Diana Mary Rawstron and Another v Paul McAdam Freud
| Jurisdiction | England & Wales |
| Judge | Richard Spearman |
| Judgment Date | 30 July 2014 |
| Neutral Citation | [2014] EWHC 2577 (Ch) |
| Docket Number | Claim No: HC13D05162 |
| Court | Chancery Division |
| Date | 30 July 2014 |
[2014] EWHC 2577 (Ch)
IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
IN THE ESTATE OF LUCIAN MICHAEL FREUD DECEASED
Royal Courts of Justice
Strand, London, WC2A 2LL
Richard Spearman Q.C.
(sitting as a Deputy Judge of the Chancery Division)
Claim No: HC13D05162
Michael Furness QC (instructed by Goodman Derrick LLP) for the Claimants
Tracey Angus QC (instructed by Wedlake Bell LLP) for the Defendant
Hearing date: 19 May 2014
Richard Spearman Q.C.:
Introduction
In his long and successful life, the late Lucian Freud achieved international recognition as an outstanding painter and draughtsman, and, with it, considerable wealth. He also lived a very full private life. These matters form the background to these proceedings under CPR Part 8, which raise a short point of construction concerning Lucian Freud's last Will dated 10 May 2006 ("the Will"). As in the case of his previous will, which was made on 25 June 2004 ("the 2004 Will"), and which it superseded, the Will was professionally drawn by his solicitors, Goodman Derrick LLP. Lucian Freud died on 20 July 2011. His net United Kingdom estate was sworn for probate at just under £96m, and his residuary estate after payment of legacies and inheritance tax but before administration expenses has been estimated by the Claimants to be worth about £42m.
The parties
The First Claimant was Lucian Freud's solicitor. She first provided legal services to him in 1986, the same year as she became a partner in the firm that was then called Goodman Derrick & Co. She did an increasing amount of work for him and had an increasing amount of contact with him from then on, speaking to him almost daily for about 20 years before he died. The Second Claimant is one of Lucian Freud's children. The Claimants are the executrices of the Will, and bring this claim in that capacity.
Although at one time this was disputed by the Claimants, it is accepted, at least for purposes of the present application, that the Defendant is another of Lucian Freud's children. (According to the papers before me, these children numbered "at least 14").
The issue
Paragraph 6 of the Will provides as follows:
"I GIVE all the residue of my estate (out of which shall be paid my funeral and testamentary expenses and my debts) and any property over which I have a general power of appointment to the said Diana Mary Rawstron and the said Rose Pearce jointly".
Shortly stated, the issue that I have to decide is whether, on its true construction, this provision makes the Claimants absolutely entitled to Lucian Freud's residuary estate. A declaration to this effect is the only relief claimed by their CPR Part 8 Claim Form.
While the Claimants contend this is so, they have also made clear that it is their case that this gift of residue is subject to a trust imposed by Lucian Freud. The terms of that trust have not been disclosed by the Claimants. Indeed, one of their purposes in taking the course that they have adopted in these proceedings is to avoid revealing the terms of that trust to the Defendant, on the basis this would go against Lucian Freud's wishes. However, they have informed the Defendant that he is not a beneficiary of the trust.
The Defendant's case is that, on a proper construction of the Will, Lucian Freud's residuary estate was not given to the Claimants for their absolute benefit, but instead was given to them to hold on trusts which are not set out in the Will. On that basis, any trust imposed on the residuary estate can only have been a half secret trust.
In light of the different requirements for creation of a valid half secret trust in comparison to a fully secret trust, the Defendant would then wish to explore whether any valid half secret trust was created, or whether there was an intestacy of the residue. In the event of intestacy, the Defendant would be entitled to a share of the residue, whereas if the Claimants' case is right the Defendant's only claim for provision from the estate arises under the Inheritance (Provision for Family and Dependants) Act 1975.
In fact, the Claimants' evidence, contained in paragraph 12 of the First Claimant's witness statement dated 27 November 2013, is that even if the Defendant's construction of the Will is correct "the secret trust attaching to the gift would still qualify as a half secret trust, as its terms were communicated to my fellow Claimant and [me] before the Will was executed". The Claimants consider that the material which supports this case is confidential, and that providing it to the Defendant is likely to lead to ever increasing demands for verification. They have therefore declined to provide it to the Defendant. For his part, the Defendant is not prepared to concede the point in the absence of supporting material. In the result, on 19 December 2013 Master Price gave directions to enable this issue to be determined in the event that the Claimants' current claim fails.
These rival cases were argued with skill and moderation, both orally and in writing, by Michael Furness QC for the Claimants and Tracey Angus QC for the Defendant.
Legal framework
There was no dispute between the parties concerning the relevant legal principles.
Save where section 21 of the Administration of Justice Act 1982 ("section 21") applies, a will should be interpreted in the same way as a contract, namely as summarised by Lord Neuberger of Abbotsbury PSC in Marley v Rawlings [2014] UKSC 2, [2014] 2 WLR 213 at [18]–[19]:
"[18] During the past 40 years, the House of Lords and Supreme Court have laid down the correct approach to the interpretation, or construction, of commercial contracts in a number of cases starting with Prenn v Simmonds [1971] 1 WLR 1381 and culminating in Rainy Sky SA v Kookmin Bank [2011] 1 WLR 2900.
[19] When interpreting a contract, the court is concerned to find the intention of the party or parties, and it does this by identifying the meaning of the relevant words, (a) in the light of (i) the natural and ordinary meaning of those words, (ii) the overall purpose of the document, (iii) any other provisions of the document, (iv) the facts known or assumed by the parties at the time that the document was executed, and (v) common sense, but (b) ignoring subjective evidence of any party's intentions. In this connection, see Prenn, at pp 1384–1386 and Reardon Smith Line Ltd v Yngvar Hansen-Tangen (trading as H E Hansen-Tangen) [1976] 1 WLR 989, per Lord Wilberforce, Bank of Credit and Commerce International SA v Ali [2002] 1 AC 251, para 8, per Lord Bingham of Cornhill, and the survey of more recent authorities in Rainy Sky, per Lord Clarke of Stone-cum-Ebony JSC, at paras 21–30."
Neither side before me contended that section 21 is in point. Section 21 is headed "Interpretation of wills – general rules as to evidence", and provides as follows:
"(1) This section applies to a will –
a) in so far as any part of it is meaningless;
b) in so far as the language used in any part of it is ambiguous on the face of it;
c) in so far as evidence, other than evidence of the testator's intention, shows that the language used in any part of it is ambiguous in the light of surrounding circumstances.
(2) In so far as this section applies to a will, extrinsic evidence, including evidence of the testator's intention, may be admitted to assist in its interpretation."
The judgments in the earlier Court of Appeal decision in Royal Society for the Prevention of Cruelty to Animals v Sharp [2010] EWCA Civ 1474 are to the same effect. In that case, Patten LJ (with whom Black LJ agreed) said at [19]–[20] and [22]:
"[19] One thing on which the parties were in agreement was the approach of the Court to the construction of a will. As mentioned above, it was common ground before the judge that no extrinsic evidence was admissible. He had therefore to follow the guidance of Lord Simon LC in Perrin v Morgan [1943] AC 399 at 406 and to construe the language of the will so as to find:
"… the meaning which, having regard to the terms of the will, the testator intended. The question is not, of course, what the testator meant to do when he made his will, but what the written words he uses mean in the particular case — what are the "expressed intentions" of the testator."
[20] We have therefore to examine the language of the will in its context taking into account the will as a whole; any relevant background circumstances which inform the meaning of the words used; and giving to those words their ordinary meaning unless they are obviously used in some special or technical sense …
[22] … it is dangerous to approach the assessment of the Testator's intentions other than through the language of his will. The first relevant consideration in my view is that the will was professionally drafted by a solicitor who has to be assumed to be competent. Although solicitors do obviously make mistakes, there needs to be something in the language of the document or its admissible background to justify that inference. More importantly, those factors must be such as to permit the Court to give the words actually used a meaning which is not strictly in accordance with the usual rules of grammar or vocabulary: see Investors Compensation Scheme Ltd v West Bromwich Building Society [1998] 1 WLR 896."
The Master of the Rolls, Lord Neuberger of Abbotsbury, said at [31]–[32]:
"[31] As Patten LJ impliedly acknowledges by his reference to Investors Compensation Scheme Limited v West Bromwich Building Society [1998] 1 WLR 896, the court's approach to the interpretation of wills is, in practice, very similar to its approach to the interpretation of contracts. Of course, in the case of a contract, there...
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Table of Cases
...[2016] WTLR 1277 214 Rawlinson, Re; Kayll v Rawlinson [2010] EWHC 1269 (Ch), [2010] WTLR 1443, ChD 37 Rawstron and Pearce v Freud [2014] EWHC 2577 (Ch), [2014] WTLR 1453, 17 ITELR 479, [2015] 1 P & CR D13 16 Ray, Re; sub nom Cant v Johnstone [1916] 1 Ch 461, 85 LJ Ch 781, 114 LT 688, ChD 14......
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Sources of Rights
...628, 19 WWR 118 (Alta SC); Jankowski v Perpetual Trustee Co Ltd , [1996] 2 WWR 457, 131 DLR (4th) 717 (Man CA) [ Jankowski ]. 149 [2014] EWHC 2577 (Ch). 150 Jankowski , above note 148. 151 Ibid at para 14. Sources of Rights 209 majority of the Manitoba Court of Appeal construed the clause a......
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Table of Cases
...Park, [1955] EWCA Civ 4, [1956] Ch 131 ........................................................142, 143, 144, 145, 146, 149 Re Freud, [2014] EWHC 2577 (Ch) ...................................................................208 Re Gape, [1952] Ch 743 (CA) ..........................................
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Form, Content and Interpretation of a Will
...(this interpretation was also given by the Jersey courts in Re Krishnan Deceased [2015] JRC 181). In Rawstron and Another v Freud [2014] EWHC 2577 (Ch), the court took the natural and ordinary words used in the context of the will to construe the disposition in the will of Lucian Freud. The......