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posted 1 Nov 1998 in Volume 4 Issue 1
Case Reports
1. Gold v Hill
The Times 24 August
1998 [1998/1999] 1 ITELR27.
The case concerned the nomination of a
beneficiary under a life insurance policy. The deceased Mr Gilbert told Mr Gold
(a solicitor who he knew socially) that he intended to nominate him as a
beneficiary under Mr Gilbert's life assurance policy. Some time later he told Mr
Gold at a social occasion that he was counting on him to look after Carol (with
whom Mr Gilbert was living) and the children. Mr Gilbert and Carol were not
married. Mr Gilbert had also executed a Will leaving everything to his third
wife Antoinette, appointing Mr Hill as executor.
Following Mr Gilbert's death Mr Gold
maintained that the nomination was in his favour as trustee for Carol and the
children. The nomination form had described Mr Gold as an executor. Carnwath J
held that Mr Gold was holding the proceeds on trust for Carol and the children.
The principal points were:
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A nomination under a policy of this kind did not create an immediate interest in the fund. The judge found a useful analogy with secret trusts under which no interest was created or transferred until death and held that it was therefore sufficient if the nature of the trust was communicated prior to death. The discussion between Mr Gold and Mr Gilbert on the social occasion adequately communicated the terms of the trust with sufficient certainty. |
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The gift into the trust was not subject to the condition that Mr Gold should be appointed as an executor. A trust for "Carol and the kids" was sufficiently certain and Mr Gilbert was using the word "executor" in layman's terms to describe the role he wished Mr Gold to take in relation to the beneficiaries and the fund. The nomination was not testamentary in character and did not have to be executed as a Will. |
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It had been suggested that the nomination would be treated as a disposition of an equitable interest which would therefore fail if not evidenced in writing (s53(1)(c) Law of Property Act 1925). This argument was rejected. |
2. Cancer Research Campaign and others v Ernest Brown & Co and others
(see ECA March/April 1998.
This case has in fact not been appealed.
3. Kane v Radley-Kane [1998] 3 ALL ER753
This case concerned intestacy and the operation of the self dealing rule. The deceased died intestate in 1994 leaving a widow and three adult sons by an earlier marriage. Under the intestacy rules the widow was entitled to a statutory legacy of £125,000 plus a life interest in half of the residuary estate. In April 1995 the widow was appointed as sole personal representative. The net assets of the estate were valued at £93,000 including a private company shareholding which was professionally valued at £50,000. The size of the net estate meant that the whole estate would pass to the widow in part satisfaction of her statutory legacy. The shares were registered in the widow's name.
In January 1997 the widow sold the shares in the company for £1.1m. The sale was without prior consent from her stepsons who issued proceedings.
Sir Richard Scott, the Vice Chancellor, held that although personal representatives could satisfy a personal legacy to themselves by appropriating cash or assets equivalent to cash, it was objectionable and a breach of the self dealing rule for a personal representative to appropriate assets in specie which were not equivalent to cash. Unquoted shares of uncertain value could not be treated as being equivalent to cash.
The appropriation could only have stood if it had been sanctioned by the court, authorised by the other beneficiaries or (in the case of the executors) covered by a power to permit self dealing in the Will of the deceased.
4. Gillett v Holt [1998] 2ALL ER917.
This is the second recent case examining the extent of the doctrine of proprietary estoppel in the context of an assurance to leave property in a Will. The first case Taylor v Dickens [1998] 1FL806 was examined in the March/April edition of ECA.
Mr Gillett worked for Mr Holt on Mr Holt's farm between 1956 and 1995. On several occasions over the years, Mr Holt indicated that he intended to leave the bulk of his estate to Mr Gillett and executed several Wills reflecting this. In 1995 there was a falling out between Mr Gillett and Mr Holt and Mr Holt made a new Will excluding Mr Gillett completely. Mr Gillett claimed that Mr Holt was subject to an obligation to bequeath the whole of his estate to him. The claim was founded in proprietary estoppel on the basis that Mr Gillett had devoted his entire working life to Mr Holt on the understanding that he would inherit.
Carnwath J rejected the claim, holding that Mr Gillett would have to have shown words or conduct on behalf of Mr Holt which went beyond a mere statement of intention and amounted to an irrevocable promise by Mr Holt as to how the estate would be disposed of.
The overriding principle of proprietary estoppel in the context of future inheritance was held to be that the prospective testator should be held to his promise only if it would be unconscionable for him to go back on it. Although estoppel could be founded on the mere expectation of entitlement as created or encouraged by the testator, in reliance on which the claimant had acted to his detriment, however, it was held to be essential that the testator must be aware that the claimant was so acting. The facts in relation to this type of claim had to be assessed against the presumption that a testator's intention in relation to his Will were subject to change.
Julia Abrey, the author is a Partner with Withers.
