James v James [2018] EWHC 43 (Ch)

WTLR Issue: Winter 2018 #170

RAYMOND ALLEN JAMES

V

1. KAREN JAMES

2. SERENA UNDERWOOD

3. SANDRA JAMES

Analysis

The deceased was a self-made man who had operated a farming business and a haulage company in partnership with his wife (the third defendant) and his son (the claimant). Over the course of his life, he purchased a number of parcels of agricultural land in Dorset. In 2007 he gave two of these parcels to one of his daughters (the first defendant). In 2009 the partnership dissolved, and the deceased transferred one of the parcels to himself and the third defendant to hold jointly. At the same time the claimant was given one of the parcels and the haulage business.

The deceased died in 2012, having made a will in 2010 (‘the will’). By this will the deceased left his remaining interest in the parcels to wife and two daughters (the defendants), but bequeathed nothing to the claimant. The claimant brought a claim on two grounds:

  1. i. The will was invalid as the deceased lacked testamentary capacity when he made the will; and
  2. ii. In any event, a proprietary estoppel arose in his favour and therefore he was entitled to the parcels of land bequeathed by the will, as well as to the parcels given to the first defendant in 2007 and jointly to the third defendant and the deceased in 2009.

Testamentary capacity

There was significant discussion about the correct test that should be applied when assessing testamentary capacity. Initially the parties agreed that the correct test was that established in Banks v Goodfellow; however in closing counsel for the claimant submitted that the correct test of capacity was that set out in the Mental Capacity Act 2005.

Proprietary estoppel

The claimant sought to impugn the deceased’s transfers of land in 2007 and 2009 on the basis that these an estoppel arose in his favour before the transfers. The claimant asserted that as the first and third defendants were volunteers and had notice of the circumstances in which the estoppel arose, and therefore the fact that they were third parties could not be used in their defence. In response the first defendant counterclaimed that a proprietary estoppel arose in her favour as she had spent significant sums and built a business in reliance on the 2007 transfer. The third defendant also counterclaimed on the basis that when the land was transferred into her joint name in 2009, she already had an interest in the land under a constructive trust. If the first and third defendants were correct about their respective interests, a question arose as to whose interest took priority.

Held:

  1. 1) The correct test of testamentary capacity remains the test in Banks v Goodfellow. Had Parliament wished the MCA 2005 to apply to retrospective decisions on capacity, it could have done. It would be wrong to interpret the statute as overruling such a long-standing and well established common law rule when it fails to do so expressly or without being implied by necessity. The authorities since the MCA came into effect were unclear on this point, but a number of them had come to the same conclusion.
  2. 2) On the facts, the deceased did have testamentary capacity at the time that he made the will.
  3. 3) The proprietary estoppel claim failed because the court found that was no clear assurance or promise that the claimant could rely upon. The testator may have made statements outlining his current intentions as to his future conduct, but this could not be seen as a promise of that conduct, let alone a promise capable of being acted upon.
  4. 4) The proprietary estoppel claim also failed because, on the facts, it did not appear that the claimant had suffered any detriment, nor could he show he would have acted differently had he not relied on what he thought was an assurance.
  5. 5) If the judge was wrong about an estoppel arising in the claimant’s favour, then he held that this would have come into being before any interest held by the defendants, and therefore would have had priority over them.
JUDGMENT
 HHJ MATTHEWS:
 Introduction
 [1] This is my judgment on the trial of a claim arising out of the will of 
Charles Frederick Allen James. He was born on 25 May 1931 and died on 
27 August 2012, aged 81 years, having made a will dated 16 September 2010. The claimant is his only son, …
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Counsel Details

Penelope Reed QC (5 Stone Buildings, Lincoln’s Inn, London WC2A 3XT, tel 0207 242 6201, e-mail clerks@5sblaw.com) and Edward Hewitt (5 Stone Buildings, Lincoln’s Inn, London WC2A 3XT, tel 0207 242 6201, e-mail clerks@5sblaw.com) instructed by Wilsons Solicitors LLP (697 High Road, Tottenham, London N17 8AD, tel 0208 808 7535) for the claimant.

Steven Ball (Magdalen Chambers, Victory House, Dean Clarke Gardens, Exeter EX2 4AA, tel 01392 285 200, e-mail clerks@magdalenchambers.co.uk) instructed by Burges Salmon (One Glass Wharf, Bristol BS2 0ZX, tel 0117 939 2000) for the defendants.

Cases Referenced

Legislation Referenced

  • Mental Capacity Act 2005, ss1, 2, 3, 15, 16, 18