Charan-Jyothi Ramamurthie Naidoo v David Barton & Anor

A mutual-wills agreement is contractual before equity imposes any constructive trust. Its validity is therefore tested by the equitable doctrine of undue influence, not the distinct probate doctrine applicable to wills. Where a claimant establishes trust and confidence or ascendancy, and a transaction calls for explanation, the evidential burden shifts to the defendant. Independent legal advice is relevant but does not automatically remove undue influence; it must have enabled a free and informed decision. Delay will not ordinarily bar relief while the claimant remains subject to the influence. A mutual-wills agreement, a settlement transferring substantially all assets, and related trusts may accordingly be rescinded where the influence remains operative despite competent advice.

The claimant, the executor and beneficiary under Mrs Naidoo’s 2015 will, challenged a 1998 mutual-wills agreement, 1992 share transfers, a 2000 settlement agreement and three policy trusts. He alleged common mistake, fraudulent misrepresentation and undue influence, and sought rescission and declarations concerning the estate. The defendants relied on the transactions, independent legal advice and laches.

The court also considered the evidential effect of the first defendant’s criminal convictions and the practical consequences of any rescission in the context of a restraint order. The central issues were whether the mutual-wills agreement and later transactions were vitiated, whether the policy trusts followed the same fate, and what relief could safely be granted.

1. Mutual wills. The 1998 wills created a mutual-wills agreement. Such an agreement is a contract enforceable at law, whether expressed in the wills or proved externally. After the first death, the survivor’s property is subject to a floating constructive trust. The agreement was not avoided for common mistake because Mrs Naidoo understood that it would effectively restrict later testamentary freedom.
2. Undue influence. The relevant test was the equitable test in Royal Bank of Scotland Plc v Etridge (No.2), not the probate doctrine concerning undue influence on a will. The agreement was a transaction calling for explanation. Mrs Naidoo and Dr Naidoo were vulnerable and profoundly dependent on Mr Barton, who had initiated the mutual-wills proposal. The defendants offered no satisfactory explanation for the disproportionate benefit conferred on him. Advice which explained the legal effect did not establish that the decision was free from his influence. The agreement was therefore set aside.
3. Choiceclassic transfers. The claimant failed to establish the necessary relationship of trust and confidence or ascendancy in 1992. The rescission claim concerning the shares was dismissed.
4. 2000 Agreement. The alleged fraudulent misrepresentation was not proved. However, the agreement called for explanation and was procured by undue influence. Although Cobbetts gave competent independent advice, the advice did not free Mrs Naidoo from the influence, given her profound dependency and lack of a genuinely free choice. The agreement was prima facie rescindable.
5. Policy trusts and laches. The policy trusts were executed pursuant to the 2000 Agreement and were likewise vitiated. Alternatively, they were procured by continuing undue influence without fresh independent advice. Mr and Mrs Barton were removed as trustees of the second and third trusts. Laches failed: delay while Mrs Naidoo remained subject to the influence was not inequitable, and no concrete evidential prejudice was shown.
6. The court pronounced for the validity of the 2015 will and declared that the estate should be administered under it. Further submissions were invited on the practical terms of rescission, including the restraint order, proceeds-of-crime issues and possible credit for expenditure.