The recent Court of Appeal case of King v Chiltern Dog Rescue [2015] decided on 9 June 2015 marks a decisive swing away from what was seen by many as an overly flexible application by the courts of the law on deathbed gifts, also known as ‘Donatio Mortis Causa’ or ‘DMCs’ in recent cases.
The case overturns the previous High Court decision in King v Dubrey [2014] which we commented on in December 2014. Readers will recall from that article that the now overturned High Court decision represented a widening of the requirements needed for a valid deathbed gift. There had been widespread concern amongst the legal profession, charities and others, that this decision might open the floodgates to DMC claims and that it represented a further reflection of the erosion of the strict requirements of testamentary disposition. The recent successful appeal by two of the previous claimants (Redwings Horse Sanctuary and Chiltern Dog Rescue Society), thankfully, marks a return to the strict application of deathbed gift requirements.
DMCs occur when a gift does not comply with the formal legal requirements regarding the transfer of property or those of a valid Will, but meets the 3 primary requirements of a deathbed gift, namely:
Up until 1990 the DMC could not apply to land because the Donor could be said to be ‘parting with dominion’ where they retained the legal and equitable interest in the property, i.e. the subject matter of the gift.
The landmark case of Sen v Hedley [1991] Ch 425 changed this and in so doing the landscape of DMCs going forwards.
The case of Vallee v Birchwood [2013] was a further key decision which had the effect of widening the previously narrow application of the law of DMCs. The case concerned a Miss Vallee, an adopted daughter of the Donor whom Miss Vallee visited twice a year. On one such trip to visit in August 2003, her father stated he may not be alive by the time of her next visit (which was due to take place at around Christmas time of that year) and he gave her the key and Deeds to his house (an unregistered property), his war medals and a photograph album. He died in December 2003, just over 4 months after his daughter’s last visit and shortly before she was due to visit him next.
The Court found that the Donor had made the gift ‘in contemplation of his death’ notwithstanding that he had died over 4 months after the purported gift. By way of comparison, in previous reported decisions the period between the gift and the death of the Donor had been a few days: 5 days in the case of Re Craven’s Estate (No.1) [1937] Ch.423, 3 days in the case of Sen v Hedley and 3 days in the case of Woodard v Woodard [1995] 3 All ER 980.
The Court’s decision that the gift was a valid DMC was heavily criticised in the case of King v Chiltern Dog Rescue and should be relied on only with great caution, if at all, going forwards.
The present case involved a Miss Fairbrother who gifted her house to her nephew, 4-6 months before she died. This gift was to the disappointment of seven charities that were set to inherit the house under the Will in addition to the rest of the Deceased’s Estate. The nephew, who was living with his aunt and caring for her, claimed that when his aunt’s health deteriorated she passed him the Title Deeds to the property and said “this will be yours when I go”.
The Court decided at first instance that the gift of the house was a valid DMC notwithstanding that the Donor was not thought to be seriously ill and had not visited a doctor recently, she was not about to undergo an operation or a dangerous journey, she did not express a date by which she thought she might be dead, or say she would die shortly. Additionally, the Court decided the gift was ‘made in contemplation of death’ despite Miss Fairbrother surviving the gift for four months as it was still ‘conditional upon death’.
This first instance decision was overruled on appeal which considered that it, as well as Vallee, had been wrongly decided and stepped outside of the bounds of DMCs.
In coming to this decision, the Court of Appeal considered that the first requirement – that the Donor must have contemplated his impending death – was not met in either the case of Vallee or in the first instance decision in King v Dubrey.
In Vallee, the Donor, like many elderly people, was approaching the end of his natural life span but he did not have reason to anticipate his death in the near future from a known cause.
In King v Dubrey, although it was obvious that at the age of 81 most of the Donor’s life was behind her, there was still no evidence that she was suffering from any specific illness, she was not about to undergo a dangerous operation or to undertake a dangerous journey. It could not, therefore, be said that she was contemplating her impending death for a specific reason at the time of making the gift.
In addition, the words “this will be yours when I go” were reflective of a statement of testamentary intent, rather than a gift conditional upon death within a period of time. Also, and potentially crucially to the court’s ultimate decision, the Donor’s repeated, unsuccessful, attempts to prepare a will with her nephew’s assistance after the purported gift showed that they both assumed that she had the ability to dispose of her house by will, which would not have been the case if she had made a DMC.
The Court of Appeal’s reasoning was that it was important to keep DMCs within its proper bounds. DMCs are an anomaly in the law insofar that they enable a Deceased to transfer property without complying with legal formalities. Such an anomaly could potentially be used as a device to validate ineffective wills which could have had far reaching and unwanted implications on the freedom of testamentary disposition. The decision is an affirmation that the law of DMCs cannot be used as a flexible alternative to the testamentary requirements set out in Wills Act 1837.
The positive outcome for the charities in King v Chiltern Dog Rescue [2015] means that all seven charities under the King v Dubrey case will benefit; the Chiltern Dog Rescue Society, the Redwings Horse Sanctuary, the Blue Cross Animal centre, the Donkey Sanctuary, the International Fund for Animal Welfare, the PDSA and the World Society for the Protection of Animals.
The decision could be particularly significant to charities that may be disputing or defending a DMC claim: going forwards DMCs will be significantly harder to establish than they had become.
For more information please contact Tony Cockayne, Head of the Disputed Wills & Trusts team on 01392 687601 or email tony.cockayne@michelmores.com.
