England and Wales High Court (Chancery Division) Decisions

IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION

		The Rolls Building 7 Rolls Buildings Fetter Lane London EC4A 1NL
		20th March 2013

MR ISAACS QC:

1. The Claimant and the Defendant are the two sons of Mr Igor Tociapski, who died on 12^th March 2010. The Deceased made a will dated 20^th June 2007, under which the Claimant and the Defendant are the only persons entitled to share in the deceased's estate. The Defendant is the sole executor of the estate under that will.
2. In this action the Claimant seeks a declaration that an alleged later will executed by the deceased on 13^th May 2009 -- which I shall call the 2009 will -- is invalid. The Defendant is also the sole executor of the estate under that will. The Claimant also seeks an order that the grant of probate to the Defendant dated 27^th May 2010 in respect of the 2009 will be revoked, together with related relief.
3. The key difference between the 2009 will and the 2007 will is that under the 2009 will the entirety of the deceased's estate is left to the Defendant, whereas under the 2007 will the estate was shared between the two sons. The Claimant also seeks relief in relation to a transfer dated 12^th February 2010, by which the deceased transferred to the Defendant a property known as Hillcrest Cottage in Weedon, Northamptonshire.
4. In these proceedings the Claimant is ably represented by Ms Araba Taylor. The Defendant has taken no part in the proceedings. He did not acknowledge service or file a defence. He has not appeared at the hearing today and is not represented. His whereabouts are unknown, although the Claimant believes that the Defendant may be in Australia or South Africa. I received written and oral evidence from the Claimant's solicitor, Mr William Ryan, which evidence I accept, to the effect that the Defendant was served with all proceedings up to 2^nd October 2012. Mr Ryan could not be sure, however, that the documents served on the Defendant thereafter were received by the Defendant, including therefore notice of today's hearing.
5. The relevance of the October 2012 date is that the trial of this action was originally due to take place in that month and that the Defendant was aware of that trial date, although in the event it was adjourned at the Claimant's request due to certain visa difficulties being experienced by the Claimant. Under CPR Part 39.31 the Court may proceed with the trial in the absence of a party and that is the course which I have taken in this case.
6. The grounds on which the Claimant seeks to set aside the 2009 will are that the deceased did not know or approve its contents at the time he executed it and that when he executed it he was subject to undue influence exerted by the Defendant. Ms Taylor accepted that if I were to conclude that the deceased did not know or approve the contents of the 2009 will, it would be unnecessary to consider the issue of undue influence. The grounds on which the Claimant seeks to set aside the transfer are that when the deceased executed it he was subject to undue influence exerted by the Defendant and also, that this was a case of non est factum, due to the deceased's lack of capacity at the time he executed the transfer. In relation to the non est factum plea: at the hearing I gave the Claimant permission to amend the amended Particulars of Claim so as to make that plea in view of the fact that lack of capacity was only pleaded in the amended Particulars of Claim in the context of the allegation of undue influence.
7. In addition to the evidence of Mr Ryan, I received written and oral evidence from the Claimant himself and from Dr Andrew Barker, a consultant in old age psychiatry, who prepared expert's report dated 29^th August 2012 on the deceased's capacity at the times when he executed the 2009 will and the transfer respectively and the deceased's vulnerability to undue influence at those times. Dr Barker relied in part on a report dated 25^th May 2012 prepared by the deceased's general practitioner, Dr Jonathan Hill. Dr Hill did not give oral evidence and his report is hearsay. However, there is, in my judgment, no reason not to accord full weight to its contents, which essentially consist of a summary of the care provided to the deceased and an expression of Dr Hill's views as to the deceased's state of mind at the material times. There was no evidence adduced on the Defendant's behalf.
8. I turn first to consider the validity of the 2009 will. I accept the evidence of Dr Barker that, for the reasons set out in his report, while it cannot be concluded that the deceased lacked the capacity to execute the 2009 will, his capacity was impaired and that this impacted adversely on the deceased's ability to have known and approved the contents of the 2009 will. In his oral evidence Dr Barker amplified his written evidence by explaining the particular significance, in his view, of Dr Hill's evidence about the CT scan carried out in October 2010 on the deceased, which showed marked generalised and atrophic and ischaemic changes, of which, in Dr Hill's view, most would have been present in May 2009.
9. For Dr Barker, whose evidence I accept, the significance of this is that they support a conclusion of impaired judgment and impaired capacity. I should add that Dr Barker fairly pointed out that the views he expressed were based on the limited evidence available to him, but that, on that evidence, he had no reason to express any other views.
10. So far as the law is concerned, I was referred by Ms Taylor to the relevant passages in Williams, Mortimer and Sunnucks on Executors, Administrators and Probate, to the Court of Appeal decision in Gill v. Woodall [2011] Ch 380 and to Norris J's decision in Wharton v. Bankcroft [2011] EWHC 3250 (Ch) where the judge considered, at paragraphs 27 to 29 in particular, Gill v. Woodall and the correct approach to be taken in a case of this nature.
11. The factual basis for the Claimant's allegations in the present case, that the deceased did not know or approve the contents of the 2009 will are summarised in paragraph 4 of the amended points of claim, which reflect the evidence given by the Claimant and which, except in one respect, I accept:

(4) Some reason for excluding Paul was thus necessary, but the reason given was not itself true or rational;

Also, the Claimant relies on the following facts and matters in addition to those stated in the amended Particulars of Claim in support of the existence of circumstances arousing suspicion:

"(1) There was no reason for the Testator to alter the provision made in the 2007 Will, which acknowledged both the equal status of his sons and Boris's special position/needs;

(2) The Pretended Will departed from his previous pattern of always including Paul, sometimes to the exclusion of Boris;

(3) Historically, the exclusion of Boris was always a reflection of Boris's troubled circumstances; there was no equivalent basis for excluding Paul;

(4) Some reason for excluding Paul was thus necessary, but the reason given was not itself true or rational;

(5) It was out of character for the Testator to include a provision explaining exclusion; Paul invites the Court to conclude that this originated with Boris and did not express any intention of the Testator's;

(6) The change from the draft will prepared by Patel & Co was one intended to ensure that no third party would have any control over the Testator's estate. This is unlikely to have originated with the Testator, was not in his interests, but was very much in Boris's interests. It is more likely than not that he did not understand the nature or effect of this provision.

(7) The original instructions to Wright Hassall were given by Boris, who was thus "active and instrumental" in the preparation of the Pretended Will;

(8) The confirmatory letters and draft will sent to the Property on 23 April 2007 are unlikely to have been read by the Testator and he may not even have been aware that they had arrived;

(9) He was suffering particular health problems at the time, particularly with respect to glaucoma;

(10) It was difficult for the Nurse to gain access to him at the Property and she was completely unable to do so from 1-4 May 2009, between the date of the instructions (23 April 2009) and execution of the Pretended Will (14 May 2009). The reasonable inference is that Boris was able to keep him isolated;

(11) Boris had control over the Testator, by reason of the latter's frailty, many illnesses, general dependence and their domestic arrangements;

(12) The Court can reasonably infer that this testator, who could not read for himself, would not have had control of the Pretended Will before or after its execution; while there is no evidence from which the Court can infer that he did read or understand it.

Those facts are, in my judgment, sufficient to -- in the language used in some of the older cases -- excite the vigilance and suspicion of the Court, such that a very high degree of proof is required for the Defendant, on whom the burden of proof lies, to show that the deceased knew and approved of the 2009 will in the sense that the 2009 will represents his testamentary intentions.

12. I take into account the fact that the deceased had testamentary capacity and did duly execute the 2009 will. However, in the light of all the available evidence, both factual and expert, to which I have referred -- in the absence of any evidence adduced by or on behalf of the Defendant -- I am not satisfied, on the balance of probabilities, that the deceased either understood what was in the 2009 will when he signed, or what its effect would be.
13. I accept that in all the circumstances, particularly the deceased's total dependence on the Defendant while being frail and elderly and probably mentally disordered, the reading over of the 2009 will to him is insufficient to establish that the deceased understood what he was doing and its effect, for the reasons amplified in paragraph 24 of the Claimant's skeleton argument.
14. In these circumstances I conclude that the deceased did not know and approve the contents of the 2009 will and that it should be set aside on that basis. In those circumstances it is unnecessary for me to determine the Claimant's other submission that the 2009 will was procured by the Defendant's undue influence.
15. I turn next to consider the validity of the transfer. By the time the transfer came to be executed, the undisputed evidence of Dr Barker, which I accept, is that the deceased lacked mental capacity. Since the transfer was made inter vivos' the question of testamentary capacity does not arise here, but the absence of capacity does, in my judgment, give rise to the issue whether it can properly be said that the transfer was not the deceased's document and is also relevant to the issue of undue influence. A successful plea of non est factum enables a party to avoid an agreement if that party was permanently or temporarily unable, through no fault of his own, to have any real understanding of the purport of the document irrespective of whether this inability arises from inter alia any incapacity -- see Saunders v. Anglia Building Society [1971] AC 1004 at 1015 to 1016, considered recently by Silber J in Hackett v. Crown Prosecution Service [2011] EWHC 1170 (Admin) at paragraphs 85 to 90. There is a heavy burden of proof on the party who seeks to invoke this remedy.
16. The present case is unusual in that it is the Claimant and not the deceased who is seeking to set aside the transfer. The non est factum point only arose late during the course of the argument and was not argued before me to any extent by Ms Taylor, for which she cannot in any way be criticised. In those circumstances I prefer not to decide this aspect of the case on the ground of non est factum but to consider whether the transfer may be set aside on the ground originally relied on by the Claimant: namely undue influence.
17. In this regard the Claimant alleges that the transfer was procured by the exercise of undue influence by the Defendant. The Claimant relies on the following matters:

"PARTICULARS OF UNDUE INFLUENCE

(1) The Claimant repeats the Particulars set out above in support of his plea of want of knowledge and approval.

(2) In addition to the matters therein pleaded the Deceased was dependent upon the Defendant by reason of health complaints in addition to his diabetes and impaired eyesight including the consequences of a stroke suffered in about [date] and chronic angina together with the distress and vulnerability caused by double incontinence and difficulties with mobility.

(3) In the premises very little pressure from the Defendant would have sufficed to overbear the Deceased's will.

(4) Such pressure was brought to bear both generally and specifically in relation to the Deceased's testamentary wishes by reason of the Deceased's constant fear of the Defendant due to his irrational and violent behaviour his own dependence on the Defendant and the Defendant's clear wish that the Deceased should leave the whole of his estate to the Defendant in particular the Property.

(5) Further the Defendant had put the Deceased under pressure to make a new will by making the arrangements for him to attend at the offices of Patel & Co, Solicitors and when the draft will prepared by them did not accord with the Defendant's wishes in respect of representation to the Deceased's estate arranging for Wright Hassall to be retained in their place.

(6) There is no explanation rational or otherwise for the Pretended Will to have been made in the terms it was particularly having regard to the terms of the 2007 Will.

The one point on which I do not accept in full the Claimant's evidence relates to the allegation that the deceased had no reason to enter into the transfer. The reason I do not accept that in its entirety is because there is evidence that subsequently came to light arising out of the documentation produced by the deceased's solicitors who were involved at the time of the transfer that the execution of the transfer was apparently an estate planning measure, designed as a potentially exempt transfer within the meaning of s.3(a) of the Inheritance Act 1984. To the extent that the transfer was indeed such a measure then there would have been a legitimate reason for the transfer having been executed by the deceased.

18. However, it seems to me that that explanation is implausible. The following considerations come into play in this regard: that there was little reason for the transfer to have been executed as an estate planning measure; there was no realistic likelihood of the deceased surviving for seven years and, as events proved, little chance of his surviving for even a short time after the transfer was executed and that that is something which would have been evident to the solicitors involved. It is questionable also whether the concept of estate planning would have been something within the deceased's contemplation and understanding at that time and, perhaps most significantly, the transfer would not, for estate planning purposes, have been worthwhile having regard to the value of £300,000 which Boris had given the solicitor to the estate and the applicable inheritance tax threshold of £325,000. Even if the property was worth the £350,000, which it was said to be on 5^th March 2010, a transfer of half would still have meant a maximum tax saving in the region of £10,000.
19. The applicable principles are laid down in Royal Bank of Scotland v. Etridge (No. 2) [2001] UKHL 44 and are summarised in paragraph 35 of the Claimant's skeleton argument:

"35. An inter vivos transaction can be set aside for undue influence, as a matter of public policy, even where there is no actual wrongdoing. The applicable principles are those laid down in Royal Bank of Scotland v Etridge (No. 2) [2001] UKHL 44 (HL)

which can be summarised as follows:-

• The issue the court is concerned with is the use of "unacceptable forms of persuasion" being employed by one person over another, to induce that other to enter into a transaction;

• There are 2 such forms: "improper pressure or coercion, such as unlawful threats" and a second, which "arises out of a relationship between two persons, where one has acquired over the other a measure of influence, or ascendancy, of which the ascendant person then takes unfair advantage";

• The law will intervene to prevent abuse of influence in "relationship" cases, even in the absence of overt acts of persuasive conduct;

• Equity is particularly concerned about those relationships where one party is disposed to do whatever the other asks without exercising independent judgment, usually occurring where one party has placed trust in another to look after his affairs and interests. In this class of case, it is the duty of one party to advise the other or to manage his property for him;

• Relationship cases are properly to be identified by asking whether one party has reposed sufficient trust and confidence in the other, rather than whether the relationship belongs to a particular type (e.g., parent and child); but

• The principle is not confined to cases of trust and confidence. It can include reliance, dependence or vulnerability on one side and ascendancy, domination or control on the other side. Even this is not to be taken as a comprehensive definition;

• The party asserting undue influence has the burden of proof (i.e., Paul). However, if they make out the appropriate relationship and a transaction which cannot readily be explained by the ordinary motives of ordinary persons in that relationship, the court will then infer that the transaction can only have been procured by undue influence. It is then for the party alleged to have exercised undue influence (i.e., Boris) to produce evidence to counter this inference;

• Instead of speaking of "the presumption of undue influence", the better language now is to say that there is "a rebuttable evidential presumption of undue influence";

• This is to be distinguished from "presumed undue influence". This applies to relationships in a special class, of which the law had traditionally been "sternly protective". In these cases, the law presumes irrebuttably that one party had influence over the other;

• The class of relationships does not include husband and wife. It does include parent and child, guardian and ward, trustee and beneficiary, solicitor and client; and medical adviser and patient;

• However, although in this respect the law will presume the relationship, it will still be necessary to prove that the transaction is one which calls for explanation;

• Proof that the complainant (i.e., The Testator) received advice from a third party – such as a solicitor - before entering into the impugned transaction is one of the matters that the court will take into account in weighing the evidence, but is not in itself conclusive. In the circumstances of this case, the lack of input from Mr Rouse does not provide much assistance for Boris.

The Claimant submitted that the transfer clearly calls for an explanation and that the only one available, namely that it was an estate planning measure is improbable and should be rejected. I accept that submission. There is no sufficient evidence before me to satisfy me that the deceased executed the transfer after full, free and informed thought. In reaching that conclusion I have taken into account the attendance note dated 12^th February 2010, the date when the transfer was executed made by the deceased's solicitors of their meeting with him and the Defendant on that day, which I note was preceded by a meeting between the solicitors and the Defendant alone on 12^th January 2010, during which, according to the solicitor's attendance note of that meeting, they were told by the Defendant that the deceased wished to transfer the property to the Defendant.

20. For completeness, it appears that the property has since been sold by the Defendant, but for the reason of undue influence I therefore also consider that the transfer should be set aside. I will now hear from Ms Taylor about the appropriate relief that should be granted in the circumstances of the judgment.
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