Setting Aside Mutual Wills For Undue Influence

Re estate of Naidoo Naidoo v Barton and another [2023] EWHC 500 (Ch)

Background

Dr Naidoo and his wife Mrs Naidoo made mutual Wills in 1998. Each of those Wills appointed the other spouse and the third eldest child, David Barton, as executor, with Mrs Barton as a substitute executor. Each of the Wills also provided that the estate of each shall pass to the surviving spouse absolutely, and if the surviving spouse should fail to survive for 28 days, to David absolutely (then to Mrs Barton if David fails to survive for 28 days).

Dr Naidoo died in 1999. Mrs Naidoo subsequently changed her Will in 2015. The 2015 Will appointed the sixth eldest child Charan as the sole executor and sole beneficiary. Mrs Naidoo died in 2016.

Charan, in the capacity of the sole executor of Mrs Naidoo’s estate, applied to the Court to propound the 2015 Will and rescind the 1998 mutual Will by reason of, among others, the undue influence exerted by David on his parents.

Undue influence – the law

The equitable doctrine of undue influence ensures that one’s influence over another is not abused. If a person has used means to persuade another to enter into a transaction in circumstances in which the other cannot be regarded as having agreed to the transaction under free will, the Court can set aside the transaction.

The leading case is Royal Bank of Scotland Plc v Etridge (No.2) [2002] 2 AC 773. The law identifies two forms of unacceptable conduct:

The second form occurs when one person places trust in another to look after his affairs or interests, and the latter abuses this trust by preferring his own interests.

It is for the person claiming that there was undue influence to prove it on the balance of probabilities. However, in the context of contractual or transactional arrangements, proof that there existed a relationship of trust and confidence between the parties in relation to the management of the complainant’s financial affairs, together with proof of a transaction that calls for explanation, is normally sufficient to satisfy the burden of proof. If the party defending the transaction cannot provide an explanation to satisfy the Court that the transaction had taken place for reasons other than undue influence, the Court can find that the transaction was a result of undue influence and can be set aside. Therefore, it is said that in these cases, undue influence is “presumed”.

The burden of proof is different in the context of Wills. There is no “presumed” undue influence. The party asserting undue influence has to prove that the Will was made under undue influence, i.e. the other person did certain acts to abuse the trust and confidence placed on him by the testator when the Will was being made.

In the context of mutual Wills, one of the main issues before the Court in this case was, which one of the above evidential positions applies.

Mutual Wills and undue influence

If two people have agreed to dispose of their estate in a certain way upon their deaths and have executed mutual Wills to this effect, on the death of the first person, the property of the survivor will be held on an implied trust for the beneficiaries named in the mutual Wills. Whilst the survivor may change his Will, the survivor’s personal representative will hold the estate on trust for the beneficiaries named in the mutual Wills.

Proof of mutual Wills is a matter of construction of the terms of the alleged agreement between the two testators. The Court found that in this case, the Wills are mirror Wills, drafted by the same solicitors, refer to each other, contain the same provision, and were executed with express statements that they are mutual. Therefore, the Wills in question are mutual Wills.

The Court ruled that an agreement to execute mutual Wills is a contract. Therefore, the evidential position set out in the case Royal Bank of Scotland Plc v Etridge (No.2) applies, rather than the more stringent one in the context of probate.

The Court found that Charan has successfully proved a profound level of trust placed by Dr and Mrs Naidoo on David and they depended on David. The making of mutual Wills in favour of David is considered a transaction that calls for an explanation because David was the only beneficiary under the mutual Wills and the rest of Dr and Mrs Naidoo’s children were not included. The Court concluded that the only explanation for these mutual Wills is that David had abused his parents’ trust and dependence on him and his influence upon them. David failed to provide a satisfactory explanation. The Court thus set aside the 1998 mutual Will of Mrs Naidoo and declared the 2015 Will to be the valid Will.

Comment

This case is a helpful clarification of the position of mutual Wills in the context of undue influence challenges. The burden of proving undue influence in the making of an individual Will is very different from that of mutual Wills. The presence of “presumed” undue influence in the context of mutual Wills can arguably aid those challenging their validity, albeit all depends on the strength of evidence.

This case is also an important reminder to testators and professional Will drafters when making mutual Wills as they impose limitations on testamentary freedom. If surviving testators with mutual Wills want to change their Will to dispose of their property in ways other than the terms in the mutual Wills and are not properly advised, their end wishes may not be fulfilled and beneficiaries’ entitlement could be severely affected by implied trusts.