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England and Wales High Court (Chancery Division) Decisions
You are here: BAILII >> Databases >> England and Wales High Court (Chancery Division) Decisions >> Burnard v Burnard & Ors  EWHC 340 (Ch) (03 March 2014)
Cite as:  EWHC 340 (Ch)
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LEEDS DISTRICT REGISTRY
IN THE MATTER OF THE ESTATE OF GODFREY HARRY BURNARD DECEASED
AND IN THE MATER OF THE INHERITANCE (PROVISION FOR FAMILY AND DEPENDANTS) ACT 1975
Leeds LS1 3BG
B e f o r e :
sitting as a Judge of the High Court in Newcastle
| STELLA BURNARD
(in her own right and as executrix of the estate of Godfrey Harry Burnard Deceased)
|- and -
|(1) GRAHAM BURNARD
(2) PAUL BURNARD
(3) DANIEL BURNARD
(4) PAULINE BURNARD
(5) HEATHER BURNARD
(6) GRANGEWAY (CONTRACTORS) LIMITED
Michelle Temple (instructed by Hadaway & Hadaway) for the Defendants
Hearing dates: 20 24 January 2014
Crown Copyright ©
|Inheritance (Provision for Family and Dependants) Act 1975||The 1975 Act|
|Administration of Justice Act 1982||The 1982 Act|
|Godfrey Harry Burnard||Goff|
|Grangeway (Contractors) Limited||Grangeway|
|Grangeway Properties Ltd||Properties|
|Rhapsody Properties Limited||Rhapsody|
|Station Road, Whitley Bay||Station Road|
|King Street, Penrith||King Street|
31/31A Station Road, Whitley Bay
27 and 29 Station Road, Whitley Bay
31 King Street, Penrith
Shareholding in Grangeway
3 Brief chronology
1. All of the Annual Returns up until the return for 2007 were completed by Goff. Later returns were completed by Graham.
2. As noted in the Schedule some of the information for the period after July 2007 is taken from other documents filed at Companies House.
3. With the exception of the disputed transfers of 23 August 2007 only two stock transfer forms have been produced:
1) The transfer dated 17/3/1998 of 2,000 shares from Patricia to Goff.2) The transfer dated 17/7/1993 of 4,000 shares from Goff to Stella.
4. Thus there are no stock transfer forms for any of Goff's transfers to his sons in 1993, or Graham and Paul to Goff and Daniel in 1998/1999 (shortly before their bankruptcies). Indeed both Graham and Paul confirmed that no transfer forms were executed.
5. There is no stock transfer form for the transfer of Stella's 4,000 shares on 1st July 1998. When she gave evidence Stella was adamant that she had not transferred her shares.
6. If Stella had transferred her 4,000 shares and Paul had transferred his 1,000 shares on 1st July 1998 those facts ought to have been recorded in the 1999 Annual Return. However the 1999 Annual Return records "There was no changes in the period".
7. The book held by Grangeway contains only one undated record of the shareholders. It shows Goff holding 5,000 shares, Patricia holding 2,000 and each of the sons holding 1,000. It is thus consistent with the position as shown in the Annual Returns between 1986 and the alleged transfers of 900 shares by Goff to his 3 sons on 15th April 1992.
8. When they gave evidence Graham and Paul said they had no knowledge of any shareholding by Stella. The effect of their evidence was that it was a matter that was dealt with by Goff.
Discussions with Hay & Kilner
I have just met Graham and Paul to discuss company matters following [Goff's] recent death.
Graham told me that the shareholdings were changed within the last 5 weeks or so, so that each of the sons held 1,000 Ordinary £1 shares. However it became clear in the meeting that whilst Graham may have filed an Amended Annual return with Companies House, none of the other requirements were complied with so the transfers he told me took place may well have not taken place.
they did not seem to know anything about the whereby they pay their dividends to Stella.
The transfers dated 23rd August 2007
Looked on Companies House website. Only entry for this co is co registered in London to Julia G(?). Only share issue is 1 share to Charles G(?). Probably not same co.
6 The Will
The relevant provisions.
(a) I GIVE free of tax to such of my sons [Graham] , [Paul] and [Daniel] as survive me and if more than one in equal shares all my shares in GRANGEWAY PROPERTIES LIMITED ("the Company").
(b) IN THIS clause 'shares' means(i) All the ordinary shares or ordinary stock which I own at my death in the Company and
19 When interpreting a contract, the court is concerned to find the intention of the party or parties, and it does this by identifying the meaning of the relevant words, (a) in the light of (i) the natural and ordinary meaning of those words, (ii) the overall purpose of the document, (iii) any other provisions of the document, (iv) the facts known or assumed by the parties at the time that the document was executed, and (v) common sense, but (b) ignoring subjective evidence of any party's intentions. In this connection, see Prenn at 13841386 and Reardon Smith Line Ltd v Yngvar Hansen-Tangen  1 WLR 989 , per Lord Wilberforce, Bank of Credit and Commerce International SA v Ali  1 AC 251 , para 8, per Lord Bingham, and the survey of more recent authorities in Rainy Sky , per Lord Clarke at paras 21-30.
23 In my view, at least subject to any statutory provision to the contrary, the approach to the interpretation of contracts as set out in the cases discussed in para 19 above is therefore just as appropriate for wills as it is for other unilateral documents. This may well not be a particularly revolutionary conclusion in the light of the currently understood approach to the interpretation of wills (see eg Theobald on Wills , 17th edition, chapter 15 and the recent supplement supports such an approach as indicated in RSPCA v Shoup  1 WLR 980 at paras 22 and 31). Indeed, the well known suggestion of James LJ in Boyes v Cook (1880) 14 Ch D 53 , 56, that, when interpreting a will, the court should "place [itself] in [the testator's] arm-chair", is consistent with the approach of interpretation by reference to the factual context.
24 However, there is now a highly relevant statutory provision relating to the interpretation of wills, namely section 21 of the 1982 Act (" section 21 "). Section 21 is headed "Interpretation of wills general rules as to evidence", and is in the following terms:(1) This section applies to a will a) in so far as any part of it is meaningless;b) in so far as the language used in any part of it is ambiguous on the face of it;c) in so far as evidence, other than evidence of the testator's intention, shows that the language used in any part of it is ambiguous in the light of surrounding circumstances.(2) In so far as this section applies to a will extrinsic evidence, including evidence of the testator's intention, may be admitted to assist in its interpretation."
25 In my view, section 21(1) confirms that a will should be interpreted in the same way as a contract, a notice or a patent, namely as summarised in para 19 above. In particular, section 21(1)(c) shows that "evidence" is admissible when construing a will, and that that includes the "surrounding circumstances". However, section 21(2) goes rather further. It indicates that, if one or more of the three requirements set out in section 21(1) is satisfied, then direct evidence of the testator's intention is admissible, in order to interpret the will in question.
26 Accordingly, as I see it, save where section 21(1) applies, a will is to be interpreted in the same way as any other document, but, in addition, in relation to a will, or a provision in a will, to which section 21(1) applies, it is possible to assist its interpretation by reference to evidence of the testator's actual intention (eg by reference to what he told the drafter of the will, or another person, or by what was in any notes he made or earlier drafts of the will which he may have approved or caused to be prepared).
7 31 Station Road
The conveyancing documents
1. On 11th August 1989 31 Station Road was transferred to Grangeway for £39,000. the ground floor comprised a shop and was referred to as 31 Station Road, The first floor comprised office premises and is referred to as 31A Station Road.
2. On 4th September 1990 Grangeway let the ground floor shop to Stella for a term of 999 years at a peppercorn rent and a premium of £52,250. In evidence Stella confirmed that the premium was in fact paid. Stella ran a coffee shop known as Zucci's from the premises. Goff ran his accountancy practice from the office premises upstairs (31A).
3. On 31st May 1991 Grangeway transferred 31 Station Road to Goff for £44,000. There is no evidence as to whether this sum was actually paid. Stella said she assumed it was.
4. After Goff's death in 2008 Stella assigned the benefit of the 999 year lease of 31 Station Road to Paul and his wife Pauline for £77,500.
5. In reliance, no doubt, on the controversial 2007 Transfer Paul (and his wife Pauline) were registered as proprietors of 31 Station Road on 11th January 2008. Although they created a charge in favour of NatWest Bank plc that charge has now been redeemed.
The 1993 Declaration of Trust
The challenge to the Declaration of Trust
1. In December 1994 Patricia obtained a charging order absolute in respect of 27 Station Road in respect of a judgment obtained against Goff in the divorce proceedings
2. In his judgment in 1997 District Judge Holloway referred to 27/29 Station Road as being in Goff's personal ownership.
3. In paragraph 3(g) of a will dated 2nd June 1995 he gave to Stella a life interest in 27/29 Station Road.
1. As well as recording the shareholders prior to 1992 the Company Book records property held by Grangeway as at 31st August 1998. This includes 27, 29 and 31 Station Road.
2. The rents from 27/29 Station Road were paid into an account in Portugal in the name of Grangeway until the beginning of 2007.
3. Amongst the papers given to Mr Tahir at the two meetings in July 2007 were two documents one typed (presumably by Goff) and the other in Goff's hand writing. Both of these documents refer to 27 and 29 belonging to Grangeway (although it described it wrongly as Properties) and 31A as belonging to Goff.
4. The fact that Goff gave the Declaration of Trust to Mr Tahir is an indication that Goff intended it to be relied on.
The Transfer dated 14th September 2007
The Transferor has received from the Transferee for the property the sum of £110,000.
I visited him at home following his discharge from the hospice. Although he was in poor physical condition I found him mentally alert and believed him capable and competent of making decisions. I base my opinion upon my discussions with him about his clinical condition and his treatment, and my observations of him during my clinical assessment.
8 27/29 Station Road
9 31 King Street
1. An invoice dated 10th April 1984 from the vendors' solicitors to the vendor which described Grangeway as the Purchaser.
2. A Form 395 sent to Companies House in July 1985 in respect of a charge created by Grangeway on 31 King Street on 15th July 1985.
3. A similar form in respect of another charge created in August 1989.
4. Various planning applications in the name of Grangeway. These include
1) a successful application by Grangeway in September 1985 for conversion of the first and second floor to one flat and2) a further (unsuccessful) application by Grangeway in February 1987 for change of use to a food takeaway.
1. An invoice dated 12th October 1998 addressed to Goff from Reeds Rains for £334.88 in respect of introducing a tenant for 31 King Street.
2. A receipt issued by Reeds Rains to Goff for the £334.88. The date is illegible.
3. A similar invoice dated 2nd September 1996 for £230.
10 A letter dated 14th September 2007.
I saw Stella and Graham yesterday. Graham handed me the letter and the TR1 that I've left on your chair
11 The assessment of the witnesses.
Graham and Paul
12.1 31 Station Road
The Declaration of Trust.
The 2007 TR1
"In the circumstances, it seems to me that the law is this. The degree or extent of understanding required in respect of any instrument is relative to the particular transaction which it is to effect. In the case of a will the degree required is always high. In the case of a contract, a deed made for consideration or a gift inter vivos, whether by deed or otherwise, the degree required varies with the circumstances of the transaction. Thus, at one extreme, if the subject-matter and value of a gift are trivial in relation to the donor's other assets a low degree of understanding will suffice. But, at the other, if its effect is to dispose of the donor's only asset of value and thus for practical purposes to pre-empt the devolution of his estate under his will or on his intestacy, then the degree of understanding required is as high as that required for a will, and the donor must understand the claims of all potential donees and the extent of the property to be disposed of."
1. There is no evidence of actual undue influence or improper pressure by Paul. All of the evidence points to Goff managing his own affairs until his death.
2. There is no evidence that Goff reposed trust and confidence in Paul in relation to his financial affairs [see paragraph 14 of Lord Nicholls' speech]
3. In my view this is not a transaction which calls for an explanation within Lindley LJ's explanation in Allcard v Skinner 36 Ch D 145, 185. It is the gift by a dying man of the office from which he had traded to his son who had taken over the business.
12.2 27/29 Station Road
12.3 31 King Street
12.5 Shares in Grangeway
1. the evidence of Graham and Paul that Goff treated Grangeway as his other self and paid no attention to the requirements of the Companies Act. Thus there was a failure to keep an up to date register of members. There was a failure to hold meetings in accordance with the Act. This included board meetings and general meetings of shareholders.
2. A number of share transactions were recorded in the annual returns where no stock transfer forms were executed. These include the alleged transfers in 1993, 1998 and 1999.
3. If Stella had indeed transferred her shares on 1st July 1998 it should have been mentioned in the 1999 Annual Return.