Author: Wellers

High Court Ruling Underlines the Pitfalls of Making ‘Inflexible’ Mutual Wills

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It is legally possible for couples to make mutual wills by which each binds the other not to alter their bequests at any point in the future, save by mutual agreement. As a High Court ruling showed, however, the inherent inflexibility of such arrangements is one good reason why lawyers usually advise against them.

A married couple made mutual wills by which they each bequeathed their estates to the other. The wills provided that, on the death of the second spouse, the entirety of his or her estate would pass to their third-eldest child. Following the husband’s death, however, the wife made a fresh will by which she appointed their sixth-eldest child as her sole beneficiary.

The effect of the mutual wills, if valid, was that, in the absence of their agreement to the contrary, each spouse bound the other to bequeath his or her estate to the third child. When the death of the husband rendered any such agreement impossible, the obligation on the wife to do so became irrevocable.

The sixth child sought a formal declaration that his mother’s final will was valid. In resisting his claim, however, the third child asserted that the document was of no effect in that it conflicted with the terms of the earlier mutual wills.

Ruling on the matter, the Court noted that it is notorious to lawyers practising in the field that a decision to make mutual wills needs to be considered with the greatest care. The inflexibility of such arrangements, which take no account of any future changes in circumstances, usually renders them inappropriate.

The couple understood the effect of their agreement to enter into mutual wills. It was, however, certainly a transaction that called for an explanation. In setting aside the agreement, the Court was not satisfied that they had entered into it free from the third child’s undue influence. The ruling meant that the mother’s final will took full effect and that the sixth child, not the third, was the beneficiary of her estate.

Setting Up Business in a Garden Outhouse? Make Sure You Read This First

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One of the social effects of the COVID-19 pandemic was the creation of a fashion for householders to operate businesses from outhouses in their gardens. However, an important tribunal ruling underlined the legal hazards of such a course.

In response to the pandemic, a couple began running a beauty therapy business in a wooden cabin in their back garden. They said that they only subsequently became aware that planning permission was required to allow the cabin’s commercial use. Their retrospective application for planning permission was successful.

That, however, was not the end of the matter: their property’s title deeds included a restrictive covenant which forbade its use for any trade, business or profession or for any purpose other than that of a single private dwelling. Faced with that difficulty, the couple applied to the First-tier Tribunal (FTT) for the covenant to be modified so that they could continue to run their business.

The woman asserted that the covenant took away her right to earn a living. She said that she was constrained by the pandemic to relocate the business to the cabin and that she had a medical condition which prevented her working elsewhere. Unless the covenant were modified, she would be out of work and reliant on benefits.

Three of the couple’s neighbours, however, vehemently objected to the proposed modification. Their concerns focused on such matters as vehicle parking, loss of privacy and impact on property values. The dispute had given rise to such strong feelings that the local police force had sought a resolution.

Ruling on the matter, the FTT found that the cabin’s business use in accordance with the planning permission was reasonable. The covenant was not intended to prevent residents occasionally working from home, alone on a laptop in a spare room. It did not prohibit all activity with a commercial purpose. Low-level business use of an existing building for small-scale business purposes was generally consistent with a residential neighbourhood.

In rejecting the couple’s application, however, the FTT noted that the covenant had been in place for only about 10 years, since the couple bought their newly built home. There was evidence that the neighbourhood’s developer had brought the covenant to purchasers’ attention and explained its purpose.

Homebuyers were offered the opportunity to move into a controlled environment where the appearance of the neighbourhood would remain the same and non-domestic uses would be prohibited. The covenant ensured its preservation as a pleasant place to live.

Every property in the neighbourhood had the potential to be put to business use and, were the covenant modified, objectors feared that would represent the thin end of the wedge, creating a damaging precedent. Overall, the FTT found that the covenant provided a high degree of protection to the amenity of the neighbourhood’s residents and secured for them a practical benefit of substantial advantage. Given that finding, the FTT had no jurisdiction to grant the modification sought.

Mental Capacity and Divorce – High Court Ends ‘Empty Husk’ Marriage

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Only those with the mental capacity to make important decisions for themselves can consent to marriage – or divorce. However, as a High Court ruling made plain, it is in no one’s best interests for the law to maintain a marriage that has become no more than an empty husk.

The case involved a couple whose marriage was already under considerable strain when the husband sustained a severe brain injury. Prolonged and expensive divorce proceedings followed but, more than 15 years on, they remained married. They had barely seen each other during much of that period.

With the support of a close friend, the husband sought a decree nisi. His petition was initially resisted by the wife, who was concerned that the dissolution of the marriage would be financially disadvantageous to her and, particularly, to the couple’s adult children. However, she withdrew her opposition at the end of the court hearing.

Ruling on the matter, the Court had no doubt that the husband lacked capacity to consent to a divorce. Formerly a charismatic and energetic man, his condition had sadly deteriorated to the point where even the most rudimentary decisions were beyond him. He lived a largely reclusive life and there had been little, if any, contact between him and the wife for well over a decade.

Given such a long estrangement, the Court observed that the core features of what constitutes a marriage had evaporated. There was something inevitably corrosive of the status and importance of the institution of marriage in preserving a legal framework which, for both of them, had become a mere empty vessel.

The prevailing evidence indicated that, at a time when he still had decision-making capacity, the husband regarded the marriage as having irretrievably broken down. The wife, too, had come to regard the marriage as at an end. To maintain the status quo in those circumstances would risk demeaning all involved. Reaching the very clear conclusion that a divorce was in the husband’s best interests, the Court found that a decree nisi was a necessary step that had been avoided for far too long.

Want to Keep Your Will a Secret? High Court Ruling Underlines the Pitfalls

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Tensions simmer within many families and, when making your will, you may wish to keep its contents secret from your loved ones so as to avoid feeding the fire. As a High Court case showed, however, that makes it all the more vital to engage a solicitor to assist you in expressing your wishes.

By his will, a moderately prosperous businessman bequeathed all that he owned to his wife. The document was dated just over a month before he died in hospital. One of his daughters, who would have inherited part of his estate had he died without making a valid will, challenged its authenticity.

Ruling on the matter, the Court noted that the case was unusual in that there was no evidence as to how the will was created. There was no record of instructions having been given to a solicitor and it was unclear whether the document was home-made or expertly drafted. In the absence of professional involvement, the identity of the will’s author itself remained uncertain.

There were certain suspicious circumstances surrounding the making of the will, not all of which could be explained. However, in upholding the document’s validity, the Court rejected arguments that it was the product of a large-scale conspiracy, perpetrated by several people and persisted in for a long period.

The wording of the will was, at least in part, apparently based on a foreign precedent and the Court was satisfied that it was not the work of a professional well versed in English law. The document was capable of being a valid will, however, and its contents made complete rational sense in that there was no evidence that the man had any financial dependants other than his wife.

The decisive evidence, however, came from two witnesses to the will who testified that they had seen him sign it at his home. Given the rows and distrust that had riven his family, they complied with his request not to mention the will to anyone else. In the event, the document did not come to light until after his death.

In ruling that the will had been rightly admitted to probate, the Court was satisfied that, as required by law, the man had signed the document in the presence of two witnesses who had themselves subsequently appended their signatures to the document’s attestation clause.

What Can a Family Judge Do When Faced With a Parent’s Absolute Defiance?

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In cases where even a succession of stiff prison sentences has failed to bring about compliance with court orders, what is a judge to do? A family judge faced exactly that quandary in the case of a father who defiantly refused to cooperate in arranging the return of his two daughters from Libya to England.

As long ago as 2015, the father flew with his three children to Tunisia on an agreed visit to see their paternal grandmother. Instead of returning to this country, however, he took the children to Libya, the country of his birth. He subsequently returned to England with his son, but his daughters had, so far as was known, remained in Libya ever since.

Although one of the daughters had attained adulthood – the other was approaching her teens – neither of them was permitted to leave Libya without their father’s formal consent. At their mother’s behest, various court orders were made requiring him, amongst other things, to give such consent and to use his best endeavours to procure their return to England.

His persistent refusal to comply with those orders resulted in findings of contempt of court being made against him on four separate occasions. He received prison sentences totalling five years. His continued defiance, however, did not deter the mother from applying to have him committed to prison yet again.

His lawyers realistically submitted no mitigation on his behalf. They argued, however, that a further prison sentence would have no coercive effect on him in that he was determined to do nothing to help procure his daughters’ return to England. Even if granted further time for compliance, he would not alter his stance.

Had the father been prosecuted in a criminal court, his lawyers pointed out that the maximum sentence for child abduction is seven years’ imprisonment. After a one-third deduction for a guilty plea, the maximum would be 56 months. He had already been sentenced to more than that for his successive acts of civil contempt.

Ruling on the matter, the judge noted that the maximum sentence for contempt of court is two years. However, it was possible for successive breaches of the same court orders to result in successive findings of contempt and successive terms of imprisonment which, in aggregate, exceeded two years.

In sentencing the father to a further 12-month jail term, the judge refused to overlook his wilful defiance and the appalling consequences of his conduct. Even if the sentence had no coercive effect, it was still an appropriate punishment. There was no basis for suspending the term in that he had given not an ounce of indication that that would achieve anything. The judge expressed the hope that his separation from his son during his period behind bars might prompt him to think again.

High Court Comes to Aid of Widow Left Almost Penniless by Husband’s Will

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Failing to make reasonable provision for your dependants in your will is to positively invite discord between your loved ones after you are gone. That was certainly so in the case of a man who bequeathed not a penny to his elderly widow.

The man wanted his fortune – which was estimated to be worth up to £1.99 million – to pass solely down the male line. By his will, he divided his estate equally between his two sons. He made no provision at all for his four daughters or his widow, to whom he had been married for about 66 years.

Following his death, his widow, aged 83 and in failing health, moved out of the family home after one of the sons, with whom she had a very strained relationship, moved in. She lived with one of the daughters but had very few assets of her own. Her income consisted of under £12,000 a year in state benefits.

After she launched proceedings under the Inheritance (Provision for Family and Dependants) Act 1975, the High Court noted that it was a clear-cut case of a will failing to make reasonable provision for a financial dependant. All the husband’s wealth had been accumulated during a very long marriage to which his wife had made a full and equal contribution.

Although she had worked for years in the family business, she had no direct stake in it and received no salary. She was financially dependent on her husband, who took charge of money matters and met all the family outgoings. Had the marriage ended in divorce, she would have been entitled to half his assets; yet, by the terms of his will, she was left with next to nothing.

In effectively rewriting the will, the Court ordered that the widow should have half of her husband’s estate. Such an inheritance would be sufficient comfortably to meet her reasonable capital and income needs and would enable her to purchase a modest home close to her daughter.

Domicile – Tax Tribunal Delves Back into a Century of Family History

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Discerning where an individual is domiciled for tax purposes can involve delving far back into his or her family history. In a case on point, a tax tribunal’s inquiries began with the birth of a wealthy businessman’s father in Austria at the end of the First World War and his subsequent flight from Nazi oppression to England.

In challenging tax assessments in respect of a four-year period, the businessman asserted that he was domiciled in England for none of those years. In determining his appeal, the First-tier Tribunal (FTT) was required to consider not only his own domicile but that of his parents.

His father’s domicile of origin was in Austria, where he was born in 1918. He came to England in 1938, having escaped the Nazi persecution of Jews, and served in the British Army. His future wife was born in Ireland and, after they met and married in London in 1954, they established a business and had three children together.

It was the businessman’s case that his father was domiciled in Austria throughout his life – he died suddenly, aged 50, in 1968 – and never acquired a domicile of choice in England. As his father’s dependant, he was himself born with an Austrian domicile and that continued to be the position after he reached adulthood. His mother, too, had never chosen to abandon her domicile of origin, Ireland.

Ruling on the matter, the FTT found that his father turned his back on Austria when he fled to England, renouncing any connection with the land of his birth. He became deeply settled in London and, having made up his mind to live permanently and indefinitely in England, he acquired a domicile of choice here. Although his mother may have expressed an intention to return to Ireland, any such plan was vague in nature and she too had acquired a domicile of choice in England.

The businessman described himself as a global person who owned property abroad and spent most of his time outside England. In dismissing his appeal, however, the FTT noted that he was born and brought up, and had established a thriving business, in this country. He had never had any ties or attachments to Austria or Ireland and there was compelling evidence that he had, at the relevant time, intended to make his permanent home in England and to end his days here.

Pensioner with ‘Mild Cognitive Impairment’ Capable of Making a Valid Will

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To make a valid will, you need a certain level of mental capacity. However, as a High Court ruling showed, a flawless memory is not required and those suffering from mild cognitive impairment may not be disqualified from expressing their wishes.

The case concerned a woman who was suffering from advanced vascular dementia when she died at the age of 90. She had, six years previously, made a will by which she left her entire estate to her son and only child.

He died before her, however, so that, under the terms of the will, her estate passed to one of her nephews and his wife. The will was the source of much antipathy within the family and one of the woman’s nieces mounted a challenge to its validity on the basis that she lacked the mental capacity required to make it.

Ruling on the matter, the Court noted that the capacity to make a valid will depends on the potential to understand and is not to be equated with a test of memory. The legal test for capacity is not pitched so high as to prevent the elderly and others with imperfect memories from making a will.

The first indication that the woman was having mental health difficulties occurred about four months before she made the will. She was visited at home by a mental health nurse who noted her sadness that so many old friends had passed away. Such a lament, the Court noted, was not unusual for elderly people.

In his report, the nurse described her as a pleasant and sociable lady who stated that she had not left her home for over a year. Her short-term memory was impaired, she was disorientated as to time and she had occasional episodes of confusion. Overall, the nurse’s opinion was that she was suffering from mild cognitive impairment.

Upholding the will’s validity, the Court noted that it was rational on its face. Drafted by an experienced lawyer, its terms were simple and readily understandable. In the light of medical records, the likelihood was that she was still in the early stages of mental decline when she signed the document. She recollected the extent of her property, which largely consisted of her home, and was able to understand the nature of the will and its effect.

Let Down by a Cowboy Builder? Your Complaints Should Not Go Unheard

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So-called ‘cowboy’ builders who demand overpayment for delayed and shoddy work are a curse on householders. However, as a Court of Appeal ruling showed, the law takes a tough line with dishonest tradespeople.

The case concerned a builder’s work for four clients, performed at a cost of almost £35,000. In each case, he presented himself as a solvent and stable businessman although that was far from being the case. The clients complained that his faulty work was long delayed and left incomplete.

One client received an electric shock each time she touched a washing machine he had installed. He left another client’s home uninhabitable so that she and her children were left homeless and had to move in with her ex-husband for months. She spent her life savings to get her home back into some sort of order.

After he was prosecuted, the builder pleaded guilty to engaging in unfair commercial practice, contrary to the Consumer Protection from Unfair Trading Regulations 2008. The Regulations require tradespeople to exercise skill and care in their work, to adopt honest market practices and to observe the general principle of good faith.

In sentencing him to nine months’ imprisonment, a judge noted that he had strung along and grossly misled all four clients. Making false promises, he simply ignored their concerns. Each of them was asked for more money and at least one of them was asked for cash in order to evade VAT. He behaved aggressively to one of the clients before walking off the uncompleted job.

Ruling on his appeal against the sentence, the Court had no doubt that the custody threshold was passed given the litany of wreckage and disaster he had left behind him. It was no excuse for him to argue that he was a victim of his own success, in that his business had mushroomed to the point where he was unable to keep pace with his commitments. It was a case of excessive greed rather than a businessman getting out of his depth. The judge’s decision that only immediate custody would suffice as punishment could not be faulted.

Cutting his sentence to six months, however, the Court noted his powerful personal mitigation. He was of previous good character and had received numerous positive references. He had performed charity work and had a sound working history, and his imprisonment would impact on his young family. He had wisely decided that he no longer wished to run his own construction company.

Pre-Nuptial Agreement Given Only Partial Effect in Big Money Divorce Case

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Couples who enter into a pre-nuptial agreement (PNA) with their eyes wide open can expect to be bound by its terms. However, as the outcome of a ‘big money’ divorce case made plain, judges have the power to effectively rewrite them if they fail to make fair provision for the reasonable needs of either husband or wife.

The case concerned a middle-aged couple whose realisable assets, worth more than £43 million, were almost entirely held in the wife’s name. On their wedding day they signed a PNA by which the separation between their assets was maintained. Under its terms, the husband’s financial entitlements on divorce were restricted to about £190,000 in cash and repayment of a £250,000 loan.

Following a hearing, a judge rejected his arguments that the PNA should be entirely disregarded on the basis that he entered into it in haste and without legal advice. He was found to have signed it freely and with a full appreciation of its meaning and consequences. The judge suspected that he had come to regret signing the document in the belief that it would never come into effect.

In ruling that the PNA failed to provide fairly for his reasonable needs, however, the judge noted that he had made a full contribution to the marriage and the upbringing of the couple’s three children. The wife having received a huge sum on the sale of her family’s business, the whole landscape of the couple’s finances had changed dramatically since the PNA was signed.

The judge directed the wife to provide the husband with a £2.5 million house that would revert to her on his death. She was further ordered, amongst other things, to pay him £1.2 million in capitalised maintenance and to cover his substantial debts. His total financial award came to around £1.9 million.

Had the couple married without signing a PNA, the judge suspected that, given the scale of the wife’s fortune, the husband’s award would have been significantly higher. The outcome, however, properly recognised the limiting consequences of the PNA, balanced against his reasonable needs.

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