Monday, 9 May 2011

Some recent property cases

Here is a brief look at three recent property cases which raise interesting and important issues.

Property of Cohabitees - separation and co-ownership of a home:

Kernott v Jones [2010] EWCA Civ 578, is a particularly important (majority) decision of the Court of Appeal relating to property held jointly by unmarried persons.  A further appeal has been heard by the Supreme Court and judgment is awaited.    Lord Justice Wall commenced by stating - "This is a cautionary tale, which all unmarried couples who are contemplating the purchase of a residential property as their home, and all solicitors who advise them, should study."  The Marilyn Stowe blog considers this in "Kernott v Jones: a case of square pegs and round holes" and argues that "cohabitation manifestly does produce a relationship in need of regulation. All we have at present is a hotchpotch of rigid, outmoded and outdated property law to regulate the end of a relationship that may have been every bit as financially complex as a marriage."  When the relationship between cohabitees breaks down there is a clear practical need to sort out the property but it is interesting, as Marilyn Stowe notes, that when Lord Justice Wall (President of the Family Division) stated recently that urgent legislation is required for cohabiting couples, more than 60 per cent of The Times readers surveyed disagreed.  It remains to be seen to what extent, if at all, the Supreme Court will push the boundaries of property law in the absence of specific legislation similar to that applying to divorcing couples.

Law Commission proposals on Cohabitation 
Scotland has legislation in place so that the courts may make certain orders in some cases where cohabitees separate - Family Law (Scotland) Act 2006.

Making a will and Family provision:

When making a will, the basic rule
is that the testator has complete freedom to dispose of his property in any way he or she wishes but, once the will takes effect, it may be possible for a person to make a claim for reasonable financial provision.  In Ilott v Mitson and others [2011] EWCA Civ 578, Melita Jackson was estranged from her daughter Heather Ilott and had, quite intentionally, left Mrs Ilott out of her will preferring instead to leave most of her money to various charities.  Mrs Ilott  was married, had five children and lived in modest circumstances.  Mrs Ilott claimed for "reasonable financial provision" under the Inheritance (Provision for Families and Dependants) Act 1975 and was successful.  The judgments contain a detailed examination of the case law on this tricky area.  The case also makes it clear that the appeal court will not lightly alter the assessment of reasonable financial provision reached by the trial judge.

Note: "Reasonable financial provision" under the 1975 is not the same thing as a variation of a will entered into by all the beneficiaries of a will agreeing to vary the dispositions made by the will.  The latter is often done for tax reasons.

Solicitors acting in property sale for elderly person with dementia:

Rudyard Kipling Thorpe v Fellowes Solicitors LLP [2011] EWHC 61 (QB)  was an action for negligence against solicitors who had been instructed to sell a house by an old lady who was suffering from dementia.  Mrs Justice Sharpe dismissed the claim and said, at para. 75, "a solicitor is generally only required to make inquiries as to a person's capacity to contract if there are circumstances such as to raise doubt as to this in the mind of a reasonably competent practitioner ..."  Thus, there is no duty on a solicitor to obtain medical evidence every time they are instructed by an elderly client just in case they lack capacity.  Such a requirement would be insulting and unnecessary (para 77).  Interestingly, this decision does not appear to affect the "golden rule" in relation to the making of wills (Kenward v Adams 1975) which is that, in the case of an aged testator or a testator who has suffered a serious illness, the making of a will should be witnessed or approved by a medical practitioner who satisfies himself of the capacity and understanding of the testator.

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