Corinne Blythe v Stephanie Blythe

A lifetime gift is assessed by asking whether the donor was capable of understanding what he was doing if the transaction’s general purport had been explained. The degree of understanding required depends on the nature and significance of the transaction. A diagnosis of dementia or intermittent forgetfulness does not establish incapacity without evidence directed to the particular decision.

Presumed undue influence requires proof of both a relationship of influence and a transaction calling for explanation. Family relationship, practical assistance, vulnerability or a substantial gift do not automatically satisfy either requirement. The assessment is fact-specific.

The proceedings concerned the estate of Roland Blythe. His daughter, Corinne, sought a declaration that a £200,000 transfer made by Roland to her in 2015 was a gift and sought directions for completion of the estate administration.

Stephanie, Roland’s executrix and another daughter, counterclaimed for declarations that Roland lacked capacity and that the transfer was voidable for presumed undue influence. Corinne relied on delay, laches, acquiescence and affirmation as defences to the counterclaim.

The central issues were whether Roland had capacity to make the gift, whether presumed undue influence arose, and whether Stephanie’s claims were barred by equitable defences.

1. Capacity. Applying the approach in Re Beaney and Kicks v Leigh, the question was whether Roland was capable of understanding the transfer if its general purport had been fully explained. The required degree of understanding was relative to the transaction. Because the transfer was substantial but did not dispose of Roland’s only valuable asset or leave the other beneficiaries without substantial benefit, the testamentary standard was not required.
2. The burden of establishing incapacity lay on Stephanie. The court considered the medical records, lay evidence and circumstances surrounding the transfer. Dementia, an MMSE score, confusion and forgetfulness did not amount to a blanket finding of incapacity. The evidence showed periods of stability, and the transaction documents and surrounding circumstances supported Roland’s ability to understand the transfer. Stephanie failed to establish incapacity.
3. Presumed undue influence. The claimant had to establish both a relationship of influence and a transaction calling for explanation, applying Royal Bank of Scotland plc v Etridge (No 2) and National Westminster Bank Plc v Morgan. The evidence did not establish that Corinne had acquired ascendancy over Roland or that he reposed the necessary trust and confidence in her at the time of the transfer. Her later use of a power of attorney followed a significant deterioration in Roland’s condition and did not prove the earlier relationship.
4. The transfer was not so unusual or suspicious as to be explicable only by undue influence. Roland retained substantial assets, the money transferred appeared surplus to his needs, and assisting one child to purchase a property was an ordinary possible motive. The undue-influence claim therefore failed.
5. Equitable defences. The court observed that, had the substantive claims succeeded, neither laches, acquiescence nor affirmation would have defeated them. Delay alone was insufficient without irreversible detriment or prejudice. The communications with HMRC were not unequivocal affirmation because Stephanie continued to seek a compromise.
6. The Part 20 claim failed. The transfer was treated as a gift, and Stephanie’s challenge to it was dismissed.