Doing the splits – the Court of Appeal rules on split trials & preliminary issues
In inheritance disputes there is a tendency to throw the kitchen sink at litigation. Probably more than any other type of dispute, inheritance proceedings regularly include a multitude of different types of claim. Often it will be justified. A disappointed beneficiary will have a number of ways in which to . The most well-known include probate claims to challenge the validity of the Will, claims for rectification, a claims under the Inheritance (Provision for Family and Dependants) Act 1975 (“the Inheritance Act”) and the perennial kitchen sink favourite, proprietary estoppel. In recent years, it has become more common for inheritance disputes to result in claims that plead and assert more than one of the above possible causes of action. In Baker v Baker  2 FLR 727 for example, the claimant alleged lack of testamentary capacity, proprietary estoppel and brought a claim under the Inheritance Act.
What’s the point of running different arguments in inheritance cases?
Whilst such diverse causes of action will always have broadly the same aim as each other, they can be both technically and evidentially diverse. In a number of cases the addition of a proprietary estoppel claim or an Inheritance Act claim will significantly increase both the time and costs of the litigation. Of course litigants should broadly speaking be able to wield what weapons they wish in court and there are circumstances where a lack of capacity might not be made out but proprietary estoppel will be. It is for the same reason that most ‘pure’ probate claims will never allege just lack of capacity or just lack of knowledge and approval.
Nonetheless the effect of the fashion for running multiple arguments in inheritance disputes runs the risk of resulting high litigation costs and long and expensive trials. It is in these circumstances that parties (usually defendants) and, indeed, the Court might consider ordering a split trial or hiving certain issues off as preliminary issues. After all, if the claimant can rectify a Will to include a gift of the property he seeks, he doesn’t need to rely on his proprietary estoppel claim.
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Too many cooks? What are the drawbacks of running multiple arguments?
However, this must be balanced against two points. Firstly, whilst it might reduce the length of a trial by dealing with preliminary issues, there can be a risk of creating a situation where the same individual might need to give evidence on the same or similar points on two separate occasions. Obviously this can be a recipe for confusion and even disaster, with a judge finding himself or herself seriously constrained by findings made in the first trial even where the evidence in the second trial is different. Secondly, if the preliminary issue doesn’t resolve things, then the costs of two slightly smaller trials can often exceed the cost of one bigger one.
Case management by the Court
The Court has wide powers to order split trials and hearings of preliminary issues under CPR 3.1(2) the Court can:
(e) direct that part of any proceedings (such as a counterclaim) be dealt with as separate proceedings;
(f) stay the whole or part of any proceedings or judgment either generally or until a specified date or event;
(i) direct a separate trial of any issue;
(j) decide the order in which issues are to be tried;
(l) dismiss or give judgment on a claim after a decision on a preliminary issue;
Masters and Judges are actively encouraged to consider split trials and delivery issues at case management conferences. PD29 5.3 states:
“the topics the court will consider at a case management conference are likely to include… (7) whether it will be just and will save costs to order a split trial or the trial of one or more preliminary issues”
Similarly, in the Chancery Guide, paragraph 3.14 and 3.15 state:
“3.14 Costs can sometimes be saved by identifying decisive issues, or potentially decisive issues, and ordering that they are tried first. The decision of one issue, although not itself decisive of the whole case, may enable the parties to settle the remainder of the dispute. In such cases a preliminary issue may be appropriate.
3.15 At the allocation stage, at any case management conference and again it any PTR, consideration will be given to the possibility of the trial of preliminary issues resolution of which is likely to shorten proceedings. The court may suggest the trial of a preliminary issue, but it will really make an order without the concurrence of it least one of the parties.”
Fox and Pettgrew v Jewell and others  EWCA Civ 1152 is a highly interesting examination of the Court’s case management powers and decisions in inheritance disputes and is notable as the first serious Court of Appeal consideration of preliminary issues since Rossetti Marketing Ltd & Anor v Diamond Sofa Company Ltd  EWCA Civ where Neuberger MR (as he then was) memorably warned of the dangers of trials of preliminary issues and urged resistance of the “siren song of agreeing or ordering preliminary issues”.
Fox and Pettigrew was an inheritance dispute concerning a farm near Falmouth in Cornwall. In true kitchen sink style, it was couched in five different ways:
(1) lack of testamentary capacity;
(2) want of knowledge and approval;
(4) mutual Wills; and
(5) proprietary estoppel
Mr and Mrs Jewell owned and operated a family farm called Pennance, near Falmouth in Cornwall. They had four children, three daughters and a son. Following a heart attack in 1981 Mr Jewell was unable to carry out all his farm duties. Alan Jewell (‘Alan’), their son, said that he and his parents came to an agreement that if he “threw in his lot” with them by assisting with the running of Pennance, the farm would pass to him when the later of his parents died. Alan agreed to assist with the running of the farm and was invited to and did in fact join the farm partnership in early 1986.
Mr Jewell died on 27 March 1997. In the spring of 2002 Mrs Jewell began to suffer from a series of physical and mental impairments including a stroke that by the start of 2003 left her without social life or mobility and impaired faculties. On 6 May 2003 she executed a new Will, bequeathing part of her interest in Pennance to the daughters. She died on 22 December 2009.
In the light of the family dispute, the executors issued a probate claim on 30 April 2012, and Alan challenged his inheritance on the five separate grounds set out above: first, lack of testamentary capacity; second, lack of knowledge and approval of the content of the Will; third, failure on the part of Mrs Jewell’s solicitors to reflect properly her intentions in drafting the Will, so that the Will should be rectified; fourth, that Mr and Mrs Jewell had earlier agreed to make identical irrevocable Wills before Mr Jewell died, an issue which came to be known as the ‘mutual Wills issue’; and fifthly, a matter which was contained in Mr Alan’s counterclaim, namely a claim by him based on proprietary estoppel.
The original decision
The claim was down to be tried in Bristol and came before HHJ McCahill for case management conference on 23 January 2013. Prior to that conference, the third parties submitted draft directions proposing a split trial. Their suggestion was that the probate claims (capacity and want of knowledge and approval), the rectification claim and the mutual Will claim should be dealt with as preliminary issues, with the proprietary estoppel counterclaim to be stayed pending their resolution. The third parties claimed that this would substantially reduce the time and cost of disposing with the claim.
At the adjourned case management conference on 18 April 2013, the Defendant, Mr Alan, estimated the difference in time between the 2 trial structures to be no more than 2 days. The 3rd parties estimated the difference at about 5 days. The judge favoured this latter view and said that if proprietary estoppel was dealt with separately, the rest of the matters to be dealt with in 2-and-a-half days. Trying all together, the judge estimated, would take 7-and-a-half days.
Accordingly the judge went on to consider whether the so-called ‘Wills’ issues could be separated from the proprietary estoppel claim. He concluded that they could, stating:
“Therefore on the basis of the current pleadings and the issues as defined I am persuaded that there is a proper role here for a trial of preliminary issues which includes not only those which I have indicated, ie testamentary capacity, knowledge and approval and rectification, but also the issue of mutual Wills. Even if I were to be faced tomorrow with an application by Mr Warner to amend his pleading and for me to reconsider this ruling in the light of a pleading that did allege that additional agreement, it does not seem to me necessary to bring in every single aspect of detail about the history underlying his case for proprietary estoppel into a case even on an amended mutual Wills case which alleged that additional [agreement].
It seems to me that it would be possible to look at the general background to provide context to see whether an agreement could be found or inferred without detailed examination of the minutiae which would be involved in the proprietary estoppel case. I am not encouraging an application to amend, nor am I encouraging an application for me to revisit my ruling. Nevertheless it would be naive of me not to consider that there will now be some attention to that particular point. Much will depend upon the evidence which is going to be called. I am looking at Mr Troup’s application this side of the evidence and on issues as currently identified in the pleadings. Even if there were such an amendment I do not think it needs to bring in all the details which are involved in a proprietary estoppel claim (eg representation, detrimental reliance and the appropriate remedy) if all one were doing was adding context to an alleged agreement never to revoke or change a Will after the death of the first to die. For those reasons, therefore, I do separate all the issues into two categories. The first trial will be confined to the four Will-related matters; the second trial, if necessary, will deal with the issue of proprietary estoppel.”
The Court of Appeal
Mr Alan appealed and the matter came before Longmore, Rimer and Mummery LJJ. Of course, the Court of Appeal will usually be very hesitant to interfere with a case management decision, a point that is stressed by Longmore and Mummery LJJ in their judgments.
Nonetheless, the Court of Appeal unanimously allowed the appeal, quoting in passing Rossetti. In the leading judgment, Longmore LJ explained the difficulties behind a split trial if it did not resolve matters, highlighting the fact that claims concerning capacity, want of knowledge and approval, mutual Wills and proprietary estoppel were very likely to be concerned with the same matrix of facts and therefore have considerable overlap with each other. Longmore LJ rejected the submission that the background facts of assertions and promises would only overlap between the mutual Wills and proprietary estoppel limbs and was of the view that a judge ought to be very wary to exclude evidence when considering questions of capacity and want of knowledge and approval. In his short judgement in support Mummery LJ stated the following:
“The more one went into the facts of this case, and both counsel did, mainly by reference to the pleadings, it became clear that all these various issues are part of an unfortunate family dispute which is being brought to court to resolve one main issue, and that is the inheritance of the farm. I think it would be virtually impossible to conduct separate trials relating to the Will issues and the proprietary estoppel issues. As has been pointed out and accepted by Mr Troup, there is partial overlap. I think there may be more than partial overlap. It would be almost impossible to conduct a second trial without backtracking over matters that had been dealt with in the first trial of preliminary issues.”
This is a strong call toward inheritance disputes being resolved in a single trial without hiving separate claims off into additional litigation. It will be a useful weapon to wield when faced with a hostile action for a split trial or preliminary issue. This is not to say that split trials will never be appropriate in inheritance disputes ,but where the facts so often overlap between the diverse ways in which they can be argued, those tempted to argue for a split trial ought to bear in mind Mummery LJ’s parting words:
“I would finally comment that the effect of this application, which succeeded below, is not in fact to save time and money at all. Time has been spent before the judge and then on the appeal. Most of today has been spent on this appeal. The case is no further forward than it was when the application was made for the stay of the proprietary estoppel claim. I think it would have been better if this application had never been made.”
Practitioners will need to think carefully before promoting applications for preliminary issues or split trials. They are most likely to be appropriate where the resolution of a comparatively simple issue (from a factual point of view) is a real ‘knock-out blow’ or where the different types of claim concern truly separated matrixes of fact. However, in true kitchen sink litigation, where everything relies on everything else, the Court is likely to be hesitant to allow split trials. Of course, the Court will remain quick to penalise litigants who put forward bad heads of claim in costs, particularly where they increase the length and cost of the ultimate trial.
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