there does not need to be. It seems to me to be obvious that reasonable diligence would not have required the making of expensive time consuming inquiries which would lead nowhere. In my judgment, the first limb is satisfied.
27. As Lord Justice Dyson pointed out in the course of argument, it is perhaps logically preferable to look at the third Ladd v Marshall criterion, namely whether:

"... the evidence is such as presumably to be believed, or in other words, it must be apparently credible, though it need not be incontrovertible."

Mr Blackett-Ord makes a number of telling points about the inconsistencies in the evidence, especially of Lorenzo, the detail of which I need not elaborate. But it is there apparent on an analysis of his three different statements. The same cannot be said of Orazio whose one and only statement is emphatic and maintained.

28. Mr Blackett-Ord makes the second telling point that there is no expert evidence to confirm the alleged forgery. That may be because Dr Valkova refused to release the letters for forensic examination. I have before me a thick clip of correspondence, which I have declined to look at, in which the parties will have argued about the conditions under which the documents should be released to the appellant's handwriting expert.
29. The fact is that there is no expert evidence produced by the appellant. The fact, moreover, is that there is some expert evidence produced by the respondent's expert. He concludes that it is highly probable that Orazio signed his letter; it is highly probable that Lorenzo signed his full name on his letter, but it is only probable that Lorenzo signed the squiggle. Quite how the expert arrived at that conclusion will no doubt be a matter that Mr Ferris will want to explore with him because it seems from what I can understand that there is no comparable squiggle with which to compare the squiggle on the letter. The expert arrived at that conclusion:

"In spite of its pictorial difference with the comparative signatures it has unique traits in common with more recent signatures. In my opinion there is limited but strong evidence that it was written by Lorenzo".

30. Mr Blackett-Ord makes a further forensic point that it is highly improbable that a fraudster, and in this case Dr Valkova, would have chosen to forge two signatures on the letter when one would do, and moreover would have chosen to forge the squiggle when that squiggle would not have been in her possession.
31. All those points cause concern, but the ultimate question for this court is whether or not the evidence of want of due attestation is apparently credible? In my judgment, the sworn statement by Orazio that he was not in the presence of the deceased, standing alone, is a matter which this court cannot discount as unlikely or improbable or not apparently credible. Even Lorenzo's differing views do not so excite the suspicion of this court as to discount them at this stage without further investigation. This hurdle of being apparently credible, though not necessarily incontrovertible, seems to me to be sufficiently established for that limb of the test to be satisfied.
32. Thirdly, would that evidence, if it were given, probably have an influence on the result of the case? If the evidence were given, that they were not in the presence of the testator when she signed, it would have a total killing blow for the Italian Will signed on 24 October. The argument, however, is that that will not avail the respondent because there is no challenge to the due execution of the Doyle Will some few days earlier. That may be, but I agree with Mr Ferris that if the evidence of the Di Gregorio brothers is accepted, and if the court is satisfied that there was an attempt to mislead the court, all of them did conditional assumptions, that the evidence of the brothers could then have a compelling influence on other evidence in the case as to the knowledge and approval of the deceased of the contents of her Will.
33. I repeat that Orazio was saying forthrightly that the deceased did not appear to be fully aware of what was going on. This evidence could therefore have its material impact on the whole outcome of the trial, including the validity of the Doyle Will and could therefore result in the 1978 Will in favour of Barbara and Piet being admitted to probate.
34. In my judgment, the three conditions in Ladd v Marshall are satisfied, but that leads to the question what do we now do? There has been some slight shifting of the sand in recent judgments of this court as to the appropriate course of action. In Hamilton v Al Fayed [2001] EMLR 15, this court said in paragraph 14:

"Often the fresh evidence relied upon demonstrates that perjured evidence was given at the trial. In such circumstances, provided that the requirements of Ladd v Marshall are satisfied, the practice of the Court of Appeal has been to order a new trial without resolving the issue of whether the alleged fraud in fact occurred. That issue is best resolved on the retrial."

Lord Buckmaster in Jonesco v Beard [1930] AC 298 said at page 300 that:

"It has long been the settled practice of the Court that the proper method of impeaching a proper judgment on the ground of fraud is by action in which, as in any other action based on fraud, the particulars of the fraud must be exactly given and the allegation established by the strict proof such a charge requires."

35. Returning to Hamilton, in paragraph 21 the court said that:

"Because the Court of Appeal alone has the power to order a new trial on the ground of fresh evidence, it has been the rule rather than the exception that parties seeking to overturn a judgment on the grounds that it was obtained by fraud have appealed to the Court of Appeal. Lord Buckmaster's strictures have been disregarded. We are inclined to think that because the Court of Appeal has much wider powers to do justice in such a situation, including the power to order issues of fact to be tried, the prevalent practice is one attuned to the overriding objective. Different considerations may, however, apply within the Family Division."

36. Sohal v Sohal [2002] EWCA Civ 1297 was a permission application but one which the court said could be referred to, addressed these two approaches. In paragraph 29 Nourse LJ, addressing paragraph 21 of the Hamilton decision which I have just read, said:

"Those observations must be accorded every respect. I do not think they can have been intended to depart from what was said in paragraphs 8 and 14. Whether that be right or wrong, it is clear that each case must be judged on its own merits. If this court takes the view that the alleged fraud has not been clearly established, or that it is or certainly will be hotly contested on the evidence, then it must be open to it to say that the question will not be dealt with by way of appeal, but must be dealt with as the subject of a fresh action."

37. The result seems to be that each case must be judged on its own merits. Where do the merits lie here? In my judgment, there is no significant or substantial advantage in dismissing this appeal and leaving the remedy to Mr Couwenbergh to institute a fresh action. The disadvantages of a fresh action are that, first, one starts all over again with a fresh action, whereas, if the matter is remitted for re-trial the issues are there, the preparation has been done and there will be a saving of time and cost in going back to the Chancery Division and not beginning again.
38. Secondly, the relief sought by way of a fresh action is to set aside the order in the first action. I am not sure that that will enable the court to pronounce in substitution for the Doyle Will or the 1978 Will. But, even if it does, one of the burning questions in this case is the costs order which was made by Carnwath J. If the order is set aside, then the costs order presumably goes. If, on the other hand, the Doyle Will is admitted, there may be a huge argument as to whether the whole of the costs of 1998 should be borne by Mr Couwenbergh, if that result was obtained partly as a result of perjured evidence from Dr Valkova.
39. In allowing the matter to be remitted to the Chancery Division for a rehearing, the door is open for justice to be done with regard to the costs of that first action. At the end of the analysis, it is important to ask where justice demands the matter should be dealt with. If there has been an attempt to deceive the court, it is, in my view, just that the court have the opportunity to look at that matter again; it is just that costs should be fully available for a disposal on the rehearing.
40. It is just that this appeal be allowed and the matter remitted to the Chancery Division for a rehearing.
41. LORD JUSTICE DYSON: I agree.
42. LORD JUSTICE JACOB: I also agree.
(Discussion on Costs) JUDGMENT ON COSTS
43. LORD JUSTICE WARD: The consequence of our judgment is that the order of Carnwath J of 31 July 1998 is set aside, including his order that the claimant pay the defendant her costs of the action. The consequences in setting aside the costs order, in so far as there are proceedings in force in Holland, will no doubt be a matter for the Dutch court, but since the basis of that proceeding is now taken away, presumably in due time, those freezing orders will be set aside.
44. There is unanimity to a large extent that the costs of the trial before Carnwath J should now be reserved to the judge dealing with the rehearing. We see no reason to interfere with the order for costs made against Mr Couwenbergh on his attempt in March 1999, unsuccessfully, to appeal the order. Those were dealt with by Peter Gibson LJ and Hale J. We see no reason for interfering with that order.
45. So far as the costs of the proceedings on these applications in the Court of Appeal, the Taylor v Lawrence issue was resisted and resisted unsuccessfully. So far as that is concerned, we see no reason why costs should not follow the event. Likewise, so far as the costs of this ensuing appeal are concerned, we think the just result is for costs to follow the event, inter alia because there was a pretty good steer in our earlier judgement as to what we thought should happen and that was not heeded. Dr Valkova has continued to resist and has lost.
46. There is not sufficient in the alleged refusal to instruct a joint handwriting expert to justify any different order. That is not conduct sufficiently unreasonable to impact upon the general rule that costs follow the event. Mr Couwenbergh must have his costs of the appeal to be assessed if not agreed. Dr Valkova is of course entitled to the assessment of her costs under the Legal Services Commission in the usual way. The costs judge is to have the power under section 11 of The Legal Act 1989 to consider whether the Legal Services Commission should pay the appellant's costs of the appeal. The usual order will follow. That is adjourned to him for consideration.