Clarke v Allen & Anor

A voluntary disposition may be rescinded for a sufficiently serious causative mistake where it would be unconscionable for the recipient to retain the benefit. Under the Inheritance (Provision for Family and Dependants) Act 1975, a surviving spouse’s needs are assessed broadly with the estate, testamentary wishes, beneficiaries’ positions, conduct and the notional-divorce comparison. An award of the whole estate is not automatic. Adverse inferences may be drawn from non-disclosure where there is a case to answer and the inference is reasonable. For an elderly claimant requiring lifelong care, the Ogden tables may be preferred to Duxbury where care costs are expected to rise faster than general inflation. Conditional-fee success fees are not recoverable as financial needs.

The claimant, widow and executor of Lloyd George Clarke, brought a claim against his daughters under the Inheritance (Provision for Family and Dependants) Act 1975. She also sought rescission for mistake of a transfer of the family home to Lloyd and his daughters as joint tenants.

The transfer and will were intended to preserve the claimant’s occupation for life, but the daughters later pursued possession proceedings. The daughters did not appear at trial. The court considered rescission, adverse inferences, reasonable financial provision and the appropriate method of capitalising lifelong care costs.

1. The transfer was rescinded. Lloyd acted under a serious mistake as to the legal effect of the transfer. He believed that the claimant’s matrimonial home rights protected her occupation for life and that the daughters could not evict her. Those assumptions were wrong. The mistake went to the essence of the transaction and it would be unconscionable for the daughters to retain the property. The property was to be held on constructive trust for Lloyd’s estate.
2. The principles in Wisniewski v Central Manchester Health Authority applied to adverse inferences. There had to be evidence giving rise to a case to answer, and any inference had to be reasonable. The court drew adverse inferences against Vinette from her non-attendance, non-disclosure and unexplained withdrawals. It drew none against Heather because there was no evidential case requiring an answer.
3. Comparable matrimonial principles concerning non-disclosure could be applied in an inheritance claim by a spouse when assessing the estate and conduct factors. The claimant passed the statutory gateways. Her lifelong nursing care was assessed at £71,500 annually. Because she was elderly, required enduring care and faced care-cost inflation above general inflation, the Ogden tables were preferred to Duxbury. Her capitalised care need was £699,270, with £32,039 for lost pension credit.
4. Success fees under conditional fee agreements were not included as financial needs. The court rejected an award of the entire estate. Testamentary freedom, the daughters’ adult status, the property’s pre-marriage acquisition, the notional-divorce comparison and the claimant’s actual needs remained relevant.
5. The claimant received £731,309 for capitalised care and lost pension credit, together with an adjusted share of residue. Vinette’s share was reduced by £80,000 and Heather’s by £1,000. The daughters were in principle liable for the claimant’s costs.