Ready & willing?
Date: 12 August 2011
Authors: Michael Tringham
Issue: Vol 161, Issue 7478
Categories: Features, Wills & probate
The number of contentious probate actions fell last year for only the second time in five years. Even so they were 64% higher than in 2006. Meanwhile trust property disputes have soared—from only 10 in 2006 to 111 in 2010, an increase of more than 1000% (Judicial and Court Statistics 2010).
What the Dickens?
Some will disputes must run their course. It took seven years to resolve the almost Dickensian case of Barrett v Bem (No 2) In re Lavin, decd [2011] EWHC 1247 Ch, [2011] All ER (D) 182 (May). The testator Martin Lavin died in hospital in January 2004, leaving seven surviving brothers and sisters. But his “2004 will”, made three hours earlier, named his sister Anne—who with her daughter Hanora and two nurses had been at his bedside—his sole beneficiary. In June she was granted probate, but died five months later.
In 2007 those entitled upon intestacy challenged Martin’s 2004 will, seeking revocation of Anne’s grant and claiming that “the 2002 will”, under which other relatives would benefit, be declared valid. In 2009, handwriting experts concluded it was “very unlikely” that Martin had signed the 2004 will; on 9 October that year Mr Justice Vos revoked Anne’s grant of probate and ordered Hanora (her joint executor and one of her beneficiaries) to pay half the claimant’s costs as well as her own.
Three weeks later the nurses who had been at Martin’s bedside when “the 2004 will” was signed, stated that the pen was in his hand when he signed it, with Anne and Hanora holding his hand to stop it shaking. At the 2011 retrial, ordered by the Court of Appeal, Vos J, citing 19th and 20th century judgments, concluded that “in the peculiar, some might say extraordinary circumstances of this case”, Martin “knew and approved” of the 2004 will, “wanted Anne to benefit under it”, “validly directed her to sign it on his behalf” and that it was “valid, even though it was signed by its beneficiary on behalf of the testator”. The retrial’s transcript also revealed what Vos J described as “allegations of lack of integrity” surrounding Martin’s estate: “They do not much redound to the credit of either of the main protagonists.” For instance it emerged that although probate of the 2004 will was certified at not more than £240,000, Martin’s house alone eventually sold for £230,000, and he had a further £100,000 in UK bank accounts and more still invested in Ireland—all rendering the probate certificate false. Later evidence referred to his gold watches, jewellery and diamonds “collected while he was working abroad”.
In essence the judge decided that although s 15 of the Wills Act 1837 made a gift to an attesting witness “utterly null and void”, it did not extend to a beneficiary of a will who had signed a will on the testator’s behalf at his direction. However, the court should not pronounce in that instrument’s favour unless it were satisfied that the true will of the deceased was expressed therein (second rule in Barry v Butlin (1838) 2 Moo PCC 480).
Peter “pays” Paul
Australian courts have seen a flood of challenges to wills—especially in small value estates. Scott Hay-Bartlem of Brisbane law firm Cooper Grace Ward says: “Applicants have long taken comfort from Singer v Berghouse (1994), in which the High Court ruled that costs orders will not be made against unsuccessful applicants but that everyone’s costs will be paid from the estate—particularly if a cost order would have a detrimental effect on an applicant’s financial position.” Now the recent Victorian decision of Moerth v Moerth [2011] VSC 176 suggests the courts may be changing their attitude.
In Moerth the deceased’s sons, Peter and Paul, both in their early fifties, brought claims for a greater share of their late mother’s estate. Her will left Paul a life interest in the home that he shared with her, worth about AU$750,000 and the only significant asset of the estate.
The transcript includes an exhaustive analysis of family histories and tensions—including what His Honour Judge Gardiner described as “mischievous and irrelevant” revelations about an alleged welfare fraud 20 years earlier. He acknowledged that “the estate will be consumed by the need to make provision for Paul” (described by his own counsel as a “lame duck” son), adding: “[this was the testator’s] primary duty and responsibility…She would not have fulfilled her moral duty by dividing the estate in half, as she did in a previous will.” The shared home would be sold and the net funds applied to buy Paul a life interest in another home.
Peter owned a “significant” property portfolio, albeit with substantial mortgage liabilities, but had a net asset position of AU$800,000. Paul’s evidence showed a AU$225 weekly social security income and AU$3,000 savings. So Peter’s claim failed because “the legislation is not designed to provide an award of provision to adults who have become [so] self-reliant”.
The judge was “dismayed” that legal costs of “this unfortunate proceeding” would total approximately AU$150,000. Subsequently the court ordered Peter to pay not only his own costs—but also the estate’s costs of defending the claim even though he would have to sell property to meet the costs order.
Michael Tringham, Chairman, Hoopers. Website: www.hoopers.co.uk
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