Burnard v Burnard & Ors

A will is construed objectively, using its natural meaning, the document’s purpose, its provisions, the surrounding circumstances and common sense. Where Administration of Justice Act 1982, section 21 applies, evidence of the testator’s actual intention may also be admitted. A trust is not a sham merely because later conduct is inconsistent with it; the court must be satisfied that the original parties intended to create a false appearance. Mental capacity is transaction-specific and depends on the nature and value of the transaction. Undue influence requires evidence of actual improper pressure or a relationship and transaction calling for explanation. A mistaken conveyancing instrument may nevertheless be effective according to the parties’ true intention, and estoppel may prevent recovery of a consideration which was never intended to be paid.

The claimant, Stella Burnard, brought proceedings concerning the estate of her late husband, Godfrey Harry Burnard. The proceedings included a claim under section 2 of the Inheritance (Provision for Family and Dependants) Act 1975, a claim to rectify or construe the will, and disputes concerning company shares, property ownership, a declaration of trust and a transfer of land.

The court determined preliminary issues. It considered whether a reference in the will to Grangeway Properties Ltd should be construed as a reference to Grangeway (Contractors) Ltd; whether a 1993 declaration of trust was valid or a sham; whether a 2007 transfer was validly executed and affected by incapacity or undue influence; and the ownership of various properties and company shares.

1. Construction of the will. The reference in the will to Grangeway Properties Ltd was ambiguous in the light of the surrounding circumstances, because the deceased had never held shares in that company. Under section 21 of the Administration of Justice Act 1982, extrinsic evidence, including evidence of intention, was admissible. The court construed the reference as Grangeway (Contractors) Ltd, following the approach in Marley v Rawlings [2014] UKSC 2. The rectification claim and limitation issue therefore did not require determination.
2. Declaration of trust. The 1993 declaration was duly executed and was not a sham. A sham required an intention not to create a trust but to give third parties and the court a false impression. Subsequent conduct was admissible but, on the evidence, was equivocal and did not establish that intention.
3. 2007 transfer. The transfer of 31 Station Road was signed by the deceased and witnessed. He had the necessary capacity: the required understanding varies with the transaction, and he understood that the instrument transferred ownership to his son. The allegation of undue influence failed because there was no evidence of improper pressure, no sufficient relationship of trust and confidence, and no transaction calling for an explanation. The principles in Re Beaney [1970] 1 WLR 770, RBS v Etridge [2002] AC 773 and Allcard v Skinner 36 Ch D 145 were applied.
4. The instrument described a payment of £110,000, but the parties intended a gift and no payment was agreed. There was no enforceable prior contract. Applying Prime Sight v Lavarello [2014] 2 WLR 84, the claimant was estopped from recovering the stated sum.
5. The declaration of trust and transfer were valid. The court also held that Grangeway owned 27/29 Station Road and 31 King Street, that the Rhapsody shares passed to Stella by survivorship, and that Stella retained 4,000 Grangeway shares. Certain consequential questions were left open.