Case Reports By Julia Abrey, Withers - Elderly Client Adviser

Feature

posted 13 Sep 2000 in Volume 5 Issue 6

Case Reports
By Julia Abrey, Withers

Case 1
Chittock -v- Stevens and others
(The Times 5 April 2000)

This case concerned the trial of a preliminary issue as to whether the claimant Mrs Chittock should be allowed to apply out of time for rectification of the Will of her late husband, Ronald Ernest Chittock.

Mr Chittock had made his final Will in May 1996 on discovering that he had cancer. By clause 2 of his previous Will of 1988 he had left everything to Mrs Chittock provided that she survived him by one month. It was intended that the new Will should contain the same provision. The new Will erroneously deleted the clause concerning the bequest to Mrs Chittock but the error was not discovered until shortly after Mr Chittock died. Mrs Chittock incorrectly believed that the error in the Will did not matter as she had understood that most of the assets (including the matrimonial home) were held in joint names and would therefore pass to her by survivorship outside the terms of the Will.

Probate was granted in October 1996, however it was only towards the end of April 1997 that Mrs Chittock discovered that the matrimonial home was in the sole name of her husband. She therefore issued proceedings in July 1997 seeking leave to apply out of time for rectification of the Will or revocation of probate and pronouncement in favour of the prior Will. Leave of the Court was needed under Section 20 (2) Administration of Justice Act 1982 for a rectification application out of time; the defendants conceded that Mrs Chittock had an arguable case for rectification and therefore the only issue was whether she should have permission to apply out of time. There was no decided case on the point and therefore cases on applications for an extension of time under S.4 Inheritance (Provision for Family and Dependants) Act 1975 were considered relevant and in particular Re Salmon deceased [1981] Ch167.

It was held that Mrs Chittock’s decision not to pursue her claim was based on a fundamental mistake as to the value of the estate and of the property which passed to her by survivorship. Further, her initial decision not to apply for rectification had not resulted in any of the beneficiaries believing that they had a large entitlement under the Will since they had also been unaware that the matrimonial home was in the sole name of the testator. In addition, the estate had not yet been distributed and therefore there would be no need to correct any prior distribution of assets. Leave to apply out of time was therefore granted. Finally, although Mrs Chittock might in all probability have a good claim against the solicitors who drafted her husband’s Will, this was only one factor in the matter and did not prevent leave to apply out of time being granted.

Case 2
Gibbons and another -v- Nelsons (a Firm) and Another (ChD 5 April 2000; The Times 21 April 2000).

This case concerned the duty of care owed by a solicitor to the intended beneficiary of a Will of whom he was unaware.

Under the terms of her father’s Will Alice had a life interest in a half share of a trust fund, coupled with a general power exercisable by deed or will to appoint what should happen to the share of the trust fund on her death. In default of appointment, Alice’s interest in the fund passed to her sister Elsie as her next of kin. Alice’s last Will expressly exercised the power of appointment so that the trust fund devolved in the same way as her residuary estate; an equal distribution amongst nine charities. Elsie maintained that Alice had always intended that Alice’s half share of the trust fund would pass to her and commenced proceedings against the solicitor who had prepared Alice’s Will, alleging that he had negligently failed to ascertain her intentions in relation to the trust fund. Elsie contended that the solicitors had a duty to her as the intended recipient of the share of the trust fund.

Although Blackburne J was satisfied that Alice’s solicitors had known about the half share of the trust fund and that they owed a duty of care to Alice to ascertain her specific intention with regard to it, it was held that there was no evidence that Alice had intended the half share to go to Elsie. It could therefore not be said that the solicitors owed any duty of care to her, even if she had been a proposed beneficiary.

Their only breach of duty was in failing to ascertain to whom Alice proposed the half share would pass. The solicitor could not be in breach of duty to a person of whom he was wholly unaware.

Case 3
The Special Trustees for Great Ormond Street Hospital for Children -v- Rushin, Billinge and Others. (LTL 15 May 2000)

This case concerned (amongst other issues) the mental capacity required to make a lifetime gift of cash and a transfer of land.

Mrs Morris, a lady aged 75 in poor physical and mental health, was befriended by the first defendant Mrs Rushin and her daughter who became her carers. Within a few months she carried out various financial transactions under which both defendants benefited; these included an agreement with Mrs Rushin (which was prepared by solicitors) under which the property which was Mrs Morris’s principal asset was transferred to Mrs Rushin in return for payment of £50, subject to an obligation on the part of Mrs Rushin to allow Mrs Morris to remain in the property and to care for her during the remainder of her life.

Secondly, Mrs Morris made gifts or loans of over £25,000 to Mrs Rushin, her daughter and a relative of theirs for the purchase of three motor cars including a new BMW costing over £16,000.

Thirdly, Mrs Morris added Mrs Rushin as a co-signatory to her Building Society account; following this change, her expenditure increased to over £2,000 a month. Finally, according to the Mrs Rushin, Mrs Morris made a gift to her of the monies in the jointly-held Building Society account as at her death.

The Court heard a very significant amount of medical and other evidence and, as a result of it, was satisfied that Mrs Morris had been suffering from senile dementia brought on by Alzheimer’s Disease (as confirmed by a post mortem examination) at the time of all the relevant transactions. It was held as a result that she did not have the mental capacity to enter into any of them save for one instance where cash had been advanced by her by way of loan, rather than by way of gift. All the remaining transactions failed and were set aside.

The Court considered the previous leading case on capacity to make lifetime gifts, Re Beaney (deceased) (1978 1 WLR 770) and approved the general capacity test in that case indicating that the mental capacity to carry out any action is function specific; the degree or extent of understanding required in respect of any act being relative to the particular transaction.

The more important or significant the transaction involved, the higher the degree of understanding required. Where the effect of the transaction is (as in this case) to dispose of the donor’s only asset of value then the degree of understanding required would be as high as that required for a Will.

Rimer J made significant criticisms of the actions of the solicitor who had prepared the agreement transferring the house. He stated that, given Mrs Morris’ age and the medical evidence of her incapacity at the time of the agreement, it should have been obvious to the solicitor that this was a case where the guidance given by Templeman J in Re Simpson (1977) 121 Sol. Jo. 224 was in point.

The solicitor should have “insisted that some medical assistance was invoked as to Mrs Morris’ capacity to enter this unusual transaction and to make the proposed Will... [the solicitor] took no special precautions at all to satisfy herself that Mrs Morris had proper understanding of what she was doing and of its effect, or that she was entering into these transactions spontaneously and of her own free will.”

Case 4
John William Barrett -v- John Francis Kasprzyk (LTL 4 July 2000, LSG 27 July 2000).

This case concerned a solicitor’s duty in relation to confirming the capacity of a testatrix when taking instructions for a Will.

The testatrix was admitted to hospital in November 1998 and remained there until her death on 16 January 1999. On 11 January 1999 she gave instructions for a Will to a legal executive. The Will left everything to her brother. The Will was signed on 14 January and the testatrix slightly mis-spelled her name during execution. The defendant, the son of the testatrix, contended that his mother lacked capacity to make a Will, both when she gave her instructions and on execution. He alleged that her lack of capacity resulted from the drugs she was taking.

Park J dismissed the son’s claim. There was strong medical evidence both from the medical staff who attended the testatrix in hospital together with the legal executive who had taken the instructions and attested the Will, that the testatrix did have testamentary capacity, notwithstanding the drugs she was taking. Evidence of the non-medical witnesses did not refute that of those who saw the testatrix daily. The defendant’s medical expert also conceded that it was not a “foregone conclusion” that given the deceased’s physical condition, age and the drugs she was taking, there would have been a mental imbalance such as to render her incapable. On the evidence, therefore, the Court was satisfied that the testatrix was at all times aware of what she was doing and of what she intended to do and had testamentary capacity to do it.

This is an interesting case; although the testatrix’s capacity was confirmed, it emphasises the importance of making precautionary arrangements to ascertain and confirm capacity and the attendance notes etc which record the position.

Julia Abrey, Withers