Randall v Randall [2016] EWCA Civ 494

Following divorce, the wife undertook to share any inheritance over £100,000 from her mother with her ex-husband. When her mother's will left her exactly £100,000, the husband sought to challenge the will's validity. The Court of Appeal held he had sufficient interest to bring a probate claim.

Facts

The appellant (H) and respondent (W) were divorced. Their financial remedy consent order included an undertaking by W that, should she receive property or monies from her mother by inter vivos gift or inheritance, she would retain the first £100,000 and the balance would be divided equally between H and herself.

On her death, W’s mother left exactly £100,000 to W under her will, with the balance of her estate (estimated at £150,000) passing to W’s children after small specific legacies. H brought a probate claim challenging the validity of the will on the basis that it had not been duly executed in accordance with section 9 of the Wills Act 1837. If the will were invalid, H would be entitled to an estimated £75,000 under the undertaking. W would not seek revocation of the grant of probate.

Deputy Master Collaço Moraes determined as a preliminary issue (on the assumed fact that the deceased did not intend by her signature to give effect to the alleged will) that H had no sufficient interest in the estate to bring the claim.

Issues

The central issue was whether a creditor of a beneficiary of an estate has an “interest” in the estate within the meaning of CPR 57.7, such that they may bring a probate claim challenging the validity of a will. A subsidiary question was whether the requirement for an “interest” was a rule of substantive law or one of practice and procedure.

Arguments

Appellant (H)

Mr Littman submitted that the scope of “interest” should be delimited broadly to include those whose interest lies in ensuring that a beneficiary receives the gift they should receive, in order to take a benefit directly or indirectly out of that gift.

Respondent (W)

Mr Baxter submitted that the right to put an executor to proof of a will in solemn form depends on being able to assert the right to administer the estate. Only executors named in a will, those entitled to share on distribution, and creditors of the deceased have the requisite “privity” with the estate. This was said to be a rule of substantive law that could not be modified by procedural rules. H was a stranger to the estate.

Judgment

The Court of Appeal (Lord Dyson MR, McCombe and King LJJ) unanimously allowed the appeal.

The Master of the Rolls held that the Deputy Master was wrong to assimilate the position of a creditor of a beneficiary with that of a creditor of the estate. The interests are fundamentally different: a creditor of a beneficiary is interested in ensuring the beneficiary receives what is due under the will or on intestacy, whereas a creditor of the estate is interested only in due administration and is indifferent as to which beneficiary receives what. Accordingly, Menzies v Pulbrook and Kerr (1841), which held that a creditor of the estate has no sufficient interest, remained good law but did not govern the present situation.

The court reviewed the authorities including Kipping and Barlow v Ash (1845), Dixon and Dickenson v Allinson (1864), The Goods of Timothy White (1893), Green v Briscoe [2005] EWHC 809 (Ch) and O’Brien v Seagrave [2007] EWHC 788 (Ch). The longstanding formulation in Tristram’s text, consistently applied, provided that any person whose interest or possible interest might be affected by a probate decree has a right to be a party. The court approved the reasoning of Judge Mackie QC in O’Brien adopting a broad construction of “interest”, and held that Timothy White had been correctly decided.

The court rejected the submission that this was a matter of substantive law. Whether a will is invalid is a question of substantive law, but the question of who may bring a claim to prove invalidity is procedural. The court noted that in Menzies itself Sir Herbert Jenner had referred to a “rule of practice”. Any residual doubt was resolved by reference to the overriding objective in CPR 1.1 requiring cases to be dealt with justly.

Section 121 of the Senior Courts Act 1981 did not provide an adequate alternative route, because if H lacked an interest, he would have no means of bringing the matter before the court to engage that provision.

McCombe LJ agreed, emphasising that the nature of a qualifying “interest” has been defined pragmatically by the probate courts on a case-by-case basis and that the categories identified in older editions of Coote & Tristram were illustrative, not exhaustive. It would be highly unjust if a forged will designed to defeat a divorce order could not be challenged by the affected party.

King LJ added that the undertaking had formed part of a matrimonial consent order in which H had given up a larger share of liquid assets in exchange for the prospect of a share in a future inheritance. Parties should be able to rely on the integrity of each other in honouring such agreements, and allowing the probate claim provided a direct route to determine whether W had acted contrary to the essence of her undertaking.

Implications

The decision clarifies that the requirement in CPR 57.7 that a probate claimant have an “interest” in the estate is to be given a broad construction. A creditor of a beneficiary may have a sufficient interest to bring a probate claim challenging the validity of a will, where the validity of the will affects what the beneficiary will receive and thereby affects the creditor’s recovery. The earlier rule in Menzies concerning creditors of the estate itself remains good law but is confined to its own context.

The court affirmed that the question of standing to bring a probate claim is procedural rather than substantive. The overriding objective of the CPR informs the interpretation of “interest” in CPR 57.7.

The decision is of particular practical significance to parties to matrimonial financial settlements whose entitlements depend upon future inheritances received by a former spouse. It also has wider relevance to any person whose financial position is directly contingent upon a beneficiary’s entitlement under a will. The court did not lay down a rigid definition of “interest”, preferring the pragmatic, case-by-case approach that has historically characterised the probate jurisdiction. The judgment does not disturb the rule that creditors of the estate itself lack standing to challenge a will.

Verdict: Appeal allowed. The Court of Appeal held that H, as a creditor of a beneficiary of the estate, had a sufficient interest in the estate within the meaning of CPR 57.7 to bring a probate claim challenging the validity of the will.

Source: Randall v Randall [2016] EWCA Civ 494