Corinne Blythe v Stephanie Blythe
| Jurisdiction | England & Wales |
| Judge | Master McQuail |
| Judgment Date | 12 May 2023 |
| Neutral Citation | [2023] EWHC 1085 (Ch) |
| Docket Number | Case No: PT-2022-000333 |
| Court | Chancery Division |
[2023] EWHC 1085 (Ch)
Master McQuail
Case No: PT-2022-000333
IN THE HIGH COURT OF JUSTICE
BUSINESS AND PROPERTY COURTS OF ENGLAND AND WALES
PROPERTY TRUST AND PROBATE LIST (ChD)
Royal Courts of Justice, Rolls Building
Fetter Lane, London, EC4A 1NL
David Mitchell instructed by Roythornes Limited for the Claimants
Richard O'Sullivan instructed by Malcolm & Co Solicitors LLP for the Defendants
Hearing dates: 27 and 28 March 2023
Approved Judgment
This judgment will be handed down remotely by circulation to the parties' representatives by email and release to The National Archives. The date and time for hand-down is deemed to be 2.30pm on 12 May 2023
These proceedings concern the estate of Roland Blythe ( Roland), who died on 10 September 2017. The claimant, Corinne Blythe ( Corinne), and the defendant, Stephanie Blythe ( Stephanie) are two of his daughters. I will use the first names of family members in this judgment without intending any disrespect.
Roland was born on 28 August 1933. His older two children live in Jamaica. Roland never married, but was survived by three children in England: Corinne, Stephanie, and their brother, Courtney Blythe ( Courtney). The mother of these three children died in March 2013, although the Deceased was no longer living with her at that time. For some years before his death Roland lived with Vanita Oliver ( Vanita) in a house owned as to 51% by Roland and as to 49% by Vanita.
Roland's last will, dated 1 May 2012 ( the Will), appointed Stephanie as executrix and provided that the entire net estate should be shared between Corinne, Stephanie and Courtney in equal shares. Stephanie extracted a Grant of Probate from the Principal Registry on 7 January 2020. The net estate was sworn at £232,479.
Stephanie's solicitors, Malcolm & Co LLP, produced draft estate accounts in February 2022. It appears that the total value of Roland's assets at the date of his death was some £239,148 odd. The largest asset was his 51% interest in his home, valued at £153,000. In addition there was some £84,103 in bank accounts and other modest amounts attributable to some policies, pension arrears and tax refunds. Funeral and related catering costs have been paid as have some legal fees. Distributions have been made to Courtney and Stephanie of £50,000 each and a sum of just over £112,000 remains in an account in Stephanie's name and three insurance policies have yet to be collected in.
The main dispute between Corinne and Stephanie is about a lifetime transfer made by Roland to Corinne of £200.000 on 29 September 2015 ( the Transfer). Corinne's case is that it was a gift. Stephanie says that the transaction should be avoided on the grounds of lack of capacity or undue influence. There is also in issue a failure by Stephanie to collect in the insurance policies and complete the estate administration,
Corinne issued a Part 8 Claim on 21 April 2022 seeking a declaration that the Transfer was a gift and other relief to secure the complete administration of Roland's estate. Stephanie accepts that once the main issue is resolved she will need to finalise the administration.
Deputy Master Scher made an order on 22 June 2022 permitting Stephanie to bring a Counterclaim.
The Part 20 Claim seeks a declaration that Roland lacked capacity to make the Transfer, lacked the capacity to make a gift by the transfer, a declaration that the transfer is void for undue influence and an order that Corinne repay the £200,000.
The Defence to Part 20 Claim pleads first that Stephanie's claim is barred by laches, acquiescence and delay. It goes on to plead the presumption that the transfer was a gift. In addition any lack of capacity or undue influence is denied
Corinne's Case
Corinne's case is set out in her first witness statement and her Defence to Part 20 Claim. She explains that due to the passage of time she cannot recall exactly what was said in the conversations she had with Roland in connection with the Transfer.
Prior to 2015, Corinne was living in local authority accommodation ( the Property) and, had ‘the right to buy’ the Property at a discounted price.
Roland encouraged her to purchase the Property but learned that she could not afford to do so and made the Transfer to her to enable her to do so.
At some stage prior to the purchase Roland asked an old friend, Oscar Osmar, who is in the business of providing condition surveys for properties, to inspect the Property and provide a report to him on its disrepair and the possibility of adding a further bedroom. Mr Osmar visited the Property with Roland and provided him with a report.
Roland told Corinne that he would buy the Property for her. Corinne says that Roland told her at that time that he had previously made a similar offer to Stephanie, but she did not want to take him up on the offer as the house she was living in was too small and she wanted a larger property in a different location, in particular stating that “you can't swing a cat in it”. Corinne also says that when Stephanie found out about the gift to Corinne Stephanie asked Roland to make a similar gift to her.
In her first witness statement Corinne said that Roland went to his NatWest branch and arranged the transfer.
In her Defence to Part 20 Claim, which was her earliest opportunity to meet the case formulated against her, and her second witness statement Corinne said that, without explaining the purpose of the visit. Roland asked her to take him to the bank branch where he met with a senior bank clerk in private and that at the end of the meeting the bank clerk asked Corinne for her bank details, saying that she was lucky as Roland wanted to make a gift to her. Corinne provided the details with the result that a computer-generated instruction dated 29 September 2015 to send a CHAPS payment was prepared and was signed by Roland and £200,000 was duly transferred to Corinne's account.
Stephanie's Case
The Transfer
Stephanie is unable to advance any positive case about what occurred on 29 September 2015, her position is that she knew nothing of the Transfer until after Roland's death.
Capacity
By paragraph 3 of her Part 20 Claim Stephanie asserts that “[Roland] had been increasingly frail and suffering from ill health since the death of his wife [sic] in March 2013 and often became confused.”
By paragraph 4 of that pleading Stephanie asserts that the amount of the transfer represented either two thirds or the majority of Roland's assets and that his frail and confused state meant he lacked capacity to make such a transfer at all or as a gift.
In her first witness statement Stephanie claimed that Roland's medical records, which had not then been obtained, would show he was very ill at the time the Transfer was made. In her second witness statement she made specific reference to four entries in Roland's medical notes and commented upon them.
Undue Influence
By paragraphs 6 and 7 of her Part 20 Claim Stephanie asserts that Corinne became reconciled with Roland after the death of their mother in 2013 and was in a position of trust and confidence in relation to Roland, who was vulnerable, and had gained ascendancy over him. The pleading goes on to say that the Transfer, being of the majority of Roland's assets, and in light or the provisions of the 2012 will, is a transaction that calls for explanation giving rise to a presumption of undue influence.
Loan
The case that the Transfer was a loan was not pursued at trial.
Law
As confirmed by Kicks v. Leigh [2015] 4 All E.R. 329 the test for considering retrospectively the mental capacity to make an inter vivos gift is that explained by Martin Nourse QC (as he then was) in Re Beaney [1978] 1 WLR 770. The test is as follows:
“the question is whether the person concerned is capable of understanding what he does by executing the deed in question when its general purport has been fully explained to him.”
What is required is an ability to understand, rather than actual understanding. The question is: would the donor have understood the transaction if the consequences had been fully explained?
As to the degree of understanding required, the judgment says this:
“The degree or extent of understanding required in respect of any instrument is relative to the particular transaction which it is to effect. In the case of a will the degree required is always high. In the case of a contract, a deed made for consideration or a gift inter vivos, whether by deed or otherwise, the degree required varies with the circumstances of the transaction. Thus, at one extreme, if the subject-matter and value of a gift are trivial in relation to the donor's other assets a low degree of understanding will suffice. But, at the other, if its effect is to dispose of the donor's only asset of value and thus for practical purposes to pre-empt the devolution of his estate under his will or on his intestacy, then the degree of understanding required is as high as that required for a will, and the donor must understand the claims of all potential donees and the extent of the property to be disposed of.
As it is Stephanie who asserts incapacity the legal burden is on her to adduce evidence to raise sufficient doubt from which incapacity can be inferred so that the evidential burden would shift to Corinne; see [67] of Kicks.
The common law test for mental capacity to make a will is found in Banks v Goodfellow and set out in [30] of Kicks.
Undue Influence
Stephanie's alternative claim is that the Transfer was procured by presumed undue influence as explained in the decision of the House of Lords in Royal Bank of Scotland plc v Etridge (No 2) [2002] 2 AC 773.
The party alleging that a...
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