Hart & Anor v Burbidge & Ors [2013] EWHC 1628 (Ch)

[2013] EWHC 1628 (Ch)Case No HC11C00559& HC11C00751
IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
Venue Royal Courts of Justice, Strand, London, WC2A 2LLDate 12/06/2013
Before
SIR WILLIAM BLACKBURNE
Between
(1) KENNETH CHARLES HARTClaimants(2) PAUL ROGER HARTClaimant(1) SUSAN ANNE BURBIDGEDefendants(2) BRIAN JEFFERY BURBIDGEDefendant(3) ARTHUR KENNETH GERALD SAMWAYSDefendant(4) GRAHAM DOUGLAS SAMWAYSDefendant(5) CHRISTINE MARGARET GARLINGEDefendant(6) PETER KENNETH HARTDefendant(7) LEWIS ROGER HARTDefendant(8) GEMMA LOUISE HARTDefendant(1) ARTHUR KENNETH GERALD SAMWAYSClaimants(2) GRAHAM DOUGLAS SAMWAYSClaimant(3) CHRISTINE MARGARET GARLINGEClaimant(4) PETER KENNETH HARTClaimant(5) LEWIS ROGER HARTClaimant(6) GEMMA LOUISE HARTClaimant(1) SUSAN ANNE BURBIDGEDefendants(2) BRIAN JEFFERY BURBIDGEDefendant(3) KENNETH CHARLES HARTDefendant(4) PAUL ROGER HARTDefendant
Charles Auld (instructed by Withy King LLP) for Kenneth Charles Hart and Paul Roger HartRosanna Foskett (instructed by Wilsons Solicitors LLP) for other claimantsPaul Emerson (instructed by Blanchards Bailey LLP) for Susan Anne Burbidge and Brian Jeffery BurbidgeHearing Hearing dates: 26, 27 and 28 February and 1, 4, 5, 6 and 13 March 2013
Judgment

Sir William Blackburne :

[1]This is the trial of two claims which the Master ordered to be heard together. They are concerned with the estate of Mrs Phyllis Hart. It will simplify matters if I refer to people, I hope without discourtesy, by their first names. Phyllis, as I shall therefore call her, died on 7 November 2008. She was 86 at the time of her death. Her husband of 60 years, Ernest Hart, had died aged 82 almost four years earlier on 4 January 2005.[2]Ernest and Phyllis had three children: two sons and a daughter. The eldest, Kenneth (“Ken”), was born on 5 July 1945; the next in age was Paul who was born on 7 August 1963. The daughter, Susan, was the youngest: she was born on 1 April 1965. Ken and his wife, Mary, have a son, Peter, who was born on 23 September 1967. Paul and his partner, Christine Cox, have two children, Lewis and Gemma. Susan and her husband, Brian Burbidge, also have two small children, Leighton (born on 11 October 2004) and Trinity, (born on 1 October 2010). Trinity was born after the events which give rise to these claims.[3]Phyllis had a twin sister called Ada, known to everyone as Joan. She and Joan were born on 29 July 1922. Joan died on 4 December 2008 which was just four weeks after Phyllis. Phyllis had three other surviving siblings, Arthur, Graham and Christine. Samways is their family surname. When she married, Christine became Christine Garlinge.[4]Ken and Paul are the claimants in action HC11C00559 (“action 559”) and the three surviving Samways siblings together with Peter, Lewis and Gemma are the claimants in action HC11C00751. Ken and Paul have appeared before me by Charles Auld. The three Samways siblings and Peter, Lewis and Gemma have appeared by Rosanna Foskett. For convenience I refer to Ms Foskett’s clients collectively (if inaccurately) as “the Samways parties”. The only effective defendants to both actions are Susan and Brian. They have appeared before me by Paul Emerson.[5]The two claims allege that Susan exerted undue influence on her mother in connection with a series of transactions stretching over period of eight months between February and October 2008. By those transactions Phyllis transferred money to Susan and Brian to enable them to purchase in their joint names a property called Little Manor Farm (“Little Manor”) in which they and Phyllis were to live. Phyllis did live very briefly in Little Manor but died suddenly and unexpectedly shortly after moving in. The effect of the transactions was to adeem two gifts in Phyllis’s last will, made on 26 April 2007 (“the 2007 Will”), and, arguably, to diminish the size of residue. The gifts were of properties which Phyllis owned. They were No 7 Beacon Park Road, Upton, Poole (“No 7”) in which she and, until his death, Ernest had lived for over 30 years, and No 43 Beacon Park Road (“No 43”) which Phyllis had owned and which had been let out to provide her with a rental income. The two properties were sold by her in order to provide the sum needed, together with money from a building society account in her name, to enable the purchase to take place. In all she transferred £700,000. Under the 2007 Will No 7 had been given to Ken and Paul and No 43 to the Samways parties and Joan.[6]In their action Ken and Paul complain that Susan’s undue influence caused them to lose the gift of No 7 and take a smaller share of residue. In their action the Samways parties (but not Joan – I was given to understand that no representation has yet been taken out in respect of her estate) complain that Susan’s undue influence caused them to lose the gift of No 43. That explains why there are two sets of claimants. They seek to have the transactions set aside which resulted in the transfer of the £700,000 so that the 2007 Will can take effect as if those transactions had not occurred. Brian is sued as a knowing recipient of the benefit of the transactions in that he became, with Susan, an equal co-owner of Little Manor. Susan and Brian deny that the transactions were tainted by undue influence.[7]There is also an issue over the price at which Nos 7 and 43 were sold. The two sets of claimants contend, but Susan and Brian deny, that the two properties were sold for less than what they should have yielded because the sales were rushed in order to provide what was needed to purchase Little Manor. Little Manor was resold in 2009 and out of the sale proceeds £410,000 was paid to Phyllis’s estate. Susan and Brian say that this was in accordance with the arrangement between themselves and Phyllis when Little Manor was acquired. The arrangement, they say, was that the sale proceeds of Nos 7 and 43 were a loan to them by Phyllis to be repaid when Little Manor should be sold.[8]That in a nutshell is what the trial has been about.

A summary of the background to the claims

[9]Ernest owned and ran a marquee business, making and hiring out marquees. Phyllis was nominally in partnership with him. It had been started by his father. The business appears to have prospered. Ken had worked in it since leaving school in 1960. The only exception was a five year period in the mid-1960s when he worked elsewhere. Paul too began working in the business after he left school but he left five years later to become a lorry driver, eventually setting up his own lorry-driving business when he was about 31. Susan also worked in the business, in a secretarial role, starting in 1984 and continuing until 1992 when she left to work elsewhere. By then she had married Brian. Brian had worked in the business between 1987 and 1992, leaving it at the same time as Susan. Susan and Brian attribute their decision to go elsewhere to differences with Ken who by then was in a position of responsibility in the business.[10]In August 1997 Ernest decided to retire. He had reached the age of 74. The business had by then fallen somewhat into the doldrums. Neither Ken nor Paul wanted to acquire it on the terms on which Ernest was willing to dispose of it. The reasons do not matter. However, Susan and Brian were willing to take it on. This prompted Ken to leave the business: by then he had been in it for 37 years except only for the five years in the mid-1960s. Susan and Brian had resumed working for the business in the spring of that year. It led to an agreement dated 23 December 1997 whereby they agreed to pay Ernest and Phyllis £84,000 for the business and to discharge any outstanding liabilities. The £84,000 was payable by such instalments as Susan and Brian should choose to make and there was provision that any outstanding part of the price was to be interest-free and released altogether on the death of the survivor of Ernest and Phyllis. The premises from which the business operated, Unit 15 Sunrise Business Park, Blandford (“Unit 15”, also frequently referred to simply as “Blandford”), was not included in the sale. Instead it remained in the joint ownership of Ernest and Phyllis but was made available to Susan and Brian for the purposes of the business. This was under a lease at a nominal rent.[11]Under the terms of Ernest’s will, Phyllis was appointed his executrix and given all of his estate. It was valued at a little over £420,000 and included the marital home at No 7. She discovered too that she was the owner of No 43. She knew of that property but had no idea until after Ernest’s death that it belonged to her. It seems that Ernest had acquired it in Phyllis’s name some years earlier. It was let out and, at least after Ernest’s death (it was not clear what the position was while he was alive), it provided her with an additional source of income.[12]Gary Pick (“Mr Pick”), a solicitor with a firm called Dickinson Manser, had acted for the Hart family from the time that he joined that firm in the early 1980s. He acted in the administration of the estate of Ernest’s father in 1992, in the administration of Ernest’s estate following Ernest’s death in January 2005 and is the sole executor of Phyllis’s estate. He also drew up many wills for the family over the years, including Ken and Paul. He had a lively appreciation of the tensions within the family.[13]To his great credit Mr Pick had the habit of taking detailed attendance notes of all his meetings and telephone conversations in the course of advising Phyllis. There was one occasion only for which there is no attendance note of a conversation. It was with Paul. This was either because it was not made or is missing from the file. His practice, as he explained to me, was immediately after the meeting or conversation in question, always to dictate a note of the material points discussed and get his secretary (a lady of great experience who had been with the firm even longer than he had been) to type the note and place it on the file. On the few occasions when it was the secretary who took a call, Mr Pick being elsewhere or otherwise engaged, she would follow his practice and make a note of what had been said. I have no reason to doubt the complete accuracy of these attendance notes and that they contained the essential points which had arisen in the course of the meeting or conversation to which they related. Where the meeting or telephone conversation called for a follow-up letter, the letter would as surely appear within a day or two of the meeting or call. These attendance notes and follow-up letters are important because, in the fraught circumstances of this family dispute where all manner of accusations have been made, Mr Pick’s attendance notes provide firm ground as to what was going on, at least as far as he was involved.[14]And Mr Pick was, as he was well aware, very much involved. For he was the person to whom Phyllis, Susan and, at times, Paul came for advice or information in the course of the tussle that was to develop over the various steps which Phyllis was taking in the period leading up to the disposition of her assets. As will appear, his advice was not sought when it came to the application of the sale proceeds of Nos 7 and 43 towards the purchase of Little Manor. Indeed he was wholly unaware that that property had been acquired, much less in whose names it was acquired, until after the event.[15]I can conveniently mention at this stage that Mr Pick’s recollection of events was based almost entirely on his attendance notes in that, understandably, he had little if any recollection of events beyond what is to be gleaned from the notes. In those notes he refers to himself as “GMP”, or sometimes as simply “GP”, and to Phyllis as Mrs Hart. I should also say that Mr Pick came across as an experienced, no-nonsense person with a keen awareness of what his duties were and to whom they were owed. He was at all times aware that, in the matters with which this litigation is concerned, Phyllis was his client and that, when contacted by Paul (or on one occasion by Paul and Ken), there were matters which his duty to Phyllis as his client prevented him from divulging to them. At no stage did it appear to me that he overstepped this important boundary.[16]On 15 February 2006, acting on advice given to her by Mr Pick and by her accountant, a Mr Bemment, Phyllis entered into a variation of Ernest’s will and also into a deed of gift and release. Their overall effect was to release Susan and Brian from debts, then amounting to £44,000, which they still owed arising out of their purchase of the business in 1998 and to give them the freehold ownership of Unit 15, estimated at the time to be worth approximately £275,000. The combined value of the release of debt and gift of Unit 15 was therefore some £319,000.[17]The impetus for these dispositions (they were structured by Mr Pick so as to mitigate the impact of Inheritance Tax on Phyllis’s death) had been a wish expressed by Phyllis to Mr Pick at a meeting he had with her several months earlier, on 16 August 2005, at her home at No 7. Mr Pick’s attendance note of that meeting recorded, so far as material, that:
“1. She [Phyllis] wished to discuss matters privately with GP without the children being there in relation to both her Will and Ernest’s Estate. 2. As we were aware Ernest had always dealt with all the finances and she did not have any idea at all about the money, investments or assets which they had… 3. … Susan had taken over the family business with husband Brian which they are running from [Unit 15] which at the last valuation we had was worth around £275,000. Susan and Brian had bought the goodwill under an agreement for some £84,000 of which around half was currently outstanding and was being paid back by instalments. 4. As far as Mrs Hart was concerned, what she wanted was to give Susan and Brian the business premises and release them from any further liability to repay any monies. She knew Susan was against it, but at the end of the day, it was her decision. GP confirmed that this property had been in the joint names of herself and Ernest and passed to her by survivorship. We could do a Deed of Variation to deal with his half share interest so that that passed to Susan and Brian...She could then give her half share to Susan and Brian. 5. What she would need then to consider was what provision she could make for Ken and Paul to effectively balance the books.”
The note went on to record that Phyllis’s own assets at the time could be summarised as (1) Unit 15 (thought to be worth £275,000), (2) No 7 (thought to be worth £230,000), (3) No 43 (thought to be worth £230,000), (4) a Teachers Building Society account in the sum of £290,000, and (5) another building society account in the sum of £10,000. In all, therefore, the value of her estate was estimated to be over £1 million.[18]At the same time as entering into the variation of Ernest’s will and the deed of gift and in order to “effectively balance the books” (the expression appearing in the above attendance note) Phyllis executed a will dated 15 February 2006 (“the 2006 Will”) whereby, after making three small specific legacies of various chattels, she directed a sale of No 7 and No 43 and gave the net sale proceeds to be shared equally between Ken and Paul, free of Inheritance Tax. On the assumption that those two properties were worth £460,000, each stood to inherent £230,000. She also gave two other small pecuniary legacies to charity and directed that residue be shared equally between Susan, Ken and Paul. By “balance the books” Mr Pick meant, as he explained, that even though Phyllis was not treating her three children equally it could be said, although the matter was for her, that she was treating them fairly.[19]The discovery by Ken and Paul some months later that Unit 15 had been given to Susan and Brian caused some resentment, especially on the part of Paul. At the time they had no knowledge of the provisions made for them (over and above the equal division of residue) by the 2006 Will.[20]A year later, on 26 April 2007, Phyllis made a fresh will. This was the 2007 Will. In the meantime, Ken had found out that Susan and Brian owned Unit 15. Susan and Brian had by then sold the business but retained Unit 15 which they were letting so as to provide them with a rental income from it. By then also Phyllis was complaining of a lack of contact from Ken and Paul. Under the 2007 Will No 43 was no longer given to Ken and Paul but to Joan, Christine, Arthur and Graham together with any of Phyllis’s grandchildren living at her death. No 7 continued to be given to Ken and Paul and residue continued to be divided equally between Susan, Ken and Paul. The result of the 2007 Will, which turned out to be her last will, was a considerable reduction in the value of what Ken and Paul were to receive over and above the equal three-way division of residue between them and Susan.[21]These proceedings are not concerned with Phyllis’s gifts to Susan and Brian of Unit 15 (or with the forgiveness of the outstanding business debts totalling £44,000) or with the provisions set out in the 2007 Will. Instead, those matters form the backdrop to the transactions which are in issue and which Phyllis made in the course of 2008.[22]The essential features of those transactions, which I refer to as the impugned transactions, are as follows.[23]By the middle of 2007, Phyllis had decided that she wanted to move from No 7 to live with Susan and Brian who, for that purpose, had found and later negotiated terms for the purchase of Little Manor which was a five bed-roomed property in Corfe Mullen in Dorset. It was not far from Upton where No 7 is situated. Little Manor comprised a house together with some fields and a barn. The agreed price was £1.15 million if it was sold without an agricultural occupancy condition and £1.05 million if sold subject to the condition. The house alone could be purchased for £750,000, leaving the fields and barn available for purchase at a later stage.[24]The proposal was that the purchase should be funded by(1) the sale of Susan’s and Brian’s existing property (at nearby Lytchett Matravers) which was expected to yield £280,000,(2) the sale of No 7 which was expected to yield £290,000,(3) the sale of No 43 which was expected to yield £200,000 and(4) a contribution of £290,000 from Phyllis’s Teachers Building Society account. Together these four sums would provide the £1,060,000 needed to acquire the property, inclusive of the fields and barn, on the assumption that the agricultural occupancy condition could not be waived.[25]With a view to enabling the purchase of Little Manor to take place, and in anticipation of that happening, No 7 was placed in the hands of selling agents in early January 2008 with an initial asking price of £299,950. No 43 was placed for sale with the same agents in late March 2008 at an asking price of £224,950. To the same end, on 21 February 2008, Phyllis transferred £290,000 from her Teachers Building Society account to a joint account in the names of Susan and Brian. After a change of selling agents in late April 2008 No 7 was sold but for less than the initial asking price of £290,000: it sold for £249,950 yielding net sale proceeds of just over £244,000 on completion. No 43 later sold for £170,000 (again rather less than the initial asking price of £219,950) yielding net sale proceeds of £166,345 on completion. In the meantime, contracts were exchanged for the purchase by Susan and Brian of Little Manor (the house but without the fields and barn) for £700,000. The purchase was completed on 6 October 2008. The transfer of Little Manor was into the names of Susan and Brian alone.[26]Contrary to the original plan, Susan and Brian did not sell their own house in Lytchett Matravers. In the event therefore the purchase of Little Manor was funded entirely by Phyllis.[27]Because the sale of No 7 completed in June whereas the purchase of Little Manor did not complete until early October, Phyllis went to live for 15 weeks with Susan and Brian at their house in Lytchett Matravers. She then stayed for a week with her sister, Christine Garlinge. She finally moved into Little Manor, accompanied by Joan, in early October 2008. The two sisters, by then aged 86, were on their own; they were not joined by Susan and Brian who continued (and have since continued) to live in their Lytchett Matravers property. Instead, Susan and Brian were daily (or almost daily) visitors to Little Manor.[28]About two weeks after moving into Little Manor, Phyllis fell ill. She went into hospital. She died some days later, on 7 November 2008, to be followed, a month later by Joan.[29]The result of these various transactions was that in the course of just over 8 months Phyllis transferred to Susan and Brian almost the entirety of her assets. She received no rights in return, neither title to Little Manor, nor any share in its ownership nor any security over it.[30]On her death Phyllis left assets and personal effects worth just over £51,000 together with the benefit of an undocumented promise by Susan and Brian to repay what they say they had borrowed (a figure assumed to be £410,000 and derived from the sales of No 7 and No 43) and a liability estimated at £24,000 for the Capital Gains Tax due on the sale of No 43. Had she lived, Phyllis would have had her state pension, a state attendance allowance and an annuity to meet her needs and whatever income she could derive from her few shares (valued at just over £1,000 when she died) and from what was left in her two building society accounts after the Capital Gains Tax liability had been discharged. (If it had come out of those accounts she would have been left with under £20,000 in them although there was a vague suggestion by Susan that she and Brian would have paid or otherwise provided for it, if necessary by mortgaging another property that they owned.) The net value of her estate for probate purposes was assessed at £433,657. This assumed that the debt owed by Susan and Brian (if such it was) was indeed £410,000 (and no more) and that the £290,000 which Phyllis transferred to Susan and Brian in February 2008 was, as Susan and Brian maintain, a gift to her.[31]In the course of 2009, Little Manor was put back on the market and sold in July of that year for £595,000. That was a loss of just over £100,000 in the space of a year. Susan and Brian accounted to Phyllis’s estate for £410,000 out of the net sale proceeds.[32]The result of the sales of No 7 and No 43 was to prevent the gifts of those properties to Ken and Paul (in the case of No 7) and the Samways claimants and Joan (in the case of No 43) from taking place under the terms of the 2007 Will.

The proceedings

[33]As I have mentioned, the claimants in the two actions contend that the impugned transactions were entered into as a result of Susan’s undue influence on Phyllis. They rely on both actual and presumed undue influence. In action HC11C00559 (“action 559”) Ken and Paul contend that the sale of No 7 and the application of the net sale proceeds, together with the cash gift of £290,000 made by Phyllis to Susan and Brian in February 2008, towards the purchase of Little Manor were so entered into. They contend that the combined effect of those transactions has been to cause them to lose, through ademption, the benefit of the gift to them by the 2007 Will of No 7 and, even if that consequence of the sale of No 7 is to be ignored, to reduce the size (and therefore their share) of Phyllis’s residuary estate. They seek relief designed to put them into the financial position which they would have been in by the terms of the 2007 Will if those transactions had not occurred. They also contend that the timing of the sale of No 7 was dictated by the need to apply the net sale proceeds towards the acquisition of Little Manor and that, in so proceeding, a lesser price was obtained for No 7 than would have been realised if that property had been marketed without any such constraint.[34]In action HC11C00751 (“action 751”) the claim is confined to the sale of No 43 and the application of the net proceeds of that sale towards the purchase of Little Manor. Just as Ken and Paul do in relation to the other impugned transactions, the claimants in action 751 contend that the sale of No 43 adeemed the gift to them (and Joan) of that property by the 2007 Will. They likewise contend that the timing of that sale was dictated by the need to realise cash to enable Susan and Brian to purchase Little Manor and that the sale was for a price which was less than its value at the date of Phyllis’s death.[35]The claimants in both actions contend that, as a result of her undue influence, Susan is liable to account to them (and to Joan’s estate). This is for the monies from which she benefited at their expense, in the case of action 559 through the receipt and application of the sale proceeds of No 7 and of the £290,000 gift, and in the case of action 751 through the receipt and application of the sale proceeds of No 43. Alternatively they contend that she is liable to them in damages. Brian is sued as having benefited from the impugned transactions to the extent of his interest in Little Manor after allowing for the recoupment to Phyllis’s estate of £410,000 following the re-sale of Little Manor in July 2009.[36]The Samways claimants also allege that Susan, to whom Phyllis granted an Enduring Power of Attorney (“the EPA”) on 15 February 2006, acted in breach of the fiduciary and other duties arising out of her position as attorney under the EPA and out of her knowledge of the terms of the 2007 Will.

Undue influence - the law

[37]The principles applicable to undue influence are well established. The claimants allege that the undue influence to which Phyllis was subject and which resulted in the impugned transactions was both actual and presumed. In truth there is no distinction between the two as regards the nature of the influence and its effect. The difference lies merely in the manner of its proof. In both it must be shown that the influence in question led to the making of the impugned transaction (frequently a gift) and that it was undue in the sense that the transaction was not the result of the free exercise of an independent will on the part of the person at whose expense the transaction was made. In the case of actual undue influence it is for the person complaining of the influence to prove affirmatively that the transaction in question was caused by the influence alleged. In the case of presumed undue influence the court’s willingness to intervene to reverse the effect of the influence is triggered by proof on a balance of probabilities of essentially two matters, the burden of proof again lying on the person complaining of the undue influence. The first is that the person at whose expense the impugned transaction was made reposed trust and confidence in the recipient of the benefit conferred by the transaction or that the latter acquired ascendancy or control over the former. The second is that the transaction is of such a size or nature as to call for an explanation as being not readily explicable by the relationship of the parties. Once that stage is reached the burden of proof shifts to the person seeking to uphold the transaction to demonstrate on a balance of probabilities that the transaction was the result of the free exercise by the transferor of an independent will.[38]It is desirable to put some flesh on that summary statement of the law by reference to some of the relevant authorities.[39]I start with actual undue influence. In Royal Bank of Scotland plc v Etridge (No 2) [2002] 2 AC 773 (“Etridge (No 2)”) at [8] Lord Nicholls of Birkenhead said that actual undue influence “comprises overt acts of improper pressure or coercion such as unlawful threats” and that there was “much overlap with the principle of duress as this principle has subsequently developed.” Elsewhere he referred to “specific overt acts of persuasion”. In Daniel v Drew [2005] EWCA Civ 507 Ward LJ (with whom the other members of the Court of Appeal agreed) said this (at [31]) of the difference between actual and presumed undue influence:
“In the broadest possible way, the difference between the two classes is that in the case of actual undue influence something has to be done to twist the mind of a donor whereas in cases of presumed undue influence it is more a case of what has not been done, namely ensuring that independent advice is available to the donor.”
As will shortly be seen it is not the case that independent advice must be shown to have been given to dispel a finding of presumed undue influence. The point of the contrast is to highlight the need in cases of actual undue influence to point to some overt act or acts which can be said to be causative of the impugned transaction. The inquiry in the case of presumed undue influence is rather more subtle and the evidence bearing on the influence and its effect is likely to be more indirect.[40]That brings me how the courts have approached presumed undue influence. I begin with extracts from the speech of Lord Nicholls in Etridge (No 2) at [11]-[24]:
“11. …The principle is not confined to cases of abuse of trust and confidence. It also includes, for instance, cases where a vulnerable person has been exploited. Indeed, there is no single touchstone for determining whether the principle is applicable. Several expressions have been used in an endeavour to encapsulate the essence: trust and confidence, reliance, dependence or vulnerability on the one hand and ascendancy, domination or control on the other. None of these descriptions is perfect. None is all embracing. Each has its proper place. … Burden of proof and presumptions 13. Whether a transaction was brought about by the exercise of undue influence is a question of fact. Here, as elsewhere, the general principle is that he who asserts a wrong has been committed must prove it. The burden of proving an allegation of undue influence rests upon the person who claims to have been wronged. This is the general rule. The evidence required to discharge the burden of proof depends on the nature of the alleged undue influence, the personality of the parties, their relationship, the extent to which the transaction cannot readily be accounted for by the ordinary motives of ordinary persons in that relationship, and all the circumstances of the case. 14. 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. So the evidential burden then shifts to him. It is for him to produce evidence to counter the inference which otherwise should be drawn. … Manifest disadvantage 21. As already noted, there are two prerequisites to the evidential shift in the burden of proof from the complainant to the other party. First, that the complainant reposed trust and confidence in the other party, or the other party acquired ascendancy over the complainant. Second, that the transaction is not readily explicable by the relationship of the parties. 22. Lindley LJ summarised this second prerequisite in the leading authority of Allcard v Skinner, 36 Ch D 145, where the donor parted with almost all her property. Lindley LJ pointed out that where a gift of a small amount is made to a person standing in a confidential relationship to the donor, some proof of the exercise of the influence of the donee must be given. The mere existence of the influence is not enough. He continued, at p 185: 'But if the gift is so large as not to be reasonably accounted for on the ground of friendship, relationship, charity, or other ordinary motives on which ordinary men act, the burden is upon the donee to support the gift.' In Bank of Montreal v Stuart [1911] AC 120, 137 Lord Macnaghten used the phrase 'immoderate and irrational' to describe this concept. … 24. ... The second prerequisite, as expressed by Lindley LJ, is good sense. It is a necessary limitation upon the width of the first prerequisite. It would be absurd for the law to presume that every gift by a child to a parent, or every transaction between a client and his solicitor or between a patient and his doctor, was brought about by undue influence unless the contrary is affirmatively proved. Such a presumption would be too far-reaching. The law would be out of touch with everyday life if the presumption were to apply to every Christmas or birthday gift by a child to a parent, or to an agreement whereby a client or patient agrees to be responsible for the reasonable fees of his legal or medical adviser. The law would be rightly open to ridicule, for transactions such as these are unexceptionable. They do not suggest that something may be amiss. So something more is needed before the law reverses the burden of proof, something which calls for an explanation. When that something more is present, the greater the disadvantage to the vulnerable person, the more cogent must be the explanation before the presumption will be regarded as rebutted.”
Burden of proof and presumptions Manifest disadvantage 'But if the gift is so large as not to be reasonably accounted for on the ground of friendship, relationship, charity, or other ordinary motives on which ordinary men act, the burden is upon the donee to support the gift.'

Manifest disadvantage

[41]In Etridge (No 2) at [220] Lord Scott said this of the second prerequisite and its description as ‘manifest disadvantage’:
“…the expression is no more than shorthand for the proposition that the nature and ingredients of the impugned transaction are essential factors in deciding whether the evidential presumption has arisen and in determining the strength of that presumption. It is not a divining-rod by means of which the presence of undue influence in the procuring of a transaction can be identified. It is merely a description of a transaction which cannot be explained by reference to the ordinary motives by which people are accustomed to act.”
[42]And, as Buxton LJ pointed out in Turkey v Awadh [2005] EWCA Civ 382 at [15], the transaction must not simply be one that calls for an explanation but one where the explanation is not forthcoming. Only then does the burden shift.[43]Once the burden of proof does shift to the person seeking to uphold the transaction that person must show that the transaction was a result of the free exercise by the transferor of an independent will. The extent of the task which lies on that person is likely to depend on the strength of the matters which have caused the shift in the burden of proof. In Hammond v Osborn [2002] EWCA Civ 885, Sir Martin Nourse described the burden so placed upon that person by quoting the remark of Evershed MR in Zamet v Hyman [1961] 1 WLR 1442 at 1446 requiring him to prove that the gift was made by the donor “only after full, free and informed thought about it.” At [26] he explained the reason for this when he stated that “…it could hardly be suggested that a donor would act spontaneously under circumstances which enabled him freely to exercise an independent will if he was not fully informed not only of the nature of the gift but also of its effect.” He then went on to refer to the judgment of the Privy Council delivered by Lord Hailsham LC in Inche Doria v Shaik Allie Bin Omar [1929] AC 129 at 135:
“It is necessary for the donee to prove that the gift was the result of a free exercise of independent will. The most obvious way to prove this is by establishing that the gift was made after the nature and effect of the transaction had been fully explained to the donor by some independent and qualified person so completely as to satisfy the Court that the donor was acting independently of any inference from the donee and with the full appreciation of what he was doing; and in cases where there are no other circumstances this may be the only means by which the donee can rebut the presumption.”
[44]Showing that the transferor acted independently means showing that he entered into the transaction liberated from the undue influence presumed to exist. In Hammond Ward LJ puts the matter thus (at [25]):
“…A useful guide to rebutting [the] presumption can be found in Snell’s Equity, 30th Edition, at p617, paragraph 38-20:- ‘In order to rebut the presumption it is not sufficient to show that the complainant understood what he was doing and intended to do it. The problem is not lack of understanding but lack of independence.’” ‘In order to rebut the presumption it is not sufficient to show that the complainant understood what he was doing and intended to do it. The problem is not lack of understanding but lack of independence.’”
[45]The importance of independence was stressed by Patten J in Hodson v Hodson [2006] EWHC 2878 (Ch) at [27]:
“It is commonly the case that the donor has a full understanding of the nature of what he or she is being asked to do but no real ability to resist the demands being made of them. It is lack of independence which is the key to the intervention of equity.”
[46]The need, once the burden of proof has shifted, to show that the transaction was a result of full, free and informed thought on the donor’s part has been repeatedly emphasised in the authorities. Thus, in Smith v Cooper [2010] EWCA Civ 722 (to take a very recent decision) Lloyd LJ referred at [61] to the need for the person seeking to rebut the operation of the presumption of undue influence to show that “the transaction was not procured by an abuse of his position of influence but rather was the free exercise of the will of the other party as a result of full, free and informed thought”.[47]Adducing evidence to show that the donor received independent advice is one way, but by no means an essential and, depending on the circumstances, not necessarily a sufficient way, of demonstrating that the donor acted independently of any undue influence. As Lord Nicholls pointed out in Etridge(No 2) at [20]: Independent advice 20. Proof that the complainant received advice from a third party before entering into the impugned transaction is one of the matters a court takes into account when weighing all the evidence. The weight, or importance, to be attached to such advice depends on all the circumstances. In the normal course, advice from a solicitor or other outside adviser can be expected to bring home to a complainant a proper understanding of what he or she is about to do. But a person may understand fully the implications of a proposed transaction, for instance, a substantial gift, and yet still be acting under the undue influence of another. Proof of outside advice does not, of itself, necessarily show that the subsequent completion of the transaction was free from the exercise of undue influence. Whether it will be proper to infer that outside advice had an emancipating effect, so that the transaction was not brought about by the exercise of undue influence, is a question of fact to be decided having regard to all the evidence in the case.”

Independent advice

[48]In Niersmans v Pesticcio [2004] EWCA Civ 372 Mummery LJ said this (at [23]) in relation to the receipt of independent advice:
“…The participation of a solicitor is not, however, a precaution which is guaranteed to work in every case. It is necessary for the court to be satisfied that the advice and explanation by, for example, a solicitor, was relevant and effective to free the donor from the impairment of influence on his free will and to give him the necessary independence of judgment and freedom to make choices with the full appreciation of what he was doing.”
[49]I add a further comment. The influence is labelled “undue” influence. It is trite that nobody lives in a vacuum; every normal person is influenced to a greater or lesser degree by the events and experiences of daily life, by the milieu in which that person lives and has his or her being and, not least, by those others whom that person meets and with whom he or she interacts. It is not to be suggested that such everyday influences disable a person from freely exercising his or her will. The question only arises when the influences go beyond a point where the freedom of that person to act independently is compromised such that the court concludes that the transaction was not the act of a free agent. The identification of that point must obviously depend on the particular facts of the case.[50]Two other matters call for mention. The first is that it is not helpful in this area to have regard to authorities discussing what amounts to undue influence in the making of a testamentary disposition. I mention this because Mr Emerson referred me to the decision of Lewison J in Edwards v Edwards [2007] EWHC 1119 (Ch) which was just such a case. This is not the place to explore whether there is any material difference beyond saying that, in principle, it is difficult to see why there should be.[51]The second is that the person who is exercising the undue influence may be acting perfectly honestly and without any intention of taking advantage of the person who is presumed to have been unduly influenced. The point was put thus by Mummery LJ in Niersmans v Pesticcio (at [20]):
“…Although undue influence is sometimes described as an ‘equitable wrong’ or even as a species of equitable fraud, the basis of the court’s intervention is not the commission of a dishonest or wrongful act by the defendant, but that, as a matter of public policy, the presumed influence arising from the relationship of trust and confidence should not operate to the disadvantage of the victim, if the transaction is not satisfactorily explained by ordinary motives: Allcard v Skinner (1887) 36 ChD 145 at 171. The court scrutinises the circumstances in which the transaction, under which benefits were conferred on the recipient, took place and the nature of the continuing relationship between the parties, rather than any specific act or conduct on the part of the recipient. A transaction may be set aside by the court, even though the actions and conduct of the person who benefits from it could not be criticised as wrongful...”
[52]I leave to later what relief the court will give once it is established that the transaction in dispute was the result of undue influence.

The witnesses

[53]All of the witnesses who gave evidence from the witness box struck me as persons who were attempting to speak honestly about events as they saw them. But I have two caveats. The first is that, inevitably, where the witness was having to recall events long past, often unimportant in themselves, especially where, as was frequently the case, there was no contemporary document or other evidence to jog the memory or identify the occasion, recollection could be very unreliable. This was particularly so when Ken and Paul were cross-examined about the frequency of their visits to see Phyllis following Ernest’s death. Other witnesses too had difficulty with dates and the frequency of events or course of events. The second caveat is that Ken and Paul had a very jaundiced view of Susan and Brian, and to no less an extent she (and Brian) of them. The age gap between Ken and the other two did not help. Ken and Paul rarely saw each other and I did not get the impression that this mattered to either of them. Nor did Ken seem to bother about or take any interest in Susan and her family. Paul paid little or no attention to Susan although he claimed that they got on well when they were growing up. Susan had a different view of their shared childhood (“Paul was horrible to me when we were children” she said). She clearly had no time for him and had little that was kind to say about his partner, Christine. She had nothing good to say about Ken and was ungenerous in her opinions of some at least of her other close relatives. On the other hand she had great affection for her mother (an affection which Brian shared) and, as will appear, she and Brian went to great lengths to help her when she was left a widow on Ernest’s death in early 2005. For his part, Brian described Ken as “vindictive and spiteful” and plainly had no respect for him.[54]I have therefore approached their evidence with considerable caution. It is not that they were painting a picture which they knew to be false. Rather, their recollection is inevitably coloured by the bitterness of this dispute and the frostiness in their relationships. This was not a feature of the evidence of either Graham Samways or Christine Garlinge who were the only two of the Samways siblings who gave evidence from the witness box, or of Peter Hart, Ken’s son and one of the three grandchildren. Their evidence seemed to me to be fair and balanced.[55]Several of the witnesses spoke to events which were either irrelevant or of very marginal relevance to the issues I have to decide. That is no disrespect to the witnesses in question. Among those witnesses, I include Jonathan Ross, Robert Brown, Andrew Bennett, Kevin Rogers, Sharon Selby, Jerome Dodge, Malcolm Hicks and Ian Marsh. The last two gave their evidence from a distance by Skype. To my mind, the only material witnesses were Ken, Paul, Susan, Brian, Graham Samways and Christine Garlinge, Peter and Hazel Smith and Gary Pick. That is not to say that I have disregarded the evidence of those other witnesses; it is simply that their evidence was, at best, marginal to what I have to decide.[56]I have already commented on Mr Pick as a witness and on the fullness and, as I find, reliability of his (and his secretary’s) attendance notes. Coming to Ken, Paul, Susan and Brian, I did not get the feeling that they were dissembling in any way or seeking to hide anything. They struck me as open and frank, all of them. I mention Susan in particular. She was in many ways the main target as it was her (and to a lesser extent Brian’s) attention to and relationship with Phyllis that was under most scrutiny. She gave her evidence with calmness and in a composed manner.

The impugned transactions: setting the scene

[57]Phyllis was married to Ernest for over 60 years. The impression I gained of Ernest from the evidence I heard was that he was a tough and somewhat reserved person. Susan described him as “distant emotionally”. Peter Smith, who was called by Susan and Brian and who, with his wife, Hazel, had known and been friends with Ernest and Phyllis since the 1960s (they lived at 22 Beacon Park Road which was only a few doors away) and were said to be Phyllis’s oldest and closest friends, described the position thus:
“Ernest ran the family finances and the business, with Phyllis looking after the home and the children. It was a traditional marriage. Ernest was a quiet man but clearly determined and sensible. It is not a question of him dominating Phyllis; it was just a traditional relationship of our generation where he made the business decisions and the decisions about the family finances. He was friendly to us but our children were frightened of him as he displayed a certain antipathy towards children which they seemed to sense. He was a strong silent type who did not make conversation easily… he would never ask someone to do something he was not prepared to do himself. He was kindly to his elderly neighbours and would help them and take them out.”
I heard from other witnesses that, where the family finances were in question, Ernest was sparing in what he made available and controlling in the way that it was spent.[58]Hazel Smith stated, and I am willing to accept, that Phyllis had perhaps never written a cheque before Ernest died. But, equally, as she and other witnesses testified, Phyllis provided a happy home environment and was always welcoming to friends and family who visited. Graham Samways described Phyllis as “a gentle, loving, but shy type of person who, whilst being at ease among her family and people she knew, found it difficult to talk to strangers.” He did not feel that she had “much by way of confidence in herself”. He said that she “left all financial matters to Ernest” and “would simply accept the decisions Ernest made without comment or argument”. All of that was consistent with the broad tenor of the other evidence I heard on these matters.[59]Not surprisingly, Ernest’s death - he fell ill and died within a fairly short period of time - came as a considerable blow to Phyllis. Hazel Smith described the position as follows:
“… Phyllis found it difficult in the period after Ernest died. She had to come to terms with his death and with having to run the household and make the decisions about money and related aspects. She had to pay the household bills …”
In a later passage she said this:
“After Ernest had died Susan was Phyllis’s mainstay. Phyllis did not have much experience of matters outside the running of the family home. She was not experienced in the value of property and inflationary trends. She considered everything was expensive. She had had a hard life. She knew everything about the price of her grocery shopping but she had left the household bills and everything else to Ernest during his lifetime. She was always very close with Susan and sometimes went on holiday with her prior to her marriage. Phyllis was loyal to her sons but she felt lucky if she saw them occasionally for weeks on end. She mentioned that she did not see them very often. While she did not often complain about them it was clear that the situation upset her over a lengthy period, both before and after Ernest’s death. In later years Phyllis said that she had not seen Ken for 12 months and he had even moved without providing a new address to her.”
[60]Hazel Smith’s evidence about Phyllis and her relations with her three children was based, very much, on what Phyllis had told her. But I have no reason to doubt the general picture which she painted. In particular, and this is an important feature of the background to this dispute, Ken and Paul were not as attentive to their mother, certainly in the immediate aftermath of Ernest’s death, as perhaps they should have been. It is not for this court to say what an acceptable degree of contact would have been. The important thing is Phyllis’s expectation of the extent of that contact. Paul, I accept, was a much more frequent visitor to his mother than Ken. He did not live far away. He saw her at weekends. I accept that the nature of his occupation as a long-distance lorry driver meant there were periods when he could not visit his mother. Ken, however, had less of an excuse for neglecting his mother. And I find that he was neglectful of her. Indeed, he accepted that for a period of at least 18 months, he did not visit his mother at all. It is also the case that when he moved – over the years he moved home many times - he failed to tell his mother what his new address was. This was in the period after Ernest’s death. It was not altogether clear when the 18 months or so occurred during which he failed to visit his mother. At one stage in the evidence it was said to have been from roughly the end of 2005 to the middle of 2007. Later in his evidence he seemed to think that it started some months later. I consider that it was later rather than earlier in the 46 months that elapsed between Ernest’s death and Phyllis’s. He candidly accepted that he could and should have done more to remain in touch with his mother. I have no doubt that, in hindsight, this failure on his part is a matter of genuine regret to him.[61]In short, Phyllis had good reason to bemoan the lack of contact from her sons. I am of the view that this was amply justified in the case of Ken. I consider that, to some extent, she exaggerated the want of attention she received from Paul. Ken’s position was not helped by a mutual antipathy towards one another on the part of his mother and Mary (his wife).[62]Neglect of her by her sons is a matter which Phyllis mentioned when she saw Mr Pick as they are recorded in his attendance notes. It was also a matter which loomed large in the submissions to me by Mr Emerson.[63]A question to which Mr Emerson attached much importance is the extent to which, following Ernest’s death, Phyllis was able to become more self-assertive. Mr and Mrs Smith thought that she did. “After Ernest died” Mr Smith stated “Phyllis started to gain her independence”. Hazel Smith said that “Phyllis always knew her own mind and after the death of her husband she was able to express her views more clearly.” She then added:
“I do not mean that she had been silenced by him. It was just that she was able to speak more openly about what she wanted after his death. In some respects after the shock of his illness and death and the grieving she became a more forthright person.”
[64]This was also reflected in Mr Pick’s attendance notes.[65]It is also clear that, following Ernest’s death, Phyllis came to rely very greatly on Susan. Immediately following the passage from her witness statement set out above, Hazel Smith went on to say:
“After Ernest had died Susan gave Phyllis a great deal of support. I never saw an argument between them and Phyllis never criticised Susan, she only praised the help that she gave. I could see the love between the mother and daughter.”
[66]The closeness of mother and daughter is echoed in Phyllis’s dealings with Mr Pick. I have mentioned above that, already by then, Mr Pick had acted for the Hart family over many years. It is noteworthy that, except on two occasions, every attendance by him on Phyllis was at a time when Susan was present. When asked about this Mr Pick said that he was very conscious of this fact and was alert to whether it was proper for Susan to be present. In the event, except when he went through with her the provisions of what was to become her 2007 Will and it was then executed (when he made a point of seeing Phyllis on her own), he did not feel that there was an occasion when she should have been excluded. This did not happen when the 2006 Will was executed, presumably because the balance of testamentary provision favoured Ken and Paul and not Susan.[67]I have also described how, starting with instructions given to him by Phyllis on 16 August 2005 (an occasion when Susan was not present) and culminating in the execution of various documents on 15 and 16 February 2006, Mr Pick acted for Phyllis in the gift to Susan and Brian of Unit 15, the forgiveness of the sums which they owed in respect of the family marquee business arising out of their purchase of it 8 years earlier, and the execution of the 2006 Will.[68]Another of the documents entered into at that time was the EPA appointing Susan as Phyllis’s attorney. Although there was a suggestion at one stage of the process that Mr Pick should be appointed jointly with her, in the event Susan alone was appointed her mother’s sole attorney and, instead, words were inserted to the effect that in relation to any financial and legal affairs Susan would liaise with and take advice as appropriate from Mr Pick.[69]It is to be noted that Phyllis had the benefit of advice from both her accountant and Mr Pick in connection with the transfer of Unit 15 to Susan and Brian and the forgiveness of the debts which they owed. The transaction was drawn up in a tax-efficient manner. The 2006 Will, giving the sale proceeds of No 7 and 43 to Ken and Paul equally, was intended, according to Mr Pick’s attendance notes of 23 November 2005, to “balance the books” in view of the fact that Susan and Brian were “having the business premises earlier”. It is clear that in these transactions Phyllis received detailed advice. The documentation was carefully explained. There were several face-to-face meetings before the documentation was executed. As will appear, this was in marked contrast to the course of events which accompanied the impugned transactions.[70]At a family meeting which took place on or about 3 August 2006 Ken and Paul were told of the transfer of Unit 15 to Susan and Brian. Phyllis was present. So also was Susan. By then Susan and Brian had put the marquee business up for sale. Indeed the business had been put up for sale at the very time that they acquired Unit 15 from Phyllis. The sale did not include Unit 15 which Susan and Brian intended to rent out – and have since retained – as a source of income. Mr Jonathan Ross, who gave evidence before me, was the purchaser. I do not need to go into the disputes which arose between him and Susan when he completed the purchase of the business some months later. It is worth mentioning, however, that Ken’s son, Peter (one of the Samways claimants), had worked in the business since leaving school in the early 1980s, initially for his grandfather Ernest and then (from early 1998) for Susan and Brian. Since 2006 he has worked for Mr Ross. He was a patently honest witness. I mention too, in case this point should be considered of any importance, that I do not accept that he was guilty of any overcharging or wrongdoing when working in the business. I refer to this as there was a suggestion – it apparently concerned Phyllis who must have been told about it by someone who was either misinformed or was out to make mischief – that he, with his father, Ken, had acted in some discreditable way. I do not accept that this was so.[71]Ken and Paul were upset and annoyed to discover at their meeting on 3 August 2006 that Unit 15 had been given to Susan and Brian. They thought it unfair that Susan should be favoured in this way. It would appear that Paul attempted to find out from his mother what she had provided in her Will but she declined to tell him. This caused Phyllis a certain amount of upset. Paul later apologised to his mother for this.[72]There the matter rested until March the following year, 2007. On 13 March Mr Pick went to see Phyllis at No 7. It was, he understood, at Phyllis’s request. Susan was present. Mr Pick’s attendance note states that “Mrs Hart had clearly come out of herself since the death of her husband and she was quite strong in her views”. In his evidence Mr Pick said about that observation that he had no particular memories of the meeting beyond what his attendance noted stated but must have thought that Phyllis appeared to him to be positive and forthright.[73]His attendance note goes on to report that “Susan confirmed that she had been discussing with mother her will, and it was now over a year since her last will, and she wanted to review it”. Some of the changes were, as Mr Pick explained, inconsequential. Importantly, however, Phyllis wished to change the bequest of Nos 7 and 43. Although these had been left to Ken and Paul to “balance the books” because Phyllis had given Unit 15 to Susan, the note continued:
“Mrs Hart explained that she was really quite hurt because she had little or no contact now from Ken or Paul. Neither Ken nor Paul got on with Sue and Sue confirmed that she didn’t get on with Ken or Paul, and she wouldn't even be bothered if they died. Mrs Hart didn’t want Ken’s wife Mary, who was 13 years older than Ken to receive anything at all. GMP confirmed she couldn’t do that under her will, it was only Kenneth inherited and then she survived him that that could happen. Clearly Paul and Ken were upset because Sue had been given the business during her lifetime, whereas they always understood from their father that things would be treated equally. Mrs Hart was very concerned and upset about it. The people who had been good to her were her brothers and sisters and there were four of them and she would like to leave No 43 ... between the 4 of them and the existing four grandchildren, together with any other future grandchildren ...”
The note went on to state that Phyllis wanted Susan to receive the residue of her estate and that she sought Mr Pick’s advice. According to the note, Mr Pick advised that although he thought it was sad that the relationships within the family had deteriorated his advice over 25 years was still to treat the three children equally particularly having regard to the change of bequest in relation to No 43. He advised that it was important to treat the three children equally. It is perhaps of some significance that the note then recorded that “Sue came round to the view that this was sensible and we would draft the Will on that basis.” The note concluded, perhaps with an eye to this last observation, by stating that once the will had been approved “GMP would want to see Mrs Hart on her own, just so that we could record we had seen her totally independently.”[74]And this is what happened. Correspondence, nominally between Phyllis and Mr Pick on the contents of the new will, took place over the following few weeks. I say “nominally” because the letters were all drafted and typed by Susan and merely signed by Phyllis. Susan was adamant that they represented her mother’s wishes. One at least (it was a letter dated 8 April 2007) was in a tone which Mr Pick felt to be alien to Phyllis from whom it purportedly came. There is then an attendance note dated 13 April 2007 recording a call by Susan concerned with certain amendments to the will. The note then records that:
“Mrs Hart then wanted to speak to GP to make it clear that it was her wish the way the will was drawn up and Susan hadn’t influenced her in any way. She wanted Ken and Paul to know that she had made provisions as she wanted to provide for the people who cared for her.”
[75]In due course on 26 April 2007, after seeing Phyllis in interview in the absence of Susan and going through its terms with her, Phyllis approved and executed what became the 2007 Will and the file was then closed. By that will, as I have mentioned, she gave (so far as material) No 7 to Paul and Ken and No 43 to the four Samways siblings and any grandchildren of hers living at her death. Residue continued to be given to Susan, Ken and Paul equally.[76]In July 2007, according to Susan, Phyllis “made the decision that she wanted to move in with us.” As Susan made clear in the course of her cross-examination, her mother’s decision had been at her (and Brian’s) suggestion. They said that they could see that Phyllis “was struggling more and more at home on her own” and, once they made the suggestion to her, Phyllis was very keen. After looking at a property near to their own at Lytchett Matravers and at another in Upton, they came across Little Manor. She said that Phyllis immediately liked it as the layout gave her a suite of rooms of her own (although the kitchen needed some adaptation), room for Joan so that she could stay whenever she wanted, a spare room for Graham Samways when he should need to stay the night, together with ample space for Susan and Brian and their son, Leighton, which would be separate from Phyllis. As Susan put it:
“Mum made it absolutely plain from the outset that she wanted to buy and live at Little Manor.”
There is no reason to doubt Phyllis’s wish to move in with Susan and her family and no reason to doubt that she was very keen, once she had seen it, to live at Little Manor and, to this end, make the necessary monies available to enable this to happen. It was to lead to the sale of Nos 7 and 43. As mentioned earlier, No 7 had been Phyllis’s home for very many years. I heard nothing to suggest that leaving No 7 after so many years caused Phyllis any regrets.[77]Little Manor was available together with a barn and some fields. But it was subject to an agricultural occupancy condition. The condition caused the property to come off the market. It came back on to the market following a letter which Susan and Brian wrote in October 2007 to the couple who were handling the sale on behalf of the wife’s mother who owned the property. At a meeting they had with the couple the following month, Susan and Brian were able to agree a price for the property. This was that they would pay £1,150,000, split as to £750,000 for the house and £400,000 for the barn and surrounding land if the occupancy condition was removed, and £1,050,000 if the condition could not be removed. A memorandum of sale setting out these terms was issued by the selling agents on 11 December 2007. Susan and Brian were named as the purchasers. Solicitors on both sides (Blanchards Bailey Solicitors for Susan and Brian) were instructed a few days later. In early January estate agents (a firm called Davids) were instructed on the sale of No 7. The asking price for No 7 was £299,950.[78]It is evident that, initially at any rate, the plan was for Susan and Brian to sell their own home at Lytchett Matravers and for Phyllis to sell Nos 7 and 43. The hope was that this would yield sufficient to pay for the house. To this could be added the £290,000 from Phyllis’s Teachers Building Society account if it was needed. It would be needed if the barn and surrounding land were to be acquired although it appears that there was no obligation to proceed with this element of the transaction as, in any event, the sellers wanted completion in two phases and did not want a sale of the barn and land to complete before December 2009. The figures assumed that the occupancy condition remained but Susan and Brian had other property which they could resort to with a view to finding the balance needed.[79]It was with these intentions in mind that Phyllis and Susan had a meeting with Mr Pick on 13 February 2008. As was customary Mr Pick took a full attendance note of the meeting which lasted about 90 minutes. The matters discussed were being raised with him for the first time and took him by surprise. The note merits setting out in full. It was as follows. “Before we talked about what was proposed, Mrs Hart who historically when her husband Ernest had been alive had never said anything or indeed been allowed to say anything by him, now wanted to say a few words. She confirmed that in the last 18 months-2 years she had had little no contact from both Ken and Paul, her two sons. Ken had moved 17 times since he had married Mary and 3 times, she understood, in the last year or so. She'd brought in a Christmas card, and Thank You card, a Birthday card and a Mother's Day card all from Ken. The Christmas card didn't even have "Mother" on it and said "Best Wishes". She hadn't received any presents at Christmas, Birthday or any flowers on Mother's Day, and the Thank You card was to thank her for the £50 presents which she sent at birthdays and Christmas. She felt very angry and bitter that the two of them were apparently taking matters out on her. Susan and her husband Brian did everything for her. Susan came round at least twice a week and Brian did jobs around the house. They'd all had the option of having the family business but Ken and Paul hadn't wanted it and Susan had taken it on board. GMP confirmed that one reason may well be was the fact that Susan did have the business and also the fact that she had owed monies which had been waived, and the fact that she was perceived as having preferential treatment. Mrs Hart had been surprised that she had so much money. Apparently there was over £290,000 in the various accounts, particularly with the Teachers Building Society. She wanted Susan to have that money and there was nothing we could say that would stop her doing it or make her change her mind. Basically what was proposed was that Susan and Brian wanted to buy a property in Corfe Mullen called “Little Manor Farm”. The cost was around £1,050,000. The house was worth around £750,000 and there were fields and a barn. It was possible for them to buy the house first and then the fields and the barn later. There was some kind of agricultural tie they referred to which meant that without the tie it was worth £1,150,000 but with the tie £1,050,000. The property had been owned by Bob Arnold. Mrs Arnold was in a nursing home and she was entitled to the property, there having been some kind of claim by the grand-daughter which had now been settled. They were dealing with Mr and Mrs Latcham who were the daughter and son-in-law. GMP asked how it was proposed that this property purchase would be furnished. The reply was:(a) Susan and Brian's property would be sold with net proceeds say, £280,000.(b) No. 7 Beacon Park Road would be sold with net proceeds say, £290,000.(c) No. 43 Beacon Park Road would be sold say for £200,000. This was tenanted as we knew. The tenants apparently were interested in buying it. The property was going to be valued at the weekend. GMP stressed that we would need to get a valuation of what the property was worth (i) with vacant possession because the tenancy expired in May and (ii) what it was worth if the tenants purchased it.(d) Mum had cash of £290,000 which could be added to the above to pay the purchase price. As far as Susan was concerned the property was ideal in that on the second floor there were three bedrooms. One would be mum's; one would be Susan and Brian's which had an en-suite and there would be a third bedroom which could then be used for mum's twin sister Joan who came down every other weekend. Susan and Brian's room had an en-suite and the family bathroom and separate toilet could be used for mum. Downstairs there were 2 sitting rooms, so it would be fine for mum to come in with them, or if she wanted her own space she could have her own sitting room. On the next floor up there were other bedrooms which could be used for son Leighton, and any other children which they had. There was already a Stannah stairlift in there because Joan couldn't get up the stairs, and the fact that was already in place was a bonus. It would also be available for mum if she couldn't get upstairs at a later date. Mum was very pleased to have the option of living with Susan and Brian and enjoying the comfort of being with them, and also her grandson. Certainly Paul and Ken had not offered themselves to have her with them, not that she would go anyway. GMP asked how it was thought the new property would be purchased. Would mum have a share or interest in it? What would happen to the existing Will, which basically provided :-a. A. That 7 Beacon Park Road would go to Ken and Paul and 43 Beacon Park Road would be divided between her 4 brothers and sisters, and the 4 grandchildren.b. B. Susan confirmed that she would want to honour payments to Ken and Paul, brothers and sisters and grandchildren for the amount received for the sale of the properties.c. C. GMP confirmed that if the new property was just purchased in Susan and Brian's name this would not be practical. The only way to secure it would be, for example, for the property to be bought so that Susan and Brian owned say, 50% and mum owned 50% as tenant in common.d. D. In mum's Will she could then leave legacies to Ken, Paul, brothers and sisters and grandchildren which would be less than the value of the half share in the property. The residue could pass to Brian or to Susan. This would then give Susan up to say, 12 months, being the executor's year, to raise funds which she said she could in order to pay off the family members. Interest would run after the 12 month period. None of the family members would have a say in the property, just the right to cash.e. E. GMP thought that this could work but at the end of the day there was a lot of water to go under the bridge because a number of properties still had to be sold.”[80]There is no reason to question the accuracy of the note. There is no reason to doubt Phyllis’s disenchantment with Ken and Paul, her determination to let Susan have the £290,000, or her wish to join with Susan and Brian in buying Little Manor. The explanation of how the purchase would be funded – involving the sale of the three properties and recourse to the £290,000 “which could be added to [the sale proceeds of the three properties] to pay the purchase price” - came from Susan, as she confirmed when cross-examined about the note. Equally there is no reason to doubt the accuracy of Susan’s confirmation that, with the sale of Nos 7 and 43, her mother would want to honour the gifts to Ken and Paul and to the Samways parties and Joan by legacies equating to the sale proceeds of those properties or of Mr Pick’s advice that, if Little Manor were to be purchased, it would not be practical that it be in Susan’s and Brian’s names alone.[81]Mr Pick was adamant that there was no mention at the meeting of Phyllis not wanting to be on the title to Little Manor, much less of fearing that, if she were on the title, Ken and Paul might get their hands on the property. He said, and I accept, that if this had been her view he would have noted it. He also made the point that the need to change the 2007 Will was raised by him as something that would be appropriate if the matter proceeded as they were proposing. He said that there was no indication that Phyllis wanted to change her will there and then. Much less did he say anything to put her off or delay making any change. He felt that this lay in the future as the three properties would have first to be sold before Little Manor could be acquired and that, he knew, would take several months to achieve. I mention these matters in the light of suggestions made by Susan and others in the course of these proceedings about Phyllis’s wishes at the time and about Mr Pick’s supposed lack of concern at the meeting about the need to make any changes to her 2007 Will.[82]Mr Pick followed up the meeting with a letter the next day summarising what had been discussed. In his letter he said how pleased he was that Phyllis felt able to express her own views “so confidently”. He recited what he understood to be the terms on which Little Manor and the barn and land were available for purchase. He set out his understanding that the three properties would have to be sold to fund the purchase (with Susan’s and Brian’s producing £280,000, No 7 £290,000 and No 43 £200,00) and that “In addition, you have cash in your Teachers Building Society account of £290,000 which you would be willing to put towards the purchase price”. He then summarised his understanding of the interior layout of Little Manor and how it would be shared and continued:
“5. I can fully understand that from your point of view having the option of living with Susan and Brian and enjoying the peace of mind of not living on your own, and enjoying seeing your grandson grow up would be very sensible and happy way forward for you. Certainly Paul and Ken have not offered themselves to take you in, although I do not anticipate that if they did you would want to go in any event. 6. In your present Will you had left 7 Beacon Park Road to be divided between Paul and Ken, and 43 Beacon Park Road to be divided between your brothers and sisters and grandchildren. On the figures above this is a total of £490,000 which, if these gifts were to be honoured, would have to be found. My advice was that any purchase of "Little Manor Farm" would need to be in the joint names of Susan and Brian as to one half and as to yourself for the other half. The property would be purchased in joint names but you would own a one half share as tenant in common i.e. which would pass in accordance with the terms of your Will. Inyour Will you could then leave cash legacies to Ken and Paul, your brothers and sisters and the grandchildren of whatever amount you decide is fair and reasonable. Susan has confirmed that she would then be able to raise funds so that those legacies could be paid. There is what is known as the executor’s year which means that interest would be payable on these legacies, provided they were paid within 12 months of your death. Your half share in the new property could then be transferred to Susan once the legacies were paid. The cash of £290,000 which would go into the property would then effectively be a gift.”
[83]Mr Pick explained that the thinking underlying paragraph 6 of his letter was that Susan and Brian would have the executor’s year following Phyllis’s death to buy out her share of the property and thereby provide the cash needed to enable the cash legacies to be paid which would replace the gifts of the two properties given by the 2007 Will. The £290,000 (from the Teachers Building Society account) used in the purchase of the property would then “effectively” be gifted to Susan. The letter thus envisaged the need for changes to Phyllis’s will and for careful Inheritance Tax advice. Mr Pick ended his letter by looking forward to hearing further from Phyllis in due course. A few days later Susan rang Mr Pick to tell him that his letter “basically” confirmed the “agreement which they had reached”, that there were one or two small points “but nothing fundamental” and that “[a]s and when anything changed or they had any sales agreed” she would let him know. It is perhaps of some significance that it was Susan who rang to pass this information to Mr Pick, not Phyllis who, as it happens, had a cold at the time.[84]The conveyancing side of the sales of Nos 7 and 43 was handled by another department within Dickinson Manser. Aware that Susan was taking the lead on her mother’s behalf, Mr Pick later emailed his colleague in that department, a Ms Bradley, a few days later to pass on Phyllis’s telephone number, adding “You may be better off in the first place however calling her daughter Susan Burbidge because she is in the front line in looking after her mother’s affairs…” In the same vein is a letter to Phyllis from Ms Bradley enclosing Dickinson Manser’s Home Information Pack which explained the firm’s services. A note on the firm’s file copy of the letter records that Phyllis had rung to say that “her daughter is sorting this one and will be in touch shortly.” Thereafter Dickinson Manser’s correspondence with Phyllis on the sale of Nos 7 and 43 was addressed to Phyllis “c/o Mrs Burbidge” at the latter’s address. It is evident, and was not really in issue, that client instructions on the sales came from Susan even though the correspondence was nominally with Phyllis. Indeed, correspondence from Phyllis with her solicitors or accountants was in every case (or practically every case) by way of letters which Susan had drafted and typed. Many of them were signed by Susan “on behalf of Mrs Hart”; others were signed by Phyllis.[85]By early March Paul had got wind of what was afoot (a friend had told him that No 7 was on the market) and he became concerned. His concern was about his inheritance. On 5 March he rang Mr Pick’s offices three times and succeeded (I infer on the third call) in speaking to Mr Pick (this was the one occasion when there was no attendance note) and said that he wanted a round table meeting with his mother, Ken, presumably Susan, and Mr Pick. Quite properly, Mr Pick reported this straightaway to Phyllis, said that he had advised Paul that he could not discuss his mother’s affairs without her authority and inquired whether she would be willing to attend a family meeting and if so whether he, Mr Pick, should be in attendance. This coincided with two lengthy visits that Paul made to his mother on successive days (there was some suggestion that he made three such visits, each on successive days but I find that there only two) in the course of which he badgered his mother over the extent to which she had favoured and was continuing to favour Susan at the expense of himself and Ken, complaining that this was unfair and seeking to establish what she was intending.[86]So determined was Paul to press his concerns at his meetings with his mother that he took the unusual step of making a recording of his conversations with her. As Susan and Arthur Samways made appearances in the course of the two meetings they too are recorded. Transcripts of the conversations were available as were CDs of those parts of the conversations that counsel thought I should hear. I was not willing to listen to all seven hours not least when quite a lot (there was inevitably a dispute as to how much but I am willing to accept that it was less than half) was concerned with matters unrelated to what Mr Emerson described as “inheritance issues”. I can summarise my impressions of the extracts I heard as follows. Paul did most of the talking. Phyllis’s answers and comments were for the most part very brief. She seemed irritated at being quizzed over her property and being told how unfairly she was dealing with it. When Susan appeared (on the second of the two days) she appeared to speak for her mother as well as for herself. Phyllis seemed confused as to precisely what the arrangement was going to be over the ownership of Little Manor. At one stage, at least, she seemed to think that she would be buying it. The following is the passage where this occurs. At this time Paul was unaware that his mother, Susan and Brian had already found and had negotiated a price for Little Manor. Nor was he aware of the payment of the £290,000 a few days earlier to Susan and Brian : “[Phyllis]: And I’m buying my house. [Susan]: Mum’s, this is, where I think you’re getting slightly confused. We’re, we want to look after mum because the thought of mum getting into a cruddy nursing home doesn’t appeal. We want to look after mum. Mum is gonna have 50% in her name of the new property so wherever it may be the value of whatever mum puts in will be written in mum’s name. Mum isn’t losing this house and that house completely, all she’s doing is swapping these two for that. So the value… [Phyllis]: Will be the same won’t it? [Susan]: Exactly, whatever these two get that is the value that is mum’s and it will be written down as mum’s. 4[Paul]: Right. [Susan]: So if it’s half, mum will have 50% of that house. If it’s 40%, mum’ll have 40% of that house. There is nothing, mum’s not whacking, mum’s not selling this and that house, chucking it in and whey hey that’s it. Mum, mum’s… [Paul]: No, no I didn’t think that for one minute, [Susan]: …mum’s gonna have, we’re, we’re buying somewhere together and whatever we put in as a percentage will be written as ours and whatever mum puts in as a percentage will be written as hers. [Phyllis]: And then when I die you’ll give it to ‘em won’t you? [Susan]: Whatever happens, when mum dies what, what will happen is we will buy mum out of that share and then that will be yours and Ken’s.” [Phyllis]: Will be the same won’t it?

[Phyllis]: And then when I die you’ll give it to ‘em won’t you?

[87]A later passage from the same conversation sets out how, at that stage at least, Susan (acting as spokesperson for herself and her mother) represented to Paul what would be happening:
“[Susan]: So what you can, what we can do right is we’ve had a word with my Solicitor because we’re using our Solicitors. So if [I] explain everything that’s going on then maybe you might be a bit happier which is what I want because it’s your mum as well as mine. [Paul]: Well I don’t, I don’t… [Susan]: Right so I will get… [Paul]:…I’m made out to be the bad guy here. [Susan]: Let, let me just explain and then maybe you’ll be happier ‘cause I can see you’re not happy. We’re using Mr Pick to sell this one and 43 okay? We’re selling, using my Solicitor to sell mine. When we find somewhere that we want to buy both Solicitors have to be happy, not just mine, not just mum’s, both. So they will both get to see the contract and if one of them isn’t happy it doesn’t go ahead because at the end of the day I know I have to face you and Ken and tell you what’s going on and what isn’t going on and answer your questions. So everything has to be clear. [Paul]: Yeah but I can’t do nothing about it if it was like Blandford when it was all a done deal and you come down here and sat here knowing full well it was all signed, sealed and delivered. [Susan]: Yes. [Phyllis]: Well then she’s not having any of the houses Susan isn’t is she? [Susan]: No. [Phyllis]: You’re having the houses.” [Paul]: Well I don’t, I don’t… [Susan]: Right so I will get… [Phyllis]: Well then she’s not having any of the houses Susan isn’t is she? [Phyllis]: You’re having the houses.”

[Phyllis]: Well then she’s not having any of the houses Susan isn’t is she?

[88]In that passage Susan conceals the fact that Little Manor had been found and a price agreed for it: she pretends that they were still looking. She represents that her own property at Lytchett Matravers would be sold: it was not in fact sold and, indeed, I saw no evidence that any attempt was made to sell it. Nor, as will become apparent, was any attempt made to instruct Mr Pick (or any other solicitor) to act for and advise Phyllis on the terms of the purchase contract or otherwise “be happy” on her behalf before the matter was allowed to “go ahead”. Phyllis seems scarcely to have taken part in this all-important discussion as to how her assets would be dealt with: this role was fulfilled by Susan. From the little that she did say, she seemed to think that Ken and Paul would be receiving “the houses”. That could only be a reference to No 7 and 43. Perhaps she was concealing from Paul that under her 2007 Will only No 7 was to be given to Ken and Paul. In any event, with the intended sale of those two properties neither Ken and Paul nor the others would be given either property and, unless a change was made to the 2007 Will, none of them would be receiving anything in lieu. As I have set out above, Mr Pick had explained this to Phyllis three weeks earlier and followed this up with his explanatory letter. Quite how much Phyllis had recalled of what Mr Pick had said and written to her is far from clear at this stage of the discussion.[89]Susan rang Mr Pick three days later to complain of Paul’s conduct. Phyllis who was with her daughter came to the phone and spoke to Mr Pick. He noted that she did not want a family meeting (this was in answer to Mr Pick’s earlier enquiry) and confirmed that his firm acted for her (Phyllis). Mr Pick subsequently wrote to Paul to pass on Phyllis’s decision, taking care to send a copy of the letter to Phyllis.[90]No 7 had been placed on the market in January 2008 at an asking price of £299,950. After offering it to the tenants then in occupation (they were not interested), No 43 was placed on the market in March at an asking price of £224,950. Davids Estates Agents were the selling agents. There were no offers at those prices and in late April Davids were replaced as selling agents by a firm called Goadsby. They reduced the asking prices and, in due course, were successful in finding purchasers for both properties. Susan took the lead in all of this. Annotations on letters received from solicitors and selling agents are invariably in Susan’s handwriting.[91]On 8 May Phyllis and Susan had a meeting with Mr Pick. His attendance note of the meeting explains what was discussed:
“GMP attending Mrs Hart and Sue Burbidge at interview She confirmed there had been a family meeting for up to 3 hours the other Sunday when Paul and Ken had come round. There had been a lot of shouting, arguing and disagreement. Sue, who did not get on at all with Ken and Paul, had advised what was proposed about the various moves, but they did not believe her. Paul wanted a family meeting with GMP. GMP confirmed he would be happy to have that, or one just with Paul, if we could agree on that The latest situation was that they'd changed estate agents to Goadsby's and they'd agreed a sale on No. 7 at £249,500 and agreed a sale on No. 43 (which was a semi-detached house) for £180,000. They were happy with the prices in the current market. GMP did ask about the £180,000 because it did seem low, but the advice was to market it at £200,000 and any offer over £175,000 was worth serious consideration. The property which they wanted to purchase, which was Bob Arnold's old property was on the market for £750,000 but they had reduced that now to £725,000. GMP asked how the purchase was going to be funded and the actual costs would [be] £725,000 together with 4% Stamp Duty at a further £29,000 making a total of £754,000. The net sale proceeds of the two properties No 7 and No 43 would amount to around £430,000 which would leave a shortfall of £324,000. The monies in the Teachers Building Society would then be used. Effectively she was giving these to Susan to put in towards the purchase and there would be a shortfall of £34,000 which Susan would need to cover. The property would be bought with mother having a 50% interest and the other 50% owned by Susan and Brian. That 50% interest would form part of mum's estate and we could discuss in her Will what provisions she would make for Ken and Paul. She was effectively earmarking No. 7 so we could agree that say something like £120,000 each. Susan would have 12 months in which to raise the monies but the Will would be confidential. If they wanted, GMP would have a meeting with Paul or discuss on the telephone. GMP confirmed [it] did not sit comfortably with him, making substantially greater provision for one child [than] two others, even though one did everything and the other two did little or nothing. However, at the end of the day, Mrs Hart had come out of herself after her husband had died. She did get on well with Susan and one could see that it made sense for her to live with them. There was already a stairlift at the property and if that was what she wanted to do she said she could make whatever decision she wanted with her monies.”
[92]By then it was apparent that the sale of Susan and Brian’s house at Lytchett Matravers would not feature in the financing of the purchase.[93]Four days later, on 12 May, Ken and Paul came to see Mr Pick. This was with Phyllis’s knowledge as she had rung Mr Pick’s office earlier that day and left him a message to the effect that he was “not to mention the Teachers monies” to Paul (she was probably unaware that Ken would also be attending the meeting) when he saw him. Once again, Mr Pick’s attendance note sets out what passed between Mr Pick and Ken and Paul when they saw him later that day:
“GMP attending Paul and Ken Hart at interview They were both concerned about mother and the influence of Susan on mother. GMP understood there was no love lost between Ken and Paul, and Susan They had always been advised that matters of a financial nature would be fair so that Ken and Paul would split 7 & 43 Beacon Park Road in return for Susan (and her husband Brian) having got the factory unit at Blandford. This was worth around £400,000 they understood now and one half of 43 and 7 was not equal to that sum. GMP confirmed that he did not act for Susan and Dickinson Manser did not either. At the end of the day GMP only acted for mother. We would advise her on the merits as to what we saw fit. At the end of the day we felt that she was firm in her views. She had come out of herself since father died and she felt she was perfectly capable of making decisions with the assets which she had at her disposal. At the end of the day we could advise and guide but she would make the decision. The idea was to sell 42 and 7 Beacon Park Road and for a new property to be purchased jointly with mother owning a one half share interest. They were concerned to make sure that Susan put in funds equivalent to mother so that it was genuinely a half share interest. At the end of the day we could not advise on whatever split, it was whatever they agreed between themselves, although we could give our views and advice on this point. If mother died, Susan had said she would have a year to pay them out their monies, and if it was not paid within a year, a further 6 months on which interest would be payable, and thereafter the property would be sold. At the end of the day nothing was agreed and no documentation had been prepared but this was what had been discussed in principal. The bottom line was there was a long way to go yet, because two properties had to be sold, and another one purchased. What would happen if mother did not get on, having moved in with Susan and Brian? This was a point which we had made to her. She would effectively have burned all her bridges. The two properties would have been sold, the income that she got from 43 would have gone, and she would not be able to go back and live at No. 7. It was a potential problem/risk area. They both felt that Susan seemed to dominate mother's life and influenced her on all decisions. She was "feathering her own nest" to the extent that they hadn't even been advised that she had received, or had transferred to her the other share in the Blandford property.”

GMP understood there was no love lost between Ken and Paul, and Susan

[94]On 14 May Mr Pick wrote to Phyllis to report on his meeting with Ken and Paul two days earlier. It is an important letter as it sets out Mr Pick’s obvious unhappiness with what Phyllis was evidently proposing to agree with Susan and Brian over the financing of the purchase of Little Manor and the shares in which it would be owned. He stated his belief that Ken and Paul were genuinely concerned about Phyllis’s welfare and that they thought that Susan was controlling everything in relation to her affairs and was looking to “feather her own nest”. His letter continued:
“4. It may well be that Ken and Paul do not know about the Teachers monies. They were just keen to ensure that if a new property was being purchased on a 50/50 basis that Susan and Brian actually put in 50% of the proceeds. I have to say that I would like them to do so because it would show a commitment on their part. The fact is that what is proposed is that you will be putting in effectively all the monies by way of the sale proceeds of 7 and 43 Beacon Park Road, and all the monies in the Teachers account. I do not necessarily think this is a good idea or indeed a fair and equitable one, but the decision at the end of the day will naturally be yours. 5. My advice to you is that on the face of it you are the one who will be putting all your assets, somewhere in the region of £¾ million, into the purchase of this new property, of which you will only end up owning half. What you are effectively doing is giving Susan and Brian a gift of a further £350,000.00, or possibly more on top of what they have already received at Blandford. If you are going to put all your monies in, and frankly I would not advise you to do so, then the property should be owned by yourself in a significantly higher proportion or percentage. 6. One of the reasons why I say this is that there is no guarantee that everything will work out fine if the new property is purchased. By having sold both properties and putting all your other spare cash into this one property you will have effectively burnt all your bridges and not left yourself with any ready money available to purchase alternative accommodation, if for any reason the move does not work out for you. There is no guarantee that you will be happy after the move has taken place. You may regret having lost your own space and independence and if all your assets are tied up within the property there is no way back for you. 7. You will also have given up a steady income from number 43 and a steady income by way of interest from the monies on the Teachers' account. 8. What Paul and Ken are effectively saying is that they are being kept out of the loop in what is going on. I know there is the argument that it is none of their business. However, when there is an element of distrust between siblings matters get magnified and people become even more distrustful. My advice would be to be perfectly open with them about what you are proposing to do. It is, in my view, a proposition that on the one hand significantly favours Susan to the detriment of Ken and Paul. Is that what your husband would have wanted? As I say, I can only guide and advise and the decision at the end of the day has to be yours. 9. It may well be that a round the table meeting with everybody in attendance is the only way forward, to stop there being an element of distrust between all parties which frankly is only going to get worse if no further action is taken. I can only suggest that it may be sensible if the two of us arrange a meeting in the near future to have a general discussion on the contents of this letter so that we can discuss, between the two of us, and not in the presence of Susan, so that it is quite clear that you are being given independent advice. I look forward to hearing from you soon, and confirm that my role is purely and simply to look after your interests and to guide and advise you to the best of my ability.”
[95]Mr Pick’s last conversation with Phyllis was on 20 May when he rang her to return a call she had made. An attendance note was made. Phyllis told him that she would be happy to attend a meeting with him on his own if that was what Mr Pick felt to be appropriate (which, as he confirmed to me when he was asked about this, he did by that stage). Susan then took the receiver and, according to the attendance note, “she started getting angry and slightly aggressive because she felt that GMP was taking Ken and Paul’s sides.” Mr Pick denied that this was so and said that he was simply advising Phyllis “on what he felt the position to be and how to protect her interests.” The note continued that “At the end of the day Susan was receiving substantial assets on what is proposed and that if all Mrs Hart’s monies were going into this project what would happen if she had to go into residential care? Susan said she’d raise money to give her the money but at the end of the day this would not be easily done. GMP would rather see Susan put some money into the initial purchase.”[96]At that point, according to the note, Susan started shouting after he had been put back through to Phyllis who said that her sons did nothing for her and that at the end of the day “she would make whatever decision she wanted.” The conversation ended by Mr Pick advising Susan to get her solicitor at Blanchards “to write to GMP with their proposals and recommendations so that he could give them due consideration.” When asked about this in cross-examination Susan denied that she had shouted or become angry but accepted she had felt frustrated. I have no reason to doubt Mr Pick’s contemporary account.[97]Unfortunately, Blanchards did not contact Mr Pick with any proposals. Nor did Susan. In the meantime:(1) contracts for the sale of No 7 for £249,950 were exchanged on 30 May with completion following a week later (on 6 June) yielding £244,131 after costs and expenses,(2) contracts for the purchase of Little Manor at the price of £700,000 were exchanged on 3 June (with completion due on 1 December or earlier by agreement), and(3) contracts for the sale of No 43 for £170,000 were exchanged on 1 August with completion following a week later (on 8 August) yielding £166,345 after costs and expenses.[98]Mr Pick’s colleague in the firm’s conveyancing department informed him of the two sales. As the firm was not involved in the purchase of Little Manor (or any other property as a replacement home) the colleague could not assist with what was happening on the other side of the transaction. To find out Mr Pick wrote to Phyllis at Susan’s address on 27 August. In his letter he stated that he had heard nothing from Susan’s solicitors in relation to the proposed purchase of the new property, assumed that she was now living with Susan and added that “No doubt she or her solicitors will be in touch in due course”. I have mentioned that when he had last spoken to Susan (in late May) he had asked, and had understood, that Blanchards would be getting in touch with him. This was not idle curiosity on his part but a concern that Phyllis should be properly advised about how best to secure her interests in so far as her monies were used to acquire the intended new property.[99]On 7 September a reply came back to that letter. It was signed by Phyllis but, as Susan accepted, it was she who had drafted and typed out the letter for her mother to sign. In it Phyllis thanked Mr Pick for his letter, confirmed that she was living with Susan and Brian at Lytchett Matravers and then stated: “I can also confirm that Susan’s and Brian’s solicitor is aware of the difficulties surrounding this move and has confirmed that he will be writing to you in due course”.[100]This was, as Susan accepted, an untrue – indeed a dishonest – statement. Blanchards had not confirmed that they would be writing to Mr Pick. They had not been asked to do so. So they never did. Susan said that her mother signed the letter unaware that it contained anything untruthful.[101]This untruthful letter is significant. Its motive can only have been to avoid involving Mr Pick in what was about to happen, namely the investment of the sale proceeds of Nos 7 and 43 in the purchase of Little Manor, completion of which followed just four weeks later, on 6 October. The only plausible reason for keeping Mr Pick out of the way was to prevent him advising Phyllis on the need to structure the purchase – assuming a purchase was to take place – so as to protect her interests. For that was the very point that Mr Pick had raised in their earlier conversations. Since Phyllis was kept in the dark about the untruths in the letter it is not unreasonable to suppose either that she was actively misled by Susan about the true position or that she was accustomed to leaving matters concerned with property and finance to Susan to deal with and was happy to sign whatever Susan put before her. It is difficult to think of any other construction to place on what happened.[102]There can be no doubt that Mr Pick understood the letter as it was intended: he replied to it on 9 September stating that he noted that Brian’s and Susan’s solicitor would be in touch in due course. He was waiting to hear what the other side’s proposals were. He had no idea that Susan and Brian were already contractually committed to the purchase of Little Manor (and had been since early June) and no idea therefore that Phyllis’s monies were needed to enable them to fulfil that contractual commitment. The next day, 8 September, Blanchards wrote to the solicitors acting for the vendor of Little Manor that their clients (Susan and Brian) anticipated being able to complete on 6 October. To do so (and thereby advance the contractual completion date which, in default, was 1 December) they were required to serve a notice. This they did two weeks later. It is fairly obvious therefore that the dishonest letter of 7 September was drafted with an eye to a trouble-free completion early the following month.[103]Phyllis moved into Little Manor, accompanied by Joan, on 7 October, immediately following completion. She had been staying with her sister, Christine, (and with Christine’s husband) in the few days that preceded her move. After a few days in Little Manor she fell ill and went into hospital.[104]By the time Mr Pick came to hear that Little Manor had been purchased (he was told by Paul), Phyllis was in hospital and it was too late to advise her. Shortly afterwards he received a letter from Susan requesting him to forward to Blanchards the original of the EPA. This was the cause of some confusion in that Mr Pick assumed, wrongly as it turned out, that there was a need to have it registered which could only occur if Phyllis was no longer able to manage her affairs. More to the point, he wrote to Susan on 27 October (immediately on hearing from Paul that that Little Manor had been purchased and Phyllis was in hospital) to draw attention to Phyllis’s misleading letter of 7 September which Susan had drafted (discussed at length above) and to point out that no letter from Susan’s solicitors had been received. He stated “I would therefore be extremely surprised if a purchase has taken place. Indeed, if a purchase has taken place and that purchase has used mother’s monies, and she has not received independent legal advice then it gives me great cause for concern. I should be grateful if you would clarify the position for me in relation to whether a purchase has taken place, and if so, is that purchase in mother’s name. If it is not in mother’s name then have any of her moneys been used towards that purchase?”[105]Brian responded to this by calling Mr Pick the following day. As was his practice Mr Pick made a full note of what was discussed. On hearing from Brian that Little Manor had indeed been purchased entirely with Phyllis’s money and that her interests had not been protected, he said that he found what had happened “absolutely appalling”. Brian protested that in his view he and Susan were the only ones who cared for and looked after Phyllis. To this Mr Pick responded that that was a quite separate matter from the purchase in their joint names of a property using Phyllis’s money. The conversation ended in some acrimony when, as Mr Pick noted, Brian sought to lay the blame on Mr Pick, a criticism which he felt to be unjustified when, as he put it (accurately as it appears to me), he (Mr Pick) had been “on the face of it, deliberately not contacted and allowed to follow the course of action that had previously been agreed with Susan”, namely that he should be able to advise Phyllis as to how her interests should best be protected. In his evidence before me Mr Pick said that he felt very frustrated over what had happened and felt that, as a result, he had been unable to protect Phyllis’s interests.[106]Before the matter could be pursued any further Phyllis died and it was no longer possible for Mr Pick to do anything more to help her. His later attempts to get to the bottom of what advice if any she did receive from anyone else (it was to turn out that she had none), and from whom, went largely unanswered.[107]I can deal with later events fairly swiftly. Phyllis’s death on 7 November, exactly a month after the move, altered the intended arrangements for Little Manor. Susan and Brian had intended to move in with Leighton but never did. Their property at Lytchett Matravers was not sold. They had intended in any event to retain it until the following year in order to establish a residence qualification to enable Leighton to be accepted into a local school. Little Manor was put back on the market and sold for £595,000 in July 2009, thereby realising a loss of just over £100,000 when compared with the price paid for it in 2008. Out of the proceeds Susan and Brian accounted to Phyllis’s estate for £410,000 which was the amount that Phyllis had put into the property out of the net sale proceeds of Nos 7 and 43.[108]Probate of the 2007 Will was granted in Mr Pick’s favour on 4 August 2009. Susan was also named as an executor but in the circumstances it was agreed that Mr Pick alone should apply, with power reserved to her. As at 1 February 2013 Mr Pick held £217,801.16 in his firm’s client account on account of the estate, all legacies and administration expenses (including all debts and taxes) having been paid, including legal fees up to 9 November 2012. This was after taking into account the repayment to the estate of £410,000 following the resale of Little Manor in July 2009. Divided equally between them as residuary beneficiaries, Susan, Ken and Paul can each expect to receive approximately £70,000. This is on the footing that no adjustments are made on account of any of the impugned transactions. The figures do not deal with the costs of this litigation.

Actual undue influence

[109]Mr Auld and Ms Foskett both submitted that Susan poisoned her mother’s affections by persuading her that she (Susan) was the one who did most for her and that Ken and Paul did nothing. They submitted that that fact coupled with actions such as writing letters, including (by way of example) the letter to Mr Pick dated 7 September 2008 (and referred to at paragraph 99 above) constituted evidence that Phyllis was being coerced (the expression used by Mr Auld) by Susan such as to justify – without more – a finding of actual undue influence.[110]I do not agree. I heard no evidence from which it would be right to conclude that this was happening. To have reached such a finding I would have needed much more specific evidence. In effect I was being asked to shortcut the careful process by which the court evaluates the evidence with a view to reaching a finding of presumed undue influence. It is to this that I now turn.

The requirement of trust and confidence

[111]“Trust and confidence” is the shorthand for the spectrum of relationships referred to by Lord Nicholls in Etridge (No 2) at [11] where he spoke of “trust and confidence, reliance, dependence or vulnerability” on the one hand and “ascendency, domination or control” on the other. As it happens, trust and confidence, reliance and dependence exactly describe the nature of Phyllis’s relationship with Susan as it developed over the months following Ernest’s death. The evidence was really all one way on this.[112]The extent to which Phyllis relied and depended on Susan is evident from Phyllis’s own words in a note which she sent to Susan at around Christmas 2006 (and which Susan herself produced). In it Phyllis wrote:
“Sue thank you for looking [after] my affairs, I don’t know how I would have got on without you.”
In her witness statement Hazel Smith said that before Ernest’s death she had left the household bills and everything else to him. She went on to say that after his death Susan was Phyllis’s “mainstay” and gave her a great deal of support. She described how she never saw an argument between them and that Phyllis never criticised Susan, but only praised the help she gave. In cross-examination she described how Phyllis needed help with letters and the like as these were things she had not had to cope with when Ernest was alive. In her opinion Susan filled the role that Ernest had previously filled. Mr Smith was to like effect. He said that Susan stepped into Ernest’s shoes in matters such as the payment of family bills and described how, by 2007, Phyllis wanted support with day to day living and company, that she got lonely on her own and that, as regards living with Susan and her family, she wanted to conduct her own life and entertain people of her own choice in her own living space but have Susan and Brian on hand for assistance. “Phyllis” he said “wanted Susan to act as a sort of gatekeeper to protect her from callers and to help her deal with Ken and Paul…”[113]Susan herself made a point of the extent to which her mother trusted her and Brian when, in her witness statement, she sought (at paragraph 97) to explain why it was that her mother did not require anything in writing to record the basis on which she had made the sale proceeds of Nos 7 and 43 available for the purchase of Little Manor:
“Mum” she said “was not interested in having the transactions recorded in a single document because she trusted us.”
In the next paragraph of her statement, Susan stated that “Mum…was concerned that a single document evidencing the arrangement for Little Manor might allow Ken and Paul to interfere with it and her preference was to rely upon the word of Brian and I, whom she considered to be entirely trustworthy.” The emphasis is on the bond of trust between mother and daughter. This feature of their relationship (“Mum trusted me/us”) was a repeated theme in Susan’s evidence.[114]Over and above such explicit statements there was the fact that Susan invariably accompanied her mother when she went to see Mr Pick, handled her mother’s correspondence, dealt with her accountant and solicitors, arranged for the documentation concerning the sale of Nos 7 and 43 to be sent to her own home (albeit addressed to her mother) and drafted letters for her mother to sign or in many cases signed them on her mother’s behalf. According to Susan her routine was to take her mother out for breakfast if she had an early morning appointment, take her to her various medical and dental appointments, go shopping with her, visit her at home several times a week and have coffee with her regularly each week, as well as other meals from time to time. The very fact that, to her credit, it was Susan who gave this attention to her mother, while her two brothers did not (and that Ken rarely saw his mother at all) serves to emphasise the close, trusting and dependent relationship that existed between Phyllis and her daughter: she looked to Susan for whatever help she needed and not to the two others. And for the 15 or so weeks that elapsed between completion of the sale of No 7 in early June 2008 and her brief stay with her sister, Christine, before moving in to Little Manor at the end of the first week of October 2008, Phyllis lived with Susan and Brian at their home in Lytchett Matravers.[115]Graham Samways thought that Phyllis never really came to understand financial matters. He related an occasion (it was sometime in 2006 or 2007) when she had to rely on him to explain the figures and other contents of her building society passbook. There was more of an echo in this in the evidence of Mr Pick in that, as he explained, he seemed uncertain whether Phyllis ever truly understood the extent of her wealth. He also said of his dealings with Susan in the context of her mother’s affairs that he was always aware that she “seemed to exert a considerable amount of control” over Phyllis.[116]While I have no doubt, and no-one suggested otherwise, that Phyllis was capable of understanding matters when they were explained to her, and was well able to deal with the usual household outgoings, I was left with the strong impression that she had difficulty with larger matters when she would rely on others to help her. Taken together with the other evidence, it has been amply demonstrated that towards Susan Phyllis fell squarely within that range of relationship described by Lord Nicholls in the passage from Etridge (No 2) set out above.

Transactions calling for an explanation

[117]In the attendance note of his meeting with Phyllis on 16 August 2005 Mr Pick summarised the value of her assets. They were estimated to be worth around £1 million. She gave Unit 13 to Susan and Brian in February 2006 leaving her with assets then thought to be worth £760,000. That was the position in February 2008 when she began the process of passing to Susan and Brian the money from her Teachers Building Society account and the net sale proceeds of Nos 7 and 43 with which Little Manor was purchased. By the time the purchase was completed on 6 October 2008 she was left with assets of around £50,000 (chiefly consisting of what was left in her building society accounts) together with a prospective bill for Capital Gains Tax estimated to come to £24,000 and likely therefore to swallow up roughly half of what remained in those accounts. The sale of No 43, as well as attracting the charge to CGT, deprived her of a sizeable portion of her income. When let it had yielded a gross income (before expenses) of about £5,500 per annum. She was left with her state pension and weekly attendance allowance, annuities of approximately £6,000 per annum (after tax) and the interest earned by whatever was left in her building society accounts.[118]She acquired no interest in Little Manor and no right to remain in occupation of it if anything should happen to Susan and Brian. Susan and Brian stated that Phyllis had lent them the net sale proceeds of Nos 7 and 43 but there was nothing signed to acknowledge that to be so and nothing therefore to set out the terms of the loan. There was certainly no form of security provided to Phyllis to safeguard the repayment to her of what she had lent if there should later be an issue over its recovery.[119]The little evidence that there was to explain the status of those monies was meagre and unsatisfactory. In this regard there was among the papers at the trial a draft form of acknowledgement by Susan and Brian. Expressed to be in favour of Phyllis it had been prepared by Blanchards (who had acted for Susan and Brian in the purchase) but in circumstances which are obscure. It is undated and unsigned. It acknowledges that Susan and Brian have received £400,000 “to assist us in the purchase of land and buildings at Little Manor...” It goes on to state that they acknowledge that “notwithstanding the fact that the loan has been used to assist in the purchase of [Little Manor] the loan is not made with the intention of Mrs Hart acquiring any legal or equitable interest in [Little Manor] and that the amount will remain fixed in the sum of £400,000”. It further states that “... the loan is not linked in any way to the value of [Little Manor] and will not increase or decrease in line with any rise or fall in the value of [Little Manor] to the effect that the amount to be repaid to Mrs Hart’s estate will be £400,000 less the amount of any repayments made during her lifetime”. It then provides that the loan is to be interest-free, is not to be repayable in Phyllis’s lifetime, is to be repayable to Phyllis’s estate within one year of death, with interest becoming payable at 5% per annum if payment is not so made, and if the loan and any interest are not paid within 18 months of Phyllis’s death Little Manor is to be sold and the loan and interest paid out of the sale proceeds.[120]Susan stated that her mother did not wish to sign that document (it had been drafted on the basis that the sum to be repaid would be £400,000 whereas Susan readily accepted that it was £410,000) or any other acknowledgement of indebtedness, did not want any title or security over Little Manor, trusted her and Brian to repay their borrowing in due time, did not want any interest and was entirely content with the manner in which the purchase had been financed and structured. The acknowledgement assumes, and it was Susan and Brian’s contention that this was her firm wish, that Phyllis had given to her unconditionally the £290,000 which she had had in her Teachers Building Society account.[121]There is no challenge to the gift by Phyllis to Susan (and Brian) of Unit 15 and the release of the outstanding indebtedness, together worth £319,000. But the fact that they were made and that so soon afterwards Phyllis made over to Susan and Brian all but a small part of the property that remained to her clearly calls for an explanation. This is especially so when the effect of so doing was also to frustrate the specific gifts in favour of her two sons and the Samways parties (and Joan) in a will executed only months earlier, and (unless the £410,000 was repaid) greatly to reduce the value of her residuary estate.[122]The transfer to Susan and Brian of the £290,000 in February 2008 took place without Phyllis obtaining any prior advice. The proposal to use that money and the sale proceeds of Nos 7 and 43 in the purchase of Little Manor was contrary to the advice that Mr Pick gave to her in May 2008. The subsequent application of those monies in that purchase and the manner in which they were applied (in return for no interest in or security over the property) occurred without Phyllis receiving the advice of any solicitor, whether Mr Pick or someone else, or from any other independent adviser. She was 86 when all of this happened.[123]In these circumstances it is clear that an explanation is called for. Coupled with my finding that these transactions were entered into by Phyllis at a time when she reposed trust and confidence in Susan in respect of her financial affairs and was increasingly dependent on Susan for her help in dealing with them, the consequence is that the burden shifts to Susan to rebut the presumption of undue influence thereby arising.

Rebutting the presumption

[124]To rebut the presumption Susan has to show that, in acting as she did, her mother was exercising an independent will as a result of full, free and informed thought about what she was doing. She cannot point to any independent advice that her mother received before embarking upon the steps that resulted in the transfer to Susan and Brian of the monies used in the purchase of Little Manor other than what Mr Pick had said at their meetings in February and May – before any sale or purchase contracts had been exchanged. That advice, which was against the transaction as it was proposed to be financed, proposed safeguards for Phyllis, all of which were ignored.[125]In her evidence Susan sought to maintain that in some way Mr Pick had upset her mother, had forfeited her trust in him by his dealings with Paul and Ken and by his suggestion that she should wait before amending her will to take account of the change of the circumstances resulting from the proposal to acquire Little Manor. This was to explain why it was that, despite telling him on 20 May that Blanchards would contact him with proposals and recommendations with a view to ensuring that Phyllis’s interests were protected and despite the letter of 7 September, drafted by Susan and signed by Phyllis following the sales of Nos 7 and 43, that Blanchards would later be writing to him in connection with the proposed new purchase, he was not approached either by Blanchards or, more importantly, by Phyllis. As I have explained, Mr Pick was not aware that the purchase of Little Manor had gone ahead (he knew that it was in the offing) until it was too late for him to advise Phyllis how her interests might best be safeguarded or suggest what changes should be made to her will to take account of the matters he had raised in his advice the previous February.[126]The fact of the matter is that, after 20 May 2008 and through no fault of Mr Pick, no independent advice was given to Phyllis about whether it was in her best interests or even sensible to transfer to Susan (and Brian) over 90% of her estate and how, if she was determined to acquire Little Manor, her interests could be protected. She had no advice on what the fiscal consequences were of what she was embarking upon or how she would discharge the CGT liability that would arise on the sale of No 43. Beyond what was discussed at the meeting with Mr Pick on 13 February 2008 (and set out in writing by him the following day) Phyllis had no advice on how all this would impact on her 2007 Will and what might be done to mitigate its effect. She had no advice on what income she would be left with and how she would cope if all of a sudden she found that she needed expensive medical or home care. It was apparent also that Susan and Brian had given little or no thought to these matters. They mentioned selling Unit 15 to generate some of the money that might be needed and that Brian could take a paid job somewhere to make good the loss of income from renting out the Unit which would cease on its sale. There was mention too of another property which Susan and Brian owned, a flat at Hanworthy, which they had mortgaged. They said that if necessary they could borrow against this flat to help Phyllis to discharge her CGT liability on the sale of No 43. Nor had much if any thought been given to how Phyllis’s loss of income from the disposal of No 43 would be made good: there was vague talk of letting out the barn adjoining Little Manor if and when it was acquired. But what this would have generated and how it might compare with what she was foregoing on the sale of no 43 was not explored. Overall I had the impression that neither Susan nor Brian had given much if any thought to these matters before they were raised in the course of their cross-examination.[127]There was no coherent explanation from Susan as to why her mother’s name was not on the title to Little Manor. She stated that her mother’s reason was that she did not want Ken or Paul to “get their hands on it” but when asked how they could have done so she was unable to say. If that was indeed what Phyllis had said to Susan there must be reason to doubt whether she fully understood the transaction which her monies were financing. For, according to Hazel Smith, Phyllis thought she was purchasing 50% of Little Manor. It is to be recalled that Mr Pick’s letter to Phyllis dated 14 May (following his meeting with Ken and Paul two days earlier) assumed that she would have at least a half share in the property. It stated that if she was “going to put all your monies in…then the property should be owned by yourself in a significantly higher proportion or percentage.” Phyllis did not reply to say that Mr Pick had misunderstood what was to happen. In any event this echoed what Susan had said to Paul in the recorded conversation on 7 March in Phyllis’s presence.[128]Mr Emerson sought to explain these various inconsistencies by submitting that Phyllis knew what she intended to do but deliberately concealed her true intentions from Paul because she did not want him (or Ken) to know. I am far from persuaded that that is a correct inference to draw. Equally likely is that Phyllis had no clear idea of what she should do or wanted to do or was being asked to do and no clear understanding of the position but was content to be guided by Susan.[129]In these circumstances I am left at the end of the day with a real concern as to whether Phyllis really understood the many letters that went out under her signature and whether she understood what interest if any she would be acquiring in Little Manor and generally what rights she should have or should consider having to secure her interests in the monies she was transferring to Susan and Brian. Nor is it clear to me whether Phyllis intended by her actions to deprive her two sons and the others of the legacies given to them by the 2007 Will and, if she did not, what she needed to do to provide them with equivalent or some other gifts.[130]But even if, contrary to the evidence, Phyllis did fully understand what she was doing and fully intended to act as she did the question remains: was what she did the result of the exercise of an independent will? Was she liberated from Susan’s undue influence over her resulting from the relationship of trust and confidence, reliance and dependence that existed between them?[131]A repeated refrain in Mr Emerson’s closing submissions was that Phyllis had “come out of herself” (as one of Mr Pick’s earlier attendance notes had remarked), was perfectly capable of making her own decisions, and was determined in what she wanted. But, as the authorities show and as Mr Auld and Ms Foskett submitted, this is not necessarily sufficient to show that she was liberated from Susan’s undue influence.[132]At the end of the day it is for Susan to persuade me that her mother was acting fully independently of this undue influence when she entered into the impugned transactions. I am not persuaded that she was. I am not willing to give Susan the benefit of any doubts by accepting her protestation that the way the matter was structured – with her mother having no protection for her investment in the new property and with no steps being taken to amend the 2007 Will to enable the gifts to Ken, Paul and the others to be honoured – resulted from the exercise by Phyllis of an independent will in the full knowledge of what she was doing and why. In my judgment, Susan fails to rebut the presumption of the exertion by her of undue influence over her mother in respect of the impugned transactions, namely the transfer by Phyllis to Susan and Brian of the £290,000, the decision to sell Nos 7 and 43 and the application of the sale proceeds, along with the £290,000, in the purchase of Little Manor.[133]The claims therefore succeed.

Did Susan come under any fiduciary or other duty?

[134]Paragraph 42 of the Samways parties’ particulars of claim pleads that as attorney under the EPA Susan owed her mother a fiduciary duty(a) not to allow her own personal interests to conflict with the best interests of her mother and(b) when taking any decisions or actions to act in her mother’s best interests and, as required by the EPA, to liaise with and take advice from Mr Pick. Ms Foskett submitted that it was irrelevant to the existence of this duty that Susan did not purport to exercise any authority granted to her as attorney. She submitted that the very existence of the EPA, coupled with Susan’s knowledge of it, was sufficient to subject her to the duty.[135]In my judgment, the existence of the EPA is irrelevant to any issue I have to decide. There is no evidence that Susan ever sought to act as her mother’s attorney in reliance on the EPA. The fact that she was, to her knowledge, appointed her mother’s attorney cannot, of itself, subject her to any duty in her dealings with her mother, much less subject her to any obligation in respect of any monies deriving from the impugned transactions which came under her control. Nor do I consider that, independently of the EPA, Susan assumed any fiduciary duty to her mother arising out of the circumstances which have given rise to the claims against her.[136]The Samways parties’ particulars of claim also plead that Susan became subject to a common law duty of care. As developed in argument, the proposition advanced was that, as the result of her knowledge of the gifts in favour of, among others, the Samways parties contained in the 2007 Will, Susan became subject to a duty to ensure that Phyllis obtained legal advice in respect of the impugned transactions and a correlative duty not to act in any way which might prejudice the interests of the Samways parties under the 2007 Will. Ms Foskett relied for the existence of this duty on a passage in the speech of Lord Browne-Wilkinson in White v Jones [1995] 2 AC 207 at 268D-E. That case was concerned with the assumption of responsibility by a solicitor towards his client and those whom the solicitor is aware are intended to benefit under the client’s will. I am of the view that Susan’s knowledge of the terms of the 2007 Will subjected her to no such duty and that White v Jones, which related to a wholly different situation, provides no support for the existence of that duty.

The prices at which numbers 7 and 43 were sold

[137]The claimants complain that the two properties were sold in a hurry in order to provide what was needed to acquire Little Manor and that, as a consequence, achieved less than a more measured marketing would have yielded. They say that in formulating the relief to which they are entitled in respect of their loss of the testamentary gifts to them of those two properties I should attribute a value greater than those actually achieved. In the case of No 7 Mr Auld submitted that the correct value should be £255,000 and not the lesser sum of £249,950 for which it was sold. In the case of No 43 Ms Foskett submitted that the correct value should be £180,000 (or something near that figure) and not the lesser sum of £170,000 for which it was sold.[138]The evidence of Colin Wetherall, the single joint expert appointed pursuant to the court’s order, was that the true open market value of No 7 as at 6 June 2008 (its date of sale) was “in the region of £255,000” and that the true open market value of No 43 as at 8 April 2008 (its date of sale) was (after making a downward adjustment in the light of further instructions concerning the glazing of that property) between £172,500 and £175,000.[139]Fundamental to the claimants’ respective cases is that, but for the undue influence of which they complain, there would not have been a sale of either property prior to Phyllis’s death and the gifts to them by the 2007 Will would therefore have taken effect. The relief which they seek is designed to put them into the position in which they would have been if the sales had not occurred. The oddity of their complaints regarding the values which they say should be attributed to the two properties is that if there had been no sales in 2008 but only later, presumably in the course of the due administration of the Phyllis’s estate, the probability must be that the two properties would have realised less than the prices for which they were in fact sold. This is because, as Mr Wetherall’s evidence made clear, the property market in the Poole area was undergoing a steep fall in prices throughout 2008 (from a peak in January of that year) and that it continued to fall until early 2009 when it picked up again to achieve a new peak, this time at around July 2010, but only to the level at which the market stood in about September 2008, after which it fell away again. It is difficult in the light of that evidence (it is dealt with in paragraph 15 of Mr Wetherall’s report and set out in more detail in Appendix C) to see why the claimants should be compensated by reference to a market level for the two properties which was probably at a higher level in terms of value than it was when the properties would have been sold in the course of administration. However, Mr Emerson did not suggest that the dates of sale were irrelevant. Instead, his criticisms were directed to Mr Wetherall’s conclusion that, if properly marketed, the two properties might have achieved slightly higher prices than those that they in fact achieved.[140]I do not propose to go into whether Mr Wetherall’s mild criticisms of the marketing of the two properties were justified and whether, if they were, slightly higher prices might have been realised for the two properties, much less do I propose to go into Mr Emerson’s criticisms of Mr Wetherall’s critique. Mr Wetherall’s valuation was in each case based upon a 5% range either way so that, as it turned out, the prices at which the properties were in fact sold were in any event within that 5% range (2% in the case of No 7 and 3% in the case of No 43). In other words, it cannot be said that the prices at which each property sold did not represent its open market value at the time of sale. I propose therefore to take the values of the two properties at the time they were sold as being the figures which they actually realised. For the purpose of compensating the two sets of claimants the relevant figures to be taken are thus the sums realised, net of the expenses of sale, namely £244,131 in the case of No 7 and £166,345 in the case of No 43. For the reasons given it is moot whether, if sold in the due course of administration 18 months or 2 years later when the market was very different, they would have realised as much.

Relief

[141]There can be no question in this case of setting aside or rescinding the sales of Nos 7 and 43 and the subsequent application of the net sale proceeds of those properties in the purchase of Little Manor in order to undo the effects of Susan’s undue influence. The sales were to third parties and there are no grounds for setting them aside against those persons and no such relief is or could be sought. Little Manor has since been sold and out of the net sale proceeds £410,000, (a sum roughly equal to the sale proceeds of Nos 7 and 43 which were applied in the purchase of that property) repaid to Phyllis's estate. The question rather is one of putting Phyllis’s estate into the position in which it would have been if there had been no undue influence so that, even though it may not be possible to set the clock back to restore the two properties to the estate, the claimants will receive the economic value of those properties in the amounts which would have represented their respective shares in them if they had been sold in the due course of administration (as they almost certainly would have been) and the net sale proceeds shared between them as the 2007 Will provided. In addition there must be restitution to the estate of the £290,000 which Phyllis transferred to Susan and Brian in February 2008 to enable Ken and Paul to take their respective third shares of residue, after tax, which they would have received if that transfer had not occurred. The question is thus one of compensating the claimants for loss that they would otherwise suffer.[142]It was not suggested by counsel that the scope of the court’s power to make good the consequences of a proven case of undue influence does not extend to relief of this kind and I can think of no reason in principle why the court should not be able, in effect, to grant compensation to those injured by the exercise of undue influence. It would seem quite wrong that Susan, however unconscious she may have been of the undue influence that she was exerting on her mother, should be entitled to benefit to any degree from the consequences of her conduct.[143]In practical terms the question simply is one of marshalling the assets of the estate so that Ken and Paul are paid the monetary value of what they would have received, free of Inheritance Tax, if No 7 had been an asset of Phyllis’s estate and had later been sold to give effect to the gift of it to them and so that the Samways’ parties (and Joan’s estate) are paid the monetary value of what they would have received, free of Inheritance Tax, if No 43 had been an asset of Phyllis’s estate and had later been sold to give effect to the gift of it to them. As regards the £290,000 the need here is for Susan to pay to the estate sufficient, after tax, to enable Ken and Paul to receive their respective third shares of residue in such amounts as they would have received if the £290,000 had continued to be held by Phyllis at the time of her death. I do not consider that it is appropriate to speculate on what Phyllis might have done with her assets if she had not been subject to Susan’s influence. Equally, I do not consider that it is appropriate to calculate what benefits Phyllis would have derived from the £290,000 if it had remained in her Teachers Building Society account or if No 43 had continued to be let out to tenants.[144]That then is the relief that I shall grant. I will hear from counsel if this is likely to cause any practical difficulties. I will also hear from counsel how the outstanding charge to Capital Gains Tax on the sale of number 43 is to be dealt with. In principle, it would seem right that it be borne by Susan’s share of residue and, if that share is insufficient, by her personally. This is on the assumption that, but for the sale of that property, no charge to that tax would have arisen.

Brian

[145]Brian is sued by Ken and Paul on the footing that, as a person intended to benefit from the impugned transactions and in his capacity as Susan’s husband, he is to be attributed with knowledge of Susan’s undue influence and is therefore liable to account to them and to Phyllis’s estate as a constructive trustee for the benefits he received after giving credit for the £410,000 that has been repaid to the estate. The Samways parties advanced a similar claim.[146]I have acquitted Susan of any conscious wrongdoing in her dealings with her mother. As with Susan, so also with Brian. But he shared equally with Susan in the benefits which resulted from Susan’s undue influence over her mother with full knowledge of the fact that the two of them were in a relationship of influence. In my judgment he is obliged (to the same extent that Susan is) to restore Phyllis’s estate to the position it would have been in if the impugned transactions had not occurred. Like her, he will be credited with the £410,000 which he and Susan have already repaid. I would only add that I consider that the basis of his liability to be as one who has been unjustly enriched, not that of a constructive trustee.

Cited in 3 later judgments