Cushway v & Anor v Harris [2012] EWHC 2273 (Ch)

Case No HC08C02516 and HC08C02517[2012] EWHC 2273 (Ch)
IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
Venue Royal Courts of Justice, Rolls Building, Fetter LaneDate Wednesday, 16 May 2012
London EC4A 1NL
Before
MR JUSTICE HENDERSON
Between
SARA DANIELLE CUSHWAYClaimantSEBASTIAN MICHAEL ELLIOTClaimantMICHAEL ABRAHAM HARRISDefendant
Digital Transcript of Wordwave International, a Merrill Communications Company101 Finsbury Pavement London E C2A 1ERTel No: 020 7422 6131 Fax No: 020 7422 6134Web: www.merrillcorp.com/mls Email: mlstape@merrillcorp.com(Official Shorthand Writers to the Court)
MR T DUMONT (instructed by Harcus Sinclair) appeared for Claimants for The Defendant did not appear and was not represented.
Judgment
[1]MR JUSTICE HENDERSON: This is the trial of two closely related probate actions, in each of which the claimant asks the court to pronounce against a purported Will made on 10 January 2006. The Wills in question were made by Hannah Harris and Rosette Harris Emmanuel who were the great aunts of the two claimants, Sara Danielle Cushway and Sebastian Michael Elliot.[2]Probate of those Wills has been granted to the executors therein named, including the defendant, Michael Abraham Harris, who was until recently a practising solicitor (he has now been suspended) and is also a nephew of the two testatrices.[3]The principal ground upon which revocation of the grant of probate of the Wills is sought is want of knowledge and approval, although the pleadings also allege lack of capacity and lack of due execution. For present purposes, it is enough to concentrate on the plea of lack of knowledge and approval. As a matter of law, the burden of establishing knowledge and approval rests on the party propounding the Will, which in the present context means the defendant, Mr Harris. He is the only person who now suggests that the 2006 Wills should be admitted to probate, and he is also a beneficiary who takes a one-third share of residue under each of the Wills, which he himself drafted.[4]In those circumstances, he admits in his defence in each action (and the defences were settled for him by counsel) that the burden of proof to establish knowledge and approval rests on him. The present position, however, is that he is an undischarged bankrupt, so any rights he has as a beneficiary have vested in the Official Receiver as no trustee has yet been separately appointed. The Official Receiver does not defend the action, but he does not consent to the relief sought either.[5]So far as Mr Harris himself is concerned, he has vigorously contested the proceedings until very recently, and he even refused to consent to applications for summary judgment which were made before a Master a few weeks ago. Understandably, the Master was not willing to grant summary judgment, but at that stage Mr Harris was not consenting to the relief sought, and that remained the position until two days ago when by a letter to the court dated 14 May 2012 he said:
“Insofar as I have the power, as an undischarged bankrupt, to do so, I consent to judgment in these actions in the terms of the Claimants’ application notices dated 25/04/12.”
Those application notices were the applications for summary judgment.[6]Mr Harris goes on to say in his letter that he is suffering from certain medical conditions in respect of which further diagnosis is awaited, and that he is neither able to travel to London for a three to five day trial, nor as a bankrupt is he in a position to instruct a solicitor or counsel to represent him. However, the fact remains that he has now unequivocally consented to judgment in the actions against him.[7]Had he appeared, there might have been a question whether he had any locus standi to defend the matter, but there could have been arguments both ways on that point, and I do not express any concluded view on whether or not the court would have been willing to hear him.[8]Although the matter is not defended, it is also right to say that it is not a matter that can be dealt with by consent. I say that for two reasons. First, as I have explained, the Official Receiver does not consent, and he is the person in whom any beneficial interest of Mr Harris under the disputed Wills would be vested. Secondly, and in any event, the court always has a supervisory, and to some extent investigatory, jurisdiction in probate matters, and it would not be right for me to make a consent order where what is sought is the revocation of probates already granted and the grant of probate in common form for earlier Wills which the two ladies in question made.[9]I can, however, deal with the matter relatively briefly, both because it is unopposed and because I can indicate now I think it is entirely clear that the 2006 Wills should never have been admitted to probate.[10]Each of the 2006 Wills is in a simple form, and I will take the Will of Hannah Harris by way of example. In clause 1 she revokes, or purports to revoke, all prior Wills and testamentary dispositions. By clause 2 she appoints Mr Harris, and a Mr Craddock who was a salaried partner of Mr Harris in his firm of solicitors in Portsmouth, to be the executors and trustees of the Will. She then expresses her wish to be cremated, and gives and devises the whole of her estate upon standard trusts for calling in, conversion and so forth, and subject to payment of her debts and funeral and testamentary expenses and inheritance tax she purportedly gives it in trust as to one third part to Mr Harris, her nephew; as to another third part to her nephew, Christopher Rose; and as to the remaining third part for such of the two claimants, her great-niece and great-nephew, as should survive her, if more than one in equal shares absolutely. The only other provision of the Will, ironically enough, is a solicitor’s professional charging clause.[11]Christopher Rose, I should have explained, is the son of the twin sister of Rosette Harris, Florette, who now lives in Australia, and he too has consented to the court pronouncing against the 2006 Wills.[12]The Will of Rosette Harris is in substantially similar form, and it is unnecessary for me to set out its details.[13]Each of the two ladies had, however, made an earlier Will, brief details of which are as follows. Hannah’s previous Will was made on 30 June 1998. It appointed Rosette as her executor, and gave the two claimants legacies of £5,000 each and left the rest of her estate to Rosette. If, however, as in the event happened, Rosette died before her, the Will gave everything to the claimants.[14]Rosette, for her part, had made a previous Will on 12 October 2001. She appointed two solicitors in Harrow as her executors, and gave her entire estate to her sister, Hannah. Since she was the first of the two to die, that is the bequest which took effect if her 2006 Will is invalid. Had she survived Hannah, however, she would have given her residuary estate to the claimants, subject to payment to her sister Florette, or her son Christopherif Florette did not survive her, of a legacy of £50,000 or one-quarter of the estate if that was smaller.[15]It can be seen from this brief recital of the previous Wills that each sister named the other as her primary beneficiary, and that Mr Harris is not mentioned anywhere in either Will. It is also apparent that, in whichever order the two sisters died, the two claimants were to be the ultimate main beneficiaries. If, as happened, Rosette died first, they would receive 100 per cent of the remaining amount of the combined estates. If the order of deaths was the other way round, they would receive at least 75 per cent of the combined estates.[16]That, in brief, is the testamentary background against which the present proceedings take place. As I have said, the basic case is founded on alleged lack of knowledge and approval, the burden of establishing which lies squarely on the defendant, Mr Harris. It is enough to recall that he is a solicitor, and that he stood to benefit substantially under each Will. He drafted the two Wills, there is no dispute about that, and he did so at a time when his aunts were very elderly, in poor health, in hospital, and their eyesight was so bad that they were unable to read.[17]There is also considerable doubt whether Hannah, at least, had testamentary capacity at that date, because the perception of those who knew her was that she was and had for some time been suffering from at least the early stages of Alzheimer’s disease.[18]It is also worth noting that, on the very same day that the 2006 Wills were apparently executed, Mr Harris obtained a signed authority from each of his aunts purporting to authorise him to render an interim account of up to an initial sum of £10,000 each for work which he had supposedly performed for them since the end of October; and he then very shortly afterwards took steps, relying upon enduring powers of attorney which he had also obtained, to pay himself those sums.[19]According to the claimants, that was only the beginning of a sustained programme of depredation of the two estates upon which Mr Harris then embarked, and which had the effect of exhausting the entire amount of one estate, and severely depleting the other, both before and after the deaths of the two ladies.[20]Rosette died at the age of 84, in fact a matter of days after her 2006 Will was purportedly executed, on 25 January 2006. Hannah lived for nearly a year longer, and died at the age of 91 on 5 January 2007.[21]It would not be appropriate for me to go into these allegations of further depredation in this judgment, because they have not yet been the subject of any findings of fact against Mr Harris, with the possible exception of some matters which were ventilated in disciplinary proceedings against him before the Solicitors' Disciplinary Tribunal which led to his suspension in the course of last year. Furthermore, there is no pleaded case against him of dishonesty or depredation in the current actions, and it is therefore not open to me to make adverse findings in his absence.[22]Having said that, it does appear from the material before me that there is a very strong prima facie case that he did indeed, in a thoroughly disgraceful and deplorable manner, deplete the estates of the two ladies with the result that there is now nothing left in one of them, and the other has been substantially reduced.[23]It is also worth noting that, in earlier proceedings for a freezing injunction and his removal as an executor which took place before Sales J in the course of last year, Mr Harris purported to provide an account which revealed that there was a sum of approximately £189,000 available for distribution, but failed to disclose that most of that sum was no longer in his hands as executor.[24]In any event, I return to the law on want of knowledge and approval. The basic principles are helpfully explained by Mr Dumont in his skeleton argument on behalf of the claimants. He refers to the relatively recent decision of the Court of Appeal in Fuller v Strum [2001] EWCA Civ 1879, [2002] 1 WLR 1097, where there is a valuable review of the relevant principles by Chadwick LJ. He begins by quoting what he calls the seminal passage in the opinion of the Privy Council delivered by Baron Parke in Barry v Butlin, (1838) 2 Moo PC 480 at 482 to 483, as follows:
“The rules of law according to which cases of this nature are to be decided, do not admit of any dispute, so far as they are necessary to the determination of the present appeal: and they have been acquiesced in on both sides. These rules are two; the first that the onusprobandi lies in every case upon the party propounding a will; and he must satisfy the conscience of the court that the instrument so propounded is the last will of a free and capable testator. The second is, that if a party writes or prepares a will, under which he takes a benefit, that is a circumstance that ought generally to excite the suspicion of the court, and calls upon it to be vigilant and jealous in examining the evidence in support of the instrument, in favour of which it ought not to pronounce unless the suspicion is removed, and it is judicially satisfied that the paper propounded does express the true will of the deceased.”
[25]Chadwick LJ then quotes further from the opinion of Baron Parke, at 484 to 486, to the effect that the strict meaning of the term onus probandi (or in English, burden of proof) is that if no evidence is given by the party on whom the burden is cast, the issue must be found against him. However, that is the legal burden. There is also an evidential burden, which may be raised in cases where the circumstances are such as to excite the suspicion of the court. The degree of suspicion will, of course, vary from case to case, and equally the nature of the evidence required to allay those suspicions. At one extreme, the suspicion may be minimal and easily removed. At the other extreme, there may be cases where the suspicion is so grave that for all practical purposes it is incapable of being dispelled. An observation to that effect was made by Viscount Simonds in Wintle v Nye [1959] 1WLR 284 at 291, cited by Chadwick LJ at paragraph 71.[26]Chadwick LJ also refers to the judgment of Scarman J in In the Estate of Fuld, dec’d (No. 3) [1968] P 675 as authority for the proposition that "the whole point of the rule is evidential".[27]Finally, it is clear that the standard of proof to which the issue has to be determined is the ordinary civil standard of proof on the balance of probability (see paragraph 70).[28]For present purposes, that is all that I need to refer to on the law. It is clear, to my mind, that this is a case where the very gravest suspicions of the court are aroused by the circumstances which I have briefly outlined, and it is accepted by Mr Harris in his defences that the burden is indeed upon him to establish knowledge and approval.[29]Mr Harris has not appeared, and he has led no evidence which could begin to discharge that burden. In the circumstances, for that reason alone, it is in my judgment clear that the 2006 Wills cannot stand. They were, of course, admitted to probate in common form, without any of these matters having been investigated. Now that they have been fully pleaded, and in circumstances where knowledge and approval cannot be established, it must follow that the 2006 Wills fail, and as I have said that is the principal relief sought by the claimants.[30]I will therefore declare in solemn form of law against the validity of the purported Wills dated 10 January 2006, and I will also declare in common form in favour of the two earlier Wills which I have mentioned, namely Hannah’s Will dated 30 June 1998 and Rosette’s Will dated 12 October 2001.[31]I am also asked to make an order for costs on the indemnity basis against Mr Harris. The general principle is that the court has a wide discretion to award indemnity costs in any case which falls outside the normal run. What is said in the present case is that this is a case where Mr Harris’ conduct throughout has been thoroughly irresponsible, quite apart from the allegations of fraud which have been levelled against him.[32]It is plain, for reasons which I need not go into, that he has totally failed to give proper disclosure throughout the history of this action, including in particular documents as vital as an apparent attendance note by him upon his two aunts dated 1 December 2005. On any view that is an absolutely critical document in a probate action of this nature, yet astonishingly it was never disclosed by Mr Harris. I mention that merely as an example.[33]Quite apart from that, he has, as I have already indicated, strenuously defended the action only to back down at the very last minute, even after an unsuccessful application for summary judgment to which he could well have consented. It seems to me that his conduct of the litigation has throughout been unreasonable, and if the serious allegations levelled against him are true, he has in addition behaved in a completely disgraceful manner, quite apart from the responsibilities upon him as a solicitor and officer of the court. I leave those allegations out of account, but in all the circumstances I am nevertheless abundantly satisfied that this is an appropriate case to make an order for costs on the indemnity basis, and I therefore do so.[34]It may be wondered what is the purpose of granting this relief against Mr Harris, where he is an undischarged bankrupt who claims to have no assets apart from £100 of premium bonds, and where the debts already disclosed in his bankruptcy amount, I am told, to more than £350,000, quite apart from his liabilities in relation to the two present estates which will add at least another £250,000 to that sum. The reason why this is not an entirely pointless exercise is that, fortunately, the estates do have claims against the Solicitors' Compensation Fund ("the SCF") in respect of Mr Harris’ alleged dishonesty. If the 2006 Wills were allowed to stand, and assuming that a valid claim against the SCF were made out, the SCF might want to reduce any grant it made by one third to reflect the apparent beneficial entitlement of Mr Harris under those Wills.[35]In addition, the claimants need final costs orders against Mr Harris, even though they will in practice be irrecoverable in the bankruptcy, in order to support their claim for reimbursement of costs from the SCF. I mention this not because it has any bearing on the legal merits of the matter, but simply to explain why it is not an idle exercise upon which the court is today engaged.[36]There remains one final matter for me to mention. As I have said, there were proceedings before the Solicitors' Disciplinary Tribunal last year which led to the suspension of Mr Harris. The present claimants were not the complainants in respect of that procedure, and indeed they only found out about it shortly before the hearing took place. I understand that no allegations of fraud were levelled against Mr Harris in the disciplinary proceedings, and certainly it was not alleged that he had fraudulently misappropriated much of the content of his aunts' estates, although some of his conduct in relation to those two estates, and in relation to various other estates, was undoubtedly considered by the Tribunal.[37]I have not been taken in any detail through those proceedings, and I do not know precisely what form they took or what findings of fact were made. What is clear to me is that the Tribunal did not, and indeed could not, deal with allegations of fraud because none were pleaded. However, the prima facie evidence before me does disclose what, if substantiated, would appear to be a very serious case indeed of fraud perpetrated by a solicitor against the estates of his two elderly aunts.[38]I think it would be unsatisfactory if matters were left without a proper investigation of those complaints, and although I bear in mind that the matter has already been before the Tribunal, I think it is appropriate in the circumstances to accede to the invitation made by Mr Dumont that I should direct the papers to be referred to the Director of Public Prosecutions to consider whether any further action should be taken in this matter, and I therefore propose to give a direction to that effect.

Postscript

[39]In my oral judgment I stated, on more than one occasion, that it was alleged that Mr Harris had misappropriated the assets in both estates and left each of them entirely empty. That is indeed alleged to be the case in respect of Hannah’s estate, but it is accepted that in the case of Rosette, although some misappropriations are alleged, there were nevertheless substantial distributions made as well. To that extent, what I said in my oral judgment needs to be corrected, and I have made appropriate adjustments to the transcript to reflect this.

Cited in 1 later judgment