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England and Wales Court of Appeal (Civil Division) Decisions
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Goodchild v Bradbury & Ors [2006] EWCA Civ 1868 (15 December 2006)
URL: http://www.bailii.org/ew/cases/EWCA/Civ/2006/1868.html
Cite as:
[2006] EWCA Civ 1868
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Neutral Citation Number: [2006] EWCA Civ
1868 |
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A3/2006/1104,
A3/2006/1104(a) |
IN THE SUPREME COURT OF JUDICATURE
IN THE COURT OF APPEAL
(CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT OF JUSTICE
CHANCERY
DIVISION
(HIS HONOUR JUDGE ELLERAY QC)
|
|
Royal Courts of Justice Strand
London, WC2
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|
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15th December
2006 |
B e f o r e :
LORD JUSTICE CHADWICK
LORD JUSTICE MAY
LADY JUSTICE
SMITH
____________________
|
GOODCHILD |
CLAIMANT/APPELLANT |
|
- v - |
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|
BRADBURY & ORS |
DEFENDANT/RESPONDENT |
____________________
(DAR Transcript of
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____________________
MR P REED (instructed by Parrott & Coales) appeared on behalf of
the Appellant.
MR J LEVINSON & MR M BEAUMONT (instructed by Bruce, Lance
& co) appeared on behalf of the Respondent.
____________________
HTML VERSION OF JUDGMENT
____________________
Crown Copyright ©
- LORD JUSTICE CHADWICK: This is an appeal from an
order made on 18 April 2006 by Mr Anthony Elleray QC, sitting as a deputy
judge of the High Court in the Chancery Division, in proceedings brought
by the appellant, Mr Leslie Goodchild, to set aside two transfers of property,
known as the Orchard, Mill House, Bledlow in Buckinghamshire. The first of
those transfers is dated 15 February 2001 and was made by the appellant by way
of gift to his great nephew, the first respondent,
Mr Shane Bradbury. The second transfer is dated 5 June 2001 and was
made by Mr Shane Bradbury to the second respondent, Mr Stephen Hillier,
for a consideration of £1,800.
- The basis of the appellant's claim was that the
first transfer was procured by the exercise of undue influence and so should
be set aside in equity; and that the subsequent transferee, Mr Hillier, took
his transfer with notice that the first transfer was liable to be set aside
because he knew all the facts.
- The appellant was born on 5 May 1923, so he was some
77 years of age when he executed the first transfer in February 2001. He
brings these proceedings by his litigation friend, a solicitor to whom he gave
an enduring power of attorney in February 2003. In March 2003, that power was
registered on the basis of the attorney's belief that the appellant was then
becoming incapable of managing his affairs.
- The appellant was one of the four children of his
parents. His brother was killed in the last war; one sister, Mrs Ivy Bradbury,
died in 1988; and the other, Miss Doris Goodchild, died in 2002. Mrs
Ivy Bradbury was the grandmother of Mr Shane Bradbury. There are two other
grandchildren, Alicia and Tracey, the sisters of Shane. Alicia Bradbury is the
co-attorney of the appellant.
- The appellant inherited Mill House Farm from his
father, who died in the late 1940's. His sister Doris inherited a neighbouring
farm, Pitch Green Farm. The appellant lived with his sister at Pitch Green
Farm until the early 1970s, when he moved to Mill House, although he continued
thereafter to take his meals at Pitch Green Farm. It was clear that there was
a very close although, it seems, often stormy -- relationship between the
appellant and his sister. Miss Doris Goodchild moved to live with him in Mill
House in the mid- 1980s. She remained there until 1998.
- As I have said, Mrs Ivy Bradbury died in 1988. She
was survived by her husband, Mr Arnold Bradbury. At or about the time of
his grandmother's death, Mr Shane Bradbury moved in to live with his
grandfather at a house known as Hill View, which was also in the
neighbourhood. Mr Shane Bradbury moved from Hill View to live with the
appellant at Mill House soon after Miss Doris Goodchild had moved out. She
went to a nursing home in 1998. The appellant and Mr Shane Bradbury then lived
together at Mill House from 1998 until the beginning of 2003. The appellant
then moved out of Mill House and went to live at Hill View, which had become
vacant on the death of Mr Arnold Bradbury at the beginning of that February
2003.
- The property, which was the subject of the two
transfers dated respectively 15 February and 5 June 2001, is a plot of one
acre or thereabouts adjacent to Mill House, which, at the time of the first
transfer, was in the ownership of the appellant as part of
Mill House Farm. The circumstances in which the first transfer was
executed were described by the judge at paragraphs 66 to 69 and 72 to 75 of
his judgment. After referring, at paragraph 62, to the fact that, in August
1999, Mr Shane Bradbury brought his future wife, now Mrs Vikki Bradbury, to
live at Mill House and that, by the Autumn of 2000, they had decided to marry,
the judge went on to say this:
"66. The planned wedding was the catalyst for the gift of the
Orchard by Les to Shane as a wedding present. Mr Hiller became involved.
As he has pleaded and asserted, Les in telling him of the gift said 'The
field was no good to me and I have got enough land, boy." Mr Hiller tells
me he acted in effect for Les and Shane in arranging the transfer of the
Orchard. As he saw it, Shane was no more able than Les, to arrange a legal
matter such as a transfer of land.
"67. Following a phone call, on 30 October 2000, Mr Hiller
wrote to Blaisers Mills Winter Taylors ('Blaisers'), High Wycombe
solicitors. He wrote, 'Uncle Les wishes to transfer over one acre of land
to my friend Shane as a wedding gift at the start of December latest'. He
enclosed the deed which Les and Shane had given him. It is not obvious why
Blaisers were chosen by Mr Hillier. They had not acted for him before. If
they had acted for Les, that had been well in the past.
"68. At Blaisers, the file was handed to an assistant
solicitor Mr Seager. On 6 November 2000 Mr Hillier visited him. Mr
Hillier again said that the matter was a wedding gift. He told Mr Seager
that Shane would probably try to build a house on the land. Mr Seager
noted the need for a site meeting to decide matters such as access and
covenants restrictive of building. He identified the need for a plan.
"69. The site meeting took place on 13 November 2000. Mr
Seager's unchallenged account of it is backed by his attendance note. He
was met outside the farmhouse by Les, Shane and Mr Hillier. Mr Seager took
Les into the sitting room by himself. He describes his having to fight for
Les's attention over the sound of the television, which was on. His
meeting alone with Les he thinks took two minutes. He was satisfied that
Les knew what he was doing from his own free will and that duress was not
involved. Mr Seager then walked the Orchard with Shane and Mr Hiller. They
returned to Les. Mr Seager repeated the need for a plan, which Mr Hillier
was to arrange. Upon access, Les recalled some past discussions with the
County Council concerning a possible separate access, a matter which Mr
Hillier was to check: otherwise there would have to be shared access along
the Mill House drive. Les was noted as saying that it would be possible to
get two houses on the Orchard, subject to planning. Mr Seager noted the
need for restrictive covenants against nuisance and annoyance and
industrial use.
"72. On 5 December 2000, Mr Seager wrote a retainer letter to
Les at Mill House, setting out his fees. He commented on the need for
better plans dealing with the access. On 7 and 12 of December 2000, Mr
Hillier made further telephone calls to Mr Seager. On 18 December 2000 Mr
Hillier obtained better plans from surveyors which he had retained for the
purpose and which he sent to Seager on 22 December 2000. The marriage in
the meanwhile had taken place.
"73. On 1 January 2001, Les countersigned a copy of the
retainer letter. On 8 January 2001, Mr Seager wrote to Les c/o Mr
Hillier at Mr Hillier's address enclosing a draft transfer. He drew
attention to clause 13.5 which restricted residential development to two
houses. On 12 January 2001, Mr Hillier reported that the restrictive
covenant should increase the limit to six dwellings and informed Mr Seager
of an approximate value of the Orchard of £1,800. On 17 January 2001,
Mr Seager sent Les again c/o Mr Hillier an amended copy of the draft
transfer. He sought specific confirmation that Les was happy that the
restrictive covenant should be limited to six houses. He was to receive a
letter signed by Les to that effect on 24 January 2001, the letter being
written for Les by I think Mr Hillier. In fact Les had suffered a stroke
at the Red Cross on 15 January 2001 and was in hospital. He
presumably signed that confirmatory letter there.
"74. On 25 January 2001, Mr Seager wrote again to Les, this
time at Mill House, chasing a signed copy of the plan that was to be
incorporated in the transfer. The letter observed that the covenant
limiting residential use to six houses 'could obviously have an impact on
the value of Mill House Farm itself'.
"75. On 9 January 2001, Les signed a cheque for Blaisers'
fees. On 19 February 2001, Mr Seager confirmed to Shane and Les that
he had completed the transfer which he had dated 15 February 2001 saying
he would complete the transfer for Shane."
The judge does not refer, in those paragraphs, to the occasion on which the
appellant signed the transfer; but it is clear that he must have done so at
some point between 17 January 2001, when the amended draft transfer was
sent by Mr Seager, and 15 February 2001, the date which Mr Seager
inserted in the transfer. As I have indicated, on 15 January 2001 the
appellant had suffered a stroke and was in hospital.
- It can be seen from the judge's description of the
circumstances in which the first transfer was executed by the appellant, that
the second respondent, Mr Hillier, was closely involved in the process
throughout. The judge described Mr Hillier as an intelligent and
business-minded man. The judge found that the sale of the property from Mr
Shane Bradbury to Mr Hillier had been agreed between them before the first
transfer. The judge made^ the following findings at paragraphs 78 and 79:
"78. I have no doubt that in conversations over that
Christmas, the question was raised between Mr Hillier and Shane as to the
value of the Orchard, hence the £1,800 figure given by Mr Hillier to Mr
Seager. Importantly where this trial is concerned, I have no doubt of the
following. Shane had no money or the possibility himself of developing the
Orchard. Both Shane and Mr Hillier knew that Shane wanted the gift to
realise some cash, and always intended to sell the Orchard, Mr Hillier
offering what Shane then thought was a fair value.
"79
I have little doubt but that Mr Hillier was investing in
what he hoped one day would prove a profitable plot of land. Further, I
consider that throughout the arrangement of the transfer of the Orchard to
Shane as a wedding gift, the understanding between Shane and Mr Hillier
was that for cash Shane would sell on the Orchard to Mr
Hillier."
The judge found that, on 27 February 2001, Mr Hillier instructed solicitors
to prepare a transfer of the property from Mr Shane Bradbury to himself at a
consideration of £1,800, and that second transfer was registered on 14 June
2001.
- As I have said, the appellant continued to live at
Mill House until February 2003 when, after the death of his brother-in-law,
Mr Arnold Bradbury, he moved to Hill View. On 19 February 2003 he
appointed a solicitor and his great niece, Alicia, as his attorneys. These
proceedings were commenced in August 2004. They came for trial before the
deputy judge over four days in December 2005. The appellant did not give
evidence at the trial - it being accepted that by then he was too frail to
attend court. The judge admitted his written evidence contained in the
statement signed and dated April 2004. The judge heard oral evidence from
members of the family, and from Mr Shane Bradbury and Mr Hillier. He accepted
that all witnesses were seeking to give an honest account of the facts as they
saw them, and acquitted Mr Shane Bradbury and Mr Hillier of conscious
wrongdoing.
- After reminding himself of the principles to be
applied in a case where a claimant seeks to set aside a transaction on the
grounds of alleged wrongdoing, and having referred, in particular, to the
decision of the House of Lords in Royal Bank of Scotland v Etridge
[2001] UK HL 44, [2002] 2 AC 773,
the judge made the following findings. First, that by 2001 the appellant
reposed trust and confidence in his great nephew, Mr Shane Bradbury,
such that Mr Shane Bradbury was in a dominant position. The judge's findings
are set out at paragraph 124 to 128. I need only read the last sentence of
paragraph 128:
"128.
it does appear to me that the relationship between Les
and Shane can properly be described as one of trust and confidence, and
one in which Shane had an ascendancy, with potential for
abuse."
- Second, that the gift of the property known as the
Orchard was not explicable by the relationship of great uncle and great nephew
-- notwithstanding that the great nephew was providing some care -- and was
not explicable by the marriage of Mr Shane Bradbury in December 2000. The
judge's reasons for that conclusion are set out at paragraphs 129 to 134 of
his judgment. The judge observed that the transfer of the Orchard had the
effect of substantially reducing the value of Mill House -- a reduction that
went well beyond the value of the Orchard as agricultural land, which was the
basis of the prise for which Mr Shane Bradbury was to sell it to Mr Hillier.
The judge said this at paragraphs 133 and 134:
"133. But objectively, the transfer of the Orchard is not, in
my judgment, readily explicable by the relationship of Les and Shane at
Mill House. It substantially damaged the residual value of Mill House in
that the drive was to be shared with a site, which appeared to have a
potential, subject to planning permission, for up to six houses. It was
not simply in the context of the disposal of a field for which Les no
longer had a need, as he had indicated to Mr Hillier. Further and perhaps
even more pertinently it was of no real benefit to Shane. It was fanciful
to suppose that Shane would be in any financial position or have the nouse
to develop a home for himself on the Orchard, or otherwise to ensure its
successful development of residential profit. Les had no reason to suppose
for example that Shane would even extract the value of the Orchard as
accommodation land. I do not think that Les any more than Shane had any
proper concept of the value of the Orchard. The objective reality was that
subject to Shane winning the lottery, the Orchard would immediately be
realised for cash."
- Those conclusions led the judge to find, at
paragraph 135, that the appellant had established sufficient to shift the
evidential burden to Shane as the donee of the property. It was for Mr Shane
Bradbury to support the gift by showing that it was made after full, free and
informed thought, as the judge directed himself. That phrase, which, I think,
originates in Zenick v Heinemann, was taken by the judge from the
judgment of Sir Martin Nourse in Hammond v Osborne [2002] EWCA Civ 885, at paragraph 29; a decision in this court which post-dates the
decision of the House of Lords in Etridge.
- Third, Mr Hillier had notice of the relationship
of trust and confidence which led to potential for abuse, and of the
circumstances in which the gift was made. The judge explained why he reached
that conclusion in paragraphs 136 to 138. He said this:
"137. I consider that Mr Hillier, whom I have noted to be an
intelligent business minded man, would have realised that the selling of
the Orchard would have an adverse financial effect on Mill House because
of the sharing of the drive and the potential for neighbouring houses on
the other side of the drive. Further, I have noted that Mr Hillier's view
that Shane was no more able than Les to arrange the transfer of the land
and so he stepped in, as he told me, in effect as agent for both Les and
Shane.
"138. In those circumstances I consider Mr Hillier had full
notice of the matters from which undue influence can be presumed. Moreover
on the particular facts of this case, and the involvement of Mr Hillier in
arranging the gift to Shane I consider that he was privy to the facts
material to the presumption of undue influence."
- Fourth, that the appellant received no advice from
Mr Seager, the solicitor, which would support a conclusion that the gift made
by the first transfer was made after full and informed thought. At paragraph
143 the judge said this:
"143.
Although Mr Seager was an independent solicitor, I do
not consider in the circumstances that his evidence shows that the gift
was the result of full, free and informed thought. Brief reference almost
as an afterthought in the letter of 25 January 2001 to the possible impact
of the gift on the value of Mill House does not of itself suggest that Les
had any such impact in mind or the need to seek independent financial
advice relating to it."
- Nevertheless, having made those findings, the
judge came to the conclusion that the gift was not, in fact, the product of
undue influence; and so refused to set aside the first or the second
transfers. He reached that conclusion on the basis of two paragraphs in the
appellant's witness statement of April 2004. Those paragraphs -- paragraphs 19
and 22 --were in these terms:
"19. In late 2000, Shane announced he was going to marry Vikki
and I thought it would be a nice idea to give him an acre of land as a
wedding present. I don't think Shane didn't put me under any pressure at
all to give him the land. I was conscious of the fact that he was my
family and I wanted to give him a wedding present.
"22. However I also understand that within two months of that
on 5 June 2001, Shane sold the land to Stephen Hillier who was a
Developer. Shane told me he sold the land although he didn't say how much
for. However I wasn't concerned because it was up to him to do what he
wanted with it once I had given it to him."
In that context, the "two months of that" is two months from the completion
of the first transfer. The judge commented at paragraph 144 of this judgment
that:
"144. Les as the Claimant says that he does not think that
Shane put him under any pressure to make the gift."
- The judge then went on, at paragraph 145, to say
this:
"145. I suspect that from the independence of life at Hill
View, Les might now think, if questioned, that the gift was a mistake,
particularly if directed to full and informed views as to the effect on
the value of Mill House and the want of any real benefit beyond a modest
sum of cash from Shane. But that is speculation. The claimant in a
presumed undue influence case does not have to give evidence of actual
pressure or as to what he would have done if fully informed. But in this
case, and most unusually, the Claimant states that he was not put under
any pressure at all. In those circumstances, I should not speculate as to
what Les might have done if fully informed as to the objective problems
with the gift. Further, I do not need evidence that the gift was the
result of full and informed thought, when it is clear on the Claimant's
own evidence that it was the result of free thought, in the context of
being unpressured, and thus that Mr Seager had been right in his
assessment."
- That paragraph represents a marked shift from the
direction which the judge had given himself earlier in the judgment when --
after considering cases of Inche Noriah v Shaik Allie Bin Omar [1929]
AC 129/155, Hammond v Osborne [2002] EWCA Civ 85(20) and (60) and Jennings v Cairns [2003] EWCA Civ 1935(35) -- he had said the evidential burden on the donee would be to
show that the gift was not explicable only on the basis of the presumed undue
influence; in particular, it was for Mr Shane Bradbury to show that the
appellant had made the gift after full free and informed thought. When the
judge came to address the matter at paragraph 145, he no longer thought that
full or informed thought was a necessary ingredient for the purpose of
rebutting the presumption. But he went on to say that, if he had been
satisfied that the gift was the product of undue influence, he would have set
the first transfer aside; and by reason of:
"My notice considerations as well against Mr Hillier as
against Shane."
- The appellant was granted permission to appeal by
this court (Lloyd LJ), on 16 August 2006. The grounds of appeal are
put succinctly under two heads. First, that the judge was wrong to find that
the evidence of the claimant, contained in a draft witness statement, that he
did not think that the first defendant put him under any pressure to make the
gift was capable of rebutting the presumption of undue influence which he
found had arisen; and second, in holding that the court did not need to find
evidence that the gift was the result of full and informed thought when the
claimant gave evidence that he did not think he was pressurised. The reference
there to "a draft witness statement" is explained by the fact that the
statement which the appellant signed in April 2004 had been sent to him in the
form of a draft for approval. It was signed in the form of the draft with the
various comments, incident to the draft, unanswered and unaddressed.
- On analysis the two grounds which are set out in
the appellant's notice are, I think, really two sides of the same coin. The
issue can be put in this form. In circumstances where the judge had held: (i)
that the relationship between donor and donee was such that the donee was in
position to dominate the will of the donor; (ii) that the gift was not
explicable on the grounds of natural affection which the donor could be taken
to have for the donee and; (iii) that the donor did not, in fact, receive the
advice that he would have needed in order to give full and informed
consideration to the consequences of the gift which he was making, is it
sufficient to rebut the presumption that the gift was the result of undue
influence bearing on the mind of the donor that the donor states that he was
not put under any pressure by the donee?
- In addressing that issue, it is important to have
in mind these matters, which were the subject of findings by the judge:
(1) The appellant was not able to look after himself in his
own home. He had, as the judge found, no domestic skills at all. He needed
someone to look after him on a day-to-day basis -- paragraph 53.
(2) The appellant was very anxious not to be moved into a
nursing home or care home where he could be looked after professionally.
He had visited his sister Doris in a nursing home to which she had in
moved in 1998 and had expressed a strong dislike of it -- paragraph
43.
(3) Mr Shane Bradbury and his future wife Victoria were the
only persons who were in a position to and were willing to look after the
appellant in his own home, Mill House -- paragraph 55.
(4) The appellant had strong motives for doing whatever he
thought he needed to do in order to ensure, so far as he could, that Mr
Shane Bradbury and his new wife remained at Mill House -- paragraph 61.
(5) There was every reason why the appellant should give Mr
Shane Bradbury a generous wedding gift, but;
(6) Mr Shane Bradbury's need was for cash and it was obvious
that he would sell land given to him in order to raise cash -- paragraph
133; and
(7) There was no reason why the appellant should wish to give
Mr Shane Bradbury a generous wedding gift in a way which would cause him
detriment by way of a devaluation of his property which was out of all
proportion to the benefit which would be conferred on Mr Shane
Bradbury.
- In the context of that final point it is pertinent
to have in mind the evidence of the valuer, Mr Conie, to which the judge
refers at paragraphs 116 to 121 of his judgment. It was Mr Conie's view that
the effect of the transfer of the Orchard was to devalue the Mill House by
some 10 per cent to 15 per cent. It is not difficult to see why he took
that view. A glance at the site plan, annexed to the transfer shows that the
Orchard would be extremely attractive as accommodation land to a prospective
purchaser of Mill House. Further, loss of the Orchard without an adequate
covenant restrictive of building would expose the occupier of Mill House to a
serious loss of privacy if the Orchard was subsequently developed and the
access to the Orchard, if developed, would have to be over the driveway to
Mill House. It is also plain that the Orchard, which is in the centre of the
village and surrounded by dwelling houses, is prima facie a site ripe
for development -- it provides an obvious opportunity for in-filling.
- The effect of the transfer, therefore, was not
only seriously to devalue Mill House -- on Mr Coney's figures, by at
least £45,000 -- but also to hand to the donee (or to Mr Hillier as the person
who had purchased the land from the donee for £1,800) a property ripe for
development for which a speculative developer might, on Mr Conie's evidence,
have been prepared to pay as much as £100,000, although perhaps subject to
some option arrangement. Further, even without planning consent, the Orchard
would, on Mr Conie's evidence, be worth not less than £10,000 as accommodation
land to a purchaser in the village. No doubt there are circumstances in which
an elderly man without children would wish to benefit the grandchild or
grandchildren of his sister at the expense of his own estate by a transfer of
value out of his estate, which would increase in value in the hands of the
transferee; but that is not the explanation given for this transfer. It was to
be a wedding present, valued at agricultural land value; and in any event
there was no reason why the appellant should wish that only Mr Shane Bradbury
should benefit out of his estate, rather than the three grandchildren of Mrs
Bradbury.
- This was a transaction which no one with proper
regard for his own interests would enter into without careful and informed
thought as to its wider effect. It is that feature which gives rise to the
presumption which the judge correctly identified: that, when making the gift,
the appellant was responding to some pressure or influence which caused him to
act without proper regard to his own interests and in a manner that no-one who
was not under pressure or influence would act.
- The judge said, in paragraph 145, that the
appellant had stated that he was not put under any pressure at all. That is
not a fair reading of paragraph 19 of the witness statement. What the
appellant actually said was: "I do not think Shane did not put me under any
pressure at all to give him the land". Accepting that there is an unintended
double negative in that sentence, nevertheless, all that the appellant can be
taken to be saying is that Shane did not, himself, put pressure on the
appellant to make the transfer. That would be consistent with a finding that
Mr Shane Bradbury did not ask for a transfer of the land. It has not been
suggested that he did. But the fact that the donee has not asked for the gift
is not a complete answer to an assertion that the gift was the product of
undue influence; see Hammond v Orchard, particularly at paragraphs 25
and 32.
- Hammond v Orchard was a case in which the
donee, Mrs Osborne was given all of the deceased's investments, an amount
equivalent in value to some £395,000. She had not asked for the gift. In the
course of his judgment, Sir Martin Nourse said this at paragraph 32:
"Even if it is correct to say that Mrs Osborne's conduct was
unimpeachable and that there was nothing sinister in it, that would be no
answer to an application of the presumption. As Cotton LJ said in
Allcard v Skinner, the court does not interfere on the ground that
any wrongful act has in fact been committed by the donee, but on the
ground of public policy which requires it to be affirmatively established
that the donor's trust and confidence in the donee has not been betrayed
or abused."
- That passage was adopted by Arden LJ in
Jennings v Cairns [2003] EWCA Civ 1935 (40). She said:
"The fact that the conduct of a person exercising influence is
unimpeachable is not by itself an answer to a claim in undue influence,
though the presumption of undue principle can be rebutted in many
ways."
- The circumstances that the donor is vulnerable --
in the sense that the relationship between the donor and the donee has
potential for abuse -- and that the gift is one which is not to be explained
by the ordinary considerations by which men act lead, as a matter of public
policy, as Sir Martin Nourse pointed out in Hammond v Osborne, to the
need for the donee to show that the donor really did understand and intend
what he was doing. That is why it is necessary to show that the gift was made
after full free and informed consideration. A gift which is made without
informed consideration by a person vulnerable to influence, and which he could
not have been expected to make if he had been acting in accordance with the
ordinary motives which lead men's actions, needs to be justified on the basis
that the donor knew and understood what he was doing. In this case, that
requirement was not met. It was no answer for the judge to say, as he did in
paragraph 145 of his judgment, that full and informed consent had become
irrelevant in the light of the appellant's statement at paragraph 19 of his
witness statement of April 2004.
- For those reasons I would allow the appeal and set
aside the first transfer. In those circumstances, like the judge, I would set
aside the second transfer, that is to say the transfer to Mr Hillier also.
- Mr Hillier, as second respondent, seeks to rely on
a respondent's notice, for which he needs permission to file out of time. The
two grounds on which he seeks to uphold the judge's decision are these. First
that he, Mr Hillier, did not in law have constructive notice of any
impropriety committed by the first defendant, whether presumed or otherwise;
and, second, that the transaction was not explicable only on the basis that
undue influence had been exercised to procure it -- it was explicable on the
basis that the gift was made in contemplation of marriage.
- In my view there is nothing in either of those
points. They are so devoid of merit that I would not give permission to file
the respondent's notice out of time. The transaction was not explicable on the
basis of a gift made in contemplation of marriage for the reasons which I have
already explained. If the appellant wanted to give to his great nephew a sum
of £2,000 or thereabouts as a wedding gift, the transfer of the Orchard was a
quite remarkable, extraordinary and inappropriate way of seeking to do that.
The marriage does not provide the explanation for the gift, in the form in
which it was made. Secondly, the question is not whether the second defendant
had notice of impropriety on the part of the first defendant; the question is
whether Mr Hillier had notice of the facts which give rise to the
vulnerability of the first transfer to being set aside on an application based
on allegations of undue influence.
- In the light of the judge's findings at paragraphs
137 and 138 of his judgment, to which I have already referred -- and the
facts on which those findings were made -- it is, to my mind, quite impossible
to suggest that Mr Hillier did not have full notice of all the matters which
lead to the conclusion that the first transfer was a transaction which was
vulnerable for being set aside. He knew all the facts because he was
instrumental in procuring the transaction in the form that it took.
- For those reasons I would set aside both
transfers.
- LORD JUSTICE MAY: I agree that this appeal should
be allowed for the reasons which Chadwick LJ has given.
- The deputy judge held that there was a
relationship between Les and Shane where Les reposed trust and confidence in
Shane. Les was therefore vulnerable to being exploited or, as the deputy judge
put it, there was a potential for abuse. This is not challenged in this court.
- The judge also found that the gift of the Orchard
was not objectively readily explainable by the relationship between them, or
as Lord Scott put in it Etridge, it could not be explained by reference
to the ordinary motives by which people are accustomed to act. This was in my
judgment a finding well open to the judge on the evidence and I would reject
Mr Levinson's and Mr Beaumont's submissions to the contrary. It was to be a
wedding gift certainly and its value in the hands of Shane was £1,800. But
objectively that was not its value. Giving away the Orchard had the obvious
effect of diminishing the value of Mill House substantially: The evidence
suggested that this may have been in the order of £45,000. In addition the
Orchard had an obvious development hope value: you only have to look at the
plan attached to the transfer to see this. The same is an obvious inference
from the terms of the restrictive covenant not to build more than
six houses on it. Les himself seems to have had some idea that there was
a developer around, see for instance paragraph 20 of his witness statement,
but the deputy judge found and was entitled to find that neither Les nor Shane
had any proper concept of the value of the Orchard. So this was a wedding
present with a price tag prejudicial to Les well in excess of £50,000.
- Thus there was a presumption of undue influence,
the effect of which was that explained by their Lordships in Etridge.
Did the evidence relied on by the defence sufficiently rebut the presumption
so that the eventual finding should be that either there was no influence or,
if there was, that it was not such that Les did not act of his own full, free
and properly informed will?
- The defendant's case here was very simple. It was
that Les's own statement in paragraph 19 in particular of his witness
statement by itself established that there was no influence. The judge agreed
with this in a single paragraph of his judgment, paragraph 145, which
reads as follows:
"I suspect that from the independence of life at Hill View,
Les might now think if questioned that the gift was a mistake,
particularly if directed to full and informed views as to the effect on
the value of Mill House and the want of any real benefit beyond a modest
sum of cash to Shane."
- That is speculation. The claimant in a presumed
undue influence case does not have to give evidence of actual pressure or as
to what he would have done if fully informed. But in this case, and most
unusually, the claimant states that he was not put under any pressure at all.
In those circumstances, I would not speculate as to what Les might have done
if he had been fully informed as to the objective problems with the gift.
- The paragraph in the witness statement was not by
any means the only evidence upon which the critical question had to judged. It
is true that the deputy judge carefully and fully set out the facts in the
earlier part of his judgment, but the terms of the short paragraph 145 of the
judgment to my mind clearly show that the judge regarded paragraph 19 of the
witness statement as by itself decisive without the need to evaluate that
evidence together with other plainly relevant evidence. In my view, this was
an error by the deputy judge such that this it is for this court to make its
own evidential evaluation on this point.
- The witness statement was made in the
circumstances which Chadwick LJ has described, when Les was aged 80, and
critically after the registration of his enduring power of attorney. He was
regarded then as unable to manage his affairs. Les was unable to come to court
to give evidence at the trial. The very circumstances in which the statement
was made and put in evidence meant that its evidential reliability needed
careful consideration in the light of other evidence. The fact that Les may
have thought it would have been a nice idea to give Shane an acre of land as a
wedding present and that he did not think that Shane put him under any
pressure was of course to be taken into account. But on the evidence as a
whole it was nothing like dispositive of the question whether Les was
influenced to do so by Shane, with or without the help of Mr Hillier, and by
facts and circumstances arising out of their relationship. Indeed the
narrative facts given by the judge and summarised by Chadwick LJ lead me to
the clear conclusion that, in giving Shane the Orchard, Les was plainly
influenced to do so by Shane and by Mr Hillier on behalf of Shane and that the
influence arose from Shane's dominant position in their relationship.
- In reaching that conclusion, I give full
evidential weight to paragraph 19 of Les's witness statement. But to take but
one specific point, and there are others, Les was clearly influenced by Shane
through Mr Hillier to agree to the restrictive covenant permitting the
building of as many as six dwelling houses on the Orchard.
- I have so far addressed the question of influence
alone because this is the main way in which the first respondent at least
seeks to uphold the judge's decision. Once it is seen that the only proper
finding on the evidence as a whole is that the gift was made under Shane's
influence, there is no difficulty on the facts of this case in finding that
Les did not make the gift after full, free and informed thought. It is quite
clear that Les had little or no idea of the value of what he was giving away,
nor did he receive any proper advice in this respect.
- I consider therefore that the only proper
conclusion on the evidence was that the transfer of the Orchard to Shane was
the product of undue influence. Put another way, there was a presumption of
undue influence, which the evidence relied on by the defendant, including
paragraph 19 of Les's witness statement, did not displace.
- I agree with Chadwick LJ for the reasons he has
given, that we should not give leave to rely on the proposed respondent's
notice.
- LADY JUSTICE SMITH: I agree with both judgments
and have nothing to add.
Order: 1) Refused. 2) Appeal allowed.