NOTE: This article was published in January 2015 and reflects the law as it stands on the date of publication and not at any later date.

Introduction

My purpose in this article is to highlight the sort of issues facing charities in deciding whether or not to litigate over a legacy, or residuary gift, contained in a Will. In particular, I shall be looking at a number of cases where charities have faced such difficult decisions, some of which they have got wrong.

In 2011 the 7 main animal charities received nearly £170 million in legacies. £54 million was bequeathed to the RSPCA alone. Legacy income is a major benefit for many charities, which they are rightly concerned to protect.

Assume that a charity is left a substantial legacy, or residuary gift, in a Will, which is challenged by the testator’s children on the grounds that the testator lacked testamentary capacity, or did not know and approve of the contents of the Will. There could also be a claim in proprietary estoppel, alleging that the testator promised to make a gift to the claimant, who relied upon that promise to his/her detriment.

Alternatively, the charity (which is a beneficiary under an earlier Will) may want to challenge a later Will, made by a testator, who had questionable testamentary capacity, or where the Will was executed in circumstances which give rise to a suspicion that it did not represent the testator’s true wishes.

Another common scenario is that the Will is challenged by a spouse, child, cohabitee, or dependant, under The Inheritance (Provision for Family and Dependants) Act 1975.

There may be an issue as to the construction of the words used in the Will. On one construction the charity would receive far more than on an alternative construction favouring other beneficiaries; or there may be a claim to rectify the Will, where it is alleged that the Will contained a mistake in conferring a benefit, or too much benefit, on a charity.

Charities are, therefore, commonly faced with decisions as to whether or not to litigate in order to protect their legacy income.

Judicial criticism

The RSPCA came in for stinging criticism from Peter Smith J in of RSPCA v Sharp [2010] EWHC 268 (Ch)). The issue was one of Will construction.

The Will provided for:

• A nil-rate band gift to two friends of the testator, and his only brother, in unequal shares: ‘”I GIVE the amount which at my death equals the maximum which I can give by this my will without Inheritance Tax becoming payable in respect of this gift …” (clause 3);

 

• A gift of the testator’s house, worth £169,000, to the same two friends, directing that “the Inheritance Tax (if any) payable on my death in respect of the [house] . . . shall be payable out of my residuary estate”; (clause 4); and

 

• A gift of residue to the RSPCA.

The issue was whether the nil rate band gift under clause 3 amounted to:

• £300,000 (the nil rate band at death);

 

• £300,000 less £169,000 given under clause 4 (in which case no IHT would be payable).

Under (a), the chargeable gifts would total £469,000, and IHT of £112,667 would be payable out of residue, leaving the RSPCA with £302,241. Under (b), the RSPCA would get £651,820. There was, therefore, £349,579 at stake.

At first instance, Peter Smith J considered that the RSPCA’s interpretation was patently wrong. If the house had been worth £300,000, the testator’s brother would have received nothing, a result which Peter Smith J thought was so unlikely as to be incredible. As it was, the brother would only receive £29,000 on the RSPCA’s construction.

Peter Smith J commented that it was “a matter of regret” that the action was even brought. It clearly caused great distress to the Defendants, and he could not believe the Deceased would have been happy to see arguments by the RSPCA designed to erode the largesse in favour of his friends and relative to their benefit in this way. The whole purpose and thrust of the RSPCA’s argument is to raise its interest under the will by nearly 75%. Even though the trustees of charitable organisations are required to maximise the return for their charity, the RSPCA ought, whatever their view as to the construction of the Will, to have considered that their residuary legacy, as determined by him, was generous and ample provision out of this estate. To mark his disapproval, he ordered the RSPCA to pay indemnity costs.

If taken at face value, these comments mean that a charity should not be contending for a legal outcome, which maximises its entitlement, if this would have an adverse effect on individuals, such as family members whom the testator could be expected to favour over and above charities, even if the charity receives legal advice which supports its claim.

However, Peter Smith J’s decision was overturned by the Court of Appeal, who upheld the RSPCA’s construction of the Will. It was a matter of speculation as to what the testator really intended: he may have intended to make a Will, under which no IHT was payable, even if that reduced the entitlement of his brother. The Will was professionally drafted, and it had to be assumed that the draftsman was competent. Patten LJ specifically rejected any purposive construction as to what the testator must be presumed to have intended. It was simply a question of looking at the words of the Will, applying the usual rules of grammar and vocabulary.

The Court of Appeal embarked upon a painstaking analysis of the words used by the draftsman, which they found were more consistent, than not, with an intention that the beneficiaries under clause 3 should only receive an amount which resulted in no IHT being payable, i.e. £300,000 less £169,000.

The RSPCA were, therefore, vindicated in their stance, and obtained an order for payment of their costs. No criticism was made by the Court of Appeal of the RSPCA in seeking their maximum entitlement. Indeed, Peter Smith J’s order of indemnity costs was bluntly described as being wrong, even if the RSPCA’s construction had been rejected. All the RSPCA would have done, in that event, was to take a point on the interpretation of the Will which would have been wrong.

A charity is, therefore, not under a duty to yield to the claims of family members, simply on the basis that the testator, if asked, might have been expected to confirm that family comes before charity. Nor will the Court necessarily apply a purposive construction, in favour of family members, and against a charity.

However, there must still be a risk to a charity that – where the testator’s intention is unclear – the Court will construe the wording of the Will favourably to family members. In RSPCA v Sharp the Court of Appeal differed from the first instance Judge. Even Lord Neuberger MR admitted that he found the point far from easy, and that his ultimate view did not accord with his initial impression. There was also no extrinsic evidence of intention, which might have resolved the ambiguous wording used in the Will against the RSPCA.

Indeed, the Court of Appeal has recently upheld the decision of Asplin J, adopting a construction of ambiguous wording in a Will in a way which favoured the testatrix’s family at the expense of a charity (The Woodland Trust v Loring [2014] EWCA Civ 1314). In that case, the task for the Court was to construe a clause in a Will containing a nil rate band legacy to discretionary trustees of “such sum as is at the date of my death the amount of my unused nil rate band for Inheritance Tax”. The beneficiaries of the nil rate band discretionary trust were the testatrix’s children and grandchildren. The residue was left to a charity, the Woodland Trust. The issue was whether the nil rate band legacy included the testatrix’s transferable nil rate band: the testatrix’s husband had predeceased her with a nil rate band that was unused. The legal effect of a claim by the testatrix’s personal representatives to the husband’s transferable nil rate band was to increase the testatrix’s nil rate band from £325,000 to £650,000, reducing the residue, to which the charity was entitled, from £355,805 to £30,805. It was contended, on behalf of the Woodland Trust, that the use of the word “my” excluded the nil rate band gift, as did the use of the words “as at the date of my death”, as at that date no claim had been made by the testatrix’s personal representatives in respect of the transferable nil rate band. The Court of Appeal decided that the nil rate band legacy did include the transferable nil rate band. The statutory consequence of an election to claim the transferable nil rate band, imposed by IHTA 1984, s. 8A(3), was to increase the testatrix’s own nil rate band from £325,000 to £650,000, and to do so retrospectively to the date of the testatrix’s death.

However, two of the Judges in the Court of Appeal confessed that they did not find the issue of construction entirely easy or straightforward. However, notably, all three Judges came down in favour of a construction which favoured the testatrix’s family, as against the charity. Notably, Lewison L.J. looked at the purposes and values which were expressed in the wording of the Will. He found that the implicit purpose of the testatrix’s gift of a nil rate band legacy was to give as much as she could to her family without incurring IHT, and to give the rest to charity. Where, therefore, on one construction, a greater, rather than a lesser, sum could be given to family, rather than to charity, without incurring a liability to IHT, it was to be assumed that the testatrix would have wanted to give that greater sum to her family, rather than to charity. Lewison J was, therefore, prepared to adopt a purposive construction, favouring the family, as against the charity, so long as that construction was consistent with the implicit intention behind a nil rate band legacy, i.e. to avoid payment of IHT. This was consistent with the approach in RSPCA v Sharp where the Court of Appeal construed the nil rate band legacy as going so far as to avoid payment of IHT, but no further (even if this diminished the family’s entitlement).

In any event, the lessons (if any) from these cases are that: (a) construction points are often difficult to determine and (b) the Courts will favour a construction which favours the family, rather than a charity, but the family’s interests are not necessarily overriding. Difficult cases of Will construction are, therefore, suitable for compromise on the basis that the charity receives a figure somewhere between the two contending entitlements.

The decision to litigate

A charity is under no duty to litigate. However, the charity trustees are under a duty to protect the assets of the charity, and to act in the best interests of the charity. Such duties will no doubt necessitate the taking of legal advice as to the merits of the claim, and a cost-benefit analysis. However, probate proceedings are not “charity proceedings” for the purposes of Charities Act 2011, s. 115. The charity does not require the consent of the Charity Commission to bring or defend a probate or Will construction claim. Such proceedings are not charity proceedings, i.e. proceedings under the Court’s jurisdiction with respect to charities, or brought under the Court’s jurisdiction with respect to trusts in relation to the administration of a trust for charitable purposes.

A charity, claiming or defending an entitlement as a beneficiary of a deceased’s estate, will not be entitled to a Beddoe order authorising the pursuit or defence of the proceedings, nor an indemnity out of the estate in respect of the costs of those proceedings.

In probate proceedings, the general rule is that costs follow the event. Costs do not, generally, come out of the estate, win or lose. The losing party can generally expect to be liable in costs. This general rule is subject to some exceptions, e.g. where the litigation has been caused by the conduct of the testator, or of the principal beneficiaries. However, the worse-case scenario is that the charity will have to pay its own costs, and those of the winning parties, if it loses. Charities are not given any special status by the Court protecting them from the effect of costs orders.

The charity may legitimately take into account any reputational damage which might arise if it is seen to have taken a particularly hard line in opposition to the testator’s family. The danger of adverse publicity could deter others from making charitable legacies. One of the family may be able to spin a sob story which could engender public sympathy. There may, therefore, be a strong temptation to reach a reasonable compromise.

However, charities should not be deterred from litigating, just because there is a degree of risk. The charity must exercise its discretion, on a case-by-case basis, taking into account the legal merits (on appropriate advice); a cost-benefit analysis; and reputational risk. It will need to review the position, as evidence emerges on disclosure of documents, and exchange of witness statements.

Charities should consider the availability of after the event (“ATE”) insurance to cover their exposure to costs’ liability.

Compromise

Charity trustees have a statutory power to compromise a claim subject to complying with the statutory duty of care affecting trustees (Trustee Act 1925, ss. 1 and 15). There must, however, be a bona fide dispute. The vague intimation of a possible claim which, on the face of it, has little merit, would not justify a charity settling on inappropriate terms.

Mediation should be considered. An unreasonable refusal by a charity to mediate may result in the charity not being awarded all of its costs, even if the charity is ultimately successful at trial. The charity might, therefore, be advised to propose mediation at an early stage, or to accept such an offer. Alternatively, the charity should consider making an offer pursuant to CPR Part 36 so as to obtain costs’ protection in the event that the other party is partially successful.

However, charities should not compromise claims motivated solely by a desire to avoid reputational damage. Nor, according to Charity Commission Guidance (OG 11 B1) should they compromise proprietary estoppel claims (which can be difficult to establish) without legal advice from the Charity Commission. If trustees make unjustifiable payments on either of these grounds, they may be at risk of personal liability.

The Charity Commission has power to give written advice on any matter relating to the proper administration of a charity (Charities Act 2011, s. 110). The Commission also has power to sanction a proposed compromise, if it is expedient in the interests of the charity (Charities Act 2011, s. 105). It may, therefore, be prudent to seek advice from the Charity Commission and/or to obtain the sanction of the Charity Commission to a proposed compromise.

Ex gratia payments

A charity can make an ex gratia payment, or waive its entitlement to receive property, in circumstances where it can fairly be said that, if the charity were an individual, it would be morally wrong of him to refuse to make the payment or waive the entitlement (Re Snowden [1970] 1 Ch 700, at 710). It is not sufficient to establish that it would be morally right to make a payment; it must be morally wrong not to do so. The power to make an ex gratia payment should not be exercised lightly, or on slender evidence.

The charity trustees must, first, determine, at a duly convened and quorate meeting of the trustees, that:

• they are under a moral obligation to make the payment or waive entitlement to property;
• they are under no legal obligation to do so;
• they have no power under the governing document of the charity to make the payment; and
• they cannot justify the payment as being expedient in the interests of the charity (because, for instance, there is no arguable legal case).

The requirement of a moral obligation would normally require evidence that the Will does not express the intentions of the testator, due to a legal technicality or an oversight on the testator’s part, and as a result some other person (such as a relative) may have been deprived of money or property which the testator intended him to receive. A moral obligation will also arise where the evidence demonstrates that the testator would have altered his Will so as to make a smaller gift to charity, but had been prevented from doing so by the onset of incapacity or death. However, the fact that the testator expressed the wish to benefit someone when they had the opportunity to give effect to that wish, but did nothing, will not normally be enough.

In Re Snowden the testator left his holdings in 3 companies to 3 legatees, the children of his closest relatives, in whose welfare he had always taken a great interest; and left his residuary estate (which at the time of his Will would have been worth little) to charities. He subsequently disposed of the shares before his death, without making a new Will, with the result that the charities became entitled to the whole estate. It is likely that he had overlooked the effect of the sale of his shares on his testamentary dispositions. An ex gratia payment to the children of the relatives was approved by the Court.

In Re Henderson (heard together with Re Snowden) the testatrix attempted to alter her Will in red ink to increase the pecuniary legacies, thereby reducing the residuary gift to charity. The manuscript amendments were not valid. Again, an ex gratia payment, giving the legatees what they would have received had the amendments been valid, was approved.

The Court determined that it, and the Attorney General, had power to authorise an ex gratia payment, and that an application could be made to the Charity Commissioners for approval. By statute, the Charity Commission has power to authorise a payment on an application by the charity trustees (Charities Act 2011, s. 106). The Commission’s powers are subject to the Attorney General’s supervision and direction, and the Commission may refer the application to him for decision.

Third party claims

The Charity Commission would not generally expect a disappointed beneficiary to pursue lengthy and costly negligence proceedings against the solicitor who may (arguably) have been responsible for the non-implementation of the testator’s wishes. However, a charity may reasonably expect a person requesting an ex gratia payment to demonstrate that he cannot reasonably be expected to pursue some alternative legal remedy (such as a professional negligence claim).

Where there is a genuine case against a charity to rectify the Will, which is likely to be successful, the claim can be compromised by the charity trustees, without reference to the Charity Commission. However, where the claim to rectify is not likely to succeed, for technical reasons (e.g. because the failure to express the testator’s wishes is not due to a clerical error, or failure to understand instructions) an ex gratia payment may be appropriate.

Kell v Jones, Lawtel, 16 Nov. 2012, is an example of a case where an ex gratia payment, or a compromise, might have been appropriate. 4 charities successfully resisted a claim to rectify the Will, so as to reduce their entitlement in the testatrix’s residuary estate to nil. There was evidence from the solicitor who drafted the Will (accepted by the Judge, but disputed by the charities) that the testatrix had intended to divide her residuary estate between specified family members, excluding the charities. However, due to poor drafting, the Will was to be construed as if it divided the residuary estate between those family members, and the 4 charities. The claim to rectification failed, because a Will can only be rectified so as to express the testator’s intentions, if the failure to express those intentions was due to a clerical error, or a failure to understand instructions (s.20 of the Administration of Justice Act 1982).

The solicitor, who had drafted the Will, had not failed to understand his instructions. He knew (so he said) that the testatrix wanted to divide her residuary estate between the family members, excluding the charity. He drafted a clause which he, wrongly, considered gave effect to that intention. There was no clerical error in the solicitor drafting a provision, using carefully chosen words, which did not mean what the solicitor intended them to mean. The Will could not, therefore, be rectified.

The charities were, therefore, successful in obtaining a windfall, which, in all likelihood, the testatrix had never intended them to have. However, no ex gratia payment was made, no doubt because the charities did not accept that the testatrix intended that they should not benefit from her residuary estate and/or because the family members had a clear-cut negligence claim against the solicitor, in the event that the rectification claim did not succeed.

The charities were also reasonably confident that, even if they lost, no adverse order for costs would be made. There was a bona fide dispute as to whether the wording of a Will reflected the testator’s intentions, the cause of which was the negligence of a solicitor (who had failed to record his instructions and/or to implement them in a way that was not open to challenge).

Even if an ex gratia payment was not appropriate, an offer of settlement by the charities might well have been. Indeed, Part 36 offers had been made by the charities (which were not accepted). The charities, therefore, obtained an order for indemnity costs.

Family provision claims

The outcome of claims for reasonable financial provision under The Inheritance (Provision for Family and Dependants) Act 1975 Act is notoriously difficult to predict. The Court must, first, determine whether the applicant is entitled to bring a claim. This can involve difficult questions as to whether, for instance, the applicant was being maintained by the deceased, or whether the applicant and the deceased lived together as man and wife for 2 years before the death of the deceased.

Secondly, the Court must make a value judgment as to whether the disposition of the estate failed to make reasonable financial provision for the applicant. One Judge’s value judgment may differ from that of another.

Thirdly, if satisfied that reasonable financial provision has not been made, the Court must determine the quantum of the claim. This is a matter for the Judge’s discretion. There are a range of possible awards. It is not all-or-nothing.

A particular factor affecting charities is that the testator’s obligations to a charity may be negligible, or at least outweighed by obligations owed to family members or dependants. Also the charity may not regarded as being in “need”.

Claims under the 1975 Act do, therefore, lend themselves to settlement. It may be prudent for the charity to make a Part 36 offer.

Ilott v Mitson

The desirability of defendant charities settling 1975 Act claims is illustrated by the case of Ilott v Mitson [2011] EWCA Civ 346.

The testatrix left her entire estate of £486,000 to certain animal welfare charities, to whom she had no particular attachment. She left nothing to her only child, a daughter aged 50. The daughter was estranged from her mother. She had left home at 17 to live with a man, of whom the mother disapproved. When she married she did not even ask her mother to attend her wedding. Despite 3 attempts at reconciliation, the daughter had lived entirely independently of her mother for 26 years. She never expected to receive anything from her mother. The reason for the estrangement between mother and daughter was that the testatrix disapproved of her daughter’s choice of partner.

 

The daughter was in financial need. She had 5 children. She lived almost entirely off benefits and tax credits. She did not work, or only did so sporadically, although she was not physically or mentally incapable of working.

 

The daughter succeeded at first instance. The District Judge awarded the daughter £50,000 (as capitalised maintenance) finding that it was unreasonable for the deceased to have cut out her daughter simply because she disapproved of her daughter’s choice of partner.

 

The daughter appealed, claiming that an award of £50,000 was insufficient, and the charities cross-appealed contending that the daughter had not overcome the initial hurdle of establishing that it was unreasonable that the Will did not make reasonable provision for her maintenance. The charities’ appeal succeeded, on the basis that it was not objectively unreasonable to fail to provide for the maintenance of an estranged, adult child, who did not suffer from any disability.

 

However, the District Judge’s judgment was upheld by the Court of Appeal on the basis that it was not “plainly wrong”. He was exercising a “value judgment” in determining that it was unreasonable for the testatrix to have made no provision for the applicant. Such a value judgment should not be disturbed lightly, just because another Judge would reach a different conclusion. The District Judge had made 3 value judgments which were not plainly wrong:

 

• The daughter was entitled to make her life with a partner of her choice and to have a family of her own.
• It was reasonable for the daughter to wish to remain at home for the time being to look after her children, and not to work.
• The daughter and her husband were not to be blamed for their lack of income, and for living off state benefits.

 

Advice to charities

The charities, therefore, lost on liability. It was implicit in the decision that the charities were not beneficiaries in any sort of conventional need, and that they had no claim, moral or otherwise, on the deceased. There was £460,000 in the estate (which was more than enough to provide a modest sum for the daughter’s maintenance, and leave sufficient for the charities).

This might suggest that charities should be very wary of defending 1975 Act claims, even where it is questionable whether any obligation was owed by the deceased to the applicant. If the applicant has any sort of claim, some award is likely to be made.

On quantum, the District Judge awarded £50,000, representing a capitalisation of an annual maintenance requirement of £3,000 per annum. He declined to award more, so as to enable the claimant to improve her circumstances by moving to a new house, as she had managed her life for many years with no expectation of receiving any benefit from her mother.

The claimant appealed the award on quantum. The Court of Appeal remitted the issue of quantum to a Judge. The claimant argued that an award of £50,000 would provide little actual benefit to her: any capital over £16,000 would reduce the means-tested benefits to which she was entitled pound for pound unless such money was used to purchase a home. The claimant sought an award of £240,000, largely to buy a 3-bedroomed house, of a better standard than the one in which she was then living.

The Judge upheld the District Judge’s award of £50,000 as not being plainly wrong. The total value of the estate was simply not enough to provide the claimant with both housing and security for the future. It was not unreasonable to take the view that any award should be limited by the claimant’s lack of expectation of benefit from her mother’s estate.

It took 4 separate hearings to reach the conclusion that the claimant was entitled to £50,000. The charities would have been well advised to have made a Part 36 offer of £50,000. In fact, they did make an offer in excess of £50,000, which was rejected. Unless the Court considered that it was unjust to do so, the appropriate order would then have been that the claimant should pay the charities’ costs from the expiry of 21 days from the date of the offer, plus interest on such costs (CPR 36.14).

 

However, a charity should not be bounced into settlement. There may be a good defence, particularly if the applicant is not eligible to make a claim. In Baynes v Hedger [2009] 2 FLR 767 a claim under the 1975 Act was dismissed on the basis that the claimant was not eligible to make a claim, as she was not being maintained by the deceased immediately before her death. A charity (The Landmark Trust) was the principal beneficiary, as the specific devisee of the deceased’s manor house. The charity was vindicated in defending the claim.

Invalidity claims

Charities can often be parties to probate claims where the invalidity of a Will is in issue, on the grounds of testamentary incapacity, want of knowledge and approval, or undue influence.

In Gill v Woodall [2011] WTLR 251 the RSPCA lost in the High Court, and in the Court of Appeal (albeit on different grounds). The case does illustrate the difficulties facing a charity, seeking to uphold the validity of a Will, where the Will makes no, or little provision, for the testator’s family, and/or where the testator has no particular connection with the charity. Even though the legal and/or evidential grounds to set aside the Will may appear to be weak, the Courts are likely to strain to find in favour of family members, and against the charity.

Mr and Mrs Gill made Wills in matching terms leaving their property to the survivor and, in default of survivorship, to the RSPCA. The Wills contained a declaration that no provision was being made for their daughter (their only child) because she had been well provided for over a long period of time.

Mr Gill died first. On Mrs Gill’s death her residuary estate (worth £1M) passed under her Will to the RSPCA. The main asset of the estate was a farm of which Mr and Mrs Gill had been joint tenants.

The terms of the Will were surprising since Mrs Gill got on well with her daughter, who had not only given her considerable personal support, but had, together with her husband, done significant work on her parents’ farm, unpaid, for which Mrs Gill had expressed her gratitude.

Mrs Gill had also made disparaging remarks about the RSPCA whom she had described as “a waste of time” and “a bunch of townies”. The idea of benefiting the RSPCA at the expense of the daughter clearly came from Mr Gill, who for some mysterious reason had taken against his daughter. He was a domineering and bombastic character.

Mrs Gill, on the other hand, suffered from an extreme form of agrophobia which made her anxious and fearful when leaving home. She had executed the Will at the offices of the solicitor who had prepared the Will. The solicitor had read the Will to Mrs Gill, who had indicated her approval. The solicitor did not know that Mrs Gill suffered from agrophobia.

After Mr and Mrs Gill had executed their Wills, Mrs Gill had told her daughter that she and Mr Gill had left each other the farm, but said nothing about the gift of her estate to the RSPCA.

The daughter challenged Mrs Gill’s Will on a number of grounds, including want of knowledge and approval and undue influence. There was also a claim in proprietary estoppel. The main asset of Mrs Gill’s estate was a farm, of which Mr and Mrs Gill had been joint tenants.

 

Undue influence or want of knowledge and approval

It seemed most unlikely that Mrs Gill would have wanted to disinherit her daughter in favour of the RSPCA. It was, therefore, likely that either:

• she had known what was in the Will, but had been unduly influenced by Mr Gill, to leave nothing to her daughter, against her wishes; or
• she had not understood that she was leaving her estate to the RSPCA, if she survived Mr Gill.

The difficulty facing a want of knowledge and approval claim was that the Will had been read to and explained to Mrs Gill by a competent solicitor, and that Mrs Gill had indicated that she agreed its contents.

The difficulty facing an undue influence claim was that there was little or no direct evidence that Mr Gill had actually coerced Mrs Gill into making a Will against her wishes.

First instance decision

The trial judge decided the claim in favour of the daughter on the basis of undue influence, rejecting the want of knowledge and approval claim.

He found that Mr Gill had directed his domineering and bombastic personality to Mrs Gill, utilising her anxiety and fear of his explosive character, and of the possibility of her losing his financial support upon which she was so dependent, to coerce her into making the Will which she did. These fears, combined with her timid and shy personality, her traditional deferment to him, and the severe anxiety consequent upon the agoraphobia from which she suffered, unduly influenced her to make the Will that she did.

However, the judge’s finding of undue influence appears to have been an inference as to what must have happened. There was no direct evidence that Mr Gill had actually exercised coercion.

The trial judge rejected the want of knowledge and approval claim. He accepted that there were suspicious circumstances, but found that the suspicions were rebutted, largely on the basis that the Will had been read to Mrs Gill by the solicitor, and she had stated that she approved its terms.

 

Court of Appeal

The Court of Appeal decided the case in favour of the daughter on the basis of want of knowledge and approval, not undue influence (on which they expressed no view).

Mrs Gill suffered from a severe anxiety disorder, agoraphobia (of which the solicitor was unaware) which rendered her fearful when she left home, and when in contact with strangers, and which was likely to have inhibited her ability to concentrate and absorb information. The trial judge had accepted expert evidence that Mrs Gill would have experienced severe anxiety (at least 8 on a scale of 0 to 10) which would have impacted on her ability to concentrate, take in and commit to memory what was said to her by the solicitor. She would have done whatever she could to bring the meeting with the solicitor to a conclusion so that she could return home.

The solicitor had not read out the Will in manageable chunks. He had read it out in one go. Mrs Gill probably understood that she was giving her estate to Mr Gill, if he survived her (the first bit), but not that she was giving her estate to the RSPCA, if she was not survived by Mr Gill (the second bit).

Conclusion for charities

With hindsight, it seems inevitable that the Court should have found a way to set aside the Will, given that Mrs Gill was close to her daughter, had expressed negative views about the RSPCA, suffered from agoraphobia, and was married to a domineering husband who had taken against the daughter. A compromise of the claim would, no doubt, have been in order. Indeed, it is understood that a substantial offer was made, but rejected.

However, charities, defending a Will, can obtain some comfort from comments made in the Court of Appeal relating to want of knowledge and approval claims. The Court of Appeal stressed that it will be a rare case where a claim based on want of knowledge and approval will succeed, where a solicitor, or other qualified person, has taken the testator through the contents of the Will.

The Court of Appeal stressed that the Court should be very cautious about accepting a contention that a Will, executed in such circumstances, is open to challenge. This would risk undermining a fundamental principle of English law that people should in general be free to leave their property as they choose. There was also a danger of encouraging people to contest Wills, which could result in many estates being diminished by substantial legal costs. Further, such disputes will almost always arise when the desires, personality and state of mind of the central character, namely the testatrix herself, cannot be examined other than in a second-hand way. It is dangerous for a court to claim to see the light, when all is murky and uncertain.

Gill v Woodall was an exceptional case as two highly qualified expert witnesses agreed that Mrs Gill suffered from a fairly extreme version of a relatively unusual mental condition, which severely affected her understanding, and which would not have been appreciated by the solicitor.

The case should not, therefore, be seen as a green light to disappointed beneficiaries to challenge a Will where it has been read over to a testator. There was a grave and strong presumption that, where a Will has been read over to a testator, there was knowledge and approval. However, on the exceptional facts of the case, that presumption was rebutted.

It is not only want of knowledge and approval claims which face considerable difficulties where the Will has been read over to the testator by a solicitor. In Hawes v Burgess [2013] EWCA Civ 74 the Court of Appeal declined to find that a testatrix lacked testamentary capacity, even though she was suffering from dementia, the solicitor had failed to observe the golden rule that capacity should be assessed by a doctor, and expert medical evidence was adduced (from a doctor who never met the testatrix) that she lacked capacity.

As the Court of Appeal emphasised, it is a very strong thing for a court to find that a testator lacked testamentary capacity if the Will is prepared by an experienced and independent solicitor following a meeting with the testator, where the Will is read and explained to the testator by a solicitor. A Will, executed in these circumstances, should only be set aside “on the clearest evidence of lack of capacity” (Hawes v Burgess, para. [60]).

That is so, unless the terms of the Will are, on their face, inexplicable and irrational. A Will leaving a substantial bequest to a charity would not be inexplicable or irrational in this sense.

Nonetheless, the Will was set aside on the alternative ground of want of knowledge and approval. The Will was executed in suspicious circumstances, in that it favoured the testatrix’s daughter, who was present when the Will instructions were given, and cut out the testatrix’s son, with whom the testatrix was on good terms. The solicitor had not taken sufficient precautions (such as sending a draft of the Will to the testatrix to read in advance) to ensure that the testatrix’s instructions represented her genuine wishes, free from the influence of the daughter.

A charity beneficiary under a Will cannot, therefore, be sure that a Will may not be set aside on the grounds of want of knowledge and approval, even if the Will is read to the testator by a solicitor. If the exclusion of a family member and/or the inclusion of the charity are surprising, and the solicitor has not taken the fullest possible precautions, there will be a real risk that the Will will be set aside.

 

CHARLES HOLBECH,

NEW SQUARE CHAMBERS,

12 NEW SQUARE,

LINCOLN ‘S INN,

LONDON WC2A 3SW.