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You are here: BAILII >> Databases >> Scottish Court of Session Decisions >> Horne & Ors v. Whyte & Ors [2003] ScotCS 291 (25 November 2003)
URL: http://www.bailii.org/scot/cases/ScotCS/2003/291.html
Cite as: 2004 SCLR 197, [2003] ScotCS 291
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Horne & Ors v. Whyte & Ors [2003] ScotCS 291 (25 November 2003)
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OUTER HOUSE, COURT OF SESSION |
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A1794/00
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OPINION OF LORD DRUMMOND YOUNG in the cause (FIRST) MRS JOYCE HEATHER HORNE and (SECOND) GEORGE ALEXANDER BRYSON KYNOCH Pursuers; against MRS GAIL MIRIAM WHYTE and OTHERS Defenders:
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Pursuers: Clark; Burness
Defenders: Haldane; Balfour & Manson (for Stronachs, Advocates, Aberdeen)
25 November 2003
[1] The pursuers are the son and daughter of the late Lieutenant Colonel Gordon Bryson Kynoch (hereinafter referred to as "the deceased"). The persons called as defenders are the whole of the beneficiaries under certain informal writings and a codicil executed by the deceased. The second to eighth defenders, however, have merely been called for any interest that they may have, and the sole compearing defender is the first defender, who is entitled to certain benefits in terms of those informal writings and codicil. The conclusions of the summons are for reduction of two documents executed by the deceased, first certain informal testamentary writings dated 7 May 1997 and secondly a codicil dated 19 June 1998 to the deceased's will. [2] It is averred by the pursuers that in the deceased died on 6 July 1998, aged 94. He left a probative will dated 2 May 1997, in which he directed his executors to give effect to informal writings that were clearly expressive of his intention. In that will, he further directed his executors to make over to the first defender any motor car belonging to him at the time of his death, to pay certain sums to his daughter and his niece, and to divide a sum of money equally among his staff so long as they had been with him for a continuous period of three years prior to his death. Subject to those bequests, he directed his executors to make over the residue of his estate to the first and second pursuers, their two sisters, and to grandchildren and great-grandchildren. The pursuers go on to aver that, by a pretended probative codicil dated 19 June 1998, the deceased ostensibly altered the period of three years in the legacy to staff to six years, and increased the legacy to the first defender to £50,000. It is further averred that, following upon the death of the deceased, a typewritten letter was found, apparently signed by the deceased and dated 7 May 1997, which bore to give certain directions in respect of moveable property. That letter stated that certain items of moveable property were to be offered or given to members of the family, and the remaining items, including a number of important family heirlooms, were to be left in the hands of the first defender. The pursuers admit that both the deceased's will and the codicil bear to be witnessed by his medical practitioner, and that both documents are ex facie valid. [3] The pursuers make the following averments about the relationship between the first defender and the deceased. The first defender started employment with the deceased and his wife in about 1990 as a cook and occasional driver; at the time the deceased was aged 86. By December 1995 the deceased had become almost blind because of macular degeneration, and was also very deaf. He had a history of angina and heart trouble. The deceased's wife also had a history of serious illness, and she had suffered several strokes. Gradually the first defender's duties increased until she came to be regarded as the housekeeper. In December 1995 the deceased's general practitioner noticed that he and his wife were heavily dependent on almost continuous supervision to cope with even the most minor of decisions. Most of that supervision was provided by the first defender. The deceased's wife continued to be in poor health, and she died in July 1996. Thereafter, the deceased became dependent upon the first defender. The first defender was in charge of a staff of carers who provided care for the deceased. The staff noted the dependence of the deceased upon the first defender. He expressed himself as being terrified of losing the first defender. The first defender controlled the deceased's life. He was afraid of her. He had to check everything that he did, or proposed to do, with her. She checked all of his correspondence before it was permitted to be sent. He relied on her completely. He could not make up his mind or take a decision without her assistance. When she threatened to leave his employment he became distraught. For the purpose of his discussions with others, she often told him what to say. She was present when he made important telephone calls, for example to his solicitor. She exerted control over him. She decided whether or not members of the family would be permitted to visit the deceased. [4] The pursuers then make certain averments about the condition of the deceased in the period prior to his death. They aver that, during that period, continuing deterioration in his physical and mental health was noticeable. He was seen to become progressively weaker and was affected by tiredness and by dizziness. He was noticed to become more anxious and confused, and more forgetful. He had particular difficulty with short-term memory, and would forget who had called or what he had done during the day. His hearing deteriorated, although he could hear speech from a carer close to him. After 8 June 1998 his condition was seen to have worsened. He would speak in nonsensical terms. He was seen to become easily upset and agitated. His unsteadiness and dizziness became worse. Reference is then made to his medical records, where certain aspects of his deterioration were noted. On 12 May 1998 he was admitted to Keith Hospital. He was discharged home on 25 May, but on 8 June he collapsed and was admitted once again to hospital. He was noted to be confused and to have inappropriate speech. He was discharged home on 10 June 1998. Nine days later he executed the codicil that is challenged in the present action. On 6 July 1998 he again collapsed at home. He was admitted to Dr Gray's Hospital in Elgin, but he died of cardiac arrest. [5] Thereafter, the pursuer makes further averments about the deceased's financial affairs. It is said that the deceased's bank accounts show that in 1997 and 1998 there were frequent and unexplained withdrawals of cash, often of more than £1,200 per month. Those withdrawals were in addition to withdrawals marked as being for wages and payments to Moray Council for carers provided by the Council's Social Work Department. Regular payments to "self" were also shown in the bank statements, on an approximately weekly basis. It is averred that these stopped during a period in October 1997 when the first defender was on holiday, but continued even after the deceased's collapse in early June 1998. The pursuers state that they know of no reason why, in view of the deceased's requirements and circumstances, his monthly expenditure could be so high. In many of the cheques all of the words, including the sum to be paid, have been written by the first defender. The signature on the front and signature on the back of each of the cheques bore to be that of the deceased. The first defender had also signed or endorsed the back of many such cheques. Many of the deceased's bank statements contained annotations written by her, which are said to be indicative of her involvement in the deceased's financial affairs. Previously, the deceased had annotated bank statements himself. The pursuers aver that, so far as they are aware, there is no evidence that substantial amounts of the frequent and unexplained withdrawals of cash were ever expended by or on behalf of the deceased. The first defender, they say, went to the bank alone and cashed cheques signed by the deceased. She used the deceased's money to buy food for herself and for the "fishers", who were fishermen for whom she cooked before they went out fishing on a nearby river. In the circumstances, the pursuers seek to draw the inference that the unexplained payments to "self" were made when the first defender was personally present and that she received all or part of such payments. Her receipt of all of part of the payments is said to be indicative of the extent to which she took advantage of the deceased's weakness and facility and of how she abused the trust and confidence reposed in her. The pursuers further aver that the first defender controlled the deceased's day-to-day financial affairs. She took the deceased's wallet when she went shopping, and she became actively involved in dealing with payments to care staff. The first defender had unrestricted access to the deceased's private office, and was frequently in it. Apart from the deceased no other person had access to it. The first defender also controlled the appointment of carers. She caused her daughter to be employed as a carer by the deceased. When the deceased wanted to buy a new car in September 1998, the first defender arranged for two new cars to be brought to him to allow him to select one. That car was delivered very shortly before the death of the deceased. Under the terms of his will, the car was left to the first defender. [6] The pursuers then make averments about the informal writings dated 7 May 1997 and the codicil dated 19 June 1998. They state that the informal writings are believed to have been typed by the first defender's daughter. At the date of the informal writings the deceased was in the habit of expressing himself in handwriting. Expressions and grammar used in the informal writings were inconsistent with the normal usage of the deceased. The signature on the informal writings appears to differ from the deceased's normal signature. That signature appeared to have been made by a hesitant or shaking hand. The informal writings were not referred to in the codicil dated 19 June 1998. That codicil was dictated by the deceased after he had discussed the matter with the first defender. The first defender then telephoned the deceased's solicitor, who was also an executor, and then put the deceased on to the telephone. The first defender told the deceased what to say. She had written down the details on a notebook on the telephone table. The deceased gave instructions as to the codicil. The codicil had been instructed and executed by the deceased shortly after he had been diagnosed as suffering from heart block and the other symptoms previously mentioned, including dizziness and confusion, and shortly before the deceased's death. [7] Averments are then made relating to facility and fraud or circumvention. It is said by the pursuers that the informal writings and the codicil were instructed and executed at a time when the deceased was physically and mentally enfeebled and when he sought the direction and approval of the first defender when managing his own affairs. He was weak and facile in mind and body and was easily imposed upon by the first defender. He was unable to resist any suggestion made by her. The deceased did not obtain any independent legal advice as to the informal writings or codicil. If he did receive such advice, in view of his physical and mental condition and the degree of control and influence exercised over him by the first defender, he was unable to give rational consideration to such advice. In the circumstances the first defender, taking advantage of the deceased's weakness and facility, induced him to instruct and execute the informal writings and codicil and impetrated the informal writings and codicil by fraud and circumvention. In terms of the informal writings, moveable items including important family heirlooms were left to the first defender. Some of these had come from the pursuers' mother's side of the family. The family heirlooms had not been intended, by either of the pursuers' parents, to leave the family. In terms of the codicil, monies which under the deceased's will would have been shared by all of his staff who had been with him for three years were left largely or exclusively to the first defender, and an additional bequest of £50,000 was made to her. [8] The pursuers finally make averments of undue influence. They aver that the deceased reposed complete trust and confidence in the first defender. She exercised a dominant influence over him. She was in a position to exercise undue influence over him as to dispositions of his property. She was aware that she held such a position. In the circumstances, she abused the relationship of trust and confidence and exercised an undue influence over the deceased in order to have him instruct and execute the informal writings and codicil. [9] The first defender has tabled a plea to the relevancy and specification of the pursuers' averments, and her counsel sought to have this plea sustained, to the effect of dismissing the action or alternatively having certain averments excluded from probation. Counsel submitted first that the relationship between the first defender and the deceased, that of housekeeper and employer, was not one which, properly understood, fell within the category of those that give rise to a dominant or ascendant influence between the parties. She did not submit that a housekeeper could never exercise undue influence, but for that to happen there must be a high degree of confidence and trust coupled with the exercise of a dominant influence. Moreover, the confidence and trust must arise from the relationship between the housekeeper and her employer. The pursuers' pleadings relating to undue influence did not meet these requirements, and consequently were irrelevant. In particular, the pursuers did not state more than that the deceased became very reliant on the first defender, and became more so after his wife's death, and did not state facts that give rise to the inference that the first defender exercised an ascendant or dominant influence over the deceased. Secondly, counsel submitted that a critical element in undue influence was the lack of independent advice given to the granter of the deed. That was not present, and the case based on undue influence was accordingly irrelevant. Moreover, in relation to both facility and circumvention and undue influence, if independent advice has been given a pursuer requires to aver considerably more before a relevant case is made out. In the present case the deceased's will and codicil had been witnessed by the deceased's doctor. If the deceased had been facile when those documents were executed, it is likely that the doctor would have noticed. So far as the informal writings were concerned, the first defender averred that independent legal advice had been given, and that was confirmed by certain documents obtained from the executors' file. Counsel for the pursuers accepted that those documents came from the executors. The documents are not incorporated into the pursuers' pleadings, but counsel for the pursuers indicated that he did not want to take that technical point, and preferred instead to comment on their terms. I deal with his comments below in paragraph [14]. In making the foregoing submissions, counsel for the first defender made reference to Gray v Binny, 1879, 7 R 332, Gaul v Deerey, 2000 SCLR 407, and Grant's Exrs v Grant, 29 October 1999, unreported. Counsel further sought to have certain of the pursuer's averments excluded from probation. The averments in question were those relating to the first defender's cooking for parties of fishermen and those relating to the first defender's participation in the deceased's banking transactions; the averments in question are summarised in paragraph [5] above. [10] The pursuers' case is based on two grounds, facility and circumvention and undue influence. Historically these are distinct. Facility and circumvention has its origins in the Scots common law, whereas undue influence was imported from England, largely through the opinions in Gray v Binny, supra. In practice, however, there is a tendency to run the two grounds together, for the obvious reason that the evidence of circumvention and the evidence of undue influence will usually be similar. Nevertheless the two grounds remain conceptually distinct. In Ross v Gosselin's Exrs, 1926 SC 325, LP Clyde stated (at 334):"The essence of undue influence is that a person, who has assumed or undertaken a position of quasi-fiduciary responsibility in relation to the affairs of another, allows his own self-interest to deflect the advice or guidance he gives, in his own favour. On the other hand, the essence of circumvention and facility is that a person practices on the debility of another whose individuality is impaired by infirmity or age, and moulds the inclinations of the latter, to his own profit. I think it would be extravagant and fallacious to refuse to recognise the distinction between these two different kinds of questions, merely because they are both ultimately referable to the same broad category of fraud. Cases vary infinitely in their special circumstances; and there are no doubt cases in which the holding of a position of influence may be no more than an item of evidence of circumvention...".
Thus the element of mental weakness or facility is critical to facility and circumvention. If that is present, it is obvious that the averment and proof of circumvention, or acts impetrating a bequest or other gift, may be relatively limited. Moreover, if lesion, in the sense of a benefit to the person said to have practised the circumvention, can be demonstrated in clear terms, it may be relatively easy to infer that acts amounting to circumvention have taken place. That is why, in cases such as Pascoe-Watson v Brock's Exr, 1998 SLT 40, it has been held that the elements of weakness and facility, circumvention and lesion are interrelated and must be looked at as a whole and not in separate compartments. In general, acts of circumvention are likely to be the most difficult for a pursuer to establish, but relatively slight evidence of such acts may be supported by clear evidence of mental weakness or lesion.
[11] The classic definition of undue influence probably remains that of Lord Shand in Gray v Binny, supra, at 7R.347-348:"The circumstances which establish a case of undue influence are, in the first place, the existence of a relation between the granter and grantee of the deed which creates a dominant or ascendant influence, the fact that confidence and trust arose from that relation, the fact that a material and gratuitous benefit was given to the prejudice of the granter, and the circumstance that the granter entered into the transaction without the benefit of independent advice or assistance. In such circumstances the Court is warranted in holding that undue influence has been exercised; but cases will often occur... in which over and above all this, and beyond what I hold to be necessary, it is proved that pressure was actually used, and that the granter of the deed was in ignorance of facts, the knowledge of which was material with reference to the acts he performed".
Statements of the law to similar effect are found in the opinions of Lord President Inglis (at 10 R 342) and the Lord Ordinary, Lord Young (at 10 R 338). Facility is unnecessary, and indeed in Gray a case based on facility and circumvention was rejected by the court. The relationships that can give rise to undue influence are not a closed category. That is clear from the statements of the law in Gray, in particular Lord Shand at 347 and the Lord Ordinary at 338, where the principle is described as "very general, and applicable to an infinite variety of cases". In Honeyman's Executors v Sharp, 1978 SC 223, Lord Maxwell stated (at 227):
"It would in my opinion be quite out of keeping with the general approach of our law to confine the principle to some artificial list of relationships and I see no reason why, nowadays, when so much work, which was in former times done by law agents as 'men of business,' has been taken over by specialist advisers such as accountants, the principle should not be applied to them".
In that case, it was held that the principle of undue influence was capable of applying to the relationship between the deceased and an art dealer to whom she had purportedly made a gift of four paintings by Boudin.
[12] The first submission for the first defender was that the relationship between her and the deceased, as disclosed in the pursuers' pleadings, did not fall within the category of those that give rise to a dominant influence. In essence, counsel submitted that the pursuers' pleadings did not disclose a sufficient level of trust and confidence and did not give rise to the inference that the first defender exercised a dominant influence over the deceased. In my opinion the pursuers' averments on these matters are sufficient to entitle them to proof before answer. They aver in particular that the deceased became dependent upon the first defender, that the first defender checked important matters that the deceased carried out, including his correspondence, and that the first defender exercised considerable control over the deceased's life. Details are given as to such influence and control. Detailed averments are also made of the first defender's participation in the deceased's financial transactions, and about the first defender's alleged participation in the drawing up of the codicil that is presently under challenge. In my opinion it may well be possible, if these averments are proved, to draw the inference that the deceased placed trust and confidence in the first defender to a high degree, and that she came to exercise a dominant influence over him. Counsel for the first defender conceded that the relationship of housekeeper and employer could give rise to undue influence; that was, I think, inevitable in view of decisions such as Honeyman's Exrs, supra. She submitted, however, that in the case of a relationship such as housekeeper and employer a high level of trust and confidence was required in order to establish undue influence. I agree; indeed, if undue influence is to arise from such a relationship, I think that the trust and confidence must relate at least in part to the donor's financial and business affairs, or his property, rather than merely the provision of care and the management of his household. That is because it is of the nature of a housekeeper's work to look after the day-to-day needs of her employer and to manage his household; performing his duties as a housekeeper does not lead to the conclusion that she exercised undue influence over her employer. It does not follow, however, that evidence about influence in these areas is irrelevant; if, for example, it appeared that a housekeeper took virtually all of the important decisions about the management of the household, that might provide strong support for an inference that a dominant relationship existed. Nevertheless, influence of that sort is unlikely to be sufficient by itself, except possibly in extreme cases. In the present case, I think that the pursuers' averments go well beyond the ordinary tasks of a housekeeper, and enter the area of financial affairs and the use and disposal of property. Those averments indicate regular involvement with the management of the deceased's finances, and participation in the framing of the deceased's codicil. If a strong level of influence is shown in those areas, I think it quite possible that the requisite level of trust and confidence can be established. In addition, if it can be shown that the first defender exercised a dominant influence over the administration of the deceased's household, that might support a similar inference. In these circumstances I think that inquiry at proof is necessary. As Lord Maxwell stated in Honeyman's Exrs, supra,"What is involved [in undue influence] is some kind of abuse of the position of trust for the benefit of the person in whom the trust is confided and it seems to me that whether there has been such an abuse to an extent which would justify the Court's interference is a matter which cannot readily be confined within stated rules or ascertained on the basis of written pleadings without enquiry into the facts" (1978 SC 230).