The High Court has recently held that a daughter is entitled to receive substantial sums from her mother’s Estate in respect of a domestic contract relating to the provision of care.
The Facts
The claim centred around the Estate of Ursula ‘Sheila’ Wills.
In 2017, Sheila was found by her neighbours wandering on the road in a confused state and asking for her husband John, who had passed away some 5 years previously. Sheila’s eldest child, Bernadette therefore arranged for Sheila to stay with her and her husband in Bristol.
Although initially a temporary arrangement, Sheila asked if she could stay with Bernadette. Sheila insisted that she would ‘pay her way’ and that Bernadette would be ‘paid properly for looking after her’, although there was no discussion about how much Bernadette would be paid.
Sheila’s health deteriorated significantly, and she became increasingly dependent on Bernadette for her day-to-day care.
During her time caring for her mother, Bernadette’s siblings repeatedly commented that Bernadette should be financially compensated for the care she gave to Sheila.
Sheila died on 19 April 2020.
Between 21 April 2020 and 21 May 2020, Bernadette transferred herself £100,000 from Sheila’s bank accounts.
Bernadette’s brother, Andrew Wills, challenged these withdrawals in his capacity as Sheila’s Executor. The relationship between Bernadette and her siblings subsequently collapsed. She was reported to Lloyd’s Bank, accused of fraud and prosecuted for theft, albeit she was found not guilty when she stood trial at Bristol Crown Court.
Bernadette subsequently issued a claim to determine whether she was entitled to enforce the agreement between her and her mother.
Mental Capacity
The first issue for the Court to determine was whether Sheila had capacity to enter into a contract with Bernadette.
The judgment is a useful reminder of the presumption that an individual has capacity until the contrary is established.
Although Sheila had a diagnosis of dementia, the Court was clear that this did not automatically mean that she ceased to have capacity. Nor did it mean that she lacked capacity prior to her diagnosis.
Key evidence before the Court included Sheila’s professionally-drafted Will from December 2015, and validly executed Lasting Powers of Attorney made in 2017 and 2018. Accordingly, the Court held that Sheila had capacity to enter into a contract with Bernadette in 2017.
The Contract Claim
It is usually rare that the Court is able to find an intention to create legal relations in a domestic setting.
Of relevance in this case was Sheila’s knowledge that she had sufficient resources and her insistence that Bernadette must be paid ‘properly’ for looking after her, notwithstanding that Bernadette was her daughter.
In addition, the arrangement was a long-term one which involved hard work and anti-social hours which impacted on Bernadette’s existing lifestyle and prevented her from earning an income by other means.
Accordingly, the Court was satisfied that Sheila and Bernadette had intended to create legal intentions, and a valid contract arose.
The Restitution Claim
In the alternative, Bernadette pleaded that she was entitled to payment in the form of restitution as the Estate had been unjustly enriched by her provision of care to Sheila.
The judgment provides a helpful commentary on the concepts of failure of basis and free acceptance. Whilst the Court did not accept that unjust enrichment arose on the ground of failure of basis in this case, it was content to hold that free acceptance was the unjust factor.
This was because Bernadette had conferred substantial benefits on Sheila, who had accepted them, had the opportunity to decline them, and knew that they were expected to be paid for.
Conclusion
This claim was run as a split trial with the judgment dealing only with liability. Whilst the Court held that there was a valid contract between Sheila and Bernadette, the question of quantum is yet to be determined. The parties have been encouraged to attempt mediation to avoid further costly and stressful litigation.
The country’s ageing population and increasing costs of care mean that more and more individuals are choosing to stay at home and be cared for by a family member.
Where previously it has been difficult to enforce family arrangements in respect of compensation for care provided, this case may open the doors for further successful claims where there is sufficient evidence of an intention to create legal relations in a domestic setting.
However, it is important to note that every Court case turns on its facts, and the Court must make a decision based on the strength of the evidence before it. Therefore, it is advisable to seek professional advice on drawing up a written contract in order to protect your right to be compensated for the care you are providing.
At Wolferstans, our specialist Wills, Probate & Trusts lawyers can advise on complex cases involving domestic arrangements for the care of a family member. If you are dealing with similar issues, or would like to discuss how this case may apply in practice, please get in touch on 01752 292201.