Upper Tribunal (Administrative Appeals Chamber)

IN THE UPPER TRIBUNAL Case No. CJSA/1128/2011 

ADMINISTRATIVE APPEALS CHAMBER

Before Judge Mark

Decision:  The appeal is allowed.  I set aside the decision of the tribunal and remit the matter to be reheard by a new tribunal in accordance with the directions below.

REASONS FOR DECISION

1. This is a supported appeal with the permission of an Upper Tribunal Judge from the decision of a First-tier Tribunal dismissing the appeal of the claimant from a decision of a decision maker dated 15 February 2010.  That decision revised an earlier decision of 14 August 2009 which had awarded the claimant Income Based Jobseeker’s Allowance from 14 July 2009.  The earlier decision was found to have been made in ignorance of a material fact.  The decision maker determined that the claimant had no entitlement to Income Based Jobseeker’s Allowance from the date of the claim as she was beneficial owner of a piece of land purchased for £27,000 in 2007 which had a value after allowing for the costs of the sale in excess of £16,000.

2. It would appear that the claimant, when she originally applied for Jobseeker’s Allowance, declared that she did not have savings in excess of £5,500.  However, she did not disclose that she did have a non-income producing field of about 6 acres which she had bought for £27,000 in 2007 and on which she and her family kept ponies. 

3. It appeared that the claimant had received, following litigation in Florida in which she was not involved, an inheritance from an aunt who had lived and died in Florida.  On 26 June 2006, at a time when she was in receipt of income support, she disclosed to income support that she had received this inheritance, which was then being (see p.16 of the file), or, once received, was going to be (pp.22 and 24 of the file), held in her bank account.  There was no evidence before the tribunal as to the precise size of that bequest, but the land was later purchased using it.  The claimant told income support in 2006 that she was only entitled to a one-sixth share of it.  So far as appears on the papers no action was taken on this disclosure by the income support team.

4. The claimant switched from income support to JSA in July 2009, and again no information was sought as to the inheritance.  I am unclear whether the information as to the inheritance was passed on to those dealing with the claim for JSA, but the revised decision followed the receipt of information from the claimant’s local authority (which had been paying her housing benefit) as to the purchase of the land.  Even if the information had been passed on, the decision maker in 2009 would have proceeded on the basis that the claimant only had one-sixth of the value of land, so that if that was wrong and she was beneficially entitled to the whole of it, the decision maker would have been in ignorance of that fact.

5. The claimant contends that the money received was held on trust by her for herself and her five children in equal shares.  Four of the children were adults at all material times and the fifth was, and still is, a minor who was living with her.  There is limited evidence on the file as to this inheritance and any basis on which it was held.  That evidence includes the record of the proceedings before the tribunal and of an interview with the claimant, as well as letters written by or for her,

6. It appears that the claimant’s understanding that the money should be shared between her and her children dated back to a discussion with her aunt on a visit to England while the claimant’s father was still alive (p.65).  At that time, the aunt said that she had made a will leaving everything to the claimant’s father and she was asked what would happen if the father died before the aunt.  The aunt then, according to the record of the proceedings, said she would amend the will to provide that it would be “for children – sectioned – for the family.”  At p.66, the claimant is recorded as stating that she and her three siblings all got something from the estate separately to be used for families.  At p.67, she is recorded as saying that in discussions the grandchildren as well as children were mentioned.  If her father died the money would be split but they would “have to use it for the family, not to be squandered – but as a foot on the ladder for everybody.”

7. The father did die before the aunt, who suffered dementia before herself dying in about 2003.  There was a fraudulent attempt by somebody in Florida to obtain her estate.  This resulted in litigation there in which the claimant does not appear to have been directly involved.  Following the successful outcome of this litigation the claimant, her mother and her siblings received their inheritances, although there is no real evidence as to the basis on which they received them.  If there was a will, it appears to have been lost, and I do not know whether they inherited under a lost will or under the Florida intestacy rules.  The claimant did not know how much her mother had received but she and her siblings received equal amounts.  If Florida intestacy rules are the same as under English law, which is to be presumed unless the contrary is proved, the claimant’s mother could only inherit under a will from the sister of her late husband, so that in the absence of evidence to the contrary the monies paid would seem to have been legacies under a will.

8. The claimant personally received a cheque for her share.  She did not recall who the cheque was drawn on.  The land was bought in the claimant’s name alone, with the agreement of her children, because she thought that would save costs, although she regarded all her children as having a share of it.  Her children have all written confirming that their understanding as to the inheritance was the same as their mother’s and that they agreed to the land being bought in her sole name.  The eldest of her children, who was born in 1973, stated that her belief was due to a conversation at the family home when she was a child, but does not say between whom the conversation took place.  The others do not give any specific source for their belief.

9. The claimant did not produce any documentation in relation to the inheritance or in relation to the purchase of the land, when a solicitor was used other than  a copy of the transfer to herself.  This last, as is quite common even when land is to be held on trust despite provision for such information in the transfer form, gave no indication that she would be holding the property on trust.

10. The tribunal appears to have accepted the evidence of the claimant but concluded

“7. Although the appellant has repeatedly stated that her share of the money was meant for all the children, and has produced some evidence from her children confirming this, in my assessment this was an informal understanding.

 8.  Had there been a serious intention to formally benefit the appellant’s children, the appellant’s inheritance could have been divided with cheques issued in favour of her children as well as herself.  This would not have posed serious difficulty for whoever issued the cheques.”

11. The tribunal went on to point out that the claimant never discussed the possibility of holding the land on trust with the solicitors acting on the purchase and that while she may innocently have assumed that putting more names on the Land Registry documents would increase the legal costs, the tribunal considered it more likely that there was no intention to create a trust.  Whether the estate was distributed under intestacy rules or under a will or codicil or under a family arrangement, the tribunal did not believe that the children were actual beneficiaries and the claimant was the beneficial owner of the land.

12. It appears to me that, while there may have been grounds on which the tribunal may have concluded that there was no trust, the reliance placed in paragraph 8 of the statement of reasons, quoted above, on the failure of those dealing with the estate to issue cheques to each of the children, overlooks, as the secretary of state has accepted on this appeal, the possibility of a trust existing which was not recorded in the will but which had been established by the communications between the aunt and the claimant when the question was discussed between them as it appears to have been.  This is a type of trust known in English law as a secret trust.  Again, in the absence of any evidence of Florida law, that law must be presumed to be the same as English law, but in any event the trust is said to have been created during discussions in England between the aunt and the claimant, and if the claimant agreed in England with the aunt that if she received money in England from the aunt’s estate she would hold it on trust in England, it appears to me that the proper law of the trust will be English law, whatever the law applicable to the will.

13. If there was a secret trust of which those dealing with the estate in Florida were unaware, or even if there was an express bequest to the claimant on trust for herself and her children, the Florida representatives of the estate would properly have paid all the money to the claimant and not distributed shares to the individual children.

14. The findings of fact made, and very possibly the questions asked of the claimant, do not appear to me to be sufficient to enable me to come to my own decision on the matter, and I agree with the parties that the matter must therefore be remitted to be reheard by a new tribunal.

15. If there is a secret trust, it will not appear in the relevant will or codicil.  It must, however, have been communicated by the deceased to the legatee or person taking on intestacy, with the intention of creating a trust, and have been expressly or impliedly accepted by her.  Acceptance is readily inferred once communication occurs unless the intended recipient protests.  The trust must also be sufficiently certain to be enforceable.  The new tribunal will need to consider whether what was said was sufficient to create a trust, the terms of which were sufficiently clear to be enforceable.

16. It is possible that there may be further evidence either from one or more of the claimant’s children or from one or more of her siblings as to what was said by the aunt and expressly or impliedly agreed to by the claimant.  The claimant may wish to consider whether any such evidence is available. 

17. Further, although I have indicated that the present evidence leads to the conclusion that there was a will, even if lost, the question will be an open one for the new tribunal.  I do not know whether a copy of the Florida judgment or order is available, or indeed any correspondence from the Florida lawyers or the aunt’s partner relating to it, or even a copy of any lost will, but the new tribunal may wish to consider a direction for the production of relevant documents if available or seek an explanation why they are not available.

18. If the trust is established, then only the claimant’s beneficial interest can be taken into account in assessing her capital and her entitlement to Income Based JSA (CSB/989/1985).  The relevant principles are now to be found in paragraphs 672-676 of the 2007 re-issue of volume 48 of Halsbury’s Laws of England, 4^th ed.

19. So too, at the new hearing, the claimant can seek to prove the creation of a trust in favour of one or more of the children by estoppel or in some other way.  If estoppel were to be relied on, each child would have to show why the claimant should be estopped from denying that child an equitable interest in the property at the date of the decision in 2009.  At present, the only possible basis for such a claim would seem to be that the claimant acknowledged the existence of a trust to them in 2006/7, that as a result they did not investigate the matter further, or retain documents, at the time and that as a result they have acted to their detriment on the faith of her assurances.  There may also be evidence of one or more of the children as to some other detriment but it is for them to adduce appropriate evidence to prove it.  To the extent that any such trust is established as at the date of the decision under appeal, that part of the beneficial interest in the land would not have belonged to the claimant and would not therefore form part of her capital.

20. I express no view as to the likely outcome of the re-hearing.

(signed on the original) Michael Mark

Judge of the Upper Tribunal

28 March 2012