Re Fuld (No 3) [1968] P 675

Peter Fuld, a wealthy German-born man with complex international ties, died leaving a will and four codicils. Scarman J held him domiciled in Germany, admitted only the will and first codicil to probate, and established important principles on domicile, choice of law and burden of proof in probate.

Facts

Peter Fuld was born in Germany in 1921 to German parents. His domicile of origin was German. He came to England in 1939, was interned and transferred to Canada, where he studied law, took Canadian nationality in 1946, and returned to Europe. From 1946 until his death in 1962 he maintained residences in both London and Frankfurt, where he built a house at 14 Annastrasse. He married Marina Von Bernus in 1957, was divorced in Germany in 1961, and died of a malignant brain tumour on 21 March 1962.

He left a will dated 11 July 1961 (executed in London, drafted by his solicitor and friend Mr Hartley, who took substantial benefits), a first codicil dated 16 October 1961 (a holograph instrument executed in Frankfurt), a second codicil dated 3 November 1961 (executed at the London Clinic, handwritten by his mother), a third codicil dated 23 November 1961 (executed at St Markus Hospital, Frankfurt, linked to a waiver agreement with his mother), and a fourth codicil dated 19 February 1962 (executed at Annastrasse in duplicate, increasing Dr Tarnesby’s benefits).

Issues

Scarman J identified four issues: (1) the testator’s domicile at death; (2) if not English, the choice of law governing validity of the five instruments; (3) if German law applied, the scope of the relevant German conflict of laws rule; and (4) whether any of the five instruments were entitled to probate in England, considering formal validity, testamentary capacity, knowledge and approval, and undue influence.

Arguments

Mr Platts-Mills, for those asserting English domicile, relied on Peter Fuld’s flight from Germany in 1939, his Canadian naturalisation, his references to London as his home (including a letter of 11 January 1962 to Christa stating his roots were there), his stated wish to die in London rather than Germany, the English form of the 1957 wills, and casual statements to nurses and acquaintances.

Those asserting German domicile pointed to Peter Fuld’s building of 14 Annastrasse, his continuing family and business interests in Frankfurt, his 1955 declaration to UK tax authorities that he intended to reside permanently in Germany, his divorce in Germany (which required German domicile to be recognised), and the terms of the third codicil and waiver agreement, which assumed German domicile.

On the codicils, the mother pleaded that Mr Hartley had exercised dominant influence over the deceased. Margaret Gallagher pleaded undue influence by the mother, Dr Tarnesby and Karl Saueracker, including suggestions of hypnosis by Dr Tarnesby.

Judgment

Domicile

Scarman J reviewed the authorities including Udny v Udny, Moorhouse v Lord, Winans v Att-Gen and Ramsay v Liverpool Royal Infirmary, and distilled the principles: the domicile of origin adheres unless displaced; a domicile of choice requires residence plus an intention, formed free of external pressures, to reside indefinitely; and if evidence is lacking the domicile of origin persists. On the standard of proof, he rejected the criminal standard but held that the court’s conscience must be satisfied, emphasising that acquisition of a domicile of choice is a serious matter not to be lightly inferred.

On the facts, Peter Fuld never formed the intention to reside in England (or Canada) indefinitely. His life was marked by indecisiveness, his German business and Annastrasse house representing the foundation of his fortunes. The judge concluded he was at all material times domiciled in Germany.

Choice of Law

Scarman J held: (1) formal validity is determined by the law of the domicile (German law), subject to the Wills Act 1861 (Lord Kingsdown’s Act), which assisted the will and second codicil as he was a British subject; (2) testamentary capacity is governed by the law of domicile, and German and English substantive law are essentially the same; (3) the rule in Wintle v Nye concerning knowledge and approval is evidential in character and part of the lex fori to be applied by the English court; (4) burden of proof is a matter for the lex fori.

German Conflict of Laws

On the disputed question under Articles 11, 25 and 27 of the Introductory Law to the German Civil Code, Scarman J preferred the narrower view exemplified by the Karlsruhe Court of Appeal decision of 13 December 1919: the reference to lex loci actus in Article 11 is to internal law only. German internal law therefore applied to the third and fourth codicils, which lacked formal validity under German law.

The Five Instruments

The will (11 July 1961) was formally valid under the Wills Act 1861. The mother’s charges of undue influence by Mr Hartley were abandoned and rejected in their entirety: Mr Hartley emerged as a man of integrity. The will was admitted to probate.

The first codicil (16 October 1961) was a holograph instrument formally valid under German law. It was admitted to probate.

The second codicil (3 November 1961) failed for want of due execution. Scarman J accepted Nurse Rowed’s evidence that Delaney was not present when she and the testator signed, and rejected Delaney’s evidence. Even if formally valid, Scarman J was not satisfied the testator had testamentary capacity or that the instrument expressed his true will. The allegations of undue influence against the mother, Saueracker and Dr Tarnesby were not proved, though suspicion remained.

The third codicil (23 November 1961) was formally invalid under German law. Scarman J was not satisfied as to testamentary capacity or knowledge and approval, applying Tyrrell v Painton.

The fourth codicil (19 February 1962) was formally invalid under German law. Scarman J held Dr Tarnesby, who propounded it and whose benefits were substantially increased by it, had signally failed to dispel the suspicions which surrounded the instrument. Undue influence was not positively proved but knowledge and approval were not established.

Credibility of Dr Tarnesby

Scarman J held Dr Tarnesby was an unreliable witness whose evidence could not be accepted unless corroborated. He found Dr Tarnesby had given false evidence in support of the three rejected codicils.

Costs

Scarman J restated the principles: costs ordinarily follow the event, though the court may depart if the testator or residuary beneficiaries caused the litigation. An executor of a validly admitted will is prima facie entitled to costs out of the estate on a contractual basis, but this right may be defeated by thoroughly unreasonable conduct. Dr Tarnesby lost his contractual right due to his conduct and was ordered to pay 20 per cent of the costs of the estate on a party-and-party basis. The mother received no order as to her costs.

Implications

The judgment is a leading authority on several points. First, on domicile, it confirms the strength of the domicile of origin and rejects the criminal standard of proof, instead requiring the court’s conscience to be satisfied, while warning that acquisition of a domicile of choice is a serious matter not to be lightly inferred.

Second, on choice of law in probate, it establishes the distinction between substantive matters (governed by the law of the domicile) and evidential or procedural matters (governed by the lex fori). In particular, rules concerning burden of proof, the suspicious circumstances doctrine and the rule in Wintle v Nye are evidential and so governed by English law even where foreign substantive law applies.

Third, on suspicious circumstances, the case confirms that vigilant scrutiny is required whenever the circumstances reasonably excite suspicion, not only where a beneficiary has drawn the will (approving Tyrrell v Painton). The propounder must satisfy the court’s conscience that the instrument expresses the true will of a free and capable testator.

Fourth, the costs judgment provides useful guidance on when an executor’s contractual entitlement to costs will be defeated by unreasonable conduct, and how the court exercises its discretion in complex multi-party probate litigation.

The decision is of particular importance to private international lawyers dealing with cross-border estates, probate practitioners confronting suspicious circumstances, and more broadly to anyone advising on the acquisition and loss of domicile where an individual has multiple residences and complex cross-border connections.

Verdict: The will dated 11 July 1961 and the first codicil dated 16 October 1961 were pronounced for in solemn form. The three later codicils (dated 3 November 1961, 23 November 1961 and 19 February 1962) were pronounced against as formally invalid under German law and, in any event, the court was not satisfied they expressed the true last testament of a free and capable testator. The testator was held to have been domiciled in Germany. Dr Tarnesby was ordered to pay 20 per cent of the costs of the estate on a party-and-party basis.

Source: Re Fuld (No 3) [1968] P 675