Case Law Analysis: Interpretation of Will Clause & Limitation Act Impact on Property Charge

Citation: [2023] EWHC 3016 (Ch)
Judgment on

Introduction

This article provides an analysis of the case law concerning Jenny Pierce & Anor v Paul Barton & Anor [2023] EWHC 3016 (Ch), which involves the interpretation of a clause in a will and the application of sections of the Limitation Act 1980 to a charge on property. The case presents an examination of legal principles applied to the construction of wills and limitation issues, specifically in the context of charges, possession, and extinguishment of mortgagee rights due to adverse possession.

Key Facts

In the case at hand, the court was tasked with determining the construction of a clause in the will of the late Malcolm Barton. The clause in question, clause 5a, seemed to bequeath to Paul Barton a property he already owned. However, Malcolm Barton had previously secured a charge on the property to protect his interest in the purchase money extended to his son, Paul Barton. The will’s ambiguity precipitated claims from Malcolm Barton’s personal representatives seeking clarity on the clause’s intended effect and on whether limitations under the Limitation Act 1980 impacted the enforceability of the charge.

The case hinges on several legal principles:

Will Construction

The Supreme Court’s direction in Marley v Rawlings [2015] AC 129 was invoked, setting out that the interpretation of wills should align with the interpretation of contracts. It emphasized considering the will’s language in the context of (i) the natural and ordinary meaning of words, (ii) the overall purpose of the document, (iii) other provisions of the document, (iv) facts known or assumed by the parties at the time the document was executed, and (v) common sense. Furthermore, the court could consider evidence of the testator’s intention pursuant to section 21 of the Administration of Justice Act 1982 when the will’s language is ambiguous in the surrounding circumstances.

Limitation Act 1980

The case also examined sections of the Limitation Act 1980 pertinent to the charge on the property:

  • Section 5: Defines a six-year limitation period for actions founded on simple contracts.
  • Section 15: Bars actions to recover land after twelve years from the right of action accruing to the claimant.
  • Section 17: After the prescribed limitation period for recovering land, the title of the claimant to the land is extinguished.
  • Section 20: Prevents actions from being brought to recover any principal sum of money secured by a mortgage or charge on property after twelve years from when the right to receive the money accrued.

The case of Ashe v National Westminster Bank [2008] 1 WLR 710 also played a crucial role in the analysis. The Court of Appeal in Ashe concluded that the mortgagor’s possession was prima facie adverse to the mortgagee and that the charge was extinguished after the twelve-year limitation period.

Outcomes

Applying these principles, Judge HHJ Paul Matthews concluded that:

  1. The correct construction of clause 5a of the will was to bequeath the charge and the secured debt on the property to the son, Paul Barton. His father, Malcolm Barton, intended to gift Paul an unencumbered property upon his (Malcolm’s) death.
  2. Under the Limitation Act 1980, the right to recover the purchase price secured by the charge had become statute barred by the end of a twelve year period from the charge’s inception, and there had been no demand for payment.
  3. Furthermore, following the precedent set in Ashe v National Westminster Bank, the charge on the flat was extinguished when more than twelve years elapsed without the chargee exercising the right to possession.

Conclusion

The case of Jenny Pierce & Anor v Paul Barton & Anor renders a compelling illustration of will interpretation alongside an application of the principles of the limitation period concerning the enforceability of a legal charge. It affirms that the construction of will clauses should be approached similarly to contract interpretation, rooted in the aim to identify the testator’s intention. Furthermore, it reinforces the potential for mortgagee rights to be extinguished through the mortgagor’s adverse possession over the limitation period prescribed by statute. Legal professionals should carefully note the significance of these principles in advising clients on matters of estate planning and the enforcement of secured interests.