IN THE UPPER TRIBUNAL Case
No. CJSA/1128/2011
ADMINISTRATIVE APPEALS
CHAMBER
Before Judge Mark
Decision: The appeal is allowed. I set aside the decision of
the tribunal and remit the matter to be reheard by a new tribunal in accordance
with the directions below.
REASONS FOR DECISION
- This is a supported appeal
with the permission of an Upper Tribunal Judge from the decision of a
First-tier Tribunal dismissing the appeal of the claimant from a decision
of a decision maker dated 15 February 2010. That decision revised an
earlier decision of 14 August 2009 which had awarded the claimant Income
Based Jobseeker’s Allowance from 14 July 2009. The earlier decision was
found to have been made in ignorance of a material fact. The decision
maker determined that the claimant had no entitlement to Income Based
Jobseeker’s Allowance from the date of the claim as she was beneficial
owner of a piece of land purchased for £27,000 in 2007 which had a value
after allowing for the costs of the sale in excess of £16,000.
- It would appear that the
claimant, when she originally applied for Jobseeker’s Allowance, declared
that she did not have savings in excess of £5,500. However, she did not
disclose that she did have a non-income producing field of about 6 acres
which she had bought for £27,000 in 2007 and on which she and her family
kept ponies.
- It appeared that the
claimant had received, following litigation in Florida in which she was
not involved, an inheritance from an aunt who had lived and died in Florida. On 26 June 2006, at a time when she was in receipt of income support, she
disclosed to income support that she had received this inheritance, which
was then being (see p.16 of the file), or, once received, was going to be
(pp.22 and 24 of the file), held in her bank account. There was no
evidence before the tribunal as to the precise size of that bequest, but
the land was later purchased using it. The claimant told income support
in 2006 that she was only entitled to a one-sixth share of it. So far as
appears on the papers no action was taken on this disclosure by the income
support team.
- The claimant switched from
income support to JSA in July 2009, and again no information was sought as
to the inheritance. I am unclear whether the information as to the inheritance
was passed on to those dealing with the claim for JSA, but the revised
decision followed the receipt of information from the claimant’s local
authority (which had been paying her housing benefit) as to the purchase
of the land. Even if the information had been passed on, the decision
maker in 2009 would have proceeded on the basis that the claimant only had
one-sixth of the value of land, so that if that was wrong and she was
beneficially entitled to the whole of it, the decision maker would have
been in ignorance of that fact.
- The claimant contends that
the money received was held on trust by her for herself and her five
children in equal shares. Four of the children were adults at all
material times and the fifth was, and still is, a minor who was living
with her. There is limited evidence on the file as to this inheritance
and any basis on which it was held. That evidence includes the record of
the proceedings before the tribunal and of an interview with the claimant,
as well as letters written by or for her,
- It appears that the
claimant’s understanding that the money should be shared between her and
her children dated back to a discussion with her aunt on a visit to
England while the claimant’s father was still alive (p.65). At that time,
the aunt said that she had made a will leaving everything to the
claimant’s father and she was asked what would happen if the father died
before the aunt. The aunt then, according to the record of the
proceedings, said she would amend the will to provide that it would be
“for children – sectioned – for the family.” At p.66, the claimant is
recorded as stating that she and her three siblings all got something from
the estate separately to be used for families. At p.67, she is recorded
as saying that in discussions the grandchildren as well as children were
mentioned. If her father died the money would be split but they would
“have to use it for the family, not to be squandered – but as a foot on
the ladder for everybody.”
- The father did die before
the aunt, who suffered dementia before herself dying in about 2003. There
was a fraudulent attempt by somebody in Florida to obtain her estate. This
resulted in litigation there in which the claimant does not appear to have
been directly involved. Following the successful outcome of this litigation
the claimant, her mother and her siblings received their inheritances,
although there is no real evidence as to the basis on which they received
them. If there was a will, it appears to have been lost, and I do not
know whether they inherited under a lost will or under the Florida intestacy rules. The claimant did not know how much her mother had received but
she and her siblings received equal amounts. If Florida intestacy rules
are the same as under English law, which is to be presumed unless the
contrary is proved, the claimant’s mother could only inherit under a will
from the sister of her late husband, so that in the absence of evidence to
the contrary the monies paid would seem to have been legacies under a will.
- The claimant personally
received a cheque for her share. She did not recall who the cheque was
drawn on. The land was bought in the claimant’s name alone, with the
agreement of her children, because she thought that would save costs,
although she regarded all her children as having a share of it. Her
children have all written confirming that their understanding as to the
inheritance was the same as their mother’s and that they agreed to the
land being bought in her sole name. The eldest of her children, who was
born in 1973, stated that her belief was due to a conversation at the
family home when she was a child, but does not say between whom the
conversation took place. The others do not give any specific source for
their belief.
- The claimant did not
produce any documentation in relation to the inheritance or in relation to
the purchase of the land, when a solicitor was used other than a copy of
the transfer to herself. This last, as is quite common even when land is
to be held on trust despite provision for such information in the transfer
form, gave no indication that she would be holding the property on trust.
- The tribunal appears to
have accepted the evidence of the claimant but concluded
“7. Although the appellant has repeatedly stated that her
share of the money was meant for all the children, and has produced some
evidence from her children confirming this, in my assessment this was an
informal understanding.
8. Had there been a serious intention to formally benefit
the appellant’s children, the appellant’s inheritance could have been divided
with cheques issued in favour of her children as well as herself. This would
not have posed serious difficulty for whoever issued the cheques.”
- The tribunal went on to
point out that the claimant never discussed the possibility of holding the
land on trust with the solicitors acting on the purchase and that while
she may innocently have assumed that putting more names on the Land
Registry documents would increase the legal costs, the tribunal considered
it more likely that there was no intention to create a trust. Whether the
estate was distributed under intestacy rules or under a will or codicil or
under a family arrangement, the tribunal did not believe that the children
were actual beneficiaries and the claimant was the beneficial owner of the
land.
- It appears to me that,
while there may have been grounds on which the tribunal may have concluded
that there was no trust, the reliance placed in paragraph 8 of the
statement of reasons, quoted above, on the failure of those dealing with
the estate to issue cheques to each of the children, overlooks, as the
secretary of state has accepted on this appeal, the possibility of a trust
existing which was not recorded in the will but which had been established
by the communications between the aunt and the claimant when the question
was discussed between them as it appears to have been. This is a type of
trust known in English law as a secret trust. Again, in the absence of
any evidence of Florida law, that law must be presumed to be the same as
English law, but in any event the trust is said to have been created
during discussions in England between the aunt and the claimant, and if
the claimant agreed in England with the aunt that if she received money in
England from the aunt’s estate she would hold it on trust in England, it
appears to me that the proper law of the trust will be English law,
whatever the law applicable to the will.
- If there was a secret
trust of which those dealing with the estate in Florida were unaware, or
even if there was an express bequest to the claimant on trust for herself
and her children, the Florida representatives of the estate would properly
have paid all the money to the claimant and not distributed shares to the
individual children.
- The findings of fact made,
and very possibly the questions asked of the claimant, do not appear to me
to be sufficient to enable me to come to my own decision on the matter,
and I agree with the parties that the matter must therefore be remitted to
be reheard by a new tribunal.
- If there is a secret
trust, it will not appear in the relevant will or codicil. It must,
however, have been communicated by the deceased to the legatee or person
taking on intestacy, with the intention of creating a trust, and have been
expressly or impliedly accepted by her. Acceptance is readily inferred
once communication occurs unless the intended recipient protests. The
trust must also be sufficiently certain to be enforceable. The new
tribunal will need to consider whether what was said was sufficient to
create a trust, the terms of which were sufficiently clear to be
enforceable.
- It is possible that there
may be further evidence either from one or more of the claimant’s children
or from one or more of her siblings as to what was said by the aunt and
expressly or impliedly agreed to by the claimant. The claimant may wish
to consider whether any such evidence is available.
- Further, although I have
indicated that the present evidence leads to the conclusion that there was
a will, even if lost, the question will be an open one for the new
tribunal. I do not know whether a copy of the Florida judgment or order
is available, or indeed any correspondence from the Florida lawyers or the
aunt’s partner relating to it, or even a copy of any lost will, but the
new tribunal may wish to consider a direction for the production of
relevant documents if available or seek an explanation why they are not
available.
- If the trust is
established, then only the claimant’s beneficial interest can be taken
into account in assessing her capital and her entitlement to Income Based
JSA (CSB/989/1985). The relevant principles are now to be found in
paragraphs 672-676 of the 2007 re-issue of volume 48 of Halsbury’s Laws of
England, 4th ed.
- So too, at the new hearing,
the claimant can seek to prove the creation of a trust in favour of one or
more of the children by estoppel or in some other way. If estoppel were
to be relied on, each child would have to show why the claimant should be
estopped from denying that child an equitable interest in the property at
the date of the decision in 2009. At present, the only possible basis for
such a claim would seem to be that the claimant acknowledged the existence
of a trust to them in 2006/7, that as a result they did not investigate
the matter further, or retain documents, at the time and that as a result
they have acted to their detriment on the faith of her assurances. There
may also be evidence of one or more of the children as to some other
detriment but it is for them to adduce appropriate evidence to prove it.
To the extent that any such trust is established as at the date of the
decision under appeal, that part of the beneficial interest in the land
would not have belonged to the claimant and would not therefore form part
of her capital.
- I express no view as to
the likely outcome of the re-hearing.
(signed
on the original) Michael Mark
Judge of the Upper Tribunal
28 March 2012
