Soulsbury v Soulsbury
| Jurisdiction | England & Wales |
| Judge | Lord Justice Ward,Lord Justice Longmore,Lady Justice Smith |
| Judgment Date | 10 October 2007 |
| Neutral Citation | [2007] EWCA Civ 969 |
| Docket Number | Case No: B2/2006/2199 |
| Court | Court of Appeal (Civil Division) |
| Date | 10 October 2007 |
[2007] EWCA Civ 969
the Rt Hon. Lord Justice Ward
the Rt Hon. Lord Justice Longmore and
the Rt Hon. Lady Justice Smith
Case No: B2/2006/2199
IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM CENTRAL LONDON COUNTY COURT
HIS HONOUR JUDGE COWELL
CHY04090
Royal Courts of Justice
Strand, London, WC2A 2LL
Charles Howard QC and Mark Dubbery (instructed by Warner Goodman & Streat) for the appellant
Mr Richard Millett QC and Mark Twomey (instructed by Anthony Louca) for the respondent
Hearing date: 1st May 2007
Judgement
Lord Justice Ward
Introduction
The issue in this appeal is whether the personal representative of the estate of the deceased former husband of the claimant is liable to pay her the sum of £100,000 which the deceased had promised he would ensure she would receive on his death if she did not enforce an order for periodical payments in her favour or seek any other order for ancillary relief against him.
On 27th June 2006 His Honour Judge Cowell, sitting in the Central London County Court, held that the estate was liable to pay and he entered judgment for the claimant for £116,750 including interest. The personal representative now appeals.
The facts
The claimant, Mrs Elizabeth Soulsbury, was married to Mr Owen Soulsbury (“the deceased”) in 1966. They had three children, all of them now adults. The marriage broke down in 1986, divorce proceedings were commenced by the wife and a decree absolute of divorce was granted on 17th December 1986. By order of the Southampton County Court dated 18th September 1987, the deceased was ordered by consent to pay periodical payments to his former wife at the rate of £12,000 per annum less tax. He was also ordered to pay periodical payments to the two children of the family then still under the age of 17 years at the rate of £2,400 per annum less tax. No orders for payment of a lump sum or property adjustment orders were ever made.
Notwithstanding the divorce, the claimant and the deceased remained on very friendly terms and were regularly in communication with each other. When in about 1988 the deceased sold his shareholding in a public company which he had helped to found for a large sum of money, he made generous gifts to the claimant and the children. He bought and refurbished a property in Italy and the claimant and the children frequently took holidays there.
On the occasion of his fiftieth birthday in 1989, the deceased made the suggestion that, instead of paying maintenance to the claimant, he should leave her £100,000 in his will. From time to time he repeated this suggestion. In April 1991 he went so far as to execute a will bequeathing that sum to her, the residue to his children. He continued to press the claimant to forego the periodical payments and her right to seek any ancillary relief from him in return for his ensuring she would receive £100,000 on his death.
In about September 1993 agreement to that effect was reached between the claimant and the deceased during conversations on the telephone. This is the agreement upon which the claim is based. At or about that time he ceased making periodical payments to her. No attempt has ever been made to recover the arrears which had accrued under the order.
By about 1992 the deceased began to cohabit with the defendant. Sadly he became ill with leukaemia in 2000. On the morning of 10th October 2002, close to death, he married her in the Charing Cross Hospital and he died that evening. By virtue of s.18 of the Wills Act 1837 the effect of that marriage was to revoke the 1991 will, though whether the deceased knew that is moot and in any event immaterial.
The appellant is the personal representative of the deceased acting under a grant of letters of administration issued out of the Principal Registry of the Family Division in March 2003. She refused to pay the legacy or any part of it to the claimant. In October 2003 the claimant brought this claim for payment of £100,000 alternatively damages together with interest.
The judgment under appeal
The judge wisely approached the claimant's evidence with “a certain degree of caution”. He concluded, however:
“23. … Bearing that in mind I am nevertheless certain I can accept the evidence of the claimant that the agreement was made as she said.”
Accordingly he held:
“35. So it seems to me that on the facts effectively what the parties agreed – and here I am putting it in the words of a lawyer – was that if she, the claimant, should not have enforced or attempted to enforce the court order, as it then was, and should not seek anything from him by court process during the remainder of their joint lives then on his predeceasing her, he would ensure that she would receive on his death £100,000.
36. She did none of those things. That event happened, and indeed but for the remarriage and its unintended consequence, she would have received that sum under the will of 1991 and the consequence in law, in my judgment, is that the deceased's estate is in breach of the agreement and must make it good.
37. It is in my judgment as simple a case as that. Put another way, … the deceased would not make further maintenance payments to the claimant in consideration of a promise that the deceased would leave the claimant £100,000 by will on his death.
38. … whether or not she knew she could return to the Southampton County Court, had she done so, as she might have, that would not have been a breach of the agreement; it would have meant that the event or the condition for the arising of the obligation to be left the £100,000 would not have happened or been fulfilled “
The judge recognised that applications could have been made for a lump sum or for a variation of the periodical payments order. The claimant could have enforced the arrears and she could have applied under the Inheritance (Provision for Family and Dependants) Act 1975. The truth was, he said in paragraph 42, “either could have gone to court” but, (paragraph 43), “The point remains that neither party attempted to do any such thing.” He added in paragraph 49, “It also seems to me that if the claimant had applied it would simply have meant that the event or condition for payment would not have been fulfilled.” His conclusion was:
“45. … that neither party had ever sought to oust the jurisdiction of the court.”
The gist of the argument of Mr Dubbery, counsel for the defendant below, was that the contract was not governed by ordinary contractual principles and was unenforceable. He based his case on this dictum of Thorpe L.J. in Xydhias v Xydhias [1999] 1 FLR 683, 691:
“My cardinal conclusion is that ordinary contractual principles do not determine the issues in this appeal. This is because of the fundamental distinction that an agreement for the compromise of an ancillary relief application does not give rise to a contract enforceable in law. The parties seeking to uphold a concluded agreement for the compromise of such an application cannot sue for specific performance. The only way of rendering the bargain enforceable whether to ensure that the applicant obtains the agreed transfers and payments or whether to protect the respondent from future claims, is to convert the concluded agreement into an order of the court.”
It was a matter of public policy, argued counsel as recorded by the judge:
“that when there is an ancillary relief application that is pending it is important that the court should have some say about whether an agreement ought to be implemented …
46. So in essence Mr Dubbery's argument is that this agreement cannot be made and cannot be enforced except upon its being embodied in a court order.”
The judge dismissed that argument because:
“49. It seems to me that because there was no application which had been made by either party in 1993 the principle in Xydhias v Xydhias could not have applied to make it of no contractual force until made into a court order. …
50. … There was no application[for a lump sum etc] that was ever made, the claimant could not have been prevented from making an application but she did not make one, and the event which triggered the obligation to pay the £100,000 occurred, or if you like, the non-events occurred entitling her to the £100,000.
56. So, for those reasons, the claimant succeeds and I think the appropriate award is damages measured by that amount”
Discussion
The starting point – contracts relating to wills
The general principles are well settled and I can simply cite Williams on Wills 8th edition:
“ [3.1] General Statement
Although a will is by its nature always revocable, yet a testator may bind himself personally as to the contents of his will and may bind his assets so that his personal representative, whether he dies testate or intestate, must give effect to such agreement at the expense of the beneficiaries under the will or intestacy. There must, however, in any such case, be a binding agreement by the testator to dispose of his property in a certain way, and this involves two certainties. It must be shown that there was an agreement in law and not a mere statement of intention or mere representations. It must also be shown with certainty what the subject matter of the gift by will was to be.”
The judge's findings establish that there was a binding agreement between the claimant and the deceased entered into for good consideration. There was certainty about the subject matter of the gift, namely, to arrange his affairs in such a way that on his death £100,000 would be paid to her. There is no appeal...
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