Deeds signed by woman disposing of properties reduced on grounds of ‘facility and circumvention’ and ‘undue influence’ of sons

A judge in the Court of Session ruled that the two sons had used their “dominant influence” and the trust that arose from the relationship to gain a “material benefit” to the prejudice of their late mother, who did not have access to independent legal advice when she gave away the properties.

Lord Uist heard that the late Mrs Audrey Matossian, who and died at the age 83 in December 2010, was divorced at the time of her death and her previous husband had predeceased her in 2003.

She had three sons Berj, 60, Richard, 57, and Alexander, 55, the youngest of whom did not get on with either of his brothers.

The court was told that Mrs Matossian owned three heritable properties in Glasgow, namely, the adjoining houses at 99 and 101 Drumover Drive and a flat at 592 Tollcross Road.

At Richard’s house on 25 April 2007 in the presence of a solicitor, Gair Couston, a partner in the firm Shiells in Brechin, she executed a disposition of 99 to Richard, a disposition of 101 to Berj and a deed of gift conveying her whole right, title and interest in 592 to Berj.

But on 4 May 2007 she executed a will in the presence of a different solicitor, Kevin Lancaster, a partner in the firm Watson Lyall Bowie in Coupar Angus, in terms of which she appointed Alex as her sole executor-nominate and bequeathed 101 to Alex, 99 to Berj and 592 to Richard.

In this action Alexander Matossian, suing in his capacity as executor nominate under the will, sought reduction of the two dispositions and the deed of gift on the ground that they were impetrated by means of facility and circumvention and also by undue influence exercised over his mother by Berj and Richard.

The broad proposition advanced on his behalf is that by virtue of the three transactions of 25 April 2007 Mrs Matossian “gave away basically all her assets” to Berj and Richard in contradiction of a contemporaneous will, for no return except a capital gains tax liability at a time when she was “clearly seriously ill” and “without the assistance of independent advice”.

But Berj and Richard, who did not challenge the validity of the will, counterclaimed seeking decree for payment to them by Alex of sums of money which they had spent on 101 and 99 respectively since April 2007 on the basis of “unjust enrichment”.

All three brothers gave oral evidence at the proof, but the judge said none of them did himself any credit, adding that the “ill‑feeling” between Alex on the one hand and Berj and Richard on the other hand was evident.

He continued: “Each was plainly intent on keeping Mrs Matossian close to him in order to be able to exercise influence over her for his own benefit…It was clear that each of them wished his ‘day in court’ and that he was determined not to be denied it. The proof to which I listened consisted of the undignified spectacle of a family feud.”

Lord Uist described the circumstances of the signing of the deeds by Mrs Matossian at Richard’s house on 25 April 2007 as “unusual and irregular”.

At that time she had her own solicitor in the form of Mr Lancaster, but her meeting with Mr Couston was “instigated and arranged” at a time to suit Berj and Richard.

Although Mr Couston said he regarded “the family”, consisting of Berj, Richard and Mrs Matossian, as his clients, the judge did not accept that Mrs Matossian was then his client.

He explained: “In my view his client was Richard, for whom he had previously acted, and to whom the fee was subsequently rendered. There was at no time any written communication between Mr Couston and Mrs Matossian: for example, he did not send her any drafts of the deeds before the meeting or any copies of them afterwards.

“He knew nothing of the details of her financial affairs or what the effect of her disposing of the three properties for no consideration would be on her financial position. He gave her no advice on the potential consequences of the transactions on her liability to capital gains tax or inheritance tax or her entitlement to social security benefits.

“Mr Couston did not ask Mrs Matossian if she wished to be separately represented, although the proposed transactions were to her detriment and to the benefit of Berj and Richard…Mrs Matossian’s subsequent conduct in executing her will on 4 May 2007 is wholly inconsistent with a real intention on her part to dispose of her three heritable properties in the way in which she purported to do on 25 April 2007.”

The judge granted decrees of reduction after ruling that when Mrs Matossian signed the deeds she was subject to “facility and circumvention as well as undue influence” at the instance of both Berj and Richard.

In a written opinion, Lord Uist said: “In light of these findings I conclude that when Mrs Matossian signed the three deeds on 25 April 2007 she was subject to facility and circumvention as well as undue influence at the instance of both Berj and Richard…I am satisfied that on 25 April 2007 Mrs Matossian was suffering from weakness of mind, that acts of circumvention by Berj and Richard impetrated the execution of the three deeds and that she suffered lesion as a result. Lesion consists in her having divested herself of her entire heritable estate for no consideration. I reject any evidence from Richard, Berj and Mr Couston to the contrary.

“So far as undue influence is concerned, I am satisfied that all the requirements… have been established by the evidence. There was a relationship that created a dominant influence (sons and mother), confidence and trust arose from that relationship, a material benefit was given to the prejudice of the grantor and there was an absence of independent advice and assistance.”

The judge also dismissed the counterclaim by Richard and Berj as “irrelevant”.

He added: “The dispositions of these two properties having been impetrated by both facility and circumvention and also undue influence, that means that Richard and Berj committed a wrong and were mala fide possessors who are not entitled to any recompense for meliorations made by them to 99 and 101.”