England and Wales High Court (Chancery Division) Decisions

IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION

		20th December 2011

1. This action arises from a family dispute relating to the estate of Valerie Webster ("Valerie"). There are two claims in the action. The first is a contentious probate claim, seeking an order in solemn form granting probate of Valerie's penultimate will dated 16^th November 2000, and claiming against the validity of her last will dated 24^th May 2006. The second is a claim that land comprising The Priory and certain agricultural land at Ash Priors, near Taunton, Somerset is subject to a constructive trust or equity based on proprietary estoppel arising from a testamentary promise.
2. This is an application by the 1^st and 2^nd defendants for summary judgment dismissing the constructive trust, or proprietary estoppel, claim. The trial of the action is due to begin on 16^th January next, although, since witness statements are not due to be served until 6 weeks after my decision on this application, it seems doubtful whether the date can be retained.
3. The Ash Priors estate, consisting of The Priory, comprising a mansion house, 3 cottages and 17.628 acres of land, and the Agricultural Land, which has 20.236 acres, and certain other parcels of land which are not relevant to the present application, was purchased by Valerie's late husband, Antony Webster ("Antony") in 1950. He died on the 10^th February 1996. Valerie died on 21^st August 2007.
4. Antony and Valerie's first child was Valentine Webster ("Valentine"), He married Jennifer in 1970, and they had 3 children, of whom the oldest is the claimant in the action, Rupert, who was born in 1972. Valentine was made bankrupt in December 1992, obtaining his discharge in the following year, 1993. He died in 2006. Jennifer is still alive. She is the 3^rd defendant.
5. Antony and Valerie had 3 further children, Virginia (or Alison), Antonia and Rory who are, respectively, the 2^nd, 5^th and 4^th defendants. They have, between them, 9 children.
6. Until 1992, Antony retained the legal title to the estate, but by a Deed of Voluntary Correspondence dated 6^th April 1992 he conveyed the Priory and two fields to himself and to Valerie to be held by them as tenants in common in equal shares. Then, by a Deed of Gift dated 25^th April 1992, Antony gave the remainder of the estate, including the Agricultural Land, to Valerie.
7. By a Settlement dated 25^th April 1992, Valerie transferred her interest in part of the estate, including the Agricultural Land, to Alison, Antonia and Rory to be held on trust for her 4 children,
8. Rupert's claim is pleaded (not by counsel appearing on the application) in the following terms in the Particulars of Claim:-

"THE TRUST CLAIM IN RESPECT OF THE PRIORY

8. From the early 1970s onwards, Anthony made assurances, promises and representations to Valentine and Jennifer that if they (Valentine and Jennifer) came to live at Ash priors, helped to look after Anthony and Valerie, and helped to look after and run the farm at Ash Priors, he (Anthony) would by his Will bequeath to Valentine all his legal and beneficial interest in the Priory and in the Agricultural Land.

9. Relying upon the said assurances, promises and representations, Valentine and Jennifer went to live at Ash Priors, helped to look after Anthony and Valerie, and helped to look after and run the farm at Ash Priors. They did so without remuneration, and also spent considerable sums of money on the Priory and on the Agricultural Land, and on other properties at Ash Priors originally owned by Antony. In so doing, they acted to their detriment, in reliance upon the said assurances, promises and representations.

10. By virtue of the matters set out in Paragraphs 8 and 9 above, the Priory and the Agricultural Land were, immediately prior to the making of the 1992 Deed, and still are subject to a trust in favour of Valentine, and since his death on 16^th September 2006, in favour of the residuary beneficiary of his Estate."

9. The following Further Information relates to the constitution of this claim: -

(1) the claimant brings these proceedings in his capacity as

(a) a beneficiary of Valerie's Estate, and

(b) the beneficiary of a Trust created by Valentine in respect of Valentine's interest in The Priory and the Agricultural Land

(2) the (1^st and 2^nd) defendants are being sued in their capacity as

(a) the current Trustees of the 1992 Deed, and

(b) the Executors named in the Disputed 2006 Will,

10. Further, (the 2^nd defendant) is sued in her capacity as one of the Trustees of the 1992 Settlement.
11. The Further Information also states:

"Jennifer is the sole Executrix of Valentine's Estate.

Although she is in his Will named as the sole beneficiary of Valentine, she holds Valentine's legal and beneficial interest in The Priory and the Agricultural Land on Trust for the Claimant"

12. The Further Information also contains more detail as to the alleged detriment to Valentine and Jennifer in reliance on the alleged assurances, including both substantial physical work and financial expenditure.
13. It is clear from the evidence that Jennifer has never wished to participate in these proceedings, but on 22^nd September 2010, on the application of the 1^st and 2^nd defendants, Master Bragge ordered that she should be added as the 3^rd defendant, by consent if she filed a written consent by 20^th October 2010, otherwise not by consent. She did not consent.
14. The first ground on which the application for summary judgment is based is that Rupert has no locus standi to bring the claim. The constructive trust, or proprietary estoppel, operates in favour of his parents, and the proper claimant is therefore his mother, both in her personal capacity and as the executrix of her late husband's estate.
15. In response to this, and amplifying the rather vague references to a trust in the Further Information, Rupert states as follows in his witness statement:

"As is clear from my Response 12, (in the Further Injunction) it is my case that "she holds Valentine's legal and beneficial interest in the Priory and in the Agricultural Land on Trust" for myself. For the avoidance of doubt, I submit that I am entitled to rely, in relation to such interest, upon the terms of a Full Secret Trust agreed between my father Valentine and my mother Jennifer - in my presence - in the late stage of the terminal illness from which he eventually died. I shall seek at Trial to establish the existence of that Trust by my evidence and that of my mother Jennifer. The creation of that Trust was clearly in my father Valentine's mind at the time of the onset of that illness, as is shown by his diary note for 31^st March 2011...."

16. On behalf of the 1^st and 2^nd defendants, Mr. Grant submits that there is no obvious reason for a secret trust, and that the suggestion that there was one is not supported by any evidence on the part of Jennifer. These may well be substantial points, but they do not provide a sufficient basis for a summary judgment application, in circumstances in which these is unequivocal evidence from Rupert of a conversation with his parents, and in which his mother's evidence on the point is simply unknown. Rupert has explained his mother's understandable reluctance to become involved in some detail in his witness statement, but has said that he will if necessary compel her to give evidence.
17. Next it is submitted that, even if there was an oral declaration of trust, as Rupert alleges, (a) it is ineffective for want of writing, by reason of section 53 of the Law of Property Act 1925 and (b) even if that were not so, only the trustee i.e. Rupert's mother, could enforce it: see Roberts v. Gill & Co. [2011] 1 AC 240 at §87 per Lord Rodger, Both these points seem to be correct, and Miss Rich on behalf of Rupert, while contending that they were irrelevant, did not seek to answer them.
18. Instead, she made an application, in separate proceedings in Valentine's estate brought by Jennifer against Rupert, for the appointment of Rupert as Valentine's personal representative in substitution for Jennifer, pursuant to section 50 of the Administration of Justice Act 1985, Rupert of course consents to the application, the effect of which would be to give him locus standi to pursue his late father's claim.
19. Mr. Grant objected to this application, on the ground of its lateness, which deprived him of the opportunity of obtaining evidence that Rupert was not a fit and proper person. However, I think that Miss Rich was right to say that that is a matter between Jennifer, the sole beneficiary, and Rupert, and that in relation to this it was Mr. Grant's clients who did not have locus standi.
20. Mr. Grant further submitted that the substitution of Rupert as the personal representative of Valentine's estate did not assist his claim, since to pursue it on behalf of the estate was inconsistent with his primary case of a secret trust in his favour. I do not accept this. In circumstances in which Mr. Grant has submitted, probably correctly, that any such secret trust would be unenforceable, there is no inconsistency in Rupert advancing an alternative case. He is perfectly entitled, in these circumstances, to claim that, if the secret trust is unenforceable, the beneficiary of the claim remains the estate of his father, which he is now entitled to represent.
21. So this ground on which the application for summary judgment is based fails. I am prepared to make the order sought in the separate proceedings, which results in the position that Rupert is entitled to pursue the action in his capacity as the personal representative of his father's estate.
22. Miss Rich also applied, on behalf of Jennifer, for an order that she should cease to be a party to the proceedings, on the ground that it was not desirable for her to remain a party following the appointment of Rupert as personal representative. I reject that application. The basis for Master Bragge's Order appears clearly from the defendants' skeleton argument for that hearing. It was that the claim was improperly constituted, having regard to CPR 19.3, because all persons jointly entitled to the remedy claimed in the action ought to be party to it. That remains the position: if the claim is valid, it is, or at least may be, a joint claim belonging to Jennifer and the estate of her late husband.
23. Miss Rich said that Jennifer was concerned at the possibility of an order for costs, in circumstances in which the other parties to the action have declined to say that they would not apply for costs against her. There does not seem to me to be much risk of an order for costs being made against her, in circumstances in which she has not taken any steps to advance any claim which she may have.
24. The next ground on which the application for summary judgment is based is that Valentine's claim is vested in his trustee in bankruptcy, the Official Receiver. This seems to me to be unanswerable.
25. The property vesting in a trustee in bankruptcy is widely defined in section 436 of the Insolvency Act 1986:

" " property" includes money, goods, things in acting, and every description of property wherever situated and also obligations and every description of interest, whether present or future or vested or contingent, arising out of or incidental to, property" (my emphasis).

26. As at December 1992, on the basis of the facts alleged, either Valentine and Jennifer jointly, or Valentine alone, had an equity interest in The Priory and the Agricultural Land, which would take effect on the death of his father. The precise extent of the equity might depend on the circumstances at that time, as the court will assess the minimum that is necessary to give effect to the promise and avoid unconscionability: see Jennings v. Rice [2003] 1 P. & CR. 100 (C.A.); Gillett v. Holt [2001] Ch 210. Subject to that, Valentine and Jennifer became jointly entitled, or Valentine became entitled alone, to The Priory and the Agricultural Land on the death of his father. Alternatively, it is suggested, the assurances were to be understood as taking effect on the death of both parents, although this would require an amendment to the pleadings. However, the assurances are to be interpreted, assuming that they, and the necessary reliance and detriment, are established on the evidence, Valentine had by December 1992 a either a joint or a sole interest in the estate. Its existence did not depend on any future uncertain event.
27. Miss Rich submitted that Valentine had not acquired any property by December 1992. In cases of this kind, no property interest arose until the death of the promisor, unless the promisor did something inconsistent with the promise in his lifetime to the knowledge of the promisee: if he did, the promisee had an immediate claim, as in Gillett v. Holt.
28. This seems to me to confuse the right with the circumstances in which the right is enforced. Normally, the promisee would not bring proceedings unless and until the promisee's personal representatives refused to give effect to the equity. In Gillett v. Holt the promisor made inconsistent dispositions in his own lifetime, and earlier proceedings were justified. But the property here is not the cause of action but the equity, described by Slade L J. in Jones v. Watkins, unreported, 26^th November 1987 as "a right in equity to a transfer of the whole property." On the facts pleaded in this case, Valentine and Jennifer, alternatively Valentine alone, had acquired such a right long before December 1992. Although there is no authority directly in point, in my view Valentine's right was property which passed to the Official Receiver as his trustee in bankruptcy.
29. The Official Receiver has never transferred the equity back to Valentine, from which it follows that, at this point in time, it is vested in him, and Rupert has no locus standi to pursue Valentine's claim. Since his mother does not wish to pursue her claim, as matters stand the action must fail. However, I understand that the Official Receiver has been approached, and it may be that he will be prepared to reassign the claim to Valentine's estate. If that happens before judgment is handed down, this ground on which the application is based will disappear. Similarly, if a reassignment takes place at any time in the future, any further action brought by Rupert, and similarly constituted, would not be affected by this decision. All that I have decided is that the cause of action is at present vested in the Official Receiver as Valentine's trustee in bankruptcy.
30. The final ground on which this application is based is that the claim has no real prospect of success on the facts. Mr. Grant submitted that both the transfer by Antony to himself and Valerie as tenants in common on 7^th April 1992, and the Deed of Settlement relating to the Agricultural Land on 27^th April 1992, were flatly inconsistent with the alleged assurances. Yet Valentine and Jennifer did nothing, although they must have known of the arrangements and, indeed, a later entry in Valentine's diary for 3^rd April 2000 proves this. Therefore, Mr. Grant submitted, the claim is not credible, since Valentine would have objected at the time, and in any event the defence of laches would be unanswerable since nothing was done for the remaining 14 years of his life.
31. These are clearly very powerful points, but I am not persuaded to accept them as a basis for summary judgment. There is some evidence that Valentine did not think it appropriate to do anything while his mother was still alive, and it is possible that the assurances were intended to take effect only on her death. Rupert relies on the witness statement signed by his mother which supports the claim, although his evidence is that she did not wish this to be used, but beyond this it is not clear what she will say. It is not impossible that there may be a valid explanation for the inaction since 1992 and, in circumstances in which Rupert has said that she will be called to give evidence, it is impossible to say that the claim is fanciful or unreal.
32. Nevertheless, as matters stand at present, I propose to give summary judgment dismissing the proprietary estoppel claim, but on the sole basis that Rupert has no locus standi to bring it at present.