In the Estate of Fuld (deceased) (No 3) Hartley and Another v Fuld and Others (T

[1965] 3 All ER 776
[1966] 2 WLR 717

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(Judgment by: SCARMAN J)

In the Estate of Fuld (deceased) (No 3) Hartley and Another
v. Fuld and Others (The Attorney General intervening)

Court:

Judge:
Scarman J

Judgment date: 1 November 1965

United Kingdom

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Judgment by:
SCARMAN J

Introductory. Peter Harry Fuld (herein called "the testator"), a Canadian citizen and British subject, died at Frankfurt, Germany, on 21 March 1962. During the last nine months of his life he put his signature to five instruments of a testamentary character. This action is brought to determine whether these instruments, or any of them, should be admitted to probate in England. The instruments are:-(a) a will, dated 16 July 1961, typewritten, executed in the two-witness form; (b) a first codicil, dated 16 October 1961, in the testator's own handwriting, executed in the two-witness form; (c) a second codicil, dated 3 November 1961, in the handwriting of the testator's mother, executed in the two-witness form; (d) a third codicil, dated 23 November 1961, typewritten, executed in the two-witness form; and (e) a fourth codicil, dated 19 February 1962, typewritten; two instruments exist, both executed in the two-witness form. A copy exists in the testator's own handwriting of the second codicil; the copy was made on or after 16 December 1961.

The testator left an estate, the value of which has been estimated at approximately £6 million. The bulk of it consists of an interest in a group of companies centred in Frankfurt and engaged in the manufacture of telecommunications equipment. The business of these companies, founded on the work of his father who died before the war, showed a substantial expansion in the post-war years-a period when the testator had the benefit of the guidance and advice of the first plaintiff, Mr Hartley, in his business affairs. Part of the estate-I am told approximately £1 million-is situate in England: and it is this fact which gives the court jurisdiction to entertain the suit.

The state of the suit at the conclusion of the evidence can be summarised very shortly. The plaintiffs, Mr Hartley, an English solicitor, and Mr Blows, an English accountant, sue as two of the executors to prove the will and the first codicil. They challenge the validity of the second, third and fourth codicils. They enjoy the active support of a number of the beneficiaries under the will, who are also parties to the action. Among their principal supporters are the following defendants: Christiane Felsmann, a cousin of the testator; Felix Goldschmidt, also a cousin; Ivy Maynier, though her pleaded position is neutral, and Margaret Gallagher. The plaintiffs' challenge to the second, third and fourth codicils may be summarised as follows:-(a) second codicil-that it is neither formally valid nor proved to be the instrument of a free and capable testator; (b) third codicil-that it is formally invalid; and (c) fourth codicil-a similar attack to that on the second. Some of the defendants go further than the plaintiffs and allege the exercise of undue influence by the deceased's mother, by the eleventh defendant, Karl Saueracker, and by the twelfth defendant, Dr Tarnesby, in the preparation and execution of the second, third and fourth codicils. These defendants also include the third codicil in their challenge to capacity and to knowledge and approval.

Dr. Tarnesby seeks to prove, in addition to the will and the first codicil, the remaining codicils. For the greater part of the hearing he has fought a lone hand. As can be seen from the pleadings, the testator's mother, his ex-wife, Marina Fuld, and the mother's chauffeur, Karl Saueracker, were at one time active participants in the litigation. None of them, however, stayed the course. The chauffeur was legally aided for a time, but his legal aid was withdrawn on the eleventh day of the evidence and he took no further part in the trial. Marina Fuld came to terms with the beneficiaries, other than Dr Tarnesby, Karl Saueracker, and the mother, on the same day and elected by her counsel to take no further part in the trial, reserving however her right to be heard on costs. The mother, after showing considerable fight in the early stages, came to terms with the plaintiffs and the second to ninth defendants inclusive after fifty-three days of evidence, since when her sole concern appears to have been costs.

In the result, as the court approaches the moment of judgment, there is no challenge in being to the will or the first codicil: and only Dr Tarnesby seeks to establish the subsequent codicils. The court, however, is not bound by the manoeuvres of the parties, and will admit to probate only those instruments which it is satisfied constitute the testator's true last testament under English law-including in the term "English law" the rules of English private international law.

The issues which the court has to try are as follows:-

1.

The domicil of the testator at the date of his death.

2.

If his domicil be other than English, the choice of law to be applied in determining the validity as testaments of the five instruments.

3.

If German law applies, the scope of the German conflict of laws rule applicable to the case, and finally,

4.

Whether all or any of the five instruments propounded are entitled to be admitted to probate in England.

With respect to each instrument, I shall consider separately the problems of its formal validity or due execution, the testamentary capacity of the testator, the extent of his knowledge and approval, and whether it was procured by the undue influence of others. For the sake of clarity I have used the language of English law in describing these problems. In truth, whether German law or English law is to be applied, the court is ultimately faced with one question-whether these instruments represent truly the last testament of a free and capable testator.

[His Lordship, having stated who were the parties to the suit and their relationship to the deceased, turned to the question of the deceased's domicil, and, having reviewed the law and the evidence, found that the deceased "was at all material times domiciled in Germany". His Lordship then approached the question of the choice of law and continued:] The question now arises as to the law which I am to apply. So far as this case is concerned, the law of Ontario may be treated for all practical purposes at the same as English. The choice therefore lies between German and English law. There are two general principles:

1.

"the post-mortuary distribution of the effects of a deceased person must be made according to the law of his domicil at the time of his death" (per Lord Wensleydale in Bremer v Freeman ((1857), 10 Moo PCC 306 at p 358.));

2.

"the law of evidence in the lex fori which governs the courts. Whether a witness is competent or not: whether a certain matter requires to be proved by writing or not: whether certain evidence proves a certain fact or not: that is to be determined by the law of the country where the question arises, where the remedy is sought to be enforced, and where the court sits to enforce it" (per Lord Brougham in Bain v Whitehaven and Furness Junction Ry Co ((1850), 3 HL Cas 1 at p 19.)).

The application of these principles, the first of which is subject to certain statutory exceptions to which I shall refer later, means that the validity of each of the testamentary instruments propounded depends on whether they comply with the requirements of the law of Germany, being the land of the testator's domicil at the time of his death: but that questions of the admissibility and weight of evidence, and of the inferences to be drawn from the evidence, are to be determined in accordance with English law.

The difficulty, as so often, is not the statement but the application of principle. When is a question one of substantive law? When is a question merely one of evidence or procedure? I attempt no general answer to these questions: for answer can only be made after an analysis of the specific questions calling for decision, their legal background and factual context: for a striking illustration of the approach of our courts to such questions see the judgment of Uthwatt J in Re Cohn. It is therefore necessary for me to consider the problem of choice of law in the context of the various issues which raise it. They are:-(i) formal validity, or due execution; (ii) testamentary capacity; (iii) knowledge and approval, and (iv) undue influence.

Formal validity. This is a question of substantive law and would, in the absence of statutory provision, fall to be determined by the law of the domicil. The testator dies too soon to take the benefit of the Wills Act 1963 ; but, being a Canadian national and therefore a British subject at his death, he did have the benefit of Lord Kingsdown's Act, the Wills Act, 1861. The will and the second codicil made by a British subject and executed in England in compliance with the requirements of the Wills Act, 1837, are, subject to proof of due execution, formally valid by s 2 of the Act of 1861. The first codicil, being a holograph instrument, admittedly complies with the formal requirements of German law, and is therefore formally valid by the law of the domicil. The third and fourth codicils depend for their formal validity on German law: Lord Kingsdown's Act does not help because they were made in Germany by one whose domicil at all material times, ie, birth, time of execution, and death, was German. There is a profound dispute as to the German law applicable to these instruments, which I shall have to consider at a later stage.

Testamentary capacity. The general rule is clear that the capacity of a testator is to be determined by the law of his domicil (In the Goods of Maraver). I know of no distinction drawn between lack of capacity due to immaturity or status and incapacity arising from ill health, and I have not been referred to any English case in which the distinction has had to be considered. It is, however, clear that the German law of succession will treat a will as void if the testator, through mental weakness or disturbance of consciousness, is unable to understand its contents. In the words of the German Federal Supreme Court in a judgment (iv Zr 251/57) of 29 January 1958, it was said:

"It is necessary that the testator should also be able to form a clear idea on the consequences of his dispositions, particularly on their effect on the personal and economic conditions of those concerned, and on the grounds speaking for and against their moral justification, and that he should be able to act in accordance with this view free from the influence of any interested third parties."

Thus, though the idiom be different, the law in substance is the same. Under each system a will must express the true will of a free and capable testator. There may, however, be a difference between the two systems as to the incidence of proof. Under German law he who asserts lack of capacity must prove it: but, if he proves mental illness, the burden shifts to him who alleges a lucid interval. English law relies on a presumption of sanity unless there be circumstances which reasonably give rise to doubt, when the burden of calling affirmative evidence falls on him who propounds the will.

Were it necessary to make a choice I would think it correct in principle to accept and apply the German concept of testamentary capacity; it is, however, essentially the same as the English. This leaves open the question whether, if there be a difference between the two systems as to burden of proof, I should apply the German or English rule. For reasons which I give more fully in succeeding paragraphs, I have come to the conclusion that the English probate court, if conducting its enquiry de novo and not merely giving effect to a probate, or its equivalent, already granted abroad, must in all matters of burden of proof follow scrupulously its own lex fori.

Knowledge and approval. If the English rule which is commonly described by this phrase be part of the substantive law, it does not call for consideration: if, or in so far as it is a rule of evidence or procedure, it is to be applied as part of the lex fori. It is necessary, therefore, that I should attempt to analyse and classify the rule in the same sort of way as Uthwatt J analysed and classified the English rule of succession to commorientes in the case Re Cohn.

The rule, of course, assumes the existence of a rule of substantive law, namely, the requirement of knowledge and approval for the validity of a testamentary instrument. I may add that German law also, as one would expect, requires a valid will to express the real intentions of the deceased. The court, therefore, must, in any event, decide whether the various instruments propounded do express the intentions of a free and capable testator: for, in effect, both German and English substantive law require this of a valid will.

The English rule of knowledge and approval has been considered most recently by the House of Lords in Wintle v Nye. The headnote in the report is instructive because it suggests two significant features of the rule ( [1959] 1 WLR 284 ; [1959] 1 All ER 552 , see also the editorial note at p 553.):-(i) that there are circumstances, eg, a professional relationship, in which English law places an exceptionally heavy burden on a party to establish knowledge and approval; (ii) in cases where the burden is imposed the court is to be vigilant and jealous in scrutinising all the circumstances. The headnote therefore lends colour to the view that the rule is part of the law of evidence.

In my opinion, the whole point of the rule is evidential; it is concerned with the approach required of the court to the evidence submitted for its consideration. In the ordinary case proof of testamentary capacity and due execution suffices to establish knowledge and approval, but in certain circumstances the court is to require further affirmative evidence. The character of the rule as evidential emerges clearly from the speeches of Viscount Simonds and of Lord Reid ([1959] 1 All ER at pp 557, 558 (Viscount Simonds), 560, 561 (Lord Reid).). Both their Lordships relied strongly on the classical statement of the rule to be found in the judgment of Baron Parke in Barry v Butlin.

I shall deal under the heading of the second codicil with the scope of the rule to be found in Barry v Butlin and Wintle v Nye. It is sufficient now to indicate that it is a rule which in certain cases requires of the court vigilant care and circumspection in investigating the facts of a case. It is a rule which calls on the court not to grant probate without full and entire satisfaction that the instrument did express the real intentions of the deceased.

I am therefore satisfied that it is a rule evidential in character and to be applied by the English court as part of its lex fori, if the facts of the case are such as to call for its application.

Undue influence. It needs no analysis to support the assertion that the law which defines the nature and consequence of undue influence is part of the substantive law of wills. It is to be noted that the doctrine, as such, has no independent existence in German law, which, however, treats influence as one of the factors to be considered in determining whether the instrument expresses the free will of the testator, and provides that a transaction "contra bonos mores" is void. It follows that, since I must apply German substantive law as the law of the domicil, the English doctrine need not, in terms, be considered. It is not, however, to be thought that blind adherence to foreign law can ever be required of an English court. Whether the point be described in the language of public policy, "discretion", or "the conscience of the court", an English court will refuse to apply a law which outrages its sense of justice or decency. But before it exercises such power it must consider the relevant foreign law as a whole. The present case is a good illustration: German law contains no specific doctrine of undue influence-or, I might add, of knowledge and approval in its substantive aspect-but a review of its law of succession shows very plainly that it requires a valid will to be one which expresses the intentions of a free and capable testator. There can be no outrage in applying such a law in a case which prima facie calls for its application.

To conclude, a comparative examination of the two systems of law reveals, as one would expect, that each requires of a valid will that it be the true will of a free and capable testator. The systems differ as to the incidence of proof-notably in their respective approaches to the problem of burden of proof in regard to testamentary capacity. Which approach is the English court to adopt? I have no hesitation in saying, as I have already mentioned, that it must follow the lex fori, its own law. The English court is being asked to grant probate in solemn form. On it falls the responsibility of deciding whether the instruments propounded express the real intentions of the testator. In my judgment the discharge of this responsibility is a matter for the judicial conscience of the court, guided in the business of investigation and proof by its own lex fori.

The court is not being asked to give effect to a "foreign probate". Indeed it is conceded that no order equivalent to probate in solemn form has yet been made by a German court, and I have not been asked to adjourn until a German court of appropriate jurisdiction pronounces an order equivalent to probate. On the contrary, the parties, as is their right, have required the English court to conduct its own protracted enquiry into the facts. The court must conduct such an enquiry in accordance with its own "lex": and in cases where suspicion arises the requirements of this "lex" are strict indeed.

My conclusions on choice of law are, therefore:-(i) formal validity is to be determined by German law, subject to the provisions of the Wills Act, 1861; (ii) on a true comparison of the two systems, each requires, as a rule of substantive law, that a will to be valid must express the true intentions of a free and capable testator, and each attaches the same essential meaning to capacity and free will; (iii) there appear to be differences in their respective approaches to proof, and this is the realm of the lex fori, which I must apply; and (iv) the rule in Wintle v Nye is part of the approach to proof and is evidential in character. I must therefore apply it, if the facts warrant its application.

[His Lordship then considered a point of German private international law in regard to the third and fourth codicils, as these instruments were executed in proper form if English law applied but were invalid for want of proper form if German internal law were solely applicable. The parties were at issue on the question whether German law would allow the formal validity of the two instruments to be determined by Canadian law, ie, in the present case, the law of Ontario. His Lordship, having considered the relevant German law and having concluded that German internal law applied and that the third and fourth codicils lacked formal validity, turned to the challenge to the will and codicils or gifts thereunder by allegations of undue influence or of the relevant testamentary documents not expressing the testamentary dispositions of a free and capable testator, which latter question was relevant for the purposes of German or English law. After stating that the attack against the will and first codicil was no longer persisted in, but must be considered, His Lordship found that the charges in relation to the will ought never to have been made and that both instruments expressed the will of a free and capable testator. Having reviewed at length the evidence concerning the third and fourth codicils and the testamentary capacity of the deceased at the relevant times, His Lordship found that the circumstances had been such as to require the court to be affirmatively satisfied (applying Tyrrell v Painton), and that it had not been established affirmatively to the satisfaction of the court, that the third codicil and the fourth codicil expressed the testamentary will of a free and capable testator; but His Lordship found also that undue influence was not established. Accordingly His Lordship pronounced for the will and first codicil, and against the third and fourth codicils. His Lordship pronounced also against the second codicil.]

Probate of the testator's will and first codicil granted: second, third and fourth codicils rejected.

[22 November. Delivering judgment on the question of costs His Lordship stated that, in accordance with the principle enunciated in Re Plant, Wild v Plant, an executor was ordinarily entitled in the probate court to his costs without resort to the discretion of the court, if he were an executor under a will or other instrument which was admitted to probate, but that his contractual right might be defeated if his conduct had been such as to amount to a violation of his duty as executor or if his conduct (including his conduct at the trial) had been thoroughly unreasonable. In the present case the plaintiffs were executors under the will and first codicil, both of which were admitted to probate. They were entitled to their costs out of the estate and there was no need for the court to make any order in respect of their costs, since their right was founded on their contract, as recognised to exist between them and the estate. The thirteenth defendant was an executor of the German estate by reason of the first codicil; he also was entitled to his costs out of the estate. The fifth, sixth, seventh, eighth and tenth defendants had taken no improper part in the litigation, were entitled to be represented to protect their interests, and were entitled to their costs out of the estate on a common fund basis, such costs to include the cost of the assistance of foreign lawyers during the hearing. The ninth defendant was also to have her costs out of the estate. The Attorney General's intervention was clearly proper, and he was entitled to his costs out of the estate on a common fund basis. The first defendant had supported the codicils which the court rejected, but such knowledge as she had had of the circumstances made it not unreasonable for her to support them; moreover at an early stage she had ceased to take an active part in the litigation, having come to terms with some of the defendants, and in all the circumstances she was entitled to have her costs out of the estate on a common fund basis. Turning to the costs of the eleventh defendant, His Lordship stated that insofar as the eleventh defendant sought to support the rejected codicils he had failed, but insofar as he had to meet charges of undue influence he had succeeded. The eleventh defendant had in fact taken little part in the litigation; he was concerned in preparing for trial, and from 20 January until 17 March had had legal aid; his counsel withdrew on 22 March legal aid having been withdrawn a few days earlier. The eleventh defendant took part in two major sets of negotiations and incurred costs in attending judgment. No objection had been raised by any party to the comparatively small costs of the eleventh defendant being paid out of the estate. His Lordship accordingly ordered that the eleventh defendant should have his costs out of the estate on a common fund basis. The second, third and fourth defendants had made an attack that was successful on the three rejected codicils, and had also made charges of undue influence which failed. These charges had been very closely related to the investigation of testamentary capacity, knowledge and approval of the testator in regard to the three rejected codicils, and had not added materially to the investigation which other circumstances forced on the court, though, if the parties had properly analysed the effect of the decision in Wintle v Nye the charges of undue influence would probably not have been raised. Nevertheless, these defendants had been substantially successful and the charges on which they had failed had not added unnecessarily to the costs; accordingly they were entitled to their costs out of the estate on a common fund basis. They had been represented by three counsel, and in a case of the complexity and importance of the present case, that was a reasonable representation and the costs of three counsel would be allowed.

In regard to the costs of the twelfth defendant, who had given false evidence in support of the three rejected codicils, His Lordship's found that, in propounding the three codicils in the way that he did, he was guilty of violation of his duty as executor or, to use more modern language, of thoroughly unreasonable conduct. He had by reason of his conduct lost his contractual right to costs out of the estate. It remained for the court to exercise its discretion in regard to his costs, his contractual right having gone. It was claimed on his behalf that he had been successful insofar as he had supported the will and the first codicil; but he had signally failed to establish the second, third and fourth codicils. He had succeeded in resisting charges of undue influence made against him. His Lordship said that he would, therefore, deprive the twelfth defendant of having costs out of the estate. The twelfth defendant had known the essential facts in relation to the fourth codicil and much of the crucial facts in relation to the second and third codicils; in regard to those instruments he was largely in the position of a litigant who had lost his case, and costs ordinarily followed the event. Nevertheless he had succeeded in resisting charges of undue influence in relation to those codicils. His Lordship ordered that the twelfth defendant should pay twenty per cent of the costs of the estate taxed on a party and party basis. The costs to be brought into account as costs of the estate for this purpose were the plaintiffs' costs; such costs as the plaintiffs had to pay (out of the estate) in respect of the second and ninth defendants (including costs of other parties represented by the same solicitors as acted for the second defendant); but the costs of other parties which had been ordered to be paid out of the estate were not to be brought into account for this purpose. The fourteenth defendant had made an attack on the will and the first codicil which collapsed, and during most of the trial she had, more by silence than any other way, supported the attack on the three codicils which succeeded; a charge of undue influence made against her failed, although it had been based on reasonable grounds. His Lordship had to consider, in light of the fact that on about the fifty-third day of evidence the fourteenth defendant had come to terms with the plaintiffs and the second to ninth defendants, the mixture of successes and failures that she had sustained in the action; her unreasonable early conduct in attacking the will, and her withdrawal of that attack at a time when it meant a very real saving in further costs to the estate. His Lordship said that he had reached the conclusion that he should not order her costs to be paid out of the estate, but that he would not order her to pay any of the costs of the estate. Accordingly, in regard to the costs of the fourteenth defendant, no order would be made.]