Private Client Legal Updates (22 June 2023)

A summary of key legal updates for the Private Client industry over the past two weeks is as follows.

Contentious Estates – revocation clauses and due execution of a Will

Sangha v Sangha [2023] EWCA Civ 660 is a reminder of the importance, where a testator has more than one Will, of making sure the revocation clauses in those Wills are carefully drafted. In this case, the testator had assets in India and in the UK. He had two "wives" and two Wills. His 2007 Will left his Indian and UK assets to the second wife. His 2016 Will mentioned only his Indian assets and left his estate to his sister, first wife, one of his sons, and his first wife's son. The 2016 Will also contained a general revocation clause that: "This is my last and final will and all such previous documents stand cancelled". Part of the dispute was whether this revocation clause revoked the 2007 Will completely or only in relation to the Indian assets. In 2021, the High Court found that the 2007 Will had been revoked in its entirety but, on appeal in 2022, the High Court found that the revocation clause in the 2016 Will revoked only the part of the 2007 Will that dealt with the deceased’s Indian assets. The Court of Appeal has now overturned this judgment, ruling that the 2007 Will is revoked in its entirety. 

Although the 2007 Will was found to be revoked, the Court commented, obiter, on the execution arrangements and emphasised the correct sequence to be followed for signing and witnessing. In this case, the testator had signed the Will in the presence of only one witness. A second witness had entered the room after this and the testator acknowledged his signature in the presence of both witnesses (as required by s.9(c) Wills Act 1837) and the second witness attested the Will; however, it was unclear whether the first witness did enough to re-acknowledge their signature to confirm that he had witnessed this event. As nothing was riding on this point, the Court did not form a conclusion but the Court's comments on the correct sequence of events are a helpful reminder of the complexities of the due execution rules. Due execution of will requires testator and witnesses to sign or acknowledge in correct sequence (Court of Appeal) | Practical Law (thomsonreuters.com); Testator's intentions are key to interpretation of general revocation clauses, rules EWCA | STEP

Mental Capacity – caselaw clarifying scope of LPAs including secondary replacement attorneys

Re Public Guardians Severance Applications, 2023 EWCOP 24 is an application by the Office of the Public Guardian to the Court of Protection in relation to nine consolidated cases on the scope and ambit of Lasting Powers of Attorney ("LPAs"). The judgment includes the following points.

• The Mental Capacity Act 2005 allows the donor to appoint a secondary replacement attorney (contrary to the judgment in Office of the Public Guardian v Boff and another, MHLO (2013) 88 (LPA)). This clears up a much-debated issue since the Re Boff judgment.
• Severance of wording may be needed where LPA purports to give primary power to one attorney.
• Where attorneys are appointed joint and severally to deal with different areas in one LPA, the donor should consider making separate LPAs.
• Severance of wording in an LPA may be needed where attorneys are requested to make decisions on a majority basis.

OPG asks COP to clarify common issues relating to scope of LPAs | Practical Law (thomsonreuters.com); OPG asks EWCOP to clarify scope of LPAs in England and Wales | STEP

Trusts – Variation of Trusts Act 1958 case

In Harvey v Van Horn [2023] EWHC 1298 (Ch), the Court found that potential beneficiaries of a "mere power" (i.e. a power that is exercisable only in default of appointment, as opposed to a "trust power") had the same standing to apply for a trust variation under the Variation of Trusts Act 1958 as potential beneficiaries of a trust power. In this case, where the potential beneficiaries were minors, the Court has discretion to approve a trust variation on their behalf. The Court also held that the potential beneficiaries of such a mere power had standing to bring a breach of trust action against the trustees. Harvey v Van Hoorn | Practical Law (thomsonreuters.com); Beneficiaries of power in default of appointment had interest under Variation of Trusts Act 1958 (High Court) | Practical Law (thomsonreuters.com)

Contentious Estates – undue influence case

In Jones v Jones, 2023 EWHC 1457 Ch, the High Court ruled invalid on grounds of undue influence a Will executed by the deceased leaving her estate to one of her daughters, to the exclusion of her other children and grandchildren. The Court found that the daughter "increasingly isolated her mother from other members of the family" and as a result of this isolation, the deceased "was very vulnerable physically as well as mentally, and dependant to a substantial extent solely upon her daughter". Also significant was that the Will was signed without any involvement of a solicitor or without a medical examination despite a solicitor and a doctor being involved in the Will instructions. The Court concluded that the deceased had "signed her will not as a free agent, but because her volition had been overcome, without convincing her judgment, by the undue influence". Jones & Ors v Jones (Re Estate of Daphne Penelope Jones) [2023] EWHC 1457 (Ch) (16 June 2023) (bailii.org)

Charities – Supreme Court rules on gym's charitable relief from local authority business rates

The UK Supreme Court has ruled that a fee-paying members-only gym owned by charity Nuffield Health is entitled to mandatory 80% charitable relief from the local authority business rates imposed by Merton Council. The case centred around the "public benefit" requirement for charities and whether organisations that benefit fee-paying members only can truly be regarded as "charitable" for these purposes. The ruling emphasised the importance for these types of organisation of sufficient sections of the public being able to benefit from their activities, including ensuring that those with modest means are not excluded (such as by the provision of discounted memberships). Also important in the ruling was confirmation that business rates will be assessed against the activities of a charity as a whole and not in respect of each site where the charity operates. Partner Victoria Mahon de Palacios' comments on this case can be read here: Archive News - Charity Times; NEWS (charitiesmanagement.com).