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Secrets Revisited - Wood v Commercial First in the Court of Appeal

Author: James Saunders

Practice Areas: Commercial Litigation

Date: 12 Apr 2021

The Court of Appeal has recently handed down judgment in two appeals raising the same issues of half and fully secret commissions. The resulting judgment clarifies the test for fully secret commissions, outlines when the more generous remedies for such commissions will be available and provides a useful examination of the relevance of agency retainers in the context of bribes.

James Saunders considered the first instance decision in Wood in late 2019 and in this article examines the approach taken to the issues by the Court of Appeal. The decision is of particular note for those advising any party to a commercial agreement which involves a negotiating or proposing intermediary, particularly as regards how much disclosure will suffice to negate a fully secret commission.

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Procedural vandalism and the Solicitors Act 1974: Carpmaels & Ransford LLP and Collyer Bristow LLP v Regen Lab SA [2021] 2 WLUK 244

Author: James McKean

Practice Areas: Commercial Litigation

Date: 09 Mar 2021

James McKean represented the Claimants, two firms of solicitors and intellectual property lawyers, who resisted an application to set aside a default judgment.

The Claimants were owed fees in excess of £600,000, having represented the Defendant, a Swiss biotechnology company, in the Regen Lab SA v Estar Medical Limited [2019] EWHC 63 (Pat) patent litigation.

The Defendant acknowledged service but failed to file a defence or contest jurisdiction. Default judgment was obtained.

The Defendant’s application to set aside the judgment consisted of a jurisdictional challenge and technical objections under the Solicitors Act 1974 to the bills submitted by the Claimants. Waksman J found these arguments to have no prospects of success and refused the Defendant relief from sanctions.

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Donatio Mortis Causa or “Death Bed Gifts” Davey v Bailey [2021] EWHC 445 (Ch)

Author: James Saunders

Practice Areas: Trusts, Wills & Estates

Date: 03 Mar 2021

The recent decision in Davey has brought the doctrine of donation mortis causa back into the spotlight in the midst of a pandemic which has rendered many gravely ill and potentially unable to put their affairs in order, despite the provision for the witnessing of wills by video. James Saunders examines the decision in Davey and reviews the conditions for a valid DMC. The potential issues which may arise in cases connected with Covid-19 are also discussed.

 

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Transactions at an Undervalue – Beneficial Interests and Declarations of Trust: Lyle v Bedborough [2021] EWHC 220 (Ch)

Author: James Saunders

Practice Areas: Insolvency | Property | Trusts, Wills & Estates

Date: 18 Feb 2021

A Property was purchased in the joint names of Mr and Mrs Bedborough in 1994. In 2008 the Respondents’ evidence is that they entered into an oral agreement by which Mr Bedborough would transfer his interest to Mrs Bedborough (the “2008 Agreement”). In December 2012, the Respondents entered into a declaration of trust by which they declared that they held their interests in the Property as tenants in common for Mr Bedborough as to a 5% share and Mrs Bedborough as to a 95% share (the “2012 Declaration”).

Mr Bedborough relied upon the 2008 Agreement, being beyond the 5-year relevant period under S.339 on the Insolvency Act 1986, whilst the Applicant Trustees denied the 2008 Agreement had any effect with the only transfer being made pursuant to the 2012 Declaration, within the relevant period and at an undervalue.

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Court refuses to approve tainted fiduciary decision making (Schumacher v Clarke)

Author: James Saunders

Practice Areas: Trusts, Wills & Estates

Date: 17 Feb 2021

Private Client analysis: The court was faced with a category 2 and 3 Public Trustee v Cooper application principally for the approval of a momentous decision. The court was initially asked to approve the entirety of a settlement reached between four trustees split into two camps but later asked to approve only the dispositive elements of the settlement. The settlement unusually resolved disputes between the trustees rather than between trustees and beneficiaries or third parties. The court was concerned with mutual allegations of inappropriate action as fiduciaries and the failure of both sides to manage conflicts of interest in arriving at a settlement. After stressing that such factors could impair the decision reached and which the court was asked to approve, the court refused its approval of part of the settlement.

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Kids Company: Important Directors Disqualification Case in a Charity Context

Author: William Hopkin

Date: 17 Feb 2021

On 12th February 2021, Mrs Justice Falk handed down her judgment in Re Keeping Kids Company (Official Receiver v Sunetra Atkinson & others) [2021] EWHC 175 (Ch).

 

Facts:

Kids Company, a well-known children’s charity, entered insolvent liquidation in 2015. After a long investigation, the Official Receiver commenced proceedings against all of the (recent) directors, together with the CEO, seeking to disqualify each of them under s.6 Company Directors Disqualification Act 1986.  

 

Charitable context:

The Official Receiver argued that Kids Company's status as a charity was ultimately irrelevant: it operated as a company and was therefore required to comply with company law.  

 

Falk J considered that the courts have long taken a benevolent approach towards charity trustees in circumstances where was no dishonesty or wilful misconduct is alleged:

There are good reasons of public policy for this approach. It reflects the real risk that any other approach would deter individuals who would otherwise be well suited to becoming charity trustees from doing so. It also reflects the court's recognition of the public service that charity trustees provide.” [848] 

 

The Judge referred to Stanway v Attorney General?(unreported) 5 April 2000, where the Vice Chancellor said (in the context of whether or not proceedings should be brought against charity trustees under s.32 Charities Act 1993):

"I do think that individuals who have given long periods of their time to unpaid public service – and that is what becoming a trustee of a charity involves – do deserve to have their efforts recognised by not being sued for mismanagement unless the proposed action against them is one which anyone can see cannot be resisted." 

 

Conclusions:

Falk J reach the following conclusions, in finding that a disqualification order was not warranted against any of the Trustees, or the CEO:

The charity sector depends on there being capable individuals, with a range of different skills, who are prepared to take on trusteeship roles. Most charities would, I would think, be delighted to have available to them individuals with the abilities and experience, that the Trustees in this case possess.

It is vital that the actions of public bodies do not have the effect of dissuading able and experienced individuals from becoming or remaining charity trustees. Disqualification proceedings, or the perceived risk of them, based on wide ranging but unclear allegations of incompetence, rather than any want of probity, carry a high risk of having just that effect, and great caution is therefore required.

The result of proceedings being brought, in other than the clearest of cases, is likely to be to deter many talented individuals, who take the trouble to understand and appreciate the risks, either from charitable trusteeship at all.[911]

The public need no protection from the Trustees. On the contrary, I have a great deal of respect for the care and commitment they showed in highly challenging circumstances.[912]

The CEO was not a de facto director. If I am wrong about that then I would still not have made a disqualification order against her, taking all the circumstances into account and on the basis of the allegation or allegations made against her.[913] 

 

Broader context:

The Court has confirmed its benevolent approach to charity trustees, within the context of directors disqualification proceedings.  

Further, the Judge questioned whether the Official Receiver had a proper understanding of the operation of charities. 

Importantly, Falk J felt that enforcement by the Charity Commission (which has its own powers in relation to trustee disqualification: s.181A Charities Act 2011) would, generally, be preferable.   

Legal issues relating to trees

Author: Paul Wilmshurst

Date: 01 Feb 2021

Trees can provoke a surprising number of legal disputes which frequently lead to either civil or even criminal litigation. For example:

  • Disputes over the ownership of trees and other boundary features
  • Encroaching roots or overhanging branches causing damage to property (trespass and nuisance)
  • Damage by trees that have fallen down
  • Prosecutions for breach of Tree Preservation Orders

 

Ownership of trees & boundary disputes

It may be the dispute is between neighbours about who even owns a tree or trees in the first place? The answer will depend on looking at the nature of the underlying property ownership – as trees are not like a physical object or item that can be independently owned. Often, trees will be placed along a physical boundary but there may be a dispute about whether the tree-lined physical boundary represents the true nature of the property ownership.

 

Encroaching roots or overhanging branches causing damage to property

Claims under this head. which are generally in the tort of nuisance, can often provoke a hot dispute which expert evidence required together with careful planning of the correct legal approach. The outcome of such cases is often in the balance.

  • Case example: In a leading case known as Delaware Mansions (2001) the claimant brought a claim for £570,373 - which represented the cost of underpinning work that had to be carried out because of the encroachment of tree roots of a plane tree belonging to the defendant highway authority. The defendant had not, as requested in 1989 removed the tree. It had merely carried out some root pruning. In 1990 the claimant, on further advice, carried out the underpinning. If the Council had removed the tree the cost of repairing the building would have been a mere £14,000. The Council were eventually found liable for these extremely high damages, which were clearly avoidable on the facts.
  • Case example: In the recent Berent case (2012) the claimant brought a claim in nuisance in respect of tree roots that had grown under her property. The damage to the property was caused in 2003/2004 but the trees were only removed in 2011. The trial judge dismissed the claim on the basis that the damage was not “reasonably foreseeable.”

 

Damage caused by trees that have fallen down

It is often found that perfectly healthy trees can be toppled in severe weather. On the other hand, untreated inherent defects can lead to dangerous incidents. What is the landowner’s liability if the tree has caused damage to property or other persons? What is the liability for the landowner if the tree has caused someone’s death? Landowners will often be sued for large sums in the tort of negligence (including so-called “Rylands v Fletcher type cases”). The key question is whether the landowner has breached the duty of care that he had in relation to the tree. Thus, while the tree may have caused real damage it may be possible to keep the level damages down or to dismiss the claim altogether. Such cases may often involve trees fronting a highway.

 

TPO (Tree Preservation Order) prosecutions

Prosecutions for work carried out in breach of a Tree Preservation Order (known as “TPO”) brought under s.210(1) or s.210(4) of the Town and Country Planning Act 1980. Has the local authority got a valid TPO under which to prosecute the defendant? It is also a surprising fact that some species, despite being commonly thought of a “trees”, do not qualify under the Act as a protected tree. Are the local authority wrongly prosecuting under the more serious offence of the two offences under s.210(1) which carries a maximum £20,000 fine? It is also now possible that local authorities can pursue “Proceeds of Crime” applications against persons or companies (frequently developers) convicted. For example, if the value of properties has been increased because trees obstructing a nice view have been illegally felled, then the local authority may try and bring proceedings to seize this value. It is important to be clear at the outset as to what the possible ramifications may be.

 

High Hedges

There is a statutory code relating to High Hedges to be found in Part 8 of the Anti-Social Behaviour Act 2003 which enables local authorise to serve notices requiring work to be carried out.

 

Other issues arising where trees are protected

Issues may also arise in relation trees that are within Conservation Areas, Sites of Special Scientific Interest, on common land or where the tree (dead or living) is the habitat of rare species of bird, animals or insects.

Elections and changes of position in the Caribbean (Delta Petroleum v BVI Electricity Corp)

Author: James Saunders

Date: 20 Oct 2020

Dispute Resolution analysis: The Privy Council board in Delta Petroleum has considered the application of the doctrine of waiver by election and provided useful guidance on when the doctrine will apply in the performance of contracts. Furthermore, the board reviewed the inherent power of appellate courts to award restitution with interest, and the considerations that will apply to a change of position defence if raised by a public entity. 

Please click here to read the full article.

This analysis was first published on Lexis®PSL on 20 October 2020

Not My Brother’s Keeper – A Brief Guide to Inactive Directors’ Liabilities IT Protect Ltd (In Liquidation) [2020] EWHC 2473 (Ch)

Author: James Saunders

Date: 01 Oct 2020

This article examines issues raised by the recent decision in IT Protect Ltd (In Liquidation) and considers the challenges posed when seeking to impose liability upon wholly inactive directors. ?

Directors are, prima facie, jointly and severally liable for wrongs in which they are sufficiently involved. Those claiming damages or associated remedies can elect which director to pursue for satisfaction of any remedy granted. However, this is subject to the significant caveat that a director is not liable for the sins of their co-director solely by reason of their office, a claimant must plead and prove a sufficient basis in law for joint liability. ?

This gives rise to a range of difficulties, chief amongst which is how to fix a wholly disengaged director with liability. The point is particularly acute if the prospects of recovery and worthwhile execution differs significantly between directors. ?

 

To read the full article, please click here.

When is a case sufficiently arguable for Norwich Pharmacal relief? (Hickox v Dickinson)

Author: James Saunders

Date: 25 Sep 2020

Dispute Resolution analysis: Hickox concerned a claim for Norwich Pharmacal relief in connection with the misappropriation of an 1896 artwork of Paul Signac. The case provides a useful example of the boundaries of the jurisdiction and what must be demonstrated in order to make out the good arguable case needed to obtain an order. Whilst applicants can put forward broadly constructed cases with no requirement to commit to a particular cause of action, the need to demonstrate a good arguable case of wrongdoing generally does not prevent the court having regard to the underlying elements of the causes of action which are put forward. Finally, Hickox demonstrates the benefits of suggesting viable causes of action which do not require proof of knowledge or notice.

This analysis was first published on Lexis®PSL on 25/09/2020

 

To read the full article, please click here

Charities - Internal Disputes

Author: William Hopkin

Practice Areas: Charities | Trusts, Wills & Estates

Date: 14 Sep 2020

Disputes within charities are common, and can threaten the effective operation and continuance of the organisation. This article explores how these may be resolved by the trustees, the Charity Commission and the Courts. 

 

Please click here to read the full article.

Springboard injunctions: the principles

Author: William Hopkin

Practice Areas: Commercial Litigation | Company & Partnership

Date: 14 Sep 2020

Where a departing director or employee has gained an unlawful competitive over its former business, the court may provide ‘springboard relief’. This article explores the legal principles associated with springboard injunctions and associated interim remedies.

 

Please click here to read the full article. 

Tax consequences of setting aside a voidable transaction on the ground of mistake

Author: Rodney Stewart Smith

Date: 04 Sep 2020

This article considers whether there is, as has been widely assumed until now, a general principle that, if a voidable transaction is avoided by an order of the court (for example, on grounds of mistake or under the Hastings-Bass rule), the order operates retrospectively for all purposes, including fiscal purposes. It discusses whether the Court of Appeal decision in Clark v HMRC [2020] EWCA Civ 204 throws doubt on the existence and ambit of such a principle. It also explores how the principle operates where the court imposes terms on the rescission of a transaction, such as a requirement that one or more of the parties enters into a fresh transaction, or where there have been intervening transactions between the voidable transaction and the order rescinding it.

To read the full article, please click here.

HMRC v Parry – Supreme Court [2020] UKSC 35 – Gratuitous Dispositions, Omissions and Transfers of Value

Author: James Davies

Date: 01 Sep 2020

Mrs Staveley passed away in December 2006. Shortly before her death she transferred funds from her existing pension scheme into a personal pension plan (PPP) (“the Transfer”). Mrs Staveley did not take any pension benefits during her lifetime with the result that a death benefit was payable under the PPP (“the Omission”). She nominated her two sons as beneficiaries of the death benefit, subject to the discretion of the scheme administrator. After her death the benefit was paid to them. 

 

The executors appealed to the FTT. It permitted the appeal in part, holding that the Transfer fell within Section 10(1). However, it dismissed the appeal in relation to the Omission. 

Both sides then appealed to the Upper Tribunal. The FTT’s decision in relation to the Omission was reversed and the decision on the Transfer into the PPP was affirmed. HMRC were unsuccessful on both points. 

 

HMRC then appealed to the Court of Appeal. It held that both the the Transfer and the Omission gave rise to a charge to tax. The executors appealed to the Supreme Court. Lady Black, delivering the majority judgment, observed that the difficulty of the points at issued was underlined by the chequered fortunes of the parties’ arguments below. 

 

There were three discrete issues for consideration by the Supreme Court: 

1) Did the Transfer on its own amount to a transfer of value or did Section 10(1) apply? 

2) Was the Transfer, when considered in the wider context, still one to which Section 10(1) applied? 

3) Did the Omission satisfy the terms of Section 3(3)? 

 

Click here for full article

Theobald on Wills Top Ten Tidbits by Alexander Learmonth (Editor) Today: Revocation!

Author: Alexander Learmonth QC

Practice Areas: Trusts, Wills & Estates

Date: 12 Aug 2020

1. You can’t make an irrevocable will! A contract not to revoke a will is not specifically enforceable – but breach can give rise to a claim for damages or a constructive trust. 

2. You can’t revoke a will just by crossing it out or writing ‘revoked’ on it – unless the crossing out is signed and witnessed as a will. 

3. You can’t revoke a will by asking your solicitor to destroy it for you – unless it is done in your presence. 

4. But a will that has been revoked by destruction cannot be revived. 

5. A later will does not revoke an earlier will, unless it has a revocation clause, or is wholly inconsistent with it. 

6. And a will is not revived just by the revocation of a later will that revoked it. 

7. A will is not revoked just by having been lost – if you can show it was made and at least some of what it said, you can admit it to probate! 

8. But if the last person to have the lost will was the testator, then it may be presumed it was revoked by destruction 

9. Even voidable marriages – such as where one spouse lacked capacity to marry – revoke wills. 

10. But divorce or annulment does not revoke a will! It just invalidates any gift to the former spouse.

Charities sue jailed solicitor and her firm over lost estate monies

Author: Alexander Learmonth QC

Practice Areas: Trusts, Wills & Estates

Date: 04 Aug 2020

A jailed former Yorkshire solicitor is being sued by charities who were left money by one of her clients where she was co-executor.

It emerged from a court ruling published this week that two claims have been brought against Linda Box, a former partner with Wakefield firm Dixon Coles and Gill, who contend they have sustained loss from her criminal activities.

Box was jailed for seven years in 2017 after admitting 12 offences of fraud, theft and forgery and was ultimately struck off the roll of solicitors. She faces claims from the Guide Dogs for the Blind Association, Yorkshire Cancer Research, British Heart Foundation and the National Trust, who allege that Box appropriated monies payable to them from the estate of the deceased Ernest Scholefield.

Who can the Court compel to act reasonably? Ethiopian Orthodox Tewahedo Church [2020] EWHC 1493 (Ch)

Author: Aidan Briggs

Date: 29 Jun 2020

Since 2015 an Ethiopian Orthodox church in Battersea has been occupied by two rival factions of worshippers. After several years of Court intervention the charity which owns the building became a Charitable Incorporated Organisation (‘CIO’). There is a Clergy Council, elected by the members of the CIO, by whom other governors were to be nominated. Each member was obliged by the constitution to ‘exercise his or her powers … in the way he or she decides in good faith would be most likely to further the purposes of the Church” - words mirroring the Charities Act 2011, s.220.
 
A general meeting elected only those clergy preferred by the Claimants and none of those preferred by the Defendants. The Defendants sought to have the vote declared invalid because those voting did so as part of a campaign to seize control of the church, and not exercising their own independent judgment.
 
The Court refused to make the declaration sought. The 2011 Charities Act and the terms of the CIO constitution both depend upon the subjecting state of mind of the voting member; in order for a vote to be set aside there must be evidence that the voters do not believe that their votes will further the purpose of the CIO. In circumstances where the membership was bitterly divided along firmly-held issues of principle which were partly spiritual, partly liturgical and partly political, it was not possible to say any of those members had breached their duty by backing a candidate who shared their views.
 
Comment: The different vehicles available for charities - trust, unincorporated association, private company, CIO - come with different levels of oversight. In Lehtimaki v Children’s Investment  Fund [2018] EWCA Civ 1605 the Court of appeal held that members of charitable companies were subject to fiduciary duties akin to those applicable to members of CIOs, but the court had no jurisdiction to intervene in a member’s actions absent evidence of a breach of trust. The Supreme Court heard an appeal on 14 January this year but has yet to give judgment. It seems odd that such a high-profile decision was not cited in this case, but the two sit well together; the court will only intervene in the voting decisions of members where there is a breach of duty, and the test is a subjective one. Where votes are by secret ballot with no requirement for reasons to be given, it will be almost impossible to mount an effective challenge. In this case, the judge referred to the sermon given shortly before the vote was taken and considered it effectively as a ‘direction to the jury’.

 

Court orders third-party disclosure against witnesses to will - Gardiner v Tabet [2020] EWHC 1471 (Ch)

Author: Aidan Briggs

Date: 25 Jun 2020

In a rare decision the High court has ordered the lay draftsman and witnesses to a will to give full disclosure of their communications with the testator and the main beneficiary of the will.

The will, executed in May 2017, gave the testator’s entire estate to a friend of his, Dr Gardiner. It emerged that shortly before the will was apparently executed Dr Gardiner had provided an email, said to contain the deceased’s testamentary wishes, to one of his friends, who then showed it to the deceased and later wrote it up in the form of a formal will. The siblings of the deceased challenged the validity of the will, alleging that the signature was not authentic and that in any event he had lacked capacity and/or had not known and approved its contents. Before disclosure in the main action, the siblings sought full disclosure from the friend who drafted the will, and from the other witness, of their communications. The respondents refused, and an application was made for third-party disclosure. 

 

To read the full article, please click here.

Non-Contentious Probate - Use of Statements of Truth Probate - Frequently Asked Questions

Author: Leigh Sagar

Practice Areas: Trusts, Wills & Estates

Date: 24 Jun 2020

Two publications have been issued recently giving guidance about the probate process in England and Wales. The first was guidance on the use of statements of truth in place of affidavits in certain applications under the Non-Contentious Probate Rules. The second concerned the new online and paper application procedures. 

 

To read the full guide, please click here.

Pleading dishonesty against Trustees: Sofer v Swissindependent Trustees SA [2020] EWCA Civ 699

Author: Aidan Briggs

Practice Areas: Trusts, Wills & Estates

Date: 18 Jun 2020

Mr Sofer brought a claim for breach of trust against the trustees of a very substantial discretionary trust, on the basis that they had made gifts out of the trust to his father, when the trust instrument only permitted them to make loans. Upon his father’s death it emerged that $61m had been paid out to the father, $19m of which his estate was unable to repay. The claim faced two major hurdles: first, the trust instrument contained an exoneration clause excluding liability for anything other than acts "in personal conscious and fraudulent bad faith by the trustee”; second, the claimant himself had signed indemnities in respect of the ‘loans’, releasing the trustees from any liability.
 
HHJ Paul Matthews struck out the claim for failing properly to plead dishonesty by the trustee, and in the alternative granted summary judgment to the trustees based upon the indemnities.
 
The Court of Appeal unanimously allowed the appeal, both from the strike out and from summary judgment. As to the pleading of dishonesty, the Court of Appeal confirmed that the test of dishonesty was that set out in Fattal v Walbrook Trustees (Jersey) Ltd [2010] EWHC 2767 (Ch); as well as a deliberate breach, it was necessary to show either knowledge that the breach is contrary to the interests of the beneficiaries, recklessness as to the same, or a belief so unreasonable that no reasonable trustee could have believed the act was in the interests of the beneficiaries. It was not, said Arnold LJ, necessary to identify the particular individuals in the corporate trustee who met that test; it was enough to plead that the corporate entity had the relevant state of knowledge, and further particulars should be given ‘as soon as is feasible’.
 
Moreover, the claimant could rely upon inference from the other matters pleaded as supporting an allegation of Fattal knowledge, and although some of the particulars relied upon could, in isolation, be seen as consistent with honest incompetence, the effect of the pleading as a whole was not. Similarly, some of the pleaded particulars were inconsistent, because the claimant was advancing alternative cases on the different Fattal limbs; that was permissible. The Judge had failed “to step back and consider all of the particulars … as a whole to see if there was sufficient to tip the balance”. The pleading would not be struck out.
 
On summary judgment, the Court of Appeal held that the deeds of indemnity could be construed as only authorising payments that were in truth loans, and not gifts, and also as impliedly not authorising payments which were made dishonestly. Such an interpretation was not ‘uncommercial’. The Judge below had wrongly accepted the defendants’ contested evidence on a summary judgment application, and wrongly found that the alleged representation by the trustees that the gifts were loans equated to a  ‘shared assumption’, sufficient to give rise to an estoppel by convention. It was (at least arguably) necessary for the claimant to know the legal effect of what he was doing before a waiver would arise, i.e. that they were in truth gifts, and prohibited by the trust instrument.
 
Comment: Pleading dishonesty against professional trustees is a nerve-wracking task, coming with professional and reputational risk for the practitioner as well as huge costs risks for the client. Although all judgments on strike-out should be taken with a pinch of salt (they only set the threshold for surviving strike-out, rather than best practice), this is a helpful indication from the Court of Appeal as to what does, or does not, constitute a sufficient pleading of dishonesty against a trustee protected by an exoneration clause. Further, it is acceptable to plead knowledge and dishonesty in a general sense against a corporate trustee and to wait until after disclosure for full particulars, so long as the facts are capable of supporting an inference to that effect. 

Residence, Tax and COVID-19

Author: Amit Karia

Practice Areas: Trusts, Wills & Estates

Date: 17 Jun 2020

Overview

  1. An individual’s residence and/or domicile affects their UK Income Tax, CGT and IHT liability and the impact of COVID-19 is likely to pose problems for individuals who enjoyed foreign residence and/or domicile prior to the pandemic.

 

  1. Whilst domicile is a permanent, common law determined concept, residence is determined by the Statutory Residence Test ("SRT") and has hard edges, focusing on the number of days “spent” in the UK and can change from one tax year to another. COVID-19 presents a host of problems requiring close analysis of each of these concepts. These problems are particularly acute for residence, the most obvious being where an individual cannot leave the UK due to COVID-19 travel restrictions, thereby finding themselves resident, domiciled or even deemed domiciled in the UK.

 

  1. The law on determining whether an individual's residence or domicile is in the UK is complex. Any COVID-19 exemptions and the application thereof of them are presently unclear. In the following article, “Residence, Tax and COVID-19” we flesh out both concepts, potential COVID-19 exemptions which may apply to the hard-edged residency test, HMRC’s present position to the same and, finally, practical tips and concerns.

 

To read on, please click here.

Re Fowlds [2020] EWHC 1200 (Ch) (ICC Judge Jones)

Author: James Saunders

Date: 16 Jun 2020

The court considered whether a recipient may rely upon a change of position defence to retain what would otherwise be a recoverable preference payment. Whilst formally holding that a change of position defence was not available, the court did in substance apply a slightly narrower version of the defence when exercising its discretion to make no order for recovery. Courts and Trustees faced with similar circumstances in future may see the “limited change of position refusal” or “exceptional hardship refusal” being applied to deny recovery. 

 

To read more, please click here.

Success fees in 1975 Act claims: SH v NH [2020] EWHC 1134

Author: Aidan Briggs

Date: 02 Jun 2020

Success fees in 1975 Act claims: SH v NH [2020] EWHC 1134

The Family Division has determined that a claimant’s success fee should be awarded to her as part of her award under the Inheritance (Provision for Family and Dependants) Act 1975.

The facts are unexceptional. The claimant claimed against the estate of her late father, and against her elderly mother as the sole beneficiary of his estate. The mother did not defend the claim. The claimant had been estranged from her parents for many years, and suffered various health issues. She asked for a home, a capital sum to cover expenditure and various other sums that would have extinguished the net estate entirely. She also owed her solicitors £84,729 in fees, plus a success fee (if the claim succeeded) of a further £48,175 and asked for the latter sum to be added to her award. 

 

To read more, please click here.

Wife who beat husband to death with a hammer permitted to inherit his estate: Challen v Challen [2020] EWHC 1330 (Ch)

Author: Aidan Briggs

Practice Areas: Trusts, Wills & Estates

Date: 02 Jun 2020

On 15 August 2010 Sally Challen beat her husband to death with a hammer, wrapped him in a curtain before washing the dishes and driving home. She was convicted of murder on 23 June 2011 and sentenced to life imprisonment, but last year that conviction was quashed by the Court of Appeal. Before the retrial the Crown accepted a guilty plea to a lesser charge of Manslaughter by reason of diminished responsibility, and Mrs Challen was released, having already served her sentence. The Forfeiture rule prevented her inheriting her husband’s estate or taking their joint assets by succession, and in September 2019 she issued proceedings under the Forfeiture Act 1982 for relief. 

 

To read more, please click here.

A dog’s breakfast; defective trust instruments rescued - Bowack v Saxton [2020] EWHC 1049 (Ch)

Author: Aidan Briggs

Date: 26 May 2020

In 2013 the Claimants paid £750,000 to establish two discretionary trusts containing AXA offshore bonds in the Isle of Man. In a meeting with a financial planner from Hargreaves Lansdown, they both executed standard form declarations of trust intended to appoint themselves and their daughter as trustees, and their daughter as principal beneficiary. However, there were a string of defects in the documentation:

  • The effective date was left blank
  • The trust property (the bonds) were not identified
  • The signature of the daughter as trustee was not witnessed

Two bonds were issued, one in the name of each claimant, to a value of £750,000. However, AXA refused to recognise the trusts, because the signature of the daughter was not witnessed and no identity documents had been provided. The bonds themselves were subject to Manx law and only assignable with the company’s agreement. 

 

To read more, please click here.

Causing the death of another and the Forfeiture Rule: Amos v Mancini [2020] EWHC 1063 (Ch)- today

Author: Aidan Briggs

Date: 12 May 2020

Causing the death of another and the Forfeiture Rule: Amos v Mancini [2020] EWHC 1063 (Ch)
 
In January 2019 Mrs Amos, aged 74, was driving with her husband near their home in Llandeilo, when they collided with the car in front. Her husband later died from his injuries and Mrs Amos pleaded guilty to causing death by dangerous driving and was given a suspended prison sentence and disqualified from driving. The question arose whether she was prevented from benefitting under her husband’s will, or from receiving by survivorship his share of their home, which was owned as beneficial joint tenants.
 
To read more, click here.

Ruscoe and Moore v Cryptopia Limited (In Liquidation)

Author: Leigh Sagar

Date: 29 Apr 2020

In February 2020, judgment was given in the first opposed common law decision in which the proprietary nature of bitcoin was necessary to be decided. Justice Gendall decided the matter in the High Court of New Zealand.

 

To read more of the case report by Leigh Sagar, click here.

Top Ten Easy Mistakes to Make in Bankruptcy Petitions

Author: James Saunders

Date: 27 Apr 2020

James Saunders has listed the Top Ten Easiest Mistakes to Make in Bankruptcy Petitions.

 

To read more, click here.

Top Ten Easy Mistakes to Make When Winding Up Companies

Author: James Saunders

Practice Areas: Company & Partnership | Property

Date: 21 Apr 2020

The  unfortunate consequence  of  the  ongoing  coronavirus  pandemic  is  an  increase in  the  use  of  windingup mechanisms,  particularly  as  landlords  seek  alternative  routes  to  secure  rent  payments  from commercial  tenants. Below  are  some of  the  easiest  mistakes  to  make when  seeking  to  wind-up  companies and  how  to  avoid  them.

 

To read more, click here.

COVID 19: Revisiting Frustration in the Context of Leases

Author: Jeff Hardman | James Saunders

Practice Areas: Property

Date: 20 Apr 2020

Co-Authored by Jeff Hardman and James Saunders of New Square Chambers and Ranjeet Johal of Mills Chody LLP.

 

To read the full article, please click here.

Top Ten Easy Mistakes When Executing Wills

Author: Alexander Learmonth QC

Date: 07 Apr 2020

Alexander Learmonth, editor of Theobald on Wills, has written a list of the top ten easiest mistakes to make when executing wills. To read more, click here

Imposing Quistclose trusts—knowledge, not notice, as the golden rule (Goyal v Florence Care Ltd)

Author: James Saunders

Practice Areas: Commercial Litigation | Trusts, Wills & Estates

Date: 30 Mar 2020

James Saunders provides dispute resolution analysis for Lexis PSL addressing the recent decision in Goyal v Florence Care Ltd and others [2020] EWHC 659 (Ch).

Goyal emphasises the importance of knowledge over notice in generating a Quistclose Trust. Quistclose trusts are likely to play a significant role between commercial parties and in and insolvency context in the wake of the current coronavirus crisis. Solicitors and commercial fund managers should be alert to the possible implications arising from the allocation and management of communications received, mindful that attributed knowledge may still suffice in the right circumstances. Goyal also provides an important reminder of the gateway function of an order for an account through which substantive remedies can be accessed.

The Predatory Marriage Trap

Author: James McKean

Date: 26 Mar 2020

James McKean highlights the morality & dangers of predatory marriage & probate
 
  • Individuals without mental capacity can be ensnared in predatory marriages, in this jurisdiction and abroad.
  • Following an unfortunate change to the law in 1971, these marriages are voidable, not void, and cannot be challenged after death. They allow spouses to take the benefit of the intestacy rules. Beneficiaries under any previous wills are disinherited, and largely without recourse.
  • Practitioners should be alert to the testamentary effects of marriage and consider capacity to marry just as they consider capacity to make a will.

 

To read the full article, click here: https://bit.ly/2WTCvOh

 

Introduction to Cryptocurrencies

Author: Leigh Sagar

Date: 02 Mar 2020

Leigh Sagar has written an article on "Introduction to Cryptocurrencies." Please click here to read more. 

Counterfactual defences to unjust enrichment restricted in Woolwich restitution claims (Vodafone Ltd & Ors v The Office of Communications)

Author: James Saunders

Practice Areas: Commercial Litigation

Date: 27 Feb 2020

Dispute Resolution analysis: The Court of Appeal considered the application of counterfactual arguments to unjust enrichment claims based upon the principle in Woolwich Equitable Building Society v Inland Revenue Commissioners [1993] AC 70. The decision affirms the primacy of the principle of lawful authority and limits the scope for public authorities to rely upon hypothetical decision making to curtail restitution.

To read more, click here

Disposals of cryptoassets, tax & the UKJT Legal Statement

Author: Leigh Sagar

Date: 29 Jan 2020

Leigh Sagar looks at the mechanics and tax implications of cryptoasset disposals in the light of the UK Jurisdiction Taskforce Legal Statement on cryptoassets and smart contracts

 

To read the full article, click here: https://www.scl.org/articles/10801-disposals-of-cryptoassets-tax-the-ukjt-legal-statement

Bona vacantia and beyond—Court of Appeal considers vesting orders (Leon v Attorney-General and others)

Author: Gerard van Tonder

Practice Areas: Property

Date: 11 Dec 2019

Property Disputes analysis: Gerard van Tonder, examines a Court of Appeal decision that a leasehold interest in a property which had been assigned to the appellant's company and which, after the company was dissolved, was disclaimed by the Crown should not be ordered to vest in the appellant. The court found that although the appellant was a co-mortgagor of the leasehold interest, he was not entitled to it under section 1017(2)(a) of the
Companies Act 2006 (CA 2006). To read more, click here.

Contractual silence - a gateway for unjust enrichment (Barton v Gwyn-Jones)

Author: James Saunders

Practice Areas: Commercial Litigation

Date: 25 Nov 2019

Dispute Resolution Analysis:  James Saunders comments on how the The Court of Appeal addressed whether the so-called ‘Costello principle’ precluded a claim in unjust enrichment by an agent for an introduction fee where an oral contract governed the arrangement. 

Click here to read more.

Wood v Commercial First Business Ltd (In Liquidation) [2019] EWHC 2205 (Ch)

Author: James Saunders

Practice Areas: Commercial Litigation | Insolvency | Property

Date: 05 Nov 2019

Can You Keep A Half Secret? (Wood v Commercial First)

 

James Saunders comments on the recent judgment in Wood v Commercial First addressing fully and half secret mortgage broker commissions, remedies and limitation.

Challenging the decision to reject proofs of debt in a CVA for dividend purposes (Re JPF Clarke (Construction) Limited)

Author: Jessica Powers

Practice Areas: Insolvency

Date: 28 Oct 2019

Restructuring & Insolvency analysis: Jessica Powers comments on the courts judgement in favour of four creditors who brought an application challenging the decision of the joint supervisors of a company voluntary arrangement (CVA) to reject their proofs of debt for the purpose of a dividend.

 

Click here to read more.

Providing required information on websites—icons and cursors (Viagogo AG v Competition and Markets Authority)

Author: James Davies

Practice Areas: Commercial Litigation

Date: 24 Jul 2019

Commercial analysis: James Davies considers the case Viagogo AG v Competition and Markets Authority.

Click here to view.

Crowden v Aldridge—the correct approach to variations?

Practice Areas: Trusts, Wills & Estates

Date: 20 Jul 2019

James Saunders, second six pupil at New Square Chambers, analyses deeds of variation.

Click here to view article online (requires Oxford Academic account)

Trusts in Europe and Brexit—a view from the Bar

Author: Nicholas Le Poidevin QC

Practice Areas: Trusts, Wills & Estates

Date: 15 Mar 2019

Nicholas Le Poidevin, Q.C. explores the recognition of trusts in EU law and points out that even after Brexit there will be trust outposts in Europe.

Click here to view.