Snippets From Gladstone v White

Will claim Solicitors, specialist no win no fee will dispute and will contest Solicitors, discuss Gladstone v White [2023] EWHC 329 (Ch)

Gladstone v White – lifetime promises and gifts?

The recently reported decision in Gladstone v White serves to provide a reminder of the key elements of unfulfilled lifetime “gifts” of property and where the actual transfer of property prior to a death can be set aside and more easily than in the case of post death gifting via Wills.

Where can the case be found

Well it can be found here:

Gladstone & Anor v White & Ors [2023] EWHC 329 (Ch) (17 February 2023) (bailii.org)

Proprietary Estoppel

This area of law exists to prevent unconscionable behaviour in relation to the unfulfilled gifting of property. In other words it exists to stop one person who promises another a property from reneging on that promise in circumstances where the recipient of the promise acts substantially to his/her detriment. Rather than distil the concise definitions into our own words which might be legally imprecise, we have taken the liberty of copying and pasting the relevant extracts here (from the Judgment by Mr Justice Trower):

Proprietary estoppel: the law

16. There was very little disagreement between Ms Tracey Angus KC, acting for David, and Ms Reed as to the legal principles applicable to Leigh’s proprietary estoppel claim in relation to Wotton, but there were some differences in emphasis in their respective approaches. I can summarise the law as follows.
17. In order to establish her claim to relief Leigh must prove (a) that David gave her the assurance on which she now relies, i.e., that she would be given control of Wotton after his death and that he would make provision from his estate with sufficient assets including from the use of the London properties, to enable her to maintain Wotton, (b) that she reasonably relied upon that assurance and (c) that she has suffered detriment by virtue of her (reasonable) reliance: Thorner v Major [2009] UKHL 18 (“Thorner”) at [29]. The extent to which it was reasonable for Leigh to have relied on what she was (or thought she had been) told by David in the way that she says she did is an important aspect of the present case.
18. However, as Ms Reed submitted, these are not watertight compartments. In approaching the issue of whether an estoppel has arisen the matter has to be looked at in the round. As Robert Walker LJ said in Gillett v Holt [2001] Ch 210 at 225 c-d:

“… it is important to note at the outset that the doctrine of proprietary estoppel cannot be treated as subdivided into three or four watertight compartments. Both sides are agreed on that, and in the course of the oral argument in this court it repeatedly became apparent that the quality of the relevant assurances may influence the issue of reliance, that reliance and detriment are often intertwined, and that whether there is a distinct need for a ‘mutual understanding’ may depend on how the other elements are formulated and understood. Moreover, the fundamental principle that equity is concerned to prevent unconscionable conduct permeates all the elements of the doctrine. In the end the court must look at the matter in the round.”

19. .The assurance must be unambiguous and must appear to have been intended to be taken seriously. What is meant by this is that the assurance must be “clear enough”, but what amounts to sufficient clarity in this context is, as Lord Walker explained in Thorner at [56], “hugely dependent on context”. As is also apparent from Thorner (see e.g., the discussion on reasonable reliance at [74ff]), one of the questions which may arise in a context such as the present is whether what was said amounted to an assurance that the promisee would receive the property, or whether it amounted to no more than a statement about the promisor’s current intention with no assurance that the promisor might not change their mind whether in whole or in part.
20. There must be a sufficient link between the assurances relied upon and the conduct that is said to constitute the detriment, but the promises do not have to be the sole inducement for what is said to be the detrimental conduct (Gillett v Holt [2001] Ch 210 at 226G, citing with approval Wayling v Jones (1993) 69 P & CR 170, 173). It appears from Lord Neuberger’s judgment in Thorner at [78] that, if what Leigh was told by David was reasonably understood by her to amount to an assurance, and if she then reasonably acted to her detriment in reliance on that understanding, David may be bound even if he may not have intended what he said to have had that effect unless (in a rare case) he could not reasonably have expected Leigh so to rely.
21. Further, the items of detriment relied on must be specifically alleged and proved and the court should not readily infer detriment where that has not been done. The court must take account of countervailing benefits both when assessing whether there has been sufficient detriment to give rise to an estoppel and in considering the appropriate relief if the claimant has satisfied the court that an estoppel arises.
22. The detriment need not consist of the expenditure of money or other financial detriment, but it must be substantial, and the requirement is to be approached as part of a broad inquiry as to whether in all the circumstances, repudiation of the promise or assurance is or is not unconscionable: Gillett v Holt [2001] Ch 210, 232D-E, per Robert Walker LJ. A narrow financial view of detriment is wrong: Gillett v Holt at 235BC. This is also well illustrated by those cases (of which Suggitt v Suggitt [2011] WTLR 1841 and on appeal at [2012] WTLR 1607 is one) in which the claimant positioned his whole life on the basis of the assurances given to and reasonably believed by him.

Lifetime gifts – the dangers

It is very helpful to reconsider our earlier blog about this in 2020 in relation to which we have copied and pasted a link below:

Undue Influence in Relation to Life Time Gifts (And Other Transactions) – Will Claim Solicitors

The problem is this. In certain circumstances a life time gift of a substantial part of someone’s estate or wealth can reverse the burden of proof whereby the recipient of the gift has to prove that he/she did not exercise undue influence in order to procure it. This situation does not arise post death where the individual claiming undue influence has to prove it.

The law is carefully set out by Mr Justice Trower and again, to avoid tainting it with our own interpretation, we have simply copied and pasted the relevant extract below:

Undue influence: the law

25. David claims that a presumption of undue influence in relation to the assignment of the Bonds to Leigh has arisen and has not been rebutted. The starting point is, therefore, the decision of the House of Lords, in Royal Bank of Scotland v Etridge (No. 2) [2002] 2 AC 773 (“Etridge”). In Etridge, Lord Nicholls explained the applicable principles at [14] as follows:

“Proof that the complainant placed trust and confidence in the other party in relation to the management of the complainant’s financial affairs, coupled with a transaction which calls for explanation, will normally be sufficient, failing satisfactory evidence to the contrary, to discharge the burden of proof. On proof of these two matters the stage is set for the court to infer that, in the absence of a satisfactory explanation, the transaction can only have been procured by undue influence. In other words, proof of these two facts is prima facie evidence that the defendant abused the influence he acquired in the parties’ relationship. He preferred his own interests. He did not behave fairly to the other.”

26. .In the light of Etridge, the approach which the court is required to take where a claim of undue influence is made can be summarised as follows:

i) Whether a transaction was brought about by the exercise of undue influence is a question of fact, and the burden of proving undue influence rests on the donor, in this case David (Etridge at [13]).

ii) If a donor proves, on the balance of probabilities, that there was a relationship of trust and confidence between the parties and a transaction which calls for an explanation, the burden of proof is prima facie discharged, which means that an evidential burden then falls on the donee (Leigh) to produce evidence to rebut that prima facie case (Etridge at [14]).

iii) Concepts of ascendency and dependency are used in the authorities to describe a relationship in which a presumption of undue influence will arise where the relevant transaction calls for an explanation, but Lord Nicholls (in Etridge at [14]) treated trust and confidence by one party in the other in relation to the management of his financial affairs as being an appropriate description of the relevant relationship. It is apparent from his analysis that the relationship aspect of the test may be satisfied where the donor places sufficient trust and confidence in the donee’s role in the management of his financial affairs, even though the donee may not be ascendant in other aspects of the same relationship. The answer will depend on all the circumstances of the case.

iv) For the presumption to be engaged, a transaction which calls for an explanation is one which is not readily explicable by the relationship of the parties or by reference to the normal motives by which people act. It has also been identified as one which can be characterised as immoderate or irrational (Etridge at [22]).

v) The weight of the presumption will depend on the nature of the relationship and the nature of the impugned transaction. Thus, the greater the disadvantage of the transaction to the donor, the more cogent must be the explanation before the presumption is rebutted (Etridge at [24]).

vi) In order to rebut the presumption, the donee must prove that the donor entered into the transaction of their own free will, independent of the influence that the donee was able to exercise over him (see e.g., Smith v Cooper [2010] EWCA Civ 722 at [71], per Lloyd LJ). This can be achieved through proof that informed advice was given by an independent third party, often but not necessarily a solicitor. Whether that advice will be sufficient to give rise to what Lord Nicholls called an “emancipating effect” is a question of fact to be decided having regard to all of the evidence (Etridge at [20]).

vii) If a donor succeeds in setting aside a gift or other transaction by this route, he does so because he has succeeded in establishing a case of undue influence. In other words, the court has drawn appropriate inferences of fact upon a balanced consideration of the whole of the evidence at the end of a trial in which the burden of proof rested upon the donor.

If you consider any of these facts and matters are of interest, are likely to apply to you, or you would like to ask us for more information about our no win no fee arrangement, or you simply want us to assess your claim, then please do not hesitate to contact us for a confidential no strings chat and/or visit us at www.willclaim.com.

We provide details about our no win no fee arrangements at https://www.willclaim.com/nowin-no-fee/.