Nicola Anne Lowe v Lucy Daniells

A testamentary gift is presumed to be accepted when complete, without positive assent, even if the beneficiary is unaware of it. Once aware, the beneficiary may disclaim it by positive refusal. The court should not finally determine disclaimer where persons entitled on disclaimer are not parties and may possess relevant evidence.

In such circumstances, the court may make a protective order of the Benjamin type. The personal representative may distribute the estate on the footing that the gift was disclaimed, while preserving the beneficiary’s ability to claim against those who received the estate.

The claimant, administrator of the estate of Jean Phyllis Norman, sought directions concerning residue under a 1997 will. The defendant was the residuary beneficiary but had failed over several years to engage with the administration, provide identification, renounce her right to a grant, or accept the residue.

The claimant asked the court to declare that the defendant had disclaimed the gift, to authorise distribution to the substitute residuary legatees, and to protect her from liability. The central issue was whether the court should determine disclaimer on the existing parties and evidence, or adopt another protective course.

1. The court declined to determine whether the defendant’s conduct amounted to a disclaimer. The substitute residuary legatees, who would benefit if disclaimer had occurred, were not parties and might possess evidence relevant to the issue. The claimant, as personal representative, was neutral and had no beneficial interest.

2. The authorities established that a gift of property, whether beneficial or onerous, is presumed to be accepted when complete, without positive assent or knowledge. Once informed of the gift, the donee may positively refuse it, whereupon the property is divested. The court did not need to decide whether divesting operates retrospectively.

3. The defendant was presumed to have capacity under section 1(2) of the Mental Capacity Act 2005. Coarse or insulting language did not itself establish incapacity. A straightforward mistaken belief about the estate did not demonstrate incapacity; the relevant distinction was between ordinary mistake and an unshakeable illusory belief of the kind considered in Re Belliss.

4. The preferable course was a protective order of the Benjamin type. The claimant was permitted to distribute the residue on the footing that the defendant had disclaimed it, with the substitute residuary legatees taking equally under clause 6. The order protected the claimant from personal liability for later alleging a breach of duty, but did not extinguish any claim the defendant might later bring against the recipients, subject to limitation and other applicable matters.