Case Reports - Elderly Client Adviser

Feature

posted 1 Apr 1998 in Volume 3 Issue 3

Case Reports

Julia Abrey, a partner with Withers, begins a regular series, keeping you up to date with the latest case law of concern of those who advise older clients.

Gardener Loses His Inheritance - November 1997

Bob Taylor, a 57 year old gardener, worked for 21 years for Mrs Parker, a widow. Mrs Parker was increasingly concerned about the fate of her beloved property, garden and cats after her death. In both 1988 and 1991 she promised Mr Taylor that he would inherit the property from her. On the strength of these promises, Mr Taylor worked without pay for seven years, both in the garden and doing odd jobs about the house. Mrs Parker's Will reflected her promise until 1994 when she changed it in favour of a carer she had recently employed on account of her failing health. She died a year later, not having changed her Will again and not having informed Mr Taylor of the change. In the new Will he was left a legacy of £1000. The bulk of the estate, including the property was left to the carer. Mr Taylor attempted to have Mrs Parker's promises to him upheld by the Court.

Judgement was given against Mr Taylor, on the basis that Wills are inherently revocable and that there was no promise not to revoke. There had been a promise to make a will in his favour and this had been done but this did not bind Mrs Parker not to change the Will as circumstances might change.

Cancer Research Campaign and Others v Ernest Brown & Co and others.

Mr Norris Berry died in December 1986 having left his residuary estate to his sister, Miss Phoebe Norris who then died in May 1988 naming seven charities as residuary beneficiaries in her Will. This High Court action was brought by the seven charities seeking damages for negligence against Miss Norris's solicitors. The contention was that they had failed to advise Miss Norris to make a Deed of Variation under Section 132 IHTA within two years of the date of Mr Norris's death. The effect of the failure to advise Miss Norris of the possibility of executing such a deed resulted in the seven charities having to bear an inheritance tax liability of £200,000. Harman J dismissed the action. In his judgement he acknowledged that it was clear from White v Jones (1995) that there was a duty of care to ensure that an intended and that a solicitor must prepare a Will with reasonable expedition so that the beneficiaries' expectations are not defeated by the testator dying before the Will is executed. He did not agree however that this duty extended to advice to an intended testator about the tax saving schemes applicable to another estate. In the Judge's opinion, this made it impossible to imply any duty upon the solicitors during Miss Norris's lifetime and accordingly the solicitors were not in breach by not having advised in the question of a Deed of Variation.

It is understood that this case will be appealed to the Court of Appeal.

3. Calvert (Litigation Guardian) v Calvert (1997) 320R (36) 281 (Canadian case)

Also featured in ECA V313

In 1979 Mr & Mrs Calvert married having entered into a pre-nuptial contract confirming that any property owned prior to the marriage would not be treated as a family asset. Each had adult children from their previous marriages. Mr Calvert sold a farm he had owned at the time of the marriage for $475m, however he only paid his wife a very small allowance of approximately $16 per day.

In 1993 Mrs Calvert began to show signs of suffering from Alzheimer's Disease and in February 1994 she made a journey to visit her daughter and during the visit confirmed to her daughter that she wished to be divorced. She consulted an experienced family law practitioner who later testified that she clearly understood the purpose of the meeting and that she was quite clear that she wished to have a divorce. In August the following year she consulted another lawyer with the aim of commencing proceedings for the appointment of a trustees and guardian to handle her affairs. He also testified that she had the necessary capacity to give instructions to commence divorce proceedings. A Litigation Guardian (equivalent to a `next friend') was appointed in 1995 and a divorce petition issued. Mr Calvert argued:-

(a) That his wife did not have the mental capacity to form the intention of separate from him and thus was not entitled to an equalisation payment; and

(b) In the event that she did have capacity, she had given up her right to an equalisation when she entered into the pre-nuptial contract.

The Court held that Mrs Calvert did not have the mental capacity to separate and divorce and that Mr Calvert's petition should be granted. The Judge held that a person can be capable of making a basic decision but not at the same time be capable of making a complex decision. Three types of capacity were considered by the Court as being relevant to this action:-

(a) Capacity to separate: in the opinion of the Court this required the lowest level of understanding as a person simply has to know with whom he or she does or does not want to live.

(b) Capacity to divorce: this requires a higher level of understanding as it requires a desire to remain separate and no longer married to one spouse.

(c) The capacity to instruct counsel in connection with the divorce. This required the highest level of capacity. A distinction was drawn between capacity in relation to personal matters and capacity in relation to financial matters, the latter requiring a higher level of understanding than that required to separate and divorce.

The Court held that while Mrs Calvert might have lacked the ability to instruct counsel, that did not mean that she could not make the basic personal decision to separate and divorce, especially as the threshold of understanding with respect to separation and divorce was felt to be low.

In respect of the equalisation payment, very little of the property owned by Mr Calvert at the time of the marriage was still owned by him at the date of the separation. The marriage contract did not deal with after acquired property or assets to which existing property could be traced. In order for a marriage contract to prevent the entitlement of spousal equalisation it must deal specifically or by implication with the relative economic position of the parties on the dissolution of the marriage through the distribution of assets between them on the basis of ownership or otherwise. It is not sufficient for there simply to be an agreement as to the ownership of property. The contract did not deal with the division of assets on marriage breakdown at all. The contract did not therefore preclude Mrs Calvert from claiming an equalisation payment.

Julia Abrey