Property – Gift – “Donatio mortis causa” (DMC) – Dwelling house being principal asset of elderly deceased’s estate – Deceased making defendant charities residuary beneficiaries under will – Claimant nephew living in property and caring for deceased for several years prior to death – Claimant alleging being promised house four to six months before death – Claimant claiming entitlement to property as DMC – Whether deceased having capacity to make DMC – Whether house being gifted to claimant by deceased in contemplation of impending death – Claim allowed
At the date of her death, the deceased lived with her nephew, the claimant, in a property which was the principal asset of her estate and valued at £350,000. The deceased had made a will under which the defendant charities were the residuary beneficiaries.
The claimant said that the deceased had made a donation mortis causa (DMC) (gift of personal property in anticipation of death) to him between four and six months before her death by handing him the deeds to the property saying “This will be yours when I go”. If the claimant was unsuccessful in establishing a DMC, he brought an alternative claim for financial provision under the Inheritance (Provision for Family and Dependants) Act 1975. Legacies were also left to family and friends who did not challenge the claim.
The claimant said that he had moved in with the deceased several years before her death in order to care for her and that he had lived rent free at the property thereafter. He claimed that he had given up a room he had been renting from a friend at a cost of £600 per month and had been dependent on his aunt for almost four years until her death.
The defendants contended, among other things that the claimant’s evidence did not give rise to a DMC and that the court could not be satisfied that the deceased had capacity to make the purported DMC.
Held: The claim was allowed.
(1) A DMC took effect as an historic and anomalous exception to the requirements of the Wills Act 1837. It involved a present gift which took effect in the future and remained conditional until the donor died. Until that point, it might be revoked by the donor but, on death, the gift was absolute. The court had to distinguish between a genuine DMC, which met the requirements set out in case law, and an attempt to make a testamentary gift otherwise than in accordance with the Wills Act. It was not enough merely to contemplate death at some time or another. It was essential that death was contemplated within the near future for some reason believed to be impending. The continued enjoyment of the property during the life of the donor was not incompatible with an intention to make a gift which was effective on the donor’s death. What was required in the case of property which was not capable of physical delivery was for the donor to part with dominion over the essential indicia of title, namely, the document or thing the possession or production of which entitled the possessor to the money or property purported to be given. The test was whether the instrument amounted to a transfer: In re Beaumont [1902] 1 Ch 892, Birch v Treasury Solicitor [1951] Ch 298, Sen v Headley [1991] Ch 425 and Vallee v Birchwood [2013] EWHC 1449 (Ch) applied.
In the present case, while approaching the claimant’s evidence with a considerable degree of circumspection, the court had concluded that the claimant’s DMC evidence should be accepted. Particularly important was the evidence of various unsuccessful attempts by the deceased to make a new will in the claimant’s favour. All those attempts had been unsuccessful in law but, crucially, there had been no challenge to their authenticity. They provided powerful corroborative evidence that in the period shortly before her death, the deceased was seeking to leave her property to the claimant.
(2) In order to find a DMC, the court had to be satisfied that the deceased had capacity to make it. In a case where the effect of the alleged gift was to give away substantially the whole of a person’s estate and defeat his testamentary dispositions, the test was the same as that for making a will. The donor had to understand the extent of the property to be disposed of and the claims of all potential donees: In re Beaney [1978] 1 WLR 770 applied.
The evidence in this case did not come anywhere near justifying a conclusion that the deceased did not have capacity to make a gift of her property at the time she had purported to do so. The words used, in context, were suggestive of a gift conditional on death and not consistent with any other interpretation. Moreover, the gift had been expressly in contemplation of death at a time when it appeared that the deceased was increasingly preoccupied with her impending death, as evidenced by the failed wills. In all the circumstances, the deceased had made a valid DMC of the property to the claimant: Wilkes v Allington [1931] 2 Ch 104 considered.
(3) In any event, the claimant was entitled to financial provision as a dependant under section 1(1)(e) of the Inheritance (Provision for Family and Dependants) Act 1975 as, on the evidence, the deceased, otherwise than for full valuable consideration, had been making a substantial contribution in money or money’s worth towards the reasonable needs of the claimant. Accordingly, if the claimant had not succeeded on the DMC claim, court would have awarded him a lump sum of £75,000.
Edward Rowntree (instructed by Berry & Berry LLP) appeared for the claimant; Mark Mullen (instructed by Wilsons Solicitors LLP) appeared for the fifteenth to twenty first defendants; The other defendants did not appear and were not represented.
Eileen O’Grady, barrister
