When Undue Influence And Mutual Wills Collide: Naidoo v Barton [2023] EWHC 500 (Ch)

• Jurisdiction: European Union
• Law Firm: Gatehouse Chambers
• Subject Matter: Litigation, Mediation & Arbitration, Family and Matrimonial, Trials & Appeals & Compensation, Wills/ Intestacy/ Estate Planning
• Author: Ms Charlotte John
• Published date: 23 March 2023

Naidoo v Barton [2023] EWHC 500 (Ch) clarifies an important, and hitherto unresolved, issue concerning the doctrine of mutual wills. The court determined that it is the Etridge test for undue influence, applicable to challenging life time transactions, that applies when considering whether or not a mutual wills agreement should be set aside and not the more stringent probate test that generally applies where a will is challenged on the grounds of undue influence.

Background

The claimant in the High Court proceedings, Charan, accused his brother David Barton (formerly known as Ramamurthie Dasaratha Naidoo) of exercising undue influence in relation to both wills and lifetime transactions involving their parents, Mrs Naidoo and Dr Naidoo, as well as Charan himself. The case is further notable for the fact that David is currently serving a 17-year sentence for criminal offences involving the manipulation and exploitation of elderly residents at Barton Park Nursing Home, which he ran. The Barton Park Nursing Home itself was at the centre of one of Charan's claims to set aside life time transactions that he and his parents had entered into, having been a family owned business, until the entire shareholding in the holding company had been transferred to David.

According to the BBC report at the time of his conviction, David was convicted after a 12 month trial alongside other members of staff, with whom he had conspired, of 4 counts of conspiracy to defraud, 3 counts of theft and 1 count of fraud. Those crimes, committed over a 16 year period between 1997 and 2015 and valued at more than '4 million, involved the grooming of six wealthy and vulnerable residents of the nursing home, who had been isolated from their families and had their bank accounts drained.

In his sentencing remarks in the criminal proceedings, Judge Everett characterised David as being adept at flattery, persuasion and veiled threats. He was said to be very good at getting people to do what he wanted. The judge described him as a "despicably greedy man" and a "hypocrite" who claimed to care for the residents when in reality he only cared for himself. The sentencing judge also remarked that David would trample over anyone who opposed him and described him as having an especially unattractive habit of instructing solicitors to issue threats and unpleasant letters to warn off anyone whom he felt to be a hurdle in the pursuit of his dishonest ambitions.

That is, to say the least, a most unpromising position from which to be defending undue influence claims.

HHJ Cadwallader, in delivering judgment in the High Court proceedings between Charan and David and his wife, was at pains to assess David's credibility as a witness independently of his criminal convictions. He describes David as a composed witness and capable of charm. Giving a narcissistic impression, however, he is said to have talked up his account of helping family members and his abilities as a businessman in a grandiose manner. The judge observed that a cold and ruthless streak became evident in his evidence. He wilted under cross-examination and could not adequately justify many of his previous answers. HHJ Cadwallader concluded that his evidence could not be relied upon unless corroborated by other reliable material.

Rejecting, David's counsel's submission that David's criminal conduct was irrelevant to the matters at issue, HHJ Cadwallader observed that of relevance to the facts of the present case, and demonstrating evidence of character, propensity and ability to behave as described, the facts upon which he was convicted included the use of fairly sophisticated legal devices, including wills, contracts, spurious gifts, loans, transfers of land and other property, to enrich himself at the expense of vulnerable persons who placed their trust in him.

The Claims

Charan claimed the following relief:

1. That the Court should pronounce for Mrs Naidoo's 2015 Will which, contrary to the terms of an apparent mutual wills agreement and the resulting wills made in 1998 which favoured David alone appointed Charan as her sole executor and sole beneficiary.
2. That the Court should set aside lifetime transactions, namely
   1. The transfer in 1992 by Mrs Naidoo, Dr Naidoo and Charan to David of their shareholdings in Choiceclassic Ltd, the company owning Barton Park Nursing Home.
   2. A purported agreement between Mrs Naidoo and David and his wife entered into in February 2000, pursuant to which David supplied the settlement sums due under a compromise relating to litigation between Dr and Mrs Naidoo and a third party and under which David and his wife took the benefits of the compromise.
   3. The execution of settlements in favour of David and his wife and children by Mrs Naidoo over certain policies, pursuant to the terms of the 2000 agreement.

The 1998 mutual wills agreement and the February 2000 agreement, and the subsequent trusts of the policies, all arose in circumstances where Mrs Naidoo and Dr Naidoo (before his death in January 1999) were embroiled in litigation they had issued in 1997 to recover assets of theirs transferred to their son-in-law, Saantha. The exact terms of the agreement with Saantha were in dispute between Dr and Mrs Naidoo and Saantha. Saantha had provided assistance to Dr and Mrs Naidoo in circumstances where they were experiencing difficulties servicing a loan facility with NatWest. They transferred various assets to Saantha, including their home, but claimed, which Saantha disputed, that they were to retain the beneficial interests in those assets.

David had funded that litigation and had power of attorney for his parents and was instructing the solicitors.The mutual wills arrangement had been suggested by David and the solicitors he was instructing in the litigation with Saantha.

Terms...