Be Our Guest, Be Our Guest, Put Estoppel to the Test: Guest v Guest [2019] EWHC 869 (Ch)

Once again, a family dispute over ownership of a farm finds itself resolved by recourse to Chancery and the doctrine of proprietary estoppel in the case of Guest v Guest [2019] EWHC 869 (Ch). The facts, sadly, are all too familiar, but worth rehearsal.

Andrew, the claimant and son of the defendants, David and Josephine, left school at 16 in 1982 to work, for little money, on his parents’ farm. This he did until approximately 2015 when there was a breakdown in relations between the parties over a reorganisation of the family business and the fact that the parents’ produced new wills in 2014 revoking an earlier will from 1981. The 2014 will disinherited the claimant. Thus, the claimant felt excluded, gained employment as a senior herdsman elsewhere, moved his family away from the farm, and commenced an action for proprietary estoppel.

The proprietary estoppel claim was framed in order for the claimant to gain the entire beneficial interest of the farm, including the business which went on there, and a declaration of the right to occupy a cottage on the estate which he had been permitted to occupy since its conversion in 1989.

The claimant was successful, in part, and the case is illustrative and important as a reminder as to the relative clarity which exists in the modern doctrine of proprietary estoppel (para 127). What is needed is an assurance or representation by one party, and reasonable reliance on that assurance or representation by another party, which reasonable reliance is detrimental and causally connected to the representation. These elements, as HH Judge Russen QC reminds us, are not in ‘watertight compartments’ but ‘flow into’ one another (para 128). On the facts, there was evidence of all three. The defendant had permitted the claimant to assume he would have a substantial interest in the farm and business by inheritance, and the claimant continued to work on the farm for little or no money in consequence of that assurance. Thus, once established, attention focused on the remedy.

The remedy in proprietary estoppel claims, this being equity, is discretionary and not always easy to predict, even for the most skilful of legal adviser. In Guest, HH Judge Russen QC was at pains to point out that the starting point is the ‘claimant’s expectation based upon the nature of the assurance made to him’ (para 165), but that a remedy which satisfies the expectation should not be out of proportion with the value of the detriment suffered (ibid). Thus, while the court will do the minimum necessary to see that justice is done, this might mean that the claimant is not awarded their expectation. So it was in this case, but that is not to say that the claimant’s award was not substantial. The claimant was awarded a lump sum which was calculated by 50% of the after tax market value of the dairy farming business, and 40% of the after tax market value of the freehold title and buildings on the farm (para 288).

The case of Guest is a reminder of a number of things. First, that proprietary estoppel is a well-established and flourishing cause of action for the establishment of an interest in land by informal means. Secondly, though its principles are reasonably well-settled, the remedy can be a little unpredictable and unquantifiable for the legal adviser. However, thirdly, and most poignantly, a significant degree of sadness lies in these cases built on the broken relations of close family units, a point which did not go unnoticed by the judge (para 286) in the case.

Keeping shareholders in their place

It is settled and widely known law that a director owes a fiduciary duty to the company on whose board they sit. Of little less notoriety, certainly as legal principles go, is that a director might owe a fiduciary duty to shareholders of the company.

In Sharp v Blank [2015] EWHC 3220 (Ch), the issue came before the courts in the context of the purchase by Lloyds TSB of HBOS at the height of the financial crisis. Lloyds TSB, a well-run bank, was persuaded, if what one reads is to be believed, to purchase HBOS. The decision to purchase HBOS turned out to be one of its less wise decisions since it ultimately required Lloyds TSB to seek government support with the result that 43% of Lloyds TSB’s shares were subsequently owned by the government in a partial nationalisation of the bank. Perhaps understandably, the shareholders of Lloyds TSB were less than amused, and the case of Sharp v Blank was their attempt to seek redress. They sued the directors for breach of fiduciary duty, which they believed they owed to them as shareholders, in the acquisition of HBOS.

While it is not generally possible to sue directors for breach of fiduciary duty owed to shareholders, it may be possible in some limited circumstances. From the perspective of Lloyds TSB shareholders, these circumstances were not met. They failed to establish the necessary ‘special relationship’ between the director and the shareholders which was something over and above the usual relationship that a director has with its shareholders. The principle is generally only applied in small (family) companies, where it is possible for the directors to have a close relationship with the shareholders; in a large plc such as Lloyds TSB, this is not possible.

The decision in Sharp will come as no surprise to many observers of director and fiduciary liability, though one wonders whether the financial crisis has not changed the relationship which bank directors must have with their banks and, one might add, with shareholders. This might especially be the case given the modern (post-financial crisis) approach to corporate governance espoused by the Basel Committee on Banking Supervision where shareholder (as well as customer) protection is placed rather more prominently on the agenda. Time will tell whether this results in a new approach to the law, at least in so far as banks are concerned.

See, it was worth having children after all!

Another month passes, and yet another case from the Court of Appeal on implied trusts of the home. While this case is another one affirming the position following the cumulative impact of Stack v Dowden and Jones v Kernott, it is more interesting for how it might have extended the law.

The facts of Barnes v Phillips [2015] EWCA Civ 1056 (Longmore and Lloyd Jones LJJ and Hayden J), a joint ownership case, are almost too familiar now. Man and woman begin a relationship, buy a house together, make varying contributions to the house, have children, split up, one party moves out of the house, and then they commence litigation about who should get what.

The Court of Appeal, perhaps unsurprisingly, confirmed the principles applicable to joint ownership cases set down by the House of Lords in Stack v Dowden and the Supreme Court in Jones v Kernott. The issue of quantification can be determined by any express agreement between the parties, inferred from their conduct, or, if all else fails, it may be imputed by giving a, ‘fair share in light of the whole course of dealing between [the parties] in relation to the property.‘(per Lord Collins, Jones v Kernott, para 64). This, of course, is all measured by having regard to the domestic context provided by the issues set out at paragraph 69 of the speech of Baroness Hale in Stack v Dowden. All of this should raise no eyebrows and, indeed, should be welcomed as bringing some certainty to a notoriously difficult area of law. However, where I do think that Barnes v Phillips does add to the law, and represent an interesting development, is in relation to the issue of child support.

When the judge at first instance imputed the intention of the parties on the issue of quantification, he took account of the fact that the appellant (the father) made no maintenance payments for the children after he left the property. The inclusion of this in the calculation was challenged by the father as being impermissible. The CA rejected the argument. Lloyd Jones LJ, delivering the judgment of the court, drew attention to paragraph 69 of the speech of Baroness Hale in Stack, highlighting in particular the issue of responsibility for children of the relationship. Indeed, Lloyd Jones LJ, drew attention to obiter comments by Nicholas Strauss QC (sitting as a High Court judge) at first instance in Jones v Kernott, where it was noted that a failure to contribute to the maintenance of children could be legitimately taken into account. Lloyd Jones LJ concluded on the issue:

‘In view of the very wide terms in which the House of Lords in Stack v Dowden and the Supreme Court in Jones v Kernott described the relevant context, I consider that, in principle, it should be open to a court to take account of financial contributions to the maintenance of children (or lack of them) as part of the financial history of the parties save in circumstances where it is clear that to do so would result in double liability.‘[para 41]

These concluding words are interesting in that they hint at a more liberal approach to quantification where children of the relationship are concerned. While these comments might not go so far as to remove the injustices of cases such as Burns v Burns [1984] Ch 317, they do indicate how this element of the domestic context can have an increasing role in future cases on informal acquisition and quantification of interests in land.

Paying the Penalty

The law relating to penalty clauses in contract rarely comes before the courts, certainly not in a high profile way, therefore there was understandable excitement and anticipation of the Supreme Court decision of Cavendish Square Holding BV v Talal El Makdessi; ParkingEye Limited v Beavis [2015] UKSC 67. The case was a joined appeal, the facts of both cases being in some way concerned with penalty clauses.

In the Beavis case, Beavis had exceeded a two-hour parking limit by almost one hour and was charged a fee of £85. Beavis challenged the fee on the basis that it was either a penalty and, consequently, void or, alternatively, that the clause was in breach of the (since repealed) Unfair Terms in Consumer Contracts Regulations 1999. The facts of the El Makdessi case were a little more complex. El Makdessi agreed to sell a controlling stake in an advertising company to Cavendish. The contract of sale placed a restrictive covenant on El Makdessi preventing him from engaging in competing activities. If this was breached, El Makdessi would not be able to claim the two final payment installments and, further, El Makdessi would have to sell his remaining shares to Cavendish at a reduction. El Makdessi breached the covenant and Cavendish sought to enforce the clauses against him. El Makdessi claimed they were penalties and, therefore, not binding on him.

The Supreme Court, sitting as a panel of seven (Lords Neuberger, Mance, Clarke, Sumption, Carnwath, Toulson and Hodge), took the opportunity to review the common law on penalty clauses. While clarifying (and modernising) the law of penalties, the Supreme Court also clarified certain aspects of penalties which students and practitioners alike should welcome.

First, the Justices were careful to state that the penalties rule should remain. They had been invited, by the appellants, to remove the operation of the penalties rule in commercial cases, such as Cavendish. Secondly, the Justices stated that the penalties rule only regulates secondary obligations, not primary obligations. The secondary obligation arises from breach of a primary obligation. This is an important point which is sometimes misunderstood when considering penalties. Thirdly, the penalties rule was not limited to payments of fixed sums of money, but could, as in the Cavendish case, require transfer of assets to the non-breaching party under a contract. The Justices then turned their attention to the penalties rule.

The locus classicus on the law of penalties is Dunlop Pneumatic Tyre Co v New Garage and Motor Co (1915) where Lord Dunedin’s words should resonate with every student of English contract law:

1) Does the word ‘penalty’ appear in the contract? This is not conclusive, but a guide.
2) The essence of a penalty is a payment stipulated as punishment for breach; a liquidated damages is genuine pre-estimate of loss.
3) Construction is key – what did the parties to the contract mean? The following is the guidance:

a) Is the sum stipulated extravagant when compared with the greatest loss which could be proved? Penalty.
b) Is the breach non-payment of money, and the sum in the contract greater? Penalty.
c) If a lump is payable, irrespective of the seriousness of the breach, a presumption arises it is a penalty.
d) It is no obstacle to the sum stipulated being a liquidated damages clause that the consequences of the breach are such as to make precise pre-estimation almost an impossibility.

The court, while reminding us of these words, was careful to state that the words had become too much like a test and, rather, that the words should become guides; too much store had often been placed these words in the past. The ‘true test’, as the Supreme Court referred to it, was:

‘whether the impugned provision is a secondary obligation which imposes a detriment on the contract-breaker out of all proportion to any legitimate interest of the innocent party in the enforcement of the primary obligation. The innocent party can have no proper interest in simply punishing the defaulter.'(para 32, joint judgment of Lords Neuberger and Sumption)

The ‘legitimate interest’ element of the new test of penalties is interesting, since it immediately raises the issue of ‘what amounts to a legitimate interest?’ Obviously, the ‘legitimate interest’ will be significantly driven by the facts. In El Makdessi, the Supreme Court said that Cavendish had a ‘legitimate interest’ in the observance of the restrictive covenants given the pricing of the risk associated with the purchase [para 75], even though the clauses were interpreted to be primary obligations and, therefore, not subject to review as penalties. In the Beavis case, where the clause was a secondary obligation, the Supreme Court suggested that ParkingEye had a legitimate interest in making the £85 charge as a means of managing the car park for the retailers around the car park so that cars weren’t blocking spaces all day and, therefore, deterring shoppers [para 99]. However, does this mean that on a quiet day (and hence no pressure on parking spaces) there would be no ‘legitimate interest’?

The addition of ‘legitimate interest’, while it does make things a little more uncertain since cases will now turn on what amounts to a ‘legitimate interest’, and that will inevitably require judicial determination, it might make it more difficult to challenge a clause on the basis that it is penal.

The other matter on which the Supreme Court made a determination was in the Beavis case and whether the £85 charge infringed the UTCCR 1999. Drawing on the decision of the Court of Justice of the European Union in Aziz v Caixa d’Estalvis de Catalunya, Tarragona i Manresa (2013), which interpreted the Directive from which the UTCCR 1999 were drawn, the SC held (6-1, Lord Toulson dissenting) that the charge did not fall within the test of unfairness under regulations 5 and 6(1). Though the term was not individually negotiated, it did not cause a significant imbalance in the interests of the parties because there was no bad faith on the part of the company levying the charge. This is quite a restrictive interpretation of the provision and one with which Lord Toulson, as indicated, did not agree.

Note that though the UTCCR 1999 was repealed and replaced on 1st October 2015 by the Consumer Rights Act 2015, the decision in Beavis will continue to have some application under the new Act given the near rehearsal of the language of the Regulations in the 2015 Act and, further, because the decision of SC was based on a European judgment interpreting the Directive from which much of the pertinent law in the 2015 Act is drawn.

The joined appeals in El Makdessi and Beavis provide interesting interpretation and updating of the approach to be taken in penalties cases. By the addition of ‘legitimate interest’ into the assessment of penalties, the Supreme Court has introduced a slight element of uncertainty but, at the same time, rendered it a little more difficult to challenge such charges. Perhaps the underlying rationale is a preference for principles of freedom of contract? In cases such as El Makdessi, the courts should use powers to regulate penalties sparingly, respecting instead what the parties have agreed, unless what is agreed is so egregious that it should be checked.

Implied Terms (again) – Same issues, same judge!

On 31st October 2015 we published a blog post on the case of Classic Property Developments (South East) Ltd v Islam and others [2015] EWHC 2958 (Ch) where Arnold J bravely applied the Privy Council case of AG of Belize v Belize Telecom Ltd (2009) when considering the law on implying terms into a contract, when the Court of Appeal decision of Mediterranean Salvage and Towage Ltd v Seamar Trading and Commerce Inc (2009) would appear to be binding upon him. Well, it seems this is not the learned judge’s first brave move, for a leisurely look back through some September High Court cases turns up The Creative Foundation v Dreamland Leisure Ltd & Ors [2015] EWHC 2556 (Ch)* where, once again unperturbed by binding Court of Appeal authority, Arnold J cites the advice of the PC in AG of Belize v Belize Telecom Ltd (2009) as providing the definitive legal position when a term can be implied into a written document. What can be drawn from these cases? It seems that Arnold J is a trailblazer for bold judicial statements, and long may it continue! At least it gives us something to write about.

*The case of The Creative Foundation v Dreamland Leisure Ltd & Ors [2015] EWHC 2556 (Ch) is interesting in its own account for its memorable facts and the implications which it has for leasehold interests and removal of aspects of the leased property.

Litigants in person – Know when to keep your counsel

Litigation can be costly. This is probably why, if alternatives exist, litigation should always be the last resort. That said, if the dispute is litigated, the costs can be limited by representing oneself – becoming a litigant in person. There is some interesting statistical data which indicates (unsurprisingly) high levels of self-representation in ‘family’ litigation. Divorces, up to 70 per cent, Children Act applications, up to 50 per cent, and so on. Similarly eyebrow-raising statistics can be drawn from general civil litigation. (Source: Moorhead, R. and Sefton, M. (2005) Litigants in person. Unrepresented litigants in first instance proceedings. Department for Constitutional Affairs Research Series, 2/05).

Litigants in person are provided with assisitance in the form of the, ‘Handbook for Litigants in Person’ published on the Judiciary website. In the Foreword to the Handbook, we are warned of the possible increase in litigants in person over coming years and of the role which the judiciary has in seeing the appropriate administration of justice:

‘In an environment where more individuals litigate on their own behalf it is incumbent on the judiciary, amongst others, to do what it can to help them navigate the civil justice system as effectively as they can.’

Of course, the judges must remain impartial, but that does not mean to say that they will not be mindful of the difficulties presented to a litigant in person by the civil justice system. Therefore, it is probably wise to keep a judge on-side and not, in any way, to threaten or abuse the presiding judge, no matter how hollow the threat might be. I was caused to consider this by a quick read of the recent family case of Veluppillai v Veluppillai & Ors [2015] EWHC 3095. This is extracted from paragraph seven of the judgment:

“THIS IS MIS-CARRIAGE OF JUSTIC MOSTYN – I WANT THE F**KING UPDATE ON WHAT IS HAPPENING YOU F**KING TALIKIUNG MY HARTD EARNED MONEY MOSTYN WHO THE HELL ARE YOU MAKING DECISION ON MY MONEY. HAVE YOU EARNED THIS FUCKING MONEY. YOU ALL MUST BE EXECUTED IN A GAS CHAMBER. I WANT THE FUCKING RESPONSE NOW.”(sic)

While I have no doubt that this would not affect the impartiality of one of our most respected judges, any litigant in person would do well to remember that there is a manner of conducting oneself in the course of litigation that does not necessarily need to be taught in a law school.

Implied terms – By which court am I bound?

With all the talk of the constitutional crisis created by the House of Lords and its rejection of the tax credits reforms, it is unsurprising that this week a judicial crisis was overlooked. Okay, so I may be writing with tongue firmly in cheek, but it does seem that judicial hierarchy has been something quietly forgotten in the High Court. The case of Classic Property Developments (South East) Ltd v Islam and others [2015] EWHC 2958 (Ch) concerned, among many things, the thorny issue of when it is permissible for a term to be implied into a contract. This is a matter which has been the subject of some judicial discussion recently, caused for the most part by the impact of the Privy Council decision of AG of Belize v Belize Telecom Ltd (2009). In Belize, a new approach to implying terms was taken, moving away from the traditional ‘officious bystander’ and ‘business efficacy’ approaches of earlier cases, to a slightly more pragmatic approach to determining the content of the contract which the parties neglected to include.

The reaction to the decision in Belize, of course not binding, came first from the Court of Appeal in Mediterranean Salvage and Towage Ltd v Seamar Trading and Commerce Inc (2009). While Mediterranean Salvage didn’t wholeheartedly embrace Belize, it did give a sop to it while continuing to reference the old law. Then came the decisions of Jackson v Dear (2012), and Aberdeen City Council v Stewart Milne Group Ltd (2011), the latter being a Supreme Court case, where the traditional approach was taken using the ‘officious bystander’ and ‘business efficacy’ tests to imply a term. Indeed, in the Aberdeen City Council case, reference was made neither to Belize nor Mediterranean Salvage. It is scarcely surprising, therefore, that confusion abounds. Enter, Mr Justice Arnold who, when faced with the prospect of having to deal with (apparently) conflicting authorities, plumped for the formulation provided by the Privy Council in Belize. Such was the judge’s confidence as to the correctness of the formulation of the Privy Council in Belize, that no other case was cited and Belize represented the legal position without any apparent challenge. This is certainly a bold judicial move by Mr Justice Arnold whose decision, if appealed, will certainly come in for close scrutiny by appellate courts.

Promissory Estoppel – Rumours of its death are greatly exaggerated

The doctrine of promissory estoppel is often a law student’s first substantive contact with the judicial musings of Lord Denning. Though Lord Denning did not always find favour with his brother judges, students tend to have a sickening sentimentality for old Tom. It is in this vein that students around the country might well cheer the news that his doctrine of promissory estoppel is alive and well having been (albeit unsuccessfully) resurrected in the case of Dunbar Assets plc v Butler [2015] EWHC 2546 (Ch).

The case is notable for restating the principles applicable to promissory estoppel, confirming the approach of Robert Goff, J, in BP Exploration Co (Libya) Ltd v Hunt (No.2) (1979). There must be a:

1). legal relationship between the parties;
2). clear and unequivocal representation, express or implied, by one party that he will not enforce his strict rights against the other;
3). reliance by the representee (whether by action or by omission to act) on the representation;
4). rendering it inequitable, in all the circumstances, for the representor to enforce his strict rights.

While a restatement of the principles applicable to any area of law is always to be welcomed on grounds of certainty, the challenge to the party seeking to claim the defence of promissory estoppel lies, as ever, in convincing the judge of the merits of their claim. With something as controversial as promissory estoppel, this may not always be straightforward.

Perhaps Kierkegaard was right all along?

The courts continue to generate much of interest to students and practitioners of equity and trusts and the decision of the Privy Council in The Federal Republic of Brazil v Durant International Corporation and another [2015] UKPC 35 is no exception.

The facts of the case are tedious and complex, but essentially concerned the recovery of bribes paid to a public official. The claimants sought to recover these bribes using principles of equitable proprietary tracing. In English law, tracing requires payments to be made in a particular sequence in order for the recovery of the funds by the innocent party to be permitted. Recovery of payments out of sequence are not permitted, meaning English law does not allow backwards tracing. Backwards tracing might be explained in the following way.

Let’s say that I have £5,000 in my bank current account and I pay £6,000 for a car, the bank providing me with an overdraft of £1,000. In order to clear the overdraft, I steal £1,000 from the company of which I am a director and pay that into the account giving a balance of nil. Under the usual principles of equitable proprietary tracing, the £1,000 would be regarded as dissipated (gone because it was used to pay the overdraft debt), with the consequence that the company cannot trace the £1,000. However, the PC has indicated in the Durant case that it may be possible to ‘backwards trace’ into the overdraft and claim an interest into the car which was purchased. Previously this would not have been permitted because the innocent party (the company) had no proprietary interest in the funds used to purchase the car.

Lord Toulson, who delivers the Advice of the PC, is keen to highlight the context of this change in the law. His Lordship emphasises the ‘increasingly sophisticated’ means of committing fraud and money laundering, which often involve transfers and transactions across jurisdictions, through intermediaries, and so on, making traditional tracing rules somewhat difficult to apply. Consequently, the judicial arsenal needs to be as full as possible. Echoing the sentiment expressed by Richard Scott V-C in Foskett v McKeown, the order in which transactions occur in bank accounts should not matter as much as the need to administer justice in cases of this kind. However, Lord Toulson is keen to place limits on the operation of backwards tracing:

‘….the claimant has to establish a coordination between the depletion of the trust fund and the acquisition of the asset which is the subject of the tracing claim, looking at the whole transaction, such as to warrant the court attributing the value of the interest acquired to the misuse of the trust fund.’(para 40)

For students who already struggle with some aspects of the tracing rules in equity, I can’t imagine backwards tracing will be given a warm reception, but for practitioners it does provide exciting opportunities and flexibility when arguing cases such as those which Lord Toulson has in mind. In reflecting on this change one can’t help but feel that Kierkegaard had it right when he stated that, ‘Life can only be understood backwards; but it must be lived forwards.’ The law is moved forwards by backwards tracing.

The rise and fall of the donatio mortis causa

Few appellate cases on the donatio mortis causa (death-bed gifts) appear, but when they do their impact is often keenly felt. This is so with the recent decision of the Court of Appeal in the case of King v Chiltern Dog Rescue [2015] EWCA Civ 581.

In the case, the claimant’s aunt made a valid will in March 1998. The will made a number of legacies, but principally left the aunt’s estate to a number of animal welfare charities. In 2007, the claimant, King, went to live with his aunt. At the time, the aunt was elderly and frail, but suffered from no known illness or disease. The claimant claimed that the aunt promised her house to him after her death. She did this on a number of occasions. She did not revoke her will of 1998, but it was claimed that a new will was drafted, but never executed. Approximately, four to six months before her death, the claimant claimed the aunt said, ‘this will be yours when I go’, and handed him the deeds to the house, title being unregistered. In February 2011, a document was produced which read as follows:

‘In the event of my death I leave my house Garden Car etc [sic] and everything to Kenneth Paul King … in the hope he will care for my animals as long as reasonable.’

The aunt died in April 2011. The claimant sought to prove that a valid donatio mortis causa (‘DMC’) of the house had occurred, whereas some of the charities argued the 1998 will remained valid, and that the house passed under it. At first instance, the judge found for the claimant. The charities appealed. In a detailed analysis of the law, Jackson, Patten, and Sales LJJ agreed that the appeal should be allowed and that a valid DMC had not been made out on the facts.

The principal judgment was delivered by Jackson LJ, with which Patten and Sales LJJ agreed. The conditions for the award of a DMC were affirmed as:

(i) Donor contemplates impending death;
(ii) Donor makes a gift which will only take effect if contemplated death occurs. Otherwise, the gift is revoked;
(iii) Donor must deliver dominium or control of the subject-matter of the gift to donee.

However, Jackson LJ was careful to explain that the DMC should be kept within its ‘proper bounds … [resisting] the temptation to extend the doctrine to an ever wider range of situations.’(para 54) Taking each condition in turn, an opportunity was taken to place them in ‘proper bounds’. The first requirement has it that the donor should be in contemplation of impending death for a specific reason. For example, hospitalisation after a serious accident (Birch v Treasury Solicitor [1951] 1 Ch 298), hospitalisation as a result of serious illness (Re Beaumont [1902] 1 Ch 889), or where the donor has a terminal illness (Sen v Headley [1991] Ch 425). The donor does not have to be on their death-bed, but must have, ‘good reason to anticipate death in the near future from an identified cause.’(para 55) His Lordship then considered the recent case of Vallee v Birchwood [2013] EWHC 1449, where a valid DMC had been found where an elderly father sought to give his house to his daughter by handing her keys and the title deeds (where title was unregistered), some six months before his death. The father was elderly, but did not have a known illness. Jackson LJ felt that Vallee did not satisfy the first condition and that, ‘Vallee was wrongly decided’(para 60). The donor, ‘like many elderly people, was approaching the end of his natural life span. But he did not have a reason to anticipate death in the near future from a known cause.’(para 56)

Insofar as the second requirement is concerned, Jackson LJ reflected that the DMC is an unusual form of gift in that it only takes effect when the donor dies, but that it may be revoked at will, or if the donor, ‘does not die soon enough’(para 58), though his Lordship does not indicate how soon would be soon enough. Nevertheless, it is an ‘essential element’(para 59) of the DMC.

The third requirement, namely that dominion should pass from donor to donee, would have been satisfied in this case when the aunt passed the deeds of the house to the nephew. This is consistent with the important case concerning DMCs of land (Sen v Headley [1991] Ch 425). Interestingly, in both the case of Sen and the case of King, title to the land was unregistered. There remains no case on whether a valid donatio mortis causa of land where title is registered could be valid. However, some academics think this may not be possible, especially in light of changes made to registration of title by the Land Registration Act 2002 (see, Roberts, Donationes mortis causa in a dematerialised world [2013] Conveyancer and Property Lawyer 113).

The donatio mortis causa remains an important exception to the equitable maxim that equity will not assist a volunteer, but that the case of King reminds us that this exception is to be kept within a proper confine and not allowed to become somewhat ambulatory. Indeed, one might go further to suggest that the case of King is but a recent example of a trend of reigning in rather more liberal exceptions to the equitable maxim. I think, for example, of the controversial case of Pennington v Waine [2002] EWCA Civ 227, and the attempts to limit its operation by the cases of Zeital v Kaye [2010] EWCA Civ 159 and Curtis v Pulbrook [2011] EWHC 167 (Ch). However, this is not to suggest that these moves are necessarily a bad thing. Clarification of the law, and the promotion of certainty, are always to be welcomed. That said, one is rather left with the view that the flexibility which was central to equitable jurisdiction is too often sacrificed at the altar of certainty.