Analysis
The deceased died in July 2014, still married to the 1st claimant (DM), though they had been separated for many years. The 2nd claimant (A) was one of his daughters from the marriage. The claimants were the administrators of deceased’s estate. The deceased had lived with the defendant (HM) between 1991 and 2003/2005, and had two children with her. She continued to live in a leasehold property (38 WC) owned by the deceased until his death. The deceased’s wills were invalid but indicated an intention for the benefit of 38 WC and the associated mews house to pass to HM on trust for their two children.
The deceased and a business partner (H) had taken steps to acquire by enfranchisement the freehold of the two leasehold properties. The acquisition of the freehold of the mews house was completed in 2006. The acquisition of the freehold of 38 WC completed shortly after the deceased’s death in 2014, following litigation with the landlord over the price.
Both freeholds were then sold by H for a profit. By an agreement with H and the purchaser, HM received half of what would have been the deceased’s half-share of the profits (£2.2m), and A and her sister received the other half (£2.2m). Nothing was paid to the deceased’s estate. The payment to HM was apparently in consideration of her agreement to vacate the premises, as required by the purchaser, and agreed to by A and her sister.
The claimants as the deceased’s administrators claimed repayment of that sum, arguing that freeholds had been held on trust for the deceased and his estate, such that the proceeds belonged to him, alternatively that the estate was entitled to all the deceased’s share of the profits from the sale. They alleged that A and her sister had signed the sale agreement under duress.
The claimants also claimed delivery up of certain chattels which they said belonged to the estate and which HM had removed.
HM counterclaimed for half the proceeds of sale of a French property which she claimed to be joint owner of, and which the claimants had sold, and for repayment of a loan of £200,000. However, she pleaded that if she was entitled to keep the £2.2m from the sale of the freeholds, she would consider herself to have been adequately compensated for this and would not pursue the counterclaim.
An issue arose during trial as to whether privilege in advice received by L after the sale of the freeholds had been waived by reference to the advice in her witness statement.
Held, granting permission the claim:
1) L had waived privilege in the advice received by referring to it in the witness statement, and disclosure of the relevant attendance notes were ordered. The statement went materially further than merely referring to the advice, but had stated its effect by identifying acts taken in response to it. However, the advice was not of assistance to the underlying dispute.
2) The estate had not had a beneficial interest in the freeholds. Although it had at one stage been agreed that the deceased would have a beneficial in the freehold, that agreement had been varied so as to give the deceased only a contractual right to share in the profits.
3) HM had been entitled to receive the money from the purchaser. She had received the payment from the purchaser in consideration of her agreement to give up vacant possession. The law does not enquire as to the adequacy of that consideration. The question of whether that the estate may have a claim against H for breach of the profit-sharing agreement with the deceased did not give the estate a claim against HM.
4) Three of the 39 chattels claimed by the estate had been given to HM as gifts. The remainder had not and were to be returned to the estate.
5) Since HM had succeeded in defending the estate’s claim, her counterclaims as pleaded fell away, but in any case the court was not satisfied that there was any binding contract to repay the funds the subject of the counterclaim.
HACON J: Introduction [1] Rainer Christian Kahrmann died at his home in Cologne on 3 July 2014. He had married the first claimant (‘Ms de Muller’) in 1972 but some years later the two became estranged. Written terms of separation were agreed on 1 September 1997, although they remained married until Dr Kahrmann’s death. [2] …Continue reading "De Muller & anr v Morgan [2018] WTLR 867"