The High Court's recent decision in Rahman v Hassan & Ors [2024] EWHC 1290 (Ch) has ignited discussion about one of the more unusual elements of English probate law: donatio mortis causa ("DMC"); that is, 'gifts in contemplation of death' or 'deathbed gifts'. This is a means of making a gift (effective on death), without complying with the requirements for a will under the Wills Act 1837. As a rare example of a party successfully arguing their right to property under the legal doctrine of DMC, this case has brought to the forefront necessary elements and factual circumstances that must exist in successful claims of this type and highlighted a particular element applicable to the modern digital world – namely how the principle can apply to digital accounts such as online bank accounts.
The Facts
Masudur Rahman (the "Claimant") was a relative of Mr Al Mahmood (the "Deceased") who had becoming increasingly close to both the Deceased and his wife when he moved from Bangladesh to England in 2011. The defendants in the claim were relatives of the Deceased's wife and beneficiaries of the Deceased's 2015 will. The Deceased and his wife had no children.
The Deceased's wife died on 6 October 2020 and, by her will, left her entire estate to the Deceased. The Deceased, who was also in ill health, became increasingly aware of his own mortality and became convinced he was going to die imminently. He gave instructions for a new will leaving his estate to the Claimant, but died before it was executed. The Claimant claimed that the Deceased had made an effective DMC of a number of assets on 15 and 20 October 2020 including property, sums held in bank accounts and shares, in part by handing over bank cards, share certificates and a registered land certificate.
On 22 October 2020, the Deceased had sent two text messages. The first, to his solicitor, read: “I agreed that [the Claimant] will be the absolute own[er] of all my assets and the executor of my new and last will. This is my final word. I revoked all my previous will done by me and my wife [sic]. It’s a difficult time for me. Please help [the Claimant].” The second was to a relative: “[The Claimant] is my son. He is the absolute owner of all my assets. This is my final word”.
He then died on 23 October 2020, and the Claimant sought to enforce his rights under the principle of DMC, while the defendants sought to have those assets transferred under the Deceased's will.
The Law
HHJ Paul Matthews after a review of the case law, set out the requirements for a DMC, summarised as follows:
- A DMC is a gift made by a living person in contemplation of impending death, subject to the condition that the donor dies. The condition may be precedent (the usual case), in which case ownership passes only on death, or subsequent, in which case it passes immediately (subject to formalities) but is divested if the donor ceased to contemplate impending death (e.g. by recovery from an illness, or escape from a dangerous situation). If the title of the donee is not complete, a constructive trust is imposed on the personal representative of the deceased donor to perfect the donee's title.
- The DMC is revocable by the donor at any time until death, and is revoked automatically by insolvency, and may also be revoked by insanity.
- The donor must take a sufficient step to implement the gift by delivering to the donee the thing itself, or some means of accessing or controlling the thing (e.g. the key to a box in which it is contained, or some evidence of title). The requirements are not as onerous as would be required to pass ownership in the case of lifetime gift.
- In the case of choses in action and land, there is an additional, though somewhat elusive, requirement that the donor part with "dominion" over the property. This will be satisfied by handing over possession of title documents, but it was noted there may be other ways of doing so. However, it does not mean parting with ownership or possession. Nor does it mean ceasing to be able to deal with the property.
- The property which may be the subject of a DMC includes chattels, choses in action and interests in land.
- The test for capacity to make a DMC is the same as for a lifetime gift.
- The donee of a DMC takes against the estate and not under it, although property the subject of a valid DMC is nonetheless liable to the debts of the administration of the estate.
The Impact
HHJ Matthews' judgment has settled the uncertainty over whether registered land can be the subject of a DMC gift. It was already established that unregistered land was capable of being the subject of such a gift by the handing over of deeds, but in this case handing over the land certificate in respect of the house (which was registered land) was deemed sufficient to part with dominion (requirement 4 above). The leasehold flats owned by the Deceased were also validly gifted under the principle of DMC when the Deceased presented the Claimant with the leases to those flats. Failing to produce the official copies of the leases did not preclude such a gift being made. HHJ Matthews was happy that such acts satisfied requirement (3) above.
However, the production of those documents was analysed by the court in conjunction with other evidence, in this case the Deceased's draft will and text messages prior to the Deceased's death. This contemporaneous evidence was a key factor in HHJ Matthews' decision.
Regarding the Deceased's bank accounts, requirement (3) may be considered more problematic, given the modern-day lack of physical indicia of title to bank accounts. The Deceased had, prior to his death, explained to the Claimant, and handed over documents containing his login details for his various bank and share dealing accounts, as well as the pin readers needed for access. Previous case law has suggested that 'parting of dominion' must involve the donor rendering his own access to the subject matter of the gift 'impossible'. HHJ Matthews clarified that the correct test was that such a parting of dominion must have been an intention of the donor. In the present case, while continued access to the accounts by the Deceased would not have been impossible, the Deceased would likely have had great difficulty in doing so without reference to the documents he gave to the Claimant.
Interestingly, the chattels in the properties were not considered to have been included as part of the DMC as there had been no attempt to deliver these to the Claimant.
Notwithstanding the clarification provided in this judgment, DMC cases continue to be heavily fact-driven and nuanced area of a law. It was apparent from the facts in this case that the Deceased had taken numerous steps, including with third parties, to seek to ensure the Claimant benefitted on his death and this was supported by clear evidence of his intention. We await with interest where such decisions make take us in the increasingly digital age, where intention and parting with dominion could take many potential forms.