Royal Courts of Justice
Thursday, 15th May 2003
Before:
B E T W E E N:
- and -
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MR. H. SMITH (instructed by Messrs. Thompson
Snell & Passmore, Kent) appeared on behalf of the Claimants.
MISS P. REED (instructed by Messrs. Collyer-Bristow) appeared on behalf of the
Defendant.
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1. Enid Davidge was born on 24th September 1910. She was the eldest of three sisters: Margaret, who was born in 1912, married and lived in the USA where she practised as an architect. She had two children, the claimants in these proceedings. There are also grandchildren. The youngest sister, called Jane, was born in 1919. She married and lived in England. She had one daughter, Pene, who is a defendant in these proceedings. She and her husband, John Cairns, have three daughters, of whom the eldest either has or will reach her 18th birthday this year.
2. Enid remained a spinster, a proverbial maiden aunt, much loved by her sisters and their families. She died on 9th April 1998 at the age of 87, leaving a will which had been made on 4th October 1991. It was subject to two codicils made in 1992 and 1995 which, save that they show her active concern for her own affairs, are not material to the present dispute between the cousins.
3. The will left her large house in Blackheath, valued at that time at about £200,000, to Pene. At that time when she made her will she also had other capital amounting to some £300,000. Her family regarded her as wealthy. In 1994 her shares were valued at £320,000, besides which she had cash in building societies out of which, in April 1994, she made a gift to Pene of £35,000. The will and codicils, after a legacy of £3,000 to her daily woman, one Maria Crawford, as she is now called, divided her residuary estate equally between the families of her two sisters, that is one quarter to each of Margaret's children and one half to Jane's daughter Pene. The will named Pene as executrix, and she accordingly obtained probate on 12th January 1999.
4. Already, however, the cousins were in dispute. In July 1998 William Lewis, the second claimant, had telephoned Pene to enquire about his aunt's estate. The American side of the family had somehow gleaned that, instead of there being a residuary estate of some £300,000, there was, after taxes, likely to be nothing or only a few thousand pounds to divide between the two sides of the family.
5. On 6th August 1998 Carolyn Jennings, the first claimant, wrote a letter which, having regard to the way that these proceedings have since developed, is of particular interest and importance, and I must now read some part of it. She wrote:
We are confident that a distribution of Enid's meagre assets as of April 9, 1998 will be handled properly according to the instructions in her will. We are much less confident that the activities which preceded her death will be reported and handled correctly.
In point of fact, we are disturbed by the knowledge that prior to Aunt Enid's death you [that is to say Penelope] and John [her husband] expropriated a large chunk of her assets. As you know, Momp [that refers to Margaret] was sitting in your garden on April 2, 1995 when Aunt Enid told her (in writing) that she had just been forced to sign over her stocks. Shortly before this transfer, Aunt Enid had reviewed her financial affairs with Momp and Katy [that is to say one of the grandchildren of Margaret] and discussed the delicate situation that the accountant handling her government income tax obligations was none other than John's father. We would be very surprised if the government was enlightened about this transfer.
If you had explained your financial situation to Billy [that is the second defendant] and me at the time, I'm sure we would have been supportive of your requesting an early distribution of some portion of your prospective inheritance. After all, we never raised any objections when Aunt Enid wrote that:
1. At your request, she had set up an educational trust fund for your children.
2. At your request, she had reluctantly provided funds for you to pay off the major construction costs for your Ellerby St. home;
3. She re-wrote her will to give you her flat.
However, we heard nothing from you about this April '95 matter. It now appears that you not only took early delivery of your prospective inheritance but you also took most of what Aunt Enid intended to leave to Billy and me.
6. The reference to rewriting the will to give the defendant a flat is misconceived in that an earlier will in 1986, shortly after Pene married, already made such provision, and I accept her evidence that such disposition had always been intended. It was only the aunt's monetary assets which were intended to be divided equally between the two families.
7. Nevertheless, when these proceedings were issued on 29th November 2001, the first claim that was made was to set aside the will as not having been made with Enid's knowledge and approval. Such claim was clearly unjustified and was abandoned before trial. In any case, it had nothing to do with the true complaint, which was, as the letter makes clear, as to the estate's size rather than as to its disposition.
8. Two other claims made in these proceedings, it has transpired, however, were equally clearly justified, and they have been conceded in the course of trial. Firstly, an account is claimed for Pene's use of an enduring power of attorney granted to her on 16th October 1991, that is to say a fortnight after the will was executed.
9. Enid suffered a stroke in July 1996, after which she could no longer write. She was moved into a nursing home in Wimbledon and Pene began to administer her affairs under the EPA. It was not long after that that it should have been apparent that Enid was becoming incapable of managing her own affairs, but the EPA was not registered and, in ways to which I must return, Pene abused her power of attorney.
10. Those facts also justify her removal from acting as executrix, and at a late stage of this trial she agreed to retire in favour of an independent third party. Counsel have undertaken to formulate agreed orders to provide for such account and replacement of the personal representative in a way which will, if possible, avoid the expense of a formal taking of account before the Master.
11. The claims made in these proceedings which have not been either withdrawn or conceded, are that lifetime gifts were obtained by Pene by undue influence and that she should account for losses to the estate arising from such transactions and make equitable compensation. These transactions are particularised in para.5 of the particulars of claim as follows:
a. The sum of £35,000 was paid to the Defendant on 28 April 1994.
b. At least £15,297 (or shares of that value) was paid to the Defendant on 5 April 1995.
c. At least £83,267 (or shares of that value) was paid to the Defendant on 7 April 1995.
d. At least £50,552 (or shares of that value) was paid to the Defendant on 25 April 1995.
e. Renovations to the Defendant's home at 55 Ellerby Street, London, were paid for out of the deceased's assets.
f. School fees for the Defendant's 3 children were paid for out of the deceased's assets, and/or a trust fund to pay future school fees was set up using the deceased's assets.
12. Under (g) of these particulars there is reference to a series of loans made improperly under the EPA to companies belonging to John Cairns, which loans have, however, been repaid. The defendant nonetheless accepted that this abuse of power justified the order for an account of her attorneyship, which has been conceded.
13. The other claims as made have proved, after disclosure, to be somewhat muddled. I have already referred to the gift of £35,000 but must return to its detailed circumstances. I accept the detailed evidence that there was no payment for renovations to the defendant's home and believe that the £35,000 which was paid to Pene to buy out her husband's share in that house is the same as the claimants believed had been made for 'renovations' and, more significantly, is the same as Carolyn referred to in her August 1998 letter as a matter to which her side of the family had raised no objection. These confusions show that although Enid did inform particularly Margaret of some of her affairs, she did not think it appropriate to spell out in detail her generosity to her English niece.
14. Likewise, there is an identity between items (b) to (d), although said to have been paid to the defendant, and (f). The sums there set out amount to £149,116. This is the amount invested in bonds, either of M&G (£ 98,564) or Scottish Amicable (£50,552) and held on trust for the Cairns' children's education under deeds in forms provided by those companies. An additional £22,578 was also realised from the sale of unit trusts and made available to Pene in cash at about the same time, and it is said in order to meet the first year's school fees after April 1995, although only £15,000 was needed for that purpose. Thus Enid's capital was reduced by £171,694, and the Capital Gains Tax liability of some £30,000 remained unpaid at the date of her death.
15. These particulars in the particulars of claim therefore allege as being obtained by undue influence the establishment of an educational trust fund and its funding together with the payment of the additional £22,000-odd, to which the letter of August 1998 said no objection had been raised. This I think comes about because although there was regular correspondence across the Atlantic, mostly but not exclusively between the sisters, proposals for the educational trust had been under discussion for two years before the shares were realised and investments made in 1995, resulting in the allegation in the letter of August 1998 that Enid had been forced to sign over her stocks. There are therefore, in effect, two transactions which are said to have been obtained by undue influence: the payment of £35,000 to the defendant herself in April 1994, and the payment of a total of over £170,000 in part to trustees of investment bonds and in part to the defendant herself in April 1995.
16. There is agreement at the Bar that the authoritative statement of the law as to undue influence is to be found in the speech of Lord Nicholls of Birkenhead in Royal Bank of Scotland v. Etridge [2002] 2 AC 773. As he said at p.794:
Undue influence is one of the grounds of relief developed by the courts of equity as a court of conscience. The objective is to ensure that the influence of one person over another is not abused.
At p.795 he said:
If the intention was produced by an unacceptable means, the law will not permit the transaction to stand. The means used is regarded as an exercise of improper or 'undue' influence, and hence unacceptable, whenever the consent thus procured ought not fairly to be treated as the expression of a person's free will. It is impossible to be more precise or definitive.
He then went on to refer to circumstances material to the transactions here impugned. He referred to cases where the parties' relationship gave the ascendant person the opportunity to take unfair advantage and said, at p.795 para.11:
The principle is not confined to cases of abuse of trust and confidence. It also includes, for instance, cases where a vulnerable person has been exploited. Indeed, there is no single touchstone for determining whether the principle is applicable. Several expressions have been used in an endeavour to encapsulate the essence; trust and confidence, reliance, dependence or vulnerability on the one hand and ascendancy, domination or control on the other. None of these descriptions is perfect. None is all embracing. Each has its proper place.
17. For reasons which I will give shortly hereafter, I do not doubt that Enid had a degree of vulnerability and dependence such as to give her niece a relationship of which she had the opportunity to take unfair advantage. More, however, is necessary before a court of conscience should intervene.
18. Lord Nicholls dealt with burden of proof as follows at p.796 at para.13:
Whether a transaction was brought about by the exercise of undue influence is a question of fact. Here, as elsewhere, the general principle is that he who asserts a wrong has been committed must prove it.
He continues at para.14:
Proof that the complainant placed trust and confidence in the other party in relation to the management of the complainant's financial affairs, coupled with a transaction which calls for explanation, will normally be sufficient, failing satisfactory evidence to the contrary to discharge the burden of proof. On proof of these two matters the stage is set for the court to infer that, in the absence of satisfactory explanation, the transaction can only have been procured by undue influence. In other words, proof of these two facts is prima facie evidence that the defendant abused the influence he acquired in the parties' relationship. He preferred his own interests. He did not behave fairly to the other. So the evidential burden then shifts to him. It is for him to produce evidence to counter the inference which otherwise should be drawn.
Then at para.16 he said:
Generations of equity lawyers have conventionally described this situation as one in which a presumption of undue influence arises. This use of the term 'presumption' is descriptive of a shift in the evidential onus on a question of fact. When a plaintiff succeeds by this route he does so because he has succeeded in establishing a case of undue influence. The court has drawn appropriate inferences of fact upon a balanced consideration of the whole of the evidence at the end of a trial in which the burden of proof rested upon the plaintiff. The use, in the course of the trial, of the forensic tool of a shift in the evidential burden of proof should not be permitted to obscure the overall position. These cases are the equitable counterpart of common law cases where the principle of res ipsa loquitur is invoked. There is a rebuttable evidential presumption of undue influence.
19. In that case rebuttal must be made by the defendant's proving that the transaction was, as Lord Nicholls expressed it, to be fairly treated as the expression of a person's free will or, as it has been put in other cases, by proving that the transaction was entered into 'after full, free and informed thought' about it. That is an expression adopted by Lord Denning M.R. from other cases in Re Brocklehurst [1978] Ch 14 at p.29. I do not confuse the present case with one in which the relationship itself gives rise to a presumption, such as Lord Nicholls explained in para.18 of his speech but which I do not think it is necessary to recite.
20. I turn, therefore, to the facts of the defendant's relationship with her aunt. She was born in 1951 when her aunt was 40. She apparently spent time with her as a child, and already in her 20s began to help her with the management of her house, which had two flats created in the upper floors, which her aunt sold on long leases in 1975. Both Pene and her mother were Enid's natural resort for help, and to some extent advice, although there is no doubt that Enid was well able to manage her own affairs even after she suffered a first stroke in April 1994. That stroke did, however, completely destroy her hearing, which had already been poor. By that time Jane had moved to the country and Pene had been married in 1983 and was living in Fulham. It was therefore Pene who, in spite of her other responsibilities -- her third child was born in 1990 -- assisted her aunt with medical appointments and the like, as well as visiting her regularly. No doubt in recognition of this, Enid invested a sum within the Inheritance Tax exemption limit of £3,000 on behalf of each child as it was born.
I conclude that, in effect, she treated Pene as if she were her daughter, and Pene reciprocated dutifully and lovingly. Enid's correspondence with her sister Margaret in the USA confirms this and, although such correspondence demonstrates Enid's interest also in Margaret's family, which indeed she visited in the USA as late as the summer of 1993, there is no doubt that she was closer to Pene in affection, as well as physically, than she was to the claimants.
21. That fact both gives an opportunity to take unfair advantage but also provides a motive and explanation for acts of generosity on Enid's part. It is therefore necessary to refer, at least in outline, to Pene's use of the power of attorney as colouring the use she made of the confidence reposed in her by her aunt. As I have explained, Enid suffered a stroke on 22nd February 1994. On 10th January 1995 she suffered a serious fall, following which she recorded the help which Pene gave her in a letter to Margaret. In May 1996 she suffered another fall, and on 5th July 1996 a further stroke. After this stroke she could no longer write and had to move to the Wimbledon nursing home. From this stage Pene managed her aunt's affairs under the EPA. In September 1996 she had a spell in hospital after yet another fall, and from at least that date there must be at least doubt as to her capacity to manage her own affairs. In March 1997 Pene sold shares belonging to her aunt amounting to £26,326.70, and placed the proceeds in her own bank account, although she was managing and signatory to her aunt's account. In the course of the following year she sold a further £72,160.29 worth of shares which she again placed in her own bank account, lending out of it in total some £15,000 to her husband's companies. After Enid's death she made no immediate reference in her first list of the deceased's assets to these monies or to these loans. When she signed the Inland Revenue account for Inheritance Tax purposes on 22nd December 1998, she did admit to owing the estate £56,000 and did refer to the loans to her husband's companies, although not to any interest which was due. In spite of every opportunity to explain herself and indeed my giving her husband, who apparently assisted in the preparation of the Inland Revenue account, the like opportunity, I have had no explanation which makes it possible for me to do otherwise than infer from her conduct that she was using her aunt's money for her own purposes and was, and is, attempting dishonestly to avoid accounting fully for its use. At the least, there appears to be some £26,000 missing, besides interest.
22. Shortly before her aunt's death she contracted for work of renovation to the Blackheath flat, which expenditure would reduce the residuary estate and enhance her own bequest. Although such work could reasonably have been undertaken when it became clear that Enid was not going to be able to return to her flat so that it could be let and produce income, I heard no satisfactory explanation of why such work was not undertaken earlier in 1997 when, as Pene claimed, money was being withdrawn from Enid's account in preparation for the purchase of sheltered accommodation, whose purchase would have been inconsistent with any expectation that she would return to Blackheath. Pene had a conflict of interest in respect of this expenditure, which conflict she resolved in favour of her own interest. As I think, she had no power under the unregistered EPA to incur such expenditure, and it would seem, although this may need determination on a taking of account, that this expenditure of some £19,000 was not properly a debt of the estate as alleged in the Inland Revenue account.
23. Knowing that, Pene was thus willing to take unfair advantage of her power of attorney, I return to consider the two transactions the subject of the present claim. The gift of £35,000 arose in the following circumstances. John Cairns worked as a film producer and was engaged in the 1990s in making a television documentary about Mohammed Ali. I accept that Enid was interested in his work, not only on this film but later in a production about Mother Theresa. Mr. Cairns gave a personal guarantee and a charge over the house which he owned jointly with Pene for the purposes of the Mohammed Ali project. He got into financial difficulties and a company called DuArt sought to enforce the charge. Pene had the house valued and agreed the value of John's interest with DuArt, which was a little less than £35,000. She told her aunt of her problems. Enid agreed to give her £35,000 out of a building society account which seems to have contained most of her spare cash. It appears to me however that it was indeed spare cash. The gift was made within two months of the first stroke, and the defendant has dishonestly pretended in her defence that she did not know of the stroke. I accept, in fact, Enid was fully able to understand what she was doing when she made the gift. I do not think that Pene acted well, knowing, as she did, the provisions of her aunt's will, in accepting such gift. She could so easily have agreed to accept it only upon terms that it would be repaid into Enid's estate on her death. I accept that Enid had a will of her own, but I do not believe that Pene really sought to persuade her to make a loan only. I think her influence was such that she could have achieved that, if she had wished to treat her cousins fairly. I think her pretence that she did not know of the stroke shows that she has some feeling of guilt. Nevertheless, the transaction is one which is, in the circumstances, readily explicable as being what a maiden aunt in Enid's position would want to do in the circumstances. I cannot hold that there is reason to treat this gift other than as an expression of Enid's free will, and when the American cousins heard of it, albeit in a somewhat garbled version, they, as Carolyn's August 1998 letter says, raised no objection.
24. The claimant's concern was raised, as the letter says, by what Margaret had reported as having happened when she visited England at the end of March/beginning of April 1995. That is at the very time when the educational trust was being set up. No doubt Enid had expressed worries whilst Margaret, together with Katy, was staying with her in Blackheath. Her specific concern was, as I find, as to the amount of Capital Gains Tax which would be payable on the sale of the shares that she had by then agreed. She expressed it to Margaret as a concern to know her liabilities, not as a complaint about making the sales. I accept, however, that she also expressed concern about funding the Cairns' children's education. She had, however, already been doing so before this date, and I am satisfied that her concern was not a complaint at being constrained to do something which she did not want to do, but merely a worry as to her ability to do it and continue to do it and to afford to do it. In so far as she expressed similar concerns to her daily woman, I do not otherwise construe her alleged complaints. A year later, a letter to Margaret dated 4th March 1996, shows her concern about money and her dependence on Pene to say what she could afford, but does not suggest or support the suggestion that she had given money away unwillingly.
25. Enid visited the Cairns on Sunday 2nd April 1995. Margaret saw her there and says that as she was escorting Enid to her car in which she was to be returned to Blackheath, Enid displayed a written message saying: 'They made me sign everything.' Margaret then says that she exploded to Pene, telling her that she was shocked at the way she was treating Enid. That there was some row involving an allegation that the Cairns were taking Enid's money is admitted, although the Cairns say that the row was only the next day and that it was on the Monday that they had a business meeting with Mr. Rouse, who was setting up the educational trust.
26. I think the Cairns' version of the order of events is the more probable, but there is no doubt that Margaret was sufficiently worried about events on her return to the USA to write to Enid offering help. Enid's reply was as follows:
Thank you for offering to write to David Lane [that is a cousin with some financial experience] on my behalf but I don't think that would be much good. He has plenty to do with his mother's affairs, and also his Aunt Joan. But in any case it is too late, because all the shares were to be sold on April 5 and 6, and there is nothing to be done about it now.
I expect it will be all right.
27. Margaret, who is now 90, gave her evidence clearly, but she was not herself clear what it was that her sister was saying that she had signed until she received that letter. Everybody was agreed that Enid was very tired on that particular day. If indeed she had been signing share transfers, that would explain it and explain her message, whose precise words I do not accept Margaret could remember, although she told me that she could. It might mean no more than that she was tired as a result of signing. I fear I can place no reliance on this incident as reported by Margaret as evidence that Enid felt that she had been forced to do something against her own free will. Margaret admitted that she had dramatised events after their step-mother's death to complain of unfair treatment by her two sisters. I think that her emotional involvement and lack of clear understanding either of what was happening or what Enid was wishing to convey must lead me to reject her evidence as amounting to more than that Enid was concerned at committing herself to the gifts that she was in the process of making for the Cairns' children.
28. But there are other grounds why the transaction may be one that should be set aside. On 22nd February 1995 Enid had already, together with Pene, signed two letters of request to Scottish Amicable to issue policies under trust with, in each case, John Cairns and his sister as co-trustees with Enid and Pene. The requests in each case contained a clause 6 which provided:
In no circumstances shall the Trust Fund or any part thereof be paid or made over to either of us [that is to say either Pene or Enid] other than in the capacity of a trustee or of parent or guardian of a minor beneficiary. In particular, and without prejudice to the foregoing, no appointment shall be made in our favour nor shall any loan be made to either of us from the Trust Fund.
29. John Cairns, however, wrote to Enid on 4th April before the investments were made:
Your Trust is finally about to be set up and the shares that you have agreed to are to be transferred into it. The Trust documents, when we receive them, will be in your and Pene's names and the investments are held in your names. We hope that the Trust will produce an income for you that will be close to 10% per annum. The trust is, as you know, a Discretionary Trust which means that you, as Trustee with Pene, can decide on what the trust income and capital will be used for. You can then decide whether you wish this income to pay for school fees or whether you need it yourself. You can decide at any time that you need the income or capital from the trust yourself. However, at that point it will go back into your estate for tax purposes. As you know the purpose of setting up the trust in the first place was to try to reduce the tax on your estate and to provide an investment fund that will grow.
I do not think it is necessary for me to read the intermediate paragraphs of his letter, but I go on to read the final paragraph:
I have repeated the basis of the trust again so as I hope you will fully understand that your money has only gone into a trust of which you are trustee with Pene and which you can do with as you like.
30. This was a complete mis-description of what had been arranged. Even the account of the trustees was inaccurate, because John and his sister were co-trustees with Enid and Penelope. The M&G investment was likewise explained to John as not being revocable in the way which he had put to Enid, but he did not correct his letter to Enid. In 1996 Scottish Amicable gave Pene an opportunity to revise the deed, but she, in her capacity as attorney, opted for a course which involved the money invested being treated as an outright gift. She may well be accountable in that respect for mis-use of the EPA. As against the surviving trustees, a replacement personal representative may well be entitled in an action in which the beneficiaries, namely the Cairns children, are represented, to have the gift set aside under the principle explained by Davies J. in Anker-Petersen WGLR 313, although if the personal representative would not have had power to revoke the trust, even if such power had been reserved to Enid, such claim may not succeed.
31. The issue which I have to decide is whether the defendants can be obliged to repay the estate the money thus invested for the Cairns' children. I think it is right that Enid had been looking at ways to reduce the Inheritance Tax liability in her estate even from the date that she had made her will. Independently of that, she had been in the habit of meeting at least some of the school fees for the Cairns children from the time when they went to school, that is to say 1993 onwards. From that time she had been discussing the setting up of an educational trust. She herself asked John Cairns to find her advice. He instructed Mr. Rouse who, however, never advised Enid direct. He says that was because he knew that she was deaf. Even, however, had he done so, it seemed when he gave his evidence that he had no or little understanding of the nature of the trusts which he was inviting the insurance companies to set up, and so it may well have been that his advice would have been of little assistance in any case. He did, however, realise that unless there was a gift there would be no or very little Inheritance Tax advantage. He had been told that Enid wished to be able to revoke or benefit under the settlement if necessary. She was never advised as to the conflict between these aims, and was wrongly advised by John as to the effect of the documents which she had signed. Thus I have no difficulty in concluding that she did not enter into this transaction after full, free and informed thought.
32. But the claim in this case is not to have the transaction set aside, it is to have Pene, as the person whose relationship I have accepted gives rise to the opportunity to take unfair advantage, to repay the money given not to her personally but to her and her co-trustees for the benefit of her children. The fact that the Inland Revenue return said that the gifts were to her does not alter the fact that it was to her as trustee only. I therefore confess to having had considerable doubt as to whether that is relief which the court ought to grant. In so far as money seems to have been accepted by Pene and not put into a trust, there may be less difficulty in treating her personally as the donee, but depending on whether the whole of the £22,578 realised from unit trusts was actually expended on the children's education, or only £15,000 or less, such relief so limited would fall a long way short of remedying the reduction in the estate of which the claimants complain.
33. If Pene had merely stood by whilst a substantial gift was made to some totally independent third party, even without full, free and informed thought, I do not think that her relationship would render her liable to make equitable compensation. But, of course, provision for the education of her children is of indirect benefit to her. I think therefore I must go back to those first principles enunciated by Lord Nicholls at p.794 of the Etridge case.
Undue influence is one of the grounds of relief developed by the courts of equity as a court of conscience. The objective is to ensure that the influence of one person over another is not abused.
34. The wrong advice was not Pene's but John's. I do not accept the claimant's contention that she was, as a matter of fact, responsible for it. Nor do I think that Pene herself appreciated that the effect of the gift was not merely to reduce her aunt's residuary estate by the amount of the gift plus the Capital Gains Tax liability, that is by some £200,000, but also to create a potential Inheritance Tax Liability of a further £60,000 or more to further reduce the residuary estate.
35. The relationship which led to this gift to her children was, however, Pene's. Was the influence she thereby exercised over her aunt, in all the circumstances, abused? I came to the conclusion in respect of the £35,000 gift that, although she had acted less than well, I was satisfied that that gift was by the free will of her aunt. She was not therefore liable to repay that sum. In regard to the gift to her children, it is clear that it was not made after informed thought. In my judgment, in the circumstances of this case, Pene's failure to ensure that any such gift, with the consequences which it had, was made only after full, free and informed thought, does place her under a conscientious obligation to make compensation. She cannot conscientiously see her aunt's estate diminished in this way. In so concluding I do not set out any general principle. If I were not conscious that the effect of ordering her to make such compensation is to increase the residuary estate of which she is then herself entitled to half, I am less certain that I would regard such order as being necessary even for a court of conscience. But having regard to all the circumstances of its payment, I do so conclude. The result, having regard to the terms of the will, seems to me to be manifestly fair. I therefore order that she makes equitable compensation in the sum of £171,694. Since Enid would, I think, have wished to pay the school fees while she lived, I do not think that interest until the date of her death should be paid, but I will hear argument as to the position from the date after her death.