Signed, sealed, delivered: take care before you sign on the dotted line… Canarapen v Gauchenot

Background

The Claimant, Jean-Michael Canarapen, is the nephew of the Defendant, Marie Ginette Gauchenot. The matter concerned the estate of Ms Gauchenot’s late mother (the Deceased), who died on 30 July 2021. The Deceased left a Will dated 16 July 2009 of which Ms Gauchenot was the sole executrix and one of the beneficiaries of her estate. The net value of the estate was stated as £1,679,570 for probate purposes and the Defendant’s share was worth approximately one third of this amount.

Prior to the Deceased’s passing, the Claimant and the Defendant were estranged. However, they reconnected at the Deceased’s funeral and subsequently developed a close relationship. On 4 October 2021, the Claimant and the Defendant met up at the Deceased’s property (which was the main asset of the estate) and discussed an idea of the Claimant’s; specifically, that the property be retained by the Defendant so they could rent it out to generate an income for the beneficiaries of the Deceased’s Will. However, the Defendant’s husband was very unwell, and she therefore decided that it was not practical for her to retain the property and carry out the necessary work at that time.

What happened next was a point of dispute in this case. The Defendant stated that she suggested the Claimant buy the property from the estate using the Defendant’s one third share as collateral to obtain a commercial loan. The self-contained basement flat could be rented out, and the top floor could also take lodgers, and the income from these lettings could be used to pay any mortgage. This would leave the middle floors for the Defendant to live in for life. However, the Claimant stated that no fixed agreement was reached on this day. Instead, the Claimant states that the idea of him purchasing the property came later.

It was accepted by both parties that in October 2021, it was agreed that the Claimant would try and improve the physical condition of the property. Several text messages were disclosed which evidenced that the Defendant was extremely grateful to the Claimant and his uncle, who both worked on the property improvements.

In November 2021, the Defendant went to her solicitors explaining that she wanted to give her one third interest in the estate to the Claimant and his uncle because she wanted the Deceased’s property to stay in the family and this would enable the Claimant to purchase it. Subsequently, the Defendant’s solicitors prepared a Deed of Variation which had the effect of transferring her share in the Deceased’s estate to the Claimant and sent this to both the Claimant and the Defendant. The Claimant signed immediately but it was not until 10 October 2022 that the Defendant signed the Deed of Variation and emailed it to the Claimant with the subject line “Executed Deed of Variation”.

The relationship between the Claimant and the Defendant became tense when finalising the proposed plans for the renovation of the property. On 22 November 2022, the Defendant emailed the Claimant stated that she has decided “to revoke, terminate the Deed of Variation with effect immediately, based on [the Claimant’s] fraudulent misrepresentations”. Instead, she offered to loan the Claimant one third of the purchase price on an interest free basis. The Claimant ultimately brought proceedings against the Defendant, seeking a declaration that the Deed of Variation was valid and binding.

Legal Principles: Execution of a Deed

A deed is valid if it is signed in the presence of a witness who attests the signor’s signature and it is delivered as a deed. This is governed by the Law of Property (Miscellaneous Provisions) Act 1989. However, the Law of Property (Miscellaneous Provisions) Act 1989 does not define “delivery”. Previous case law confirms that delivery is “an act done so as to evince an intention to be bound“. The Court held that this has been satisfied when the Defendant sent the “Executed Deed of Variation” email.

Mistake

The Defendant brought a counterclaim to have the Deed of Variation set aside on the basis of a mistake. For this to be applicable, there must be a causative mistake of sufficient gravity which means it would be unconscionable for the recipient to retain the benefit of the gift. Analysing the nature of the mistake is therefore the critical first step.

The Court took issue with what was said to be the “shifting nature” of the Defendant’s alleged mistake. In additional to the factual problems with the Defendant’s case, the Court held that that the Defendant appeared to have made a misprediction about something to happen in the future as opposed to a mistake at the time the Deed of Variation was signed. Accordingly, the Court rejected the Defendant’s counterclaim in this respect.

The Court also refused a request by the Defendant to amend her argument to state that the delivery of the Deed of Variation was subject to conditions which were not met by the Claimant. The Court considered that this point was not reasonably arguable.

Conclusion

This case highlights that legal documents, such as Deeds of Variation, should only be entered into with the upmost care and after obtaining suitable legal advice. If such a document has been properly signed and delivered, it will become immediately binding. If seeking to revoke or rescind such a document without the agreement of all parties, specific requirements must be met in order to satisfy the Court. Unfortunately for the Defendant in this case, simply changing your mind is not sufficient grounds for this purpose.

This article is for general information purposes only and does not constitute legal advice or a comprehensive statement of the law. Specific legal advice should always be sought in relation to individual circumstances.

This article is for general information purposes only and does not constitute legal advice or a comprehensive statement of the law. Specific legal advice should always be sought in relation to individual circumstances.

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