Deathbed Gifts – Donatio Mortis Causa and Real Property

July 1, 2015

 

 

Deathbed Gifts – Donatio Mortis Causa and Real Property
 
A will needs to be in writing, and a will needs to be witnessed by two people. That is plain from section 9 of theWills Act 1837. Absent these two essential characteristics a will is not effective and property will pass under either a pre-existing will or alternatively under the rules of intestacy.
 
Donatio mortis causa (“DMC”) demonstrates that there is an exception to this.

DMC is an old equitable doctrine that a gift made in contemplation of death to take effect of the death of the donor is effective notwithstanding the fact that the gift does not comply with the Wills Act or, in the case law pre-dating the Wills Act, the Statute of Frauds 1677. Two recent decisions of the High Court –Vallee -v- Birchwood [2013] EWHC 1449 andKing -v- Dubrey[2014] EWHC 2083 – show that there is still life in this old doctrine, and still scope for modern impact.
 
The three requirements for a valid DMC are (per Nourse LJ in Sen -v- Headley [1991] Ch 425 at 431H):
 

1) The gift must be made in the contemplation, though not necessarily the expectation of death;

 

2) The gift must be made on the condition that it is to be absolute and perfected only on the donor’s death and that the gift is revocable until death occurs and ineffective if not; and

 

3) There must be delivery of the subject matter of the gift, or the essential indicia of title thereto, which amounts to a parting with dominion and not mere physical possession over the subject matter of the gift.

 

Sen, like Vallee and King, concerned real property. It was the first case in English law where the court allowed real property as opposed to a mere chattel or a chose in action to pass by reason of a DMC.

 

The facts, in summary, were that a dying Mr. Hewitt told his long-standing friend Mrs. Sen that his house was hers when he died. After Mr. Hewitt had passed, Mrs. Sen discovered that he had slipped the only key to the steel box where he kept the title deeds to his house.

 

The Court of Appeal reversed the decision of Mummery J, and held that Mr. Hewitt’s house passed to Mrs. Sen by reason of DMC. Sen was followed inVallee. In that case a Mr. Bogusz died intestate, but not before handing his daughter Ms. Vallee (who had been adopted by another couple, and so would not stand to inherit from her biological father absent a will) a key to his house and the title deeds. Mr. Bogusz told his daughter that he did not expect to live the four months until her next expected visit and that he wanted her to have his house when he died.

 

This was again held to be a valid DMC. At the time of writing, an appeal is pending in King. That case concerned the nephew (Mr. King) of the late Ms. Fairbrother, who lived with her during her final years. It was claimed by Mr. King that his aunt told him that her house would be his on her death, and that she gave him the title deeds for the house. By successfully establishing a DMC, Mr. King received his aunt’s house on her death rather than the charities who were the residuary beneficiaries under her will. 

 

The courts will be cautious in employing DMC – as stated by Evershed MR inBirch -v- Treasury Solicitor [1951] Ch. 298 at 307:“the courts will examine any case of alleged donatio mortis causa and reject it if in truth what is alleged as adonation is an attempt to make a nuncupative will, or a will in other respects not complying with the forms required by the Wills Act.”Further, the court will subject any claim in respect of DMC to strict scrutiny to ensure that a DMC was in fact intended by the now-deceased donor; see King at [9].

 

It remains, however, an important potential cause of action for those working with probate claims. As far as DMC of real property is concerned, the major unresolved question relates requirement (3) above.

 

In Sen itself, the “essential indicia of title” was held to be the title deeds for Mr. Hewitt’s property, as it was in Vallee and King. The claimant in each case was given dominion over, or exclusive access to, the physical document representing ownership of the gifted property. The issue comes when there is no physical deed over which dominion can be given. The issue comes when the alleged DMC is in respect of registered land. 

 

For there to be a DMC of registered land there would have to be something identified as the essential indicia of title over which the donor could pass dominion to the donee. In the absence of a deed, it is difficult to see what this could be. One suggestion for a way round this relies on the Canadian case ofCooper and Macdonald -v- Seversen. This case involved completed transfers of real property and money by way of a cheque before the death of the donor in circumstances where it was plain that the transfer was intended to be a DMC; see N. Roberts Donationes mortis causa in a dematerialised world[2013] Conv. 113 at 117.

 

The suggestion is that the actual transfer of the land means that the absence of the essential indicia of title is not a problem. In the event that the gift is revoked before the death of the donor, in such circumstances, the donee would hold the land on trust for the donor. This formula does not offend the third requirement for a DMC as set out inSen.

 

It does, however, appear to somewhat limit the doctrine from a practical perspective – if someone is able to effect a transfer of land prior to death, why would they not be able to draft a will or codicil? If the doctrine is not to be so limited, the search is on to find an alternative indicia of title for real property. If this cannot be found, the practical effect may be that the law slowly reverts – as more and more land becomes registered – the pre-Senposition whereby there can only be DMC of chattels or choses in action, not land.

 

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