Carr-Glynn v Frearsons (A Firm) [1998] EWCA Civ 1325 (29 July 1998)

LORD JUSTICE CHADWICK: The appellant, Mrs Helen Carr-Glynn, is the niece of the late Mrs Nellie Larder (“the testatrix”) who died on 11 August 1993. The respondents are a firm of solicitors whom the testatrix instructed to prepare her last will, which she executed on 9 February 1989. By clause 2(b) of that will the testatrix gave to her niece all her share or interest in the property known as “Homelands”, Burley, Hampshire. At the time when the will was prepared and executed “Homelands” was held by the testatrix and her nephew, the appellant’s brother Mr Peter Burchell, as beneficial joint tenants. The testatrix died without having severed the joint tenancy. On her death the property vested in the surviving joint tenant. Accordingly, the gift in clause 2(b) could not take effect. The share or interest in the property to which the testatrix had been entitled during her lifetime did not form part of her estate. The appellant’s expectation as a beneficiary under the 1989 will was disappointed.

The appellant blames the respondents, as the solicitors who prepared the 1989 will, for the loss of her expectation. She asserts, in effect, that it was their responsibility to ensure that she received the benefit which the testatrix intended that she should receive. In the present action she sought damages against the solicitors in respect of their alleged breach of duty. The action was tried before Mr Justice Lloyd. His judgment is reported at [1997] 2 All ER 614. He held that, where a solicitor’s breach of his duty of care to a testator in preparing her will resulted in a loss to the estate, the solicitor owed no duty of care to an intended beneficiary under the will whose gift was thereby rendered ineffective. He held, also, that even if such a duty had been owed, the plaintiff had not established on the facts before him that there had been a breach of that duty. By an order made on 17 December 1996 he dismissed the action. The appellant’s appeal from that order is now before this Court.

The 1989 will was admitted to probate on 20 September 1993. The Judge found as a fact (i) that, at the time when she executed the 1989 will, the testatrix intended that the appellant should receive a one half share in the property “Homelands” on her death, (ii) that she retained that intention until her death and (iii) that, if she had been advised that it was necessary to serve a notice of severance, she would have done so. Those findings are not challenged by the respondents on this appeal. The Judge found, also, that the manner in which the solicitors had dealt with the matter (through one of their then partners, Miss Turner) was “entirely reasonable and proper”. That finding is challenged by the appellant. It is convenient to resolve that issue before examining the questions of law raised by this appeal.

The appellant and her brother are the children of the testatrix’s sister Jessie. The Judge found that the testatrix had bought “Homelands” in 1953 as a home for Jessie and the two children. By a deed of gift dated 12 December 1969 and made between the testatrix and her nephew, Peter, the testatrix transferred the property into their joint names to hold as beneficial joint tenants. The defendant firm (but not Miss Turner) acted for the testatrix in the purchase and in the transfer. Miss Turner first acted for the testatrix in the preparation of a will which was executed on 25 October 1983. It seems likely that Miss Turner did not then know of the deed of gift. By clause 2(b) of the 1983 will the testatrix left “my property known as ‘Homelands’” to Peter. By clause 2(c) of the 1983 will the testatrix gave to her niece, the appellant, all monies standing to the credit of any deposit account in her name at the Skegness Branch of Barclays Bank.

However, I must mention that I am not entirely sure that the gift of your share or interest in the property at Burley to your niece will be effective. When I checked our records I found that we no longer have our file relating to this matter and the deeds were sent to the National Westminster Bank in March 1970. From the records which we still have I can confirm that the property is in the joint names of yourself and your nephew but there are two forms of joint ownership. One of these would leave you free to dispose of your own half share of the property in your Will but the other would have the effect that, on your death, your share would automatically pass to your nephew. If you wish me to obtain the deeds and check the position then please let me know and I will prepare the appropriate authority for you and your nephew to sign. I look forward to hearing from you.

Following the visit Miss Turner sent the testatrix a copy of the will which she had executed, together with a note of the firm’s charges. The original of the 1989 will was placed in the firm’s strong room. The covering letter, dated 9 February 1989, did not refer to the doubt as to the efficacy of the gift of the share in “Homelands” or to the need to resolve that doubt. There was no further contact between the testatrix and Miss Turner.

Miss Turner gave evidence at the trial. It is clear from the witness statement which she signed on 15 March 1996 that she had no recollection of the two meetings with the testatrix, which had taken place some seven years earlier, other than what could be deduced from her attendance notes. That is, of course, not at all surprising. After referring to the attendance note of 9 February 1989 Miss Turner said this:

I find that on 9th February 1989 Miss Turner discussed the position as regards joint ownership of “Homelands” with the deceased. The explanation which she gave in her letter of 6th February as to the two types of joint ownership is reasonably clear as to the difference, I find that she reiterated this explanation, but also that she mentioned that, if it was indeed a joint tenancy, it would be possible to change that position so that a half share could pass under the will. I do not suppose that she went into much in the way of detail as regards the process of severance, but I find that she told the deceased that it could be done simply by a letter being written to Peter Burchell. I find that she again offered to get the deeds from the bank as she had done in the letter, but the deceased decided she would do that herself. The deceased was an intelligent woman with experience of business who knew her own mind. It seems to me that she was perfectly capable of taking and following up such a decision for herself. . . .

Miss Turner did not suggest to the deceased that a notice of severance could be sent anyway, nor did she put a suitable form of letter before the deceased for her to consider signing. I find that Miss Turner did not advise that Peter Burchell’s co-operation was necessary to change the position as regards the joint tenancy, but that she did say his consent would be needed to get the deeds from the bank. She did not make a diary note to remind the deceased about the position if she heard no further news from the deceased within any given time.

The allegations of negligence on which the appellant relied in support of her claim may be summarised as follows: (i) that Miss Turner failed to take whatever steps were necessary to ascertain whether or not the property was held in beneficial joint tenancy before inviting the testatrix to sign the 1989 will; (ii) that, by the letter of 6 February 1989, she led the testatrix to believe that Mr Burchell would need to be party to any document that might be required in order to make the gift in the will effective; (iii) that Miss Turner ought to have prepared a notice of severance to be signed by the testatrix at the time that she executed the will, ought to have ensured that the testatrix did sign such a notice and ought to have ensured that such notice was served on Mr Burchell; (iv) that Miss Turner ought not to have allowed or invited the testatrix to execute her will without first having satisfied herself that all necessary steps were or would be taken to ensure that the gift of the testatrix’s share in “Homelands” would be effective; and (v) that after the execution of the will Miss Turner ought to have taken adequate steps to ascertain whether or not a notice of severance was necessary.

. . . it was not a case in which Miss Turner had any reason to suppose that there was particular urgency. I do not see how it could be said that failing to suggest an immediate notice of severance without waiting to see what the position was on the deeds is something which no reasonable solicitor could have done in 1989. . . . Given the absence of any particular reason to suppose urgency, I cannot see that it was negligent for Miss Turner to take the view that one should wait and try to find out the position as it was on the deeds first and then, if it turned out to be a joint tenancy, consider with the client and advise whether a notice of severance should be given and, if the client decided in favour, then take the necessary action. . . . ibid, 629h-630a.

Although the Judge found that there was no reason to suppose that there was particular urgency, it is necessary to bear in mind that the testatrix was 81 years of age when she made her will in 1989. It must have been within the contemplation of a solicitor who was instructed to make a will for a client of that age that the matter ought to be dealt with promptly, lest the client’s testamentary intentions be defeated by events beyond his or her control. Indeed, Miss Turner acted with commendable speed in preparing the will within a few days of receiving instructions. The real criticism is that she invited the testatrix to execute the 1989 will at a time when neither she nor the testatrix knew whether the gift in clause 2(b) could take effect and in circumstances in which (i) that doubt could immediately, easily and unilaterally be laid to rest by the service of a notice of severance and (ii) the position, if the gift did not take effect, was that the appellant (whom the testatrix clearly intended to benefit) would be excluded from any participation in the estate by the alteration to clause 2(c) of the 1983 will.

This was not, as the Judge recognised (at 629g-h), a case in which the testatrix would be in any doubt as to whether to sever the joint tenancy on the basis that she might be the survivor and might therefore lose a real chance of gaining the whole property. If the testatrix had been faced with the choice between serving a notice of severance and allowing the gift of her interest in the property to fail, there was no reason for Miss Turner to think that she would have had any hesitation in deciding to serve the notice. The Judge found (at 620g) that the testatrix had some reservations about writing to her nephew; but that was something which, as Miss Turner had advised her, she would need to do in order to obtain the deeds from the bank. Although, if the deeds showed a tenancy in common, it would be unnecessary, thereafter, for the testatrix to tell her nephew about her intentions, the need, as Miss Turner thought, to obtain his co-operation in order to examine the deeds would have already alerted him to the fact that something was afoot. In those circumstances I am unable to accept that Miss Turner could properly take the view that the sensible course was to wait to see what the position was on the deeds. There was nothing to be gained by that course; and a clear risk that the testatrix’s intentions might be defeated by the delay to which it would or might give rise. In my view, a competent solicitor, acting reasonably, would have advised the testatrix that, in order to be sure that her testamentary wishes should have effect, she should serve a notice of severance in conjunction with the execution of the will.

Miss Turner did not give that advice. She did not tell the testatrix that the doubt, identified in her letter of 6 February 1989, could and should be laid to rest by the service of a notice of severance before or at the same time as the will was executed; that there was no need to obtain the deeds before serving the notice; and that there was nothing to be gained, and potentially much to be lost, by delay. In my view the Judge was wrong to hold that Miss Turner acted in a manner which was “entirely reasonable and proper”. I am satisfied that in failing to advise that a notice of severance ought to be served immediately she fell below the standard of care to be expected from a competent solicitor acting reasonably.

The Judge found that, if that advice had been given, the testatrix would have acted upon it. As he observed (at 620j) the testatrix had a very specific reason for wanting to make sure that the gift to the appellant was effective. If notice of severance had been served the assets in the estate would have included a one half share in the property “Homelands”. As it is, the assets in the estate are less than they would have been if the testatrix had been properly advised. It follows that, prima facie , the respondents would be liable at the suit of the testatrix’s personal representatives for the loss caused to her estate by their failure to advise service of a notice of severance. But, again prima facie , any recovery by the personal representatives would not benefit the appellant. The damages would form part of the residue; and she is not the residuary beneficiary under the 1989 will.

The position of a disappointed beneficiary has received recent consideration by the House of Lords in White v Jones [1995] 2 AC 207. In that case the testator’s intentions were frustrated by the solicitors’ delay in carrying out his instructions to prepare a new will providing for legacies to his daughters. The testator died before the new will was available for execution. The House of Lords decided, by a majority, that the assumption of responsibility by a solicitor to his client, who had given instructions for the drawing up of a will for execution, extended to an intended beneficiary under the proposed will in circumstances where the solicitor could reasonably foresee that a consequence of his negligence might be the loss of the intended legacy without either the testator or his estate having a remedy against him. That statement of the principle, taken from the headnote to the report, reflects a passage in the speech of Lord Goff, at 268C-E, with which Lord Browne-Wilkinson and Lord Nolan expressed agreement:

In my opinion, therefore, your Lordships House should in cases such as these extend to the intended beneficiary a remedy under the Hedley Byrne principle by holding that the assumption of responsibility by the solicitor towards his client should be held in law to extend to the intended beneficiary who (as the solicitor can reasonably foresee) may, as a result of the solicitor’s negligence, be deprived of his intended legacy in circumstances in which neither the testator nor his estate will have a remedy against the solicitor.

The question, therefore, is whether the remedy which the House of Lords was prepared to extend to a disappointed beneficiary in White v Jones is confined to those cases, of which White v Jones was an example, in which the estate itself has no remedy - so that, absent a remedy at the suit of the beneficiary, there is no remedy at all; or is to be further extended to cases in which the estate does have a remedy but where the estate’s remedy will be of no advantage to the disappointed beneficiary.

I agree. If that were the result which the law required it would properly be regarded as unacceptable and unjust. But, as it seems to me, it ought properly be regarded as equally unacceptable and unjust if the result which the law requires is that, because of the solicitors’ negligence, the loss which the personal representatives are able to recover on behalf of the estate passes to someone who was not the beneficiary intended by the testatrix; leaving the intended beneficiary without recompense. It is, I think, pertinent to keep in mind the observations of Lord Browne-Wilkinson in White v Jones [1995] 2 AC 207, 276C:

If the law in this field is to reflect what would generally be recognised as acceptable and just the application of the relevant principles should lead to the result that the estate and its beneficiaries are restored to the position in which they would have been if the solicitors had not failed in their duty to the testatrix. It is submitted on behalf of the respondent solicitors that that is a result which cannot be achieved by applying the relevant principles of law to the facts in the present case. That submission must be examined against the speeches of those (Lord Goff, Lord Browne-Wilkinson and Lord Nolan) who formed the majority in the House of Lords in White v Jones.

But it is not clear that Lord Goff was prepared to adopt a formulation of the duty in those terms. He recognised the need “to fashion a remedy to fill a lacuna in the law and so prevent the injustice which would otherwise occur on the facts of cases such as the present” (at 268B); but to achieve that end he found it unnecessary, on the facts in White v Jones, to go beyond holding (at 268D):

Let me emphasise that I can see no injustice in imposing liability on a negligent solicitor in a case such as the present where, in the absence of a remedy in this form, neither the testator’s estate nor the disappointed beneficiary will have a claim for loss caused by his negligence. This is the injustice which, in my opinion, the judges of this country should address by recognising that cases such as these call for an appropriate remedy, and that the common law is not so sterile as to be incapable of supplying that remedy when it is required.

The complaint against the solicitors in the present case rests on their failure to ensure that the testatrix served a notice of severance in respect of the joint tenancy. It cannot be said that the solicitors failed to prepare a will for execution in terms which would have given effect to her wishes if the relevant asset had formed part of her estate. The lack of care lay in failing to ensure that the asset fell into the estate; not in failing to effect a valid testamentary disposition of an asset which did form part of the estate. It is that, of course, which founds the claim which the personal representatives have against the solicitors. This important distinction between the facts upon which White v Jones was decided and the facts in the present case requires consideration of two separate but related questions: (i) whether the assumption of responsibility - which was held in White v Jones to extend beyond the client to an intended beneficiary in connection with the preparation of a will - extends also to an intended beneficiary in connection with the service of a notice of severance without which the relevant provision in the will cannot take effect, and (ii) whether the assumption of responsibility can extend beyond the client in a case where the estate does have a remedy.

It is essential to have in mind that, in the circumstances of the present case, the need to take care to ensure that the asset fell into the estate was integral to the carrying into effect of the testatrix’s intention that her share in the property “Homelands” should pass to the appellant under her will. It was because the testatrix was making an alteration to the provisions in clause 2(b) of the 1983 will - under which her share in that property had been devised to her co-owner - that the need for severance arose. This is a not a case in which the solicitors were instructed to advise in relation to an inter vivos transaction which was independent of the will-making process. On a proper analysis, the service of a notice of severance was part of the will-making process. The appellant was as much an intended beneficiary of the severance as she was of the new clause 2(b) in the 1989 will. To refuse to treat the appellant as an intended beneficiary who (as the solicitors could reasonably foresee) might, as a result of their negligence in carrying out the testatrix’s testamentary instructions, be deprived of the legacy which she was intended to enjoy on the ground that the negligence lay in failing to get in the asset rather than to provide for its disposition would, in my view, properly be regarded as bizarre. I am satisfied that, subject to the need to avoid the injustice of imposing double liability on the solicitors, it would be consistent with the approach of the majority of the House of Lords in White v Jones to recognise that the appellant is a person in relation to whom the assumption of liability by the respondents towards their client, the testatrix, ought to be extended.

It is essential, also, to have in mind that this is a case in which, prima facie , the appellant would receive no benefit from a successful claim by the estate against the solicitors. The proceeds would form part of the residuary estate in which she has no beneficial interest. They would pass to another. Lord Goff identified as “the real cause for concern” in cases such as White v Jones what he described (at 262F) as:

That was the lacuna which had to be filled in cases of that nature. Lord Goff held (at 268B-C), that the courts were entitled - indeed, bound - to fashion a remedy to meet the need. For my part, I would find it equally extraordinary and as much a real cause for concern if the only person for whose benefit a valid claim could be pursued (the residuary legatee) was a person who had suffered no loss - because, absent the respondents’ negligence, the property would not have formed any part of the residue - and the only person who has suffered a loss (the appellant) has no claim. I am satisfied that it would be consistent with the approach of the majority of the House of Lords in White v Jones to fashion a remedy in cases of this nature also, if that can be done without imposing a double liability on the solicitors, in order to avoid what would otherwise be an injustice. It seems to me that that is a legitimate step to take in the light of what Lord Nolan described (at 295B) as “the pragmatic, case-by-case approach which the law now adopts towards negligence claims”.

In fashioning an appropriate remedy in cases of this nature it is necessary to keep in mind (i) that the personal representative’s claim on behalf of the estate cannot be ignored - for there may be circumstances in which, had the property been got in at the time when the will was made, it would have been available as an asset of the estate to meet the liabilities of the estate - and (ii) that it cannot be right to fashion a remedy to avoid injustice to the disappointed legatee if that itself leads to the injustice of imposing a double liability on the solicitors. It was argued forcibly on behalf of the respondents that these two considerations - and, in particular, the second - had the effect that no appropriate remedy could be devised; and that the court should simply accept that, in cases of this nature, the effect of the solicitors’ negligence was that the residuary legatee obtained a windfall benefit at the expense of the specific legatee. I am not persuaded that the powers of the court are so limited that it cannot do justice to each of the three interests concerned - the specific legatee, the estate and the solicitors.

The key, as it seems to me, is to recognise that, in a case of this nature, the duties owed by the solicitors are limited by reference to the kind of loss from which they must take care to save harmless the persons to whom those duties are owed - see per Lord Bridge in Caparo Industries Plc v Dickman [1990] 2 AC 605, 627D, cited by Lord Hoffmann in Banque Bruxelles SA v Eagle Star Insurance Co Ltd [1997] AC 191, 212B-C. The duty owed by the solicitors to the testator is a duty to take care that effect is given to his testamentary intentions. That is the context in which the duty to take care to ensure that the relevant property forms part of the estate arises. The duty in relation to the relevant property is a duty to take care to ensure that that property forms part of the testator’s estate so that it can pass to the intended beneficiaries on his death. It is not in contemplation, in a case of this nature, that the testator will dispose of the property in his lifetime. The loss from which the testator and his estate are to be saved harmless is the loss which those interested in the estate (whether as creditors or as beneficiaries) will suffer if effect is not given to the testator’s testamentary intentions.

The duty owed by the solicitors to the specific legatee is not a duty to take care to ensure that the specific legatee receives his legacy. It, also, is a duty to take care to ensure that effect is given to the testator’s testamentary intentions. The loss from which the specific legatee is to be saved harmless is the loss which he will suffer if effect is not given to the testator’s testamentary intentions. That is the loss of the interest which he would have had as a beneficiary in an estate comprising the relevant property.

The duties owed by the solicitors to the testator and to the specific legatee are not inconsistent. They are complementary. To the extent that the duty to the specific legatee is fulfilled, the duty to the testator is cut down. If and to the extent that the relevant property would have been distributed to the specific legatee in the ordinary course of administration, the other persons interested in the estate can suffer no loss. In so far as the relevant property or any part of it would have been applied in the ordinary course of administration to discharge liabilities of the estate, the specific legatee can suffer no loss.

To impose duties on the solicitors which enabled both the personal representatives and the specific legatee to recover for the loss of the relevant property would involve both double recovery and double liability. The duties would not be commensurate with the loss against which the persons to whom they were owed were to be saved harmless. But there is no reason in principle, as it seems to me, why, in cases of this nature, the law should not impose complementary duties; so that for breach of the one the specific legatee is enabled to recover the loss which he has suffered and for breach of the other the personal representatives are enabled to recover, and recover only, the loss suffered by the other persons interested in the estate. Justice will be done to each of the three interests concerned - the specific legatee, the estate and the solicitors - if solicitors who, in the course of carrying out the testator’s testamentary instructions, have failed to take care to ensure that the relevant property forms part of the estate are liable to compensate the specific legatee for the loss which he has suffered as a result of the breach of duty owed to him; and are liable to compensate the estate for the loss (if any) suffered by the other persons interested in the estate for breach of the duty owed to the testator.

In any case in which it could be suggested that there are, or may be, persons interested in the estate (other than the specific legatee) who have suffered loss by reason of the solicitor’s breach of duty to the testator and whose interests personal representatives ought to be concerned to protect it would be appropriate for both the personal representatives and the specific legatee to be parties to an action brought by either against the solicitors. That would enable the court to ensure that all matters in dispute are effectively and completely determined and adjudicated upon in the same action - see Order 15, rules 4(1) and 6(2)(b)(i) of the Rules of the Supreme Court 1965. But no cause or matter is to be defeated by the non-joinder of any party - see Order 15 rule 6(1) - and, in a case where there is no suggestion that anyone interested in the estate other than the specific legatee has suffered loss by reason of the solicitor’s breach of duty, it seems to me unnecessary that the personal representatives should be joined as formal defendants. The action is properly constituted without them.

For the reasons which I have set out I would allow this appeal. I understand that, in the present case, it is not suggested that there is anyone other than the appellant who has suffered loss by reason of the respondents’ failure to advise service of a notice of severance. If the amount of the appellant’s loss cannot be agreed, there will have to be a direction for the assessment of damages.

LORD JUSTICE THORPE: Mrs Larder used Frearsons when she needed a solicitor. In that sense they were her family solicitors. In such cases the continuity over an extended period of years is often with the firm rather than with any individual within the firm. When she wanted to put her property into joint ownership with her nephew Peter in 1969 she used Frearsons. When she wanted to make a will she used Frearsons and over the years whenever she wanted to change her will she used Frearsons.

She was clearly fond of her niece Helen and when Helen got into financial difficulties she wanted to help her. Her plan and intention was to increase the benefit that Helen would receive under her will at her death. Under the penultimate will Helen was only due to receive a small legacy. Her plan and intention was to substitute for that legacy her half share in Homelands. At her death Helen and her brother Peter would become joint owners and the value of the half share would resolve Helen’s financial difficulties. Since at that date she was 81 years of age the solution was unlikely to be long deferred.

In those circumstances there can be no doubt as to the nature of Frearsons retainer. It was simply to give effect to her wishes and to implement her plan. Miss Turner quite rightly recognised that in order to implement the plan it was necessary to ensure that her joint ownership with Peter rested on a tenancy in common and not a joint tenancy. In view of the age difference between Mrs Larder and Peter coupled with the absence of any testamentary provision in relation to the property it was more than likely that the existing arrangement was a joint tenancy. The ease with which a joint tenancy can be converted into a tenancy in common seems one of the simplest procedures in an area of law where procedures are not always simple. All Mrs Larder had to do was to write the requisite letter. Of course research to establish the nature of the existing tenancy had an obvious rational attraction since it might preclude the need for the short letter of severance. If Frearsons had the deeds or the conveyancing file establishing the fact would have been simple but to suggest that the joint owners should authorise the bank to release or copy the deeds was an unnecessarily cumbersome proposal. Not only was it cumbersome but it was also hazardous if not satisfactorily completed before the execution of the will. The obvious hazard was that the effect of the execution might be not to solve Helen’s financial problems but to cut her out of the will. Miss Turner caused or permitted Mrs Larder to undergo that risk. The simple letter of severance would have eliminated the risk. In my opinion Miss Turner was plainly negligent in failing to advise the sending of a letter of severance once she appreciated that she was unable to discover the nature of the existing joint ownership. The judge found that had she given the advice to send a letter of severance clearly Mrs Larder would have accepted it.

The instinct to do justice is clearly aroused by this analysis. Only Miss Turner’s negligence frustrated Mrs Larder’s kindly intention to solve Helen’s financial problems. In a perfect world Peter would have foregone his unintended benefit thus removing the ingredient of damage. But since his relationship with Helen seemingly precludes him from doing what many would feel him morally obliged to do Helen is in my opinion entitled to follow the White v Jones route to arrive at the position which her aunt planned for her. I am relieved that my lord, Lord Justice Chadwick, concludes that a permissible incremental extension of the holding in White v Jones meets the arguments addressed by Mr Mansfield and I gratefully adopt his reasoning

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You are here: BAILII >> Databases >> England and Wales Court of Appeal (Civil Division) Decisions >> Carr-Glynn v Frearsons (A Firm) [1998] EWCA Civ 1325 (29 July 1998) URL: http://www.bailii.org/ew/cases/EWCA/Civ/1998/1325.html Cite as: [1998] EWCA Civ 1325, [1998] 4 All ER 225

England and Wales Court of Appeal (Civil Division) Decisions