Standing on the shoulders of beneficiaries – who can challenge a Will?

 In Probate, Wills

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As we all know, not just anyone can challenge Will. There has to be some nexus before a challenge can be brought. Otherwise anyone could challenge anyone else as well, irrespective of whether they might inherit from their estate (though, of course, they would be mad to do so from a legal costs perspective).

Who can challenge a Will?

The early expression of the rule on standing

It is, of course, an ancient rule. In the very first edition of Tristram’s The Contentious Practice of the High Court of Justice in respect of Probates & Administrations, (now of course commonly known as Tristram and Coote’s Probate Practice), Dr Tristram himself wrote at p. 80:

“The foundation of title to be a party to a probate or administration action is interest – so that whenever it can be shown that it is competent to the Court to make a decree in a suit for probate or administration, or for the revocation of probate or of administration, which may affect the interest or possible interest of any person (Kipping and Barlow v. Ash, 1 Roberts. 270; 4 N. Cas. 11; Crispin v. Doglioni, 2 S. & T. 17; 29 L.J. 130); such person has a right to be a party to such a suit in the character either of plaintiff, defendant or intervener.”

This passage appears (with some immaterial amendments) in subsequent editions and still exists in the current edition in a similar form.

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The old cases

Whilst the principle is clear that someone must have some form of interest in an estate before they can bring a challenge (one might draw an analogy to whether or not someone has a cause of action to bring a claim and other civil proceedings), there have been remarkably few cases over the years grappling with exactly what form of interest is required.

Tristram and Coote’s Probate Practice still cites Kipping and Barlow v Ash (1845) 1 Rob 270. In this case the testator devised all his real estate to his brother and, in the event of his brother dying during the testator’s lifetime (as happened), to his brother’s children. Under the Will, the children had no interest in the personalty, only a potential interest in real estate. Under a codicil executed a little over two years after the Will, the testator gave pecuniary legacies to the children and revoked the gift to them of the real estate. The children sought to challenge the codicil and the executors challenged their standing on the basis the codicil did not affect their interest in personalty.

Sir Herbert Jenner rejected this argument, saying:

“It has been argued for the executors that the other party has no interest to oppose the codicil, as under the Will their only claim is to a portion of the real estate; that it is by the codicil alone they are entitled to any share of the personalty. I am not prepared to say that it is not competent to the party to oppose the codicil, for instance, on the score of fraud; that they can be precluded from shewing fraud in the transaction. Though at present that is merely a suggestion, still I know not what case may be made out against the codicil. I am therefore of opinion that they have an interest, and that the bare possibility of an interest is sufficient.”

This appears to set a very low bar. The ‘bare possibility of an interest’ will be enough to enable an individual to mount a challenge to the validity of the Will or a codicil.

The slightly earlier case of Menzies v Pulbrook and Kerr (1841) 2 Curt 846 sets some boundaries to the concept of ‘interest’. In that case, a creditor of the deceased sought to oppose the validity of the will and the grant of probate to the executor. The judge concluded that a creditor did not have standing to challenge the validity of the Will.

Pausing there for a moment, that must be right. A creditor of an estate will have a claim against the estate no matter how it devolves, whether under Will or intestacy. The identity of the beneficiaries of the Will are technically irrelevant to the creditor’s claim. Of course, a creditor may have real doubts about the suitability of an executor to properly administer an estate and in the absence of any executor or suitable beneficiary or relative, a creditor can become entitled to take a grant under the Non-Contentious Probate Rules, but neither of those situations would be affected by the validity or otherwise of a particular Will.

Menzies has stood the test of time and is still referred to as authority for the proposition that a creditor of an estate does not have a sufficient ‘interest’ in the estate to allow him to challenge the validity of a Will.

Can a creditor of a beneficiary stand on the shoulders of the beneficiary (or in their shoes) to bring a claim?

What, though, about the creditor of a beneficiary? Prior to the recent case of Randall v Randall [2016] EWCA Civ 494, and at first instance at [2014] EWHC 3134 (Ch), the closest case was another from the mid-19th century, Dixon and Dickenson v Allinson (1864) Tr and Sw 572. By a codicil a wife had left her husband some shares and stock. She died at sea and her husband died a few months later. Dixon and Dickenson were the executors of both Wills. There was a dispute over the validity of the wife’s Will and codicil. One of the creditors had gone into liquidation and liquidators had been appointed. Dixon and Dickenson sought to cite the liquidators (representing all of the creditors) to prove the codicil.

The judge held:

“There are certain persons representing the East of England Bank as creditors of the husband; these are official liquidators of the bank; the question is, what interest have they in the matter? They are creditors of the husband, and, as such, interested in supporting the codicil propounded, by which the husband’s estate would be benefited; thus, though somewhat circuitously, they have a real and substantial interest. In Kipping and Barlow v. Ash, 1 Rob. 270, Sir H. Jenner Fust considered that the bare possibility of an interest was sufficient to enable a person to oppose a testamentary instrument. In the present case I think it is quite proper to cite the official liquidators.”

The wording of the judge suggests that a creditor of a beneficiary would have a sufficient interest to challenge the validity of the Will. That seems to be entirely logical. The creditors would materially benefit if the wife’s codicil was valid. They had no claim on the wife’s estate. Their claim was against the husband’s estate. Although they had no interest in the disposition of the husband’s estate, whether under Will or intestacy, they were interested in the size of his estate and thus in what he might inherit from his wife.

However, the actual decision does not go quite so far as to automatically empower the creditor of the beneficiary to commence a contentious probate claim. This was a situation where the husband could not be a party, having died and where Dixon and Dickenson, as the husband’s executors, were already parties to the claim in another capacity. Moreover, it was a question of who should be joined to a pre-existing claim over the validity of a Will rather than who actually had standing to make a claim in the first place.

Finally, it is worth mentioning the Irish case of In The Goods of Timothy White, deceased (1893) LR Ir 31. Here, a son of the deceased had improperly obtained a grant of letters of administration on the basis that his father died intestate by deliberately suppressing the existence of a Will. After this became known a creditor of the deceased’s wife (who inherited under the Will) sought leave to issue a citation to recall the letters of administration granted to the son. The judge referred to Tristram and Coote’s Probate Practice and to Dixon and concluded that the creditor did have an interest, saying “a creditor of a person who has an interest under a Will have a sufficient interest to entitle him to be made a party”. However, Menzies was not referred to in the decision and it appears was not cited.

The Position under the CPR

The modern procedural iteration of this rule is set out in CPR 57.7:

(1) The claim form must contain a statement of the nature of the interest of the claimant and of each defendant in the estate.

(2) If a party disputes another party’s interest in the estate he must state this in his statement of case and set out his reasons.

It is worth noting that the wording of the rule almost insists that standing be taken as a preliminary point.

The rule is to be contrasted to the more relaxed provisions under PD 57 para 4 dealing with whether to consider joining a person to a pre-existing claim:

In giving case management directions in a probate claim the court will give consideration to the questions –

(1) whether any person who may be affected by the claim and who is not joined as a party should be joined as a party or given notice of the claim, whether under rule 19.8A or otherwise; and

(2) whether to make a representation order under rule 19.6 or rule 19.7.

The position has been somewhat complicated in the post CPR era by two contrary cases that dealt with whether or not 1975 Act claimants could have an interest in challenging the validity of a Will. In Green v Briscoe [2005] EWHC 809 (Ch), Master Bragge expressed the view that a 1975 Act claimant did not have a sufficient interest (albeit in the context of a number of different claims) but in O’Brien v Seagrave [2007] EWHC 788 (Ch) Judge Mackie QC considered that the term interest was sufficiently broad to encompass someone with a right to bring a claim under the 1975 Act.

Given that the validity or otherwise of a Will would affect the beneficiaries of an estate against whom a 1975 Act claimant would be bringing a claim, it seems to me that a 1975 Act claim could be said to be interested in an estate in a way that a mere creditor of an estate would not be.

Randall v Randall – can a creditor of a beneficiary bring a probate claim?

Randall v Randall was first argued in the second half of 2014 before Deputy Master Collaco Moraes ([2014] EWHC 3134 (Ch)).

The facts of the case are rather idiosyncratic. Colin Randall, the claimant (“H”), and Hilary Randall, the defendant (“W”), divorced in 2006. As part of their divorce settlement, they agreed that, if W were to inherit more than £100,000 from her mother, she would keep the first £100,000 but the balance would be split equally between herself and H.

Perhaps somewhat unsurprisingly in hindsight, on her death W’s mother left a Will leaving exactly £100,000 to W and, after certain pecuniary legacies the balance (about £150,000) to W’s children (“the Will”). The Will thus neatly circumvents the obligation to pay over any inheritance to H.

H issued a probate claim, alleging that the Will was not duly executed. Had she died intestate, W’s inheritance would be increased and H claimed he would have stood to receive up to around £75,000 (on his case that the estate was worth some £250,000).  The situation was somewhat complicated by the existence of a copy of an earlier Will (albeit the original had been lost) in substantially the same terms as the Will (“the Earlier Will”). Accordingly, in order to succeed on an ultimate claim, H was going to have to, in the words of the Deputy Master ‘knock out’ both the Will and the Earlier Will.

W contended that H had no standing to challenge the validity of the Will and this was dealt with by the Deputy Master as a preliminary issue by the agreement of the parties (I have written elsewhere on Lawskills about split trials and preliminary issues in inheritance disputes:

The Deputy Master was taken to the cases I have outlined above and in a full and very carefully reasoned judgment concluded that H did not have standing to bring a claim. He placed a great deal of reliance on Menzies and expressed the view in the process of his judgment that the Irish case of Timothy White had been wrongly decided.

Having answered the preliminary question in the negative, the claim was dismissed. This coincided with a traditional view held by a number of practitioners that only those entitled (on their pleaded case) to administer the estate or share in the distribution would have a sufficient ‘interest’ in the estate for the purposes of the rule.

Lewison LJ gave permission to appeal and the appeal came before Dyson MR, McCombe LJ and King LJ with judgment being handed down on 27 May 2016 ([2016] EWCA Civ 494).

The Court of Appeal unanimously allowed the appeal, holding that H did indeed have standing to bring a claim. Dyson MR giving the first judgment, preferred a broad construction of ‘interest’ and concluded that the Deputy Master was wrong to assimilate the creditor of a beneficiary of an estate with a creditor of an estate. He puts it succinctly:

“But the interests of the two types of creditor are fundamentally different. The interest of the creditor of a beneficiary is to ensure that the beneficiary receives what is due to him or her under the Will or on an intestacy. The interest of a creditor of an estate is to ensure that there is due administration of the estate. The creditor of the estate is not interested in which beneficiary receives what.”

The decision is on all fours with the reasoning (if not the facts) in Dixon and with the persuasive authority of Timothy White. Moreover, it is logical that someone with a financial interest in the identity of the beneficiaries of an estate would have an ‘interest’ for the purposes of CPR 57. It has not really ever been in doubt that a trustee in bankruptcy of a bankrupt beneficiary would have a right to challenge the validity of a Will – if a bankrupt inherits during a bankruptcy they must hand their inheritance over to their trustee. If a suspect Will diverted assets away from a bankrupt to avoid the trustee in bankruptcy taking the inheritance, it would be hard to argue that a trustee – in whom all the bankrupt’s causes of action would have vested – would not be entitled to bring a claim. A creditor, albeit not clothed with the statutory advantages of a trustee in bankruptcy, nonetheless stands in the same position: they have an interest in securing the beneficiary’s inheritance.

Dyson MR went on to consider that if H did not have an ‘interest’ then there would in practice be no route by which his claim that the Will was invalid could be brought to Court. The Deputy Master in his reasoning had reassured himself that s.121 Senior Courts Act 1981 (empowering the High Court to revoke a grant of its own motion) would provide a mechanism for the court to intervene if it thought it appropriate to do so. Dyson MR, however, was far from convinced, reasoning that if H could not bring a claim, it was difficult to see how the Court’s attention could be drawn to such a situation for the purposes of s. 121. It does seem that the idea that there would be no effective way to challenge an invalid Will weighed heavily with all three members of the Court of Appeal see for example McCombe LJ’s comments about forgeries at paragraph 37 of the judgment.

In paragraph 28 of his judgment, Dyson backed up his interpretation of ‘interest’ by reference to the overriding objective and concluded “justice in the general sense requires H to be able to bring his probate claim to set aside the Will”. This passage is echoed in King LJ’s judgment at paragraph 45. Dyson’s comment on ‘justice in the general sense’ has caused some concerns about the width of the rule and the stringency of the ‘interest’ test. In my view it is a comment on the broader situation rather than a deliberate relaxation of the rule. Pleading an ‘interest’ for the purposes of 57.7 by making bare reference to “justice in the general sense” is unlikely to cut it. H had standing because he had a financial interest in the probate claim, just as the liquidators did in Dixon and the wife’s creditor did in Timothy West. An interest is still an interest, even if it is ‘somewhat circuitous’, to borrow from Dixon.

 It remains to be seen whether H will succeed in his substantive claim to set aside the Will. He has won his point on standing but he faces what the Deputy Master, at least, considered to be an uphill struggle to challenge the validity of the Will and the Earlier Will.

In reality this decision is unlikely to open the floodgates. It will not be often that a creditor of a beneficiary of an estate will be interested (or indeed have the requisite information) in bringing a probate claim. It will only arise where the beneficiary would take more under a previous Will or on intestacy (otherwise it would be pointless) and would only succeed in circumstances where the ‘new’ Will could be shown to be invalid. In practice a successful claim by a creditor of a beneficiary is likely to be a rare one.

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