These questions and answered were first published in the newsletter of the Institute of Legacy Management, where Angela Bowman writes a regular column. If you would like any further information on any of these matters, please contact Angela.
Questions and Answers
What is the main difference between a grant issued under Section 116 of the Supreme Court Act 1981 and one issued under Section 117 pending suit?
There are many differences, but an important practical one to bear in mind is the automatic termination of the Section 117 grant when the suit is settled. A grant issued under Section 116 will usually be an absolute grant or one which is limited until further representation is granted; whereas a grant pending suit automatically ceases to operate the moment the Court determines the suit (unless there is an appeal). A new grant will be required, but will have to be applied for; this takes time and leaves a period where there is no representative with a grant and thus no-one with authority to deal with the assets. In determining a suit, therefore, it is important not to lose sight of the need to plan to continue the administration seamlessly and have a representative who can deal straightaway with any pending transactions, such as the sale of a house.
My charity wishes to remove an executor who has caused inordinate delays in relation to an estate where we have been named as the residuary beneficiary. A grant was extracted nearly 5 years ago, but the administration has still not been completed and no interim distributions have been made. Can we remove the executor under Section 116?
No. In order to remove the executor, you would need to obtain an order from the Chancery Division of the High Court (unless existing proceedings are in progress), under section 50 of the Administration of Justice Act 1985, using the Part 8 procedure set out in Part 57 of the Civil Procedure Rules. An application under this section would involve applying for an order removing the existing executor and appointing a substitute administrator in his place. Alternatively, you may wish to consider an application to the Probate Registry under Rule 61 of the Non Contentious Probate Rules 1987, for an order requiring the executor to produce an inventory and account of his administration of the estate.
Please can you explain the difference between the tests for proving undue influence in the context of (i) a Will and (ii) a lifetime gift?
To prove undue influence in the context of a Will, it is necessary to satisfy the court that the Will has been procured by either coercion or fraud. In order to prove "coercion", it is necessary to show that the testator has been subjected to pressure which has gone beyond legitimate persuasion (see Hall v Hall LR 1 P&D 481, where it was held that "Persuasion is not unlawful, but pressure of whatever character if so exerted as to overpower the volition without convincing the judgment…will constitute undue influence, though no force has been either used or threatened"). Fraud (also known as "fraudulent calumny") involves a situation where someone has poisoned the testator's mind against a natural beneficiary of the testator's estate, by casting dishonest aspersions against the beneficiary, either knowing the aspersions to be untrue, or not caring whether they are true or false (see Winifred Edwards Deceased, Lewison J, 3 May 2007).
In the case of a lifetime gift, on the other hand, a "presumption" of undue influence will arise in circumstances where (i) the relationship between the donor and donee of the gift was one of ascendency by the donee over the donor or one of trust and confidence (e.g parent/ child; teacher/ pupil; or where the donor had placed trust and confidence in the donee in relation to the management of the donor's financial affairs); and (ii) the particular transaction calls for an explanation. If the presumption is raised, then it is for the donee to show that the gift was the spontaneous act of the donor acting under an independent will and was made only after full, free and informed thought.
Our charity has been involved in litigation and has been awarded its costs of the proceedings from the claimant (to be assessed if not agreed). We have been unable to agree costs. If we bring detailed assessment proceedings, who will be ordered to pay our costs of those proceedings?
The position is governed by Part 47 of the Civil Procedure Rules, by virtue of which you will be entitled to your costs of the detailed assessment proceedings ("the detailed assessment") unless (i) some provision to the contrary is in existence; or (ii) the court makes some other order in relation to costs, having regard to all of the circumstances (including the conduct of the parties; the amount by which your costs have been reduced and whether it was reasonable for you to claim the costs of a particular item or for the claimant to dispute that item); or (iii) you fail to beat the best without prejudice offer made by the claimant (in which case it is likely you would be ordered to pay the claimant's costs of the detailed assessment from the date of expiry of the offer).
Our charity is the residuary beneficiary of an estate in which a professional executor has been appointed to deal with the administration and has extracted a grant. The executor appears to be delaying unnecessarily in progressing the administration. What can we do?
You can apply to the court for an order requiring the executor to provide an inventory and account of the deceased's estate and his administration of it (section 25 of the Administration of Estates Act 1925). Alternatively, or at a later stage, you could consider bringing an application under section 50 of the Administration of Justice Act 1985, for an order removing and replacing the executor. Ultimately, if the executor fails to act in the best interests of the estate, you may have an action against him for breach of trust, provided you can show that the estate has suffered loss as a result of his breach(es).
I seem to remember there was a recently reported decision saying that the beneficial ownership of a jointly owned property should follow the legal ownership, in the absence of very unusual circumstances. Please can you remind me of the name of the case?
Yes, this was the decision in Stack v Dowden [2007] 2 WLR 831, which involved the transfer of a property into the joint names of a cohabiting couple without any explicit declaration of their beneficial interests in the property. It was held that the starting point for division of the property, upon the breakdown of the relationship, was that where there was joint legal ownership, there was also joint beneficial ownership. The onus is on the person seeking to show that the parties intended their beneficial interests to be different from their legal interests to prove this together with the way in which they were intended to be different. (See also the case of Adekunle and Ritchie v Ritchie [2007] Lawtel 28.08.07, which applied the same principles to a property purchased by a mother and son). Each case will turn on its own facts, so it will be important to obtain legal advice where there is a jointly owned property and there is reason to question the beneficial interests in it.
Our charity is named as a beneficiary of an estate against which a claim has been brought under the Inheritance Act, but the deceased was living abroad at the date of her death, so surely that would prevent the claim from succeeding?
A claim for financial provision under the Inheritance (Provision for Family and Dependants) Act 1975 can only be established if the deceased died domiciled in England and Wales (section 1(1)). Just because someone was living abroad at the time of their death does not necessarily mean that they were not domiciled in England and Wales.
In a nutshell, at common law a person is domiciled in the country in which they either have, or are deemed by law to have, their permanent home. Every person receives a "domicile of origin" at birth which remains their domicile wherever they go, unless and until they acquire a new domicile. A new "domicile of choice" will be acquired where someone moves to a different country with the intention of (i) making their sole or principal permanent home in the country of residence; and (ii) continuing to reside there indefinitely. If someone with an English domicile of origin moves abroad with the intention of returning to England upon a specific, clearly definable event occurring, they will still be deemed to be domiciled in England and Wales, for the purposes of a claim under the Inheritance Act.
Our charity has been named as a residuary beneficiary of a deceased person's estate, in circumstances where only a copy of the deceased's Will can be located. What evidence will need to be produced to persuade the court to admit the copy Will to probate?
If the original of a Will or Codicil cannot be found upon a testator's death, and it was last known to be in the possession of the testator, there is a presumption that the testator destroyed it with the intention of revoking it (see Sugden v Lord St Leonards). However, that presumption is rebuttable by evidence showing a contrary intention on the part of the testator.
You should make enquiries to establish the deceased's relationship at the time of death with the beneficiaries due to inherit under the copy Will and also with the beneficiaries who would inherit upon an intestacy (or under an earlier will, if there is one); check with the deceased's friends and contacts as to whether the deceased made any statements after executing the Will that affirm or contradict its contents; consider whether the deceased was a tidy or disorganised person (if the latter, it is more likely that the Will could simply have been lost); and consider whether there is any evidence to show that the Will could have been stolen. The court will weigh up all of the evidence in order to determine whether, on the balance of probabilities, the presumption of revocation has been rebutted.
If the Court of Protection makes an order providing for the sale of a property owned by a patient of the Court of Protection and the property is sold prior to the patient's death, does a gift of that property in the patient’s Will adeem?
No. Section 101 of the Mental Health Act 1983 operates to prevent ademption of the gift. Section 101 applies automatically whenever a sale is authorised by the Court of Protection pursuant to its powers to manage the property and affairs of patients, under Part VII of the Mental Health Act.
In what circumstances is it appropriate to lodge a caveat against an estate?
The object of lodging a caveat is to prevent a grant of probate from issuing. It is therefore appropriate (and important) for a caveat to be lodged on behalf of your charity where you are investigating the validity of a will or codicil which you believe you may have grounds to set aside. In such circumstances, you will not want a grant to be extracted in respect of the testamentary document which you are investigating, as that would enable the personal representatives to go ahead and administer the estate in accordance with the provisions of that document. On the other hand, it is inappropriate for a caveat to be lodged on behalf of a claimant to potential Inheritance Act proceedings (see Parnall v Hurst and others [2003], in which the court emphasised that the correct course in a 1975 Act claim is not to prevent the issue of a grant, but to ensure the prospective claimant is aware of the issue of a grant and the fact that the time within which a claim can be issued has begun running, which can be achieved by the claimant applying for a standing search in accordance with Rule 43 of the Non Contentious Probate Rules 1987).
My charity has just received a sparse letter of claim from solicitors acting on behalf of a potential Inheritance Act claimant, coupled with a without prejudice offer and the threat of proceedings if the offer is not accepted within 21 days. We do not feel that we currently have sufficient information concerning the claim - what should we do?
You or your solicitors should refer the claimant’s solicitors to the case of Ford v GKR Construction Ltd [2000], in which the court said: “If the process of making Part 36 offers before the commencement of litigation is to work in the way which the CPR intend, the parties must be provided with the information which they require in order to assess whether to make an offer or whetherto accept that offer…” It would also be advisable to refer them to paragraph 4 of the Practice Direction dealing with Protocols, which indicates that parties are required to act reasonably in exchanging information and documentation of relevance to a claim and generally in trying to avoid the necessity for proceedings to be commenced. You should seek to agree a timetable for the provision of information and documentation. I would recommend suggesting that both parties agree to follow the ACTAPS Code (see www.actaps.com).
Our charity is facing an application for rectification of a will under which it benefits, but more than 6 months have expired since the date of the grant of probate. Can the court still allow the application to proceed?
A claim for rectification of a will must be issued within 6 months of the date of the grant of probate, failing which the applicant needs to apply to the court for permission to bring the claim out of time. In Re Salmon deceased [1979] sets out a number of guidelines which the court will take into account, in determining whether to grant such permission (these guidelines apply equally to out-of-time applications under the Inheritance Act). For details of these guidelines and further information concerning rectification of wills, see “latest articles” at http://www.henmansllp.co.uk/.