Stella Burnard (in her own right and as executrix of the estate of Godfrey Harry Burnard Deceased) v Graham Burnard and Others
| Jurisdiction | England & Wales |
| Judge | Judge Behrens |
| Judgment Date | 03 March 2014 |
| Neutral Citation | [2014] EWHC 340 (Ch) |
| Court | Chancery Division |
| Docket Number | Case No: HC10C01448 |
| Date | 03 March 2014 |
[2014] EWHC 340 (Ch)
IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
LEEDS DISTRICT REGISTRY
IN THE MATTER OF THE ESTATE OF GODFREY HARRY BURNARD DECEASED
AND IN THE MATER OF THE INHERITANCE (PROVISION FOR FAMILY AND DEPENDANTS) ACT 1975
The Court House
Oxford Row
Leeds LS1 3BG
His Honour Judge Behrens sitting as a Judge of the High Court in Newcastle
Case No: HC10C01448
Gregory Tee (instructed by W Davies) for the Claimant
Michelle Temple (instructed by Hadaway & Hadaway) for the Defendants
Approved Judgment
Hearing dates: 20 – 24 January 2014
I direct that pursuant to CPR PD 39A para 6.1 no official shorthand note shall be taken of this Judgment and that copies of this version as handed down may be treated as authentic.
For the purpose of this judgment I shall adopt the following abbreviations. No discourtesy is intended by referring to the members of the Burnard family by their Christian names.
| Stella Burnard | Stella |
| Graham Burnard | Graham |
| Paul Burnard | Paul |
| Godfrey Harry Burnard | Goff |
| Daniel Burnard | Daniel |
| Patricia Burnard | Patricia |
| Pauline Burnard | Pauline |
| Heather Burnard | Heather |
| Grangeway (Contractors) Limited | Grangeway |
| Grangeway Properties Ltd | Properties |
| Rhapsody Properties Limited | Rhapsody |
| Station Road, Whitley Bay | Station Road |
| King Street, Penrith | King Street |
Goff died on 15th September 2007 at the age of 76. Stella was Goff's second wife. She had known Goff since 1980. They cohabited from 1985 and married in December 1994.
. Graham, Paul and Daniel are Goff's sons by his first marriage to Patricia. Pauline is married to Paul. Heather is Graham's wife. She is also Stella's daughter by her first marriage.
. During the 1970s and 1980s Goff practised as a chartered accountant in Whitley Bay. During this time he or companies in which he had an interest built up a significant portfolio of investment properties in the area. They included 27 29, 31 and 31A Station Road Whitley Bay and 31 King Street, Penrith. The Companies with which this case is concerned comprise Grangeway, Properties and Rhapsody.
. Rhapsody is a company registered in the USA. It is the owner of Malva Rosea, a property in the Algarve where Stella and Goff lived from about 1998 until 2007. Until 1 st September 2007 the shares in Rhapsody were held by Goff and Stella as beneficial joint tenants. Until the first day of the trial it was contended that on 1 st September 2007 Goff had transferred his interest in Rhapsody to his 3 sons. However those allegations were effectively abandoned on the first day of the trial with the result that it is now common ground that Stella is the sole beneficial owner of the shares in Rhapsody either by the doctrine of survivorship or under Goff's will. It is not necessary for me to resolve the route by which she acquired Goff's shares.
. Goff's last will is dated 4 th September 2007. By clause 1 he appointed Stella and the partners of a firm of solicitors to be his executors. By clause 2 he gave free of tax his shares in Properties to his 3 sons in equal shares. By clause 3 he gave his residuary estate to Stella. [There were a number of provisions dealing with the position if any of his sons or Stella did not survive him but it is not necessary to refer to them]. There is no challenge to the execution of the will. However Goff's sons contend that it contains a mistake in that clause 2 should have referred to Grangeway and not Properties. Accordingly they seek rectification of the will under section 20 of the 1982 Act. The principal (but not the only) defence to the claim for rectification is that it is out of time. Probate of Goff's will was granted to Stella on 29 th December 2008. The claim for rectification was not made until 22 nd December 2010 – nearly 18 months out of time. In the alternative (at the court's suggestion) they contend that as a matter of construction the Court should interpret clause 2 of the will as if the reference to Properties had been a reference to Grangeway.
. In these proceedings Stella seeks reasonable provision out of Goff's estate under section 2 of the 1975 Act. It too was made out of time and permission is required for it to be pursued. In order to determine the proceedings it is plainly necessary to determine what assets form part of the estate, the effect of clause 2 of the will and, the extent of the estate's and Stella's interest in Grangeway. On 27 th March 2013 DJ Saffman (as he then was) made an order for the determination of these issues as preliminary issues. The order sets out in detail the nature of the preliminary issues. It is not necessary in this introduction to repeat them. They may however be summarised.
The will
. I have summarised the issues in relation to the rectification and construction of the will. It is common ground that Goff had no interest in Properties. If, therefore, clause 2 is treated as referring to Properties the whole estate (including Goff's interest in Grangeway) passes to Stella.
/31A Station Road, Whitley Bay
. 31 Station Road was transferred to Grangeway in 1989. In 1990 there was a lease of the ground floor to Stella for 999 years at a peppercorn rent. In 1991 Grangeway transferred 31 Station Road back to Goff. In September 1993 Goff executed a Declaration of Trust declaring that he held 31 Station Road on trust for Grangeway. On 14 th September 2007 Goff is said to have executed a transfer of 31 Station Road in favour of Paul. In February 2008 Stella assigned the lease of the ground floor to Paul.
. The issues relate to the 1993 Declaration of Trust and the September 2007 Transfer. Stella does not accept that either is genuine. If Goff did indeed sign the 2007 Transfer she challenges it on the ground of capacity and undue influence. If it is a valid document she points out that it refers to a consideration which has not been paid.
. The sons assert that both documents are valid and enforceable. Insofar as the 2007 Transfer referred to consideration this was a mistake as it was never intended that any money should change hands.
and 29 Station Road, Whitley Bay
. Photographs show that 25, 27 and 29 Station Road are physically connected as detached properties. In 1978 Goff became the registered proprietor of 29 Station Road whilst 25 and 25A were registered in the name of Grangeway. It appears that 27 Station Road was unregistered.
. In 2001 Goff and Grangeway let the upper floors of 25 and 27 and the whole of 29 Station Road to the Newcastle Mental Health Service Trust. The lease asserts that 27 Station Road is owned by Goff.
. In the 1993 Declaration of Trust Goff declared that he held 27 and 29 Station Road on trust for Grangeway.
. As set out above, Stella challenges the validity of the Declaration of Trust.
King Street, Penrith
. There is little documentation with regard to 31 King Street in that the original title deeds have gone missing. In 2009 Grangeway was registered as proprietor with possessory title.
. Almost all of the documents that exist support the suggestion that the property was owned by Grangeway rather than Goff. This documentation includes the registration of charges in 1985 and 1989 at Companies House and a number of applications for planning permission by Grangeway rather than by Goff. There are however a number of documents which suggest that it may have been owned by Goff.
. Stella contends that 31 King Street belonged to Goff and has applied to alter the register. She relies on circumstantial evidence in support of her case.
Shareholding in Grangeway
. It was common ground that Grangeway was controlled by Goff. It was clear that Goff and the other directors did not comply with their statutory duties in relation to the keeping of statutory books. Thus there is no proper register of Members. Furthermore with one or two exceptions there were no board meetings or minutes recording the change of shareholders and no share transfers when shares were said to be transferred. Goff did, however complete the annual return for most of the years between 1985 and 2007.
. There are 10,000 issued shares in Grangeway. As an appendix to this judgment I have set out the information contained in the Annual Returns in relation to the ownership of these shares. It will be necessary to refer to some of the entries in more detail later in this judgment.
. It is common ground that on 17 th July 1993 Goff transferred 4,000 shares in Grangeway to Stella. The entry in the annual return is supported by a stock transfer form signed by Goff. The shareholding is not recorded in the statutory books.
. It is contended by the Defendants that on 1 st July 1998 Stella transferred the 4,000 shares back to Goff. This transfer is supported only by the annual return for 2000 signed by Goff and subsequent returns. There is no stock transfer form. Stella denies that she ever signed any stock transfer form and accordingly contends that she remains the owner of 40% of Grangeway. I am in effect asked to infer that Stella transferred her 4,000 shares from the entries in the annual returns and from a number of conversations between Stella and Hay & Kilner (the solicitors acting for the estate) at around the time of the death of Goff or shortly afterwards.
. The other dispute relates to the validity of 3 stock transfer forms said to have...
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