State of play: case summaries

Chadwick v Collinson

A man who had killed his partner and son while suffering from a delusional disorder, and the application of the forfeiture rule to his claim of his partner's estate formed the basis of this case.

The claimant and the deceased lived together as an unmarried couple with their young son in a property they owned together as beneficial joint tenants, but purchased with funds belonging to the deceased. The deceased had made a will in which the claimant was the residuary beneficiary. The claimant had been referred for a mental health assessment after hearing voices and suffering from paranoia.
Before the assessment took place, he stabbed the deceased and their son to death, with many of the stab wounds being non-fatal and causing suffering prior to death. The claimant also stabbed himself.

He pleaded guilty to manslaughter on the ground of diminished responsibility and was detained in a medium security facility under a hospital order. The claimant applied for a declaration that the forfeiture rule did not apply and, if it did, for an order under the Forfeiture Act 1982 modifying the effect of the rule in his case.

Forfeiture is a common law rule which, for public policy reasons, precludes a person who has unlawfully killed another from acquiring any benefit as a result of the unlawful killing.
Had the forfeiture rule been applied, the effect would have been a severance of the joint tenancy of the property, and the deceased's share passing as if the claimant had died immediately before the deceased, and having taken nothing from her estate. The court, however, has (following Dunbar v Plant [1998] Ch. 412) a degree of flexibility in applying the forfeiture rule in cases where public policy demands a more sympathetic approach. Alternatively the court has the power to modify the rule pursuant to section 2.2 of the Forfeiture Act 1982, if satisfied that the justice of the case requires a modification of the effect of the rule.

The court declined to disapply or to modify the forfeiture rule. Even though the claimant's culpability was reduced by reason of his illness, he had been aware of the nature of his acts and that what he was doing was wrong. As a result, this gave effect to the forfeiture rule, which would not be contrary to the public interest.

In reaching this decision, the court examined the competing factors for and against modifying the rule: the nature and gravity of the claimant's offences having regard to the number of non-fatal wounds inflicted prior to death, and the number of times
he returned to attack each victim;
the deceased's conduct which could
not possibly be criticised; the source of the deceased's estate; the claimant's financial position; and those who would benefit from the application of the forfeiture rule (aunts and cousins of the deceased). The court concluded that the claimant would not benefit from the deceased's will.

See Chadwick v Collinson & Ors [2014] EWHC 3055 (Ch)

Routier v HMRC

This case concerned an exemption from inheritance tax where a gift had been made under a will to a Jersey law trust for charitable purposes.

The facts of the case were that Mrs Coulter died in October 2007 and was domiciled in Jersey at the date of her death. In her will, she left the residue of her estate to be held on trust for the benefit of a parish for the purpose of the provision of homes for the elderly of that parish. The disposition was subject to conditions and, had they not been fulfilled by the parish, a disposition should instead be made to Jersey Hospice Care.

Under a deed of variation, a trust was created (the Coulter Trust) which was governed by Jersey law. Exemption from inheritance tax was claimed under section 23 of the Inheritance Tax Act 1984, as being a gift to a charity or to a trust for charitable purposes only (section 23(6)).

HMRC argued that the disposition in the will of Mrs Coulter was not exempt from inheritance tax as it did not qualify under section 23(6). HMRC accepted that the objects of the Coulter Trust were charitable purposes under English law, but argued that in order to qualify for exemption, the Coulter Trust itself must have been governed by English law and this was not the case.

The High Court agreed with HMRC’s position and rejected the claim for inheritance tax exemption. The court considered the reasoning in Camille and Henry Dreyfus Foundation Inc. v HMRC [1956] AC 39, which held that a charity must be established under and in accordance with English law to qualify for the exemption.
 

The appellants argued that there was no such requirement in the second limb of section 23(6) (gifts to a trust for charitable purposes) which simply required that the trust be for charitable purposes only, which the Coulter Trust certaintly was.

The court considered whether what it called a ‘UK link’ was required and concluded that to qualify for an inheritance tax exemption under the second limb of section 23(6), the trust had to be governed by English law.
 

This is because there was no good reason to show that parliament intended that the second limb of section 23(6) should be geographically wider than the first limb and section 23(1), which requires that a charity must be established under English law for gifts to that charity to
be exempt.

The time when the bequest took place (2007) is relevant as the law has changed significantly since then. As a result of various decisions in the European Court precluding the UK from imposing a territorial restriction on the section 23 exemption, charities established in another member state can now qualify for the exemption. A new definition of charity was introduced by the Finance Act 2010 to include charities established in the EU, and to certain other territories. Nonetheless, the recipient charity must be subject to a court of corresponding jurisdiction with respect to charities and must meet the requirement that its purposes are deemed exclusively charitable under English law.

See Routier & Anor v Revenue And Customs [2014] EWHC 3010 (Ch)

Re E

This case discusses the apportionment of costs where proceedings are concerned with P’s Property and Affairs and personal Health and Welfare matters and, interestingly, considers the validity of a personal welfare LPA and an advance decision signed on the same day.

E suffered from Parkinson’s disease since 1999 and in 2006, she was diagnosed with early stage dementia; she had a carer, M. In 2008, E made lasting powers of attorney for both Property & Affairs and Health & Welfare, appointing her husband and a solicitor as her attorneys, with M and a different solicitor as replacement attorneys.

Following E’s husband’s death in June 2014, their children sought an order; (a) compelling M to hand over E’s passport and not remove her from England; (b) suspending the powers of M and the first solicitor to act as attorneys under the LPAs; and (c) conferring interim responsibility for E’s care upon the children. SJ Lush granted the order in early July 2014. A penal notice was attached to the order and M was required to quit E’s property forthwith.

The following day, the attorneys disclaimed their appointments under the LPAs and at a second hearing four weeks later, an order was made appointing a third solicitor to be E’s interim deputy for property and affairs. The official solicitor’s costs were ordered to be paid from E’s estate.

The costs of the other parties now needed to be considered. Where the proceedings concern property and affairs, the general rule was that the costs are to be paid by the patient. Where the proceedings concern personal welfare, the general rule was that there would be no order as to costs. Where the proceedings concern both property and welfare, the costs would be apportioned between the issues.

The children requested that their costs be paid from E’s estate. They requested that the court make no order for M’s costs on the basis that they had produced evidence to show that M had physically, emotionally and financially abused E, that M had indicated that she intended to take E to Florida with her, and that M had already received at least US$8-9m of the family’s money.

M argued that none of the allegations of abuse had been substantiated, and that she had complied with the original order. She added that there had been no real need for an urgent application, as there was in fact no imminent threat that E would be removed from England.

SJ Lush noted that the rule regarding costs in welfare cases reflected the fact that most personal welfare cases were of a public law nature. However, in this case, the proceedings were essentially private law proceedings. Accordingly, the starting point should be that the costs are to be paid by E.

Further, he agreed with M and the official solicitor that there would be no point in attempting to apportion the costs as between property and affairs matters and personal welfare matters. He found that the abuse allegations had not been put to proof and that M’s conduct during the proceedings had been satisfactory. Accordingly, the costs of all the parties would be paid from E’s estate.

The court also noted that E had made an advance decision on the same day that she executed her two LPAs. Section 25(2)(b) of the MCA states that an advance decision is not valid if P has created a later LPA. Section 9(2)(b) sates that an LPA is not created unless it has been registered. E’s personal welfare LPA was registered some three months after E had executed it. Therefore, the advance decision was not valid. However, E’s attorneys under the LPA had disclaimed their appointments. Accordingly, the court made a declaration which stated that the advance decision that E had made continued in existence and was valid.

It follows then, that in welfare proceedings which concern private law rather than public law, it may be possible for all parties to recover their costs from the patient’s estate.

See N & Anor v E & Ors [2014] EWCOP 27 

Public Guardian v AW and DH

See public guardian v AW and DH [2014] EWCOP 28

Karen Bayley is a solicitor at Barlow Robbins

She writes regular case updates for Private Client Adviser

 

Jennifer Ridgway is an associate in the private client team at Michelmores

She writes regular case updates for Private Client Adviser