Analysis
The deed was intended to appoint a life interest in the assets not attracting IHT relief to the deceased’s widow, the first defendant. The interest so appointed would then qualify for the spousal exemption. Due to the wording of the deed however it appointed an interest in all of the trust assets, not merely those which did not qualify for IHT relief.
The claim was issued for rectification of the deed. The claim was adjourned with directions at the first hearing, the Master expressing the view that the evidence was insufficient to sustain the rectification claim. Further evidence was filed, but at the adjourned hearing the claim for rectification was dismissed on the basis that the claimant had not demonstrated convincing proof as to the true intention of the trustees which it was said the deed did not reflect. The claimant appealed.
Held:
- (1) It could not be said that the Master had erred in applying a requirement for convincing proof in the claim. The court was not a rubber stamp in relation to unopposed claims, in particular where a remedy such as rectification was sought. The court was entitled to carefully scrutinise the evidence as the Master had done. The court had to be satisfied that both trustees had a subjective intention that the deed would appoint a life interest in the income of the IHT-liable assets in favour of the first defendant. Bald and unqualified statements of intention were not sufficient.
- (2) If the Master had heard oral evidence then the appellate court would not have been able to interfere with the findings in the absence of a good reason. In the present case the evidence was limited to the written statements and the court was in as good a position as the Master to consider the evidence.
- (3) The court differed from the Master in that while the Master considered the claimant’s evidence in isolation, the court took the view that the third witness statement of Mr Sharp, the solicitor who had advised on the deed, was also relevant. His evidence was that immediately prior to signing the deed he had explained to the claimant that the intention of the deed was to confer a life interest on the first defendant, which he had then witnessed.
- (4) The Master was not justified in rejecting Mr Sharp’s evidence. While the evidence was unsatisfactory in a number of respects it was ultimately unchallenged. The claimant was not strictly able to confirm whether she had the required intention or not, due to her lack of specific recollection. Her evidence was that she relied on what Mr Sharp told her, and Mr Sharp had given evidence of what he had said. This position had only became apparent in the final round of statements. If that evidence was taken as a whole then there was no inconsistency between the claimant’s first and second statements, as the Master had found. The Master was obliged to accept Mr Sharp’s evidence unless she had found it to be incredible, which she had not. The Master was wrong to conclude that the required intention of the claimant had not been demonstrated.
- (5) The court did not accept the Master’s conclusion that the first defendant’s evidence did not represent the required intention that the deed would confer a life interest only in a limited class of assets. It was possible to find that the first defendant had been advised that the intended effect was that the deed was to appoint to her a life interest in the IHT-chargeable assets, and that she relied on that advice when signing the deed. The first defendant also had the requisite intention.
Continue reading "Laird v Simcock & ors [2023] WTLR 1393"