Christiane De Muller v Hilary Harrison-Morgan
| Jurisdiction | England & Wales |
| Judge | Judge,Hacon |
| Judgment Date | 24 July 2018 |
| Neutral Citation | [2018] EWHC 1904 (Ch) |
| Court | Chancery Division |
| Docket Number | Case No: HC-2016-002431 |
| Date | 24 July 2018 |
[2018] EWHC 1904 (Ch)
IN THE HIGH COURT OF JUSTICE
BUSINESS AND PROPERTY COURTS OF ENGLAND AND WALES
PROPERTY TRUSTS AND PROBATE LIST (ChD)
Royal Courts of Justice, Rolls Building
Fetter Lane, London, EC4A 1NL
HIS HONOUR JUDGE Hacon
(Sitting as a High Court Judge)
Case No: HC-2016-002431
Ulick Staunton (instructed by Grosvenor Law) for the Claimants
Clifford Darton and Faisel Sadiq (instructed by Excelsior Solicitors) for the Defendant
Hearing dates: 19–20, 23–24 and 26 April 2018
Approved Judgment
I direct that pursuant to CPR PD 39A para 6.1 no official shorthand note shall be taken of this Judgment and that copies of this version as handed down may be treated as authentic.
HIS HONOUR JUDGE Hacon
Introduction
Rainer Christian Kahrmann died at his home in Cologne on 3 July 2014. He had married the first claimant (“Ms de Muller”) in 1972 but some years later the two became estranged. Written terms of separation were agreed on 1 September 1997, although they remained married until Dr Kahrmann's death.
In about 1991 Dr Kahrmann entered into a relationship with the defendant (“Ms Harrison-Morgan”). Dr Kahrmann spent much of his time in London and owned properties there. One them was the leasehold of a property in Knightsbridge: Flat 2, 38 Wilton Crescent, London SW1. In 1991 the couple moved into the flat.
Dr Kahrmann had four children. Two were daughters with Ms de Muller, Louise and Alice Kahrmann (hereafter “Louise” and “Alice”), both of whom are now in their thirties. Alice is the second claimant. Dr Kahrmann and Ms Harrison-Morgan had twin sons, Maximillian and Frederic Kahrmann (“Max” and “Fred”) who were born on 19 October 2001. All four children live in London.
Following the enactment of the Leasehold Reform, Housing and Urban Development Act 1993 (“the 1993 Act”) leaseholders with sufficient interest became entitled to purchase the freehold of the leased property, a process known as enfranchisement. Dr Kahrmann became aware of the potential financial benefit of buying the freehold of 38 Wilton Crescent (“38 WC”) and that of the mews property adjoining at the back, 38 Belgrave Mews North (“38 BMN”). The idea was to offer house and mews jointly on to a buoyant London property market.
In co-operation with a business partner, Kim Hawkins, sufficient leasehold interests were acquired. In about 2005 a statutory notice in relation to 38 BMN was served on the freeholders, namely the Sixth Duke of Westminster and two other trustees of the will of the Second Duke. I will call the trustees “Grosvenor”. On 13 March 2009 a similar application was made in respect of 38 WC. Both applications were made by companies controlled by Mr Hawkins, namely Cravecrest Limited (“Cravecrest”) for the freehold of 38 WC and Themeplace Limited (“Themeplace”) for 38 BMN.
The acquisition in respect of 38 BMN was relatively straightforward and was completed on 22 September 2006. The application for the freehold of 38 WC was more protracted due to a failure to agree a price with Grosvenor. It resulted in litigation which reached the Court of Appeal ( Cravecrest Ltd v Trustees of the Will of the Second Duke of Westminster [2013] EWCA Civ 731; [2014] Ch. 301). The Supreme Court gave permission for a further appeal. The dispute was eventually settled before the Supreme Court hearing although not until after Dr Kahrmann's death.
On 3 December 2014 a profit of about £8.8 million on the sale of the freeholds and all other interests in 38 WC and 38 BMN was realised. The freehold of 38 WC had still not been transferred from Grosvenor to Cravecrest but a price had been agreed. Cravecrest was in a position to require that upon payment Grosvenor should assign the freehold to Cravecrest's nominee, i.e. the purchaser of the two properties.
The sale was effected by a written agreement dated 3 December 2014 (“the Sale Agreement”). The parties to it were Cravecrest, Themeplace, the purchaser of the two freeholds namely 38 Wilton Crescent Limited (“38 WC Ltd”), Ms Harrison-Morgan, Alice, Louise, Mr Hawkins and his company Marlin Securities Limited (“Marlin”).
Under the terms of the Sale Agreement, Mr Hawkins through his companies received half the profit, about £4.4m. The other £4.4m or so was split equally between, Alice and Louise on the one hand – about £1.1m each – and on the other Ms Harrison-Morgan, who received about £2.2m.
The claimants in these proceedings, Ms de Muller and Alice, act as administrators of Dr Kahrmann's English estate (“the Estate”). They say that Ms Harrison-Morgan should not have received any part of the profit. On behalf of the Estate they claim recovery of the £2.2m Ms Harrison-Morgan was paid.
There is a secondary claim by the Estate. It is that Ms Harrison-Morgan removed furniture and art belonging to the Estate from 38 WC when she left the flat in May 2015. The various articles were referred to in the pleading and at trial as “the Chattels”. The Estate seeks delivery up of the Chattels or payment of their value.
Ms Harrison-Morgan has a counterclaim. She says that she and Dr Kahrmann had jointly owned a property known as “Kandili” in Le Cannet, near Cannes. Ms Harrison-Morgan claims from the Estate half the proceeds of the sale of Kandili plus repayment of about £200,000 which she says she lent to Dr Kahrmann.
Ulick Staunton appeared for the Estate, Clifford Darton and Faisal Sadiq for Ms Harrison-Morgan.
Applications
Two applications were made during the trial. Amendments to the Particulars of Claim
The Estate brought its claim pursuant to the grant of letters of administration ad colligenda bona issued by the Birmingham Probate District Registry on 21 July 2015. On 29 June 2016 the Amstgericht Köln (District Court of Cologne) granted a Gemeinschaftlicher Erbschein, translated as “Joint Certificate of Inheritance”, naming Ms de Muller, Louise, Alice, Fred and Max as heirs to Dr Kahrmann's German estate. At the start of the trial I allowed an amendment to the Particulars of Claim pleading reliance on the certificate. The amendment was not resisted and played no part in subsequent arguments.
I also allowed amendments to paragraphs 14, 16 and 18 of the Particulars of Claim which set out in more detail the Estate's case in relation to agreements between Dr Kahrmann and Mr Hawkins. These were not resisted either. I did not allow further proposed amendments in which the Estate raised new arguments of estoppel. These would have required an investigation of facts for which Ms Harrison-Morgan's legal team had not prepared. Mr Staunton argued for the Estate that none of the facts or alleged facts relied on was new. Even if that had turned out to be right, the Estate was seeking to rely on such facts for a new purpose. Had the estoppels been pleaded in good time Ms Harrison-Morgan may have wished to put in further evidence regarding the nature of the alleged representations, whether there had been reliance on the them, or on other related matters. I took the view that it would be unfair to allow the new estoppel arguments to be raised at such a late stage.
Disclosure of an attendance note
After signing the Sale Agreement, Alice and Louise sought advice from their current solicitors, Grosvenor Law. There was a conference with Grosvenor Law attended by Alice and Ms de Muller. The advice was relayed to Louise who discussed it in paragraph 71 of her affidavit of 5 May 2017. I quote a section from that paragraph below. In it, ‘EBC’ is a reference to EBC Asset Management Ltd, a company which had been partly owned by Dr Kahrmann.
“Grosvenor Law advised that they considered the sale agreement may be an instrument of fraud against creditors of the estate (principally HM Revenue and Customs and EBC) as well as other beneficiaries of the estate (our mother and brothers). They said that Mr Hawkins' claim that payment was ‘outside the estate’ was a nonsense. They advised that our mother and brothers may have claims in the estate and indirectly on the monies that were to be paid to Alice and me (and Ms Harrison-Morgan pursuant to the sale agreement).”
Mr Darton argued on behalf of Ms Hillary-Morgan that privilege had been waived in relation to the advice given by Grosvenor Law. He sought an order for disclosure of the attendance note taken of the conference. I agreed and ordered disclosure. My reasons were as follows.
Mr Darton referred me to D (A Child) [2011] EWCA Civ 684; [2011] 4 All ER 434. This was a case concerning injuries to a child. An application was made for disclosure of advice given by counsel and solicitors to the child's mother. Ward LJ (with whom Rimer and Elias LJJ agreed) said:
“[12] … There was no dispute that conferences between a client and counsel and meetings between a client and his solicitors are confidential and as such attract legal professional privilege. This confers on the client a substantive absolute right of fundamental importance to the administration of justice as a whole. It can only be waived by the person, the client, entitled to it.”
He continued:
“[13] Fairness lies at the heart of waiver and its consequences. It mattered not whether the mother intended to waive privilege: viewed objectively she clearly did so in respect of the matters contained in her statement of 23rd February. As the judge eloquently put it:
‘She need not have mentioned anything beyond the fact that conferences were held on particular dates. However, not only has the mother taken the other parties and the Court to the doors of the conference room, she has taken the reader of her statement into that room. And the journey has been undertaken more than once.’
...
To continue reading
Request your trial
-
Alice Kahrmann (as Administrator of the Estate of Rainer Christian Kahrmann) v Hilary Harrison-Morgan
...PROPERTY COURTS OF ENGLAND AND WALES PROPERTY, TRUSTS AND PROBATE LIST (ChD) HIS HONOUR JUDGE HACON (Sitting as a High Court Judge) [2018] EWHC 1904 (Ch) Royal Courts of Justice Strand, London, WC2A 2LL Ms Penelope Reed QC and Mr Luke Harris (instructed by Grosvenor Law) for the Mr Clifford......