Gorjat v Gorjat

JurisdictionEngland & Wales
JudgeSarah Asplin QC
Judgment Date29 June 2010
Neutral Citation[2010] EWHC 1537 (Ch)
Docket NumberCase No: HC08C03275
CourtChancery Division
Date29 June 2010
Between
(1) Elisabeth Gorjat
(2) Philippe Gorjat
(3) Sophie Charriere
Claimants
and
Lucrecia Gorjat
Defendant

[2010] EWHC 1537 (Ch)

Before: Sarah Asplin QC

(sitting as a Deputy High Court Judge)

Case No: HC08C03275

IN THE HIGH COURT OF JUSTICE

CHANCERY DIVISION

Hearing dates: 17,18,19,20,21,24,25,26,27,28 May 2010

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

MISS SARAH ASPLIN QC

Sarah Asplin QC

Sarah Asplin QC:

1

The Claimants, Elisabeth Gorjat (“Elizabeth”) Philippe Gorjat (“Philippe”) and Sophie Charriere (“Sophie”) are the three adult children of Jean Eugene Maurice Antoine Gorjat (“Jean”) by his first wife Cecile. They are all French citizens and are resident and domiciled in France. Jean, a French citizen, was domiciled and resident in England. He died intestate in the United States of America on 30 May 2007. The Defendant, Lucrecia de Barelli Gorjat (“Lucrecia”) is Jean's widow and was his second wife. She is an Argentinian but is domiciled in England.

2

Jean like his father before him, held a number of accounts with Credit Suisse, Lausanne. In late December 2006, or very early January 2007, he gave instructions to Credit Suisse acting through Antonio Blanco, a banking relationship manager, to effect the transfer of the funds in his accounts held in his sole name, into new accounts to be held in the joint names of himself and Lucrecia. The value at the date of Jean's death of the funds transferred was £1,823,160. After his death, the funds were transferred from the joint accounts into new accounts with Credit Suisse, Lausanne, held in the sole name of Lucrecia.

3

Elisabeth, Philippe and Sophie challenge the validity of the transfer instructions given by Jean by which the funds were transferred from accounts in his sole name to joint names. They do so on the basis of lack of mental capacity and the exercise of undue influence by Lucrecia. They no longer pursue a claim that the transfer was merely an arrangement of convenience and was not intended to confer any beneficial ownership upon Lucrecia. They seek a declaration setting aside the transfer instructions and all transactions carried out as a result and an account and order for repayment to Jean's estate of the sums transferred. Alternatively, they seek a declaration that the effect of the transfer instructions was to render Lucrecia a trustee of the accounts, or at least the balances within them, for the benefit of Jean's estate, an account and an order for restitution of the monies withdrawn and applied for Lucrecia's personal use or otherwise retained by her.

4

Criminal proceedings were commenced against Lucrecia by the Claimants in Switzerland in on 26 February 2008 and were dismissed on appeal on 5 August that year. Civil proceedings were also commenced in Lausanne on 22 July 2008 and a freezing order in respect of the Credit Suisse accounts in Lucrecia's sole name was first granted on 24 July 2008. That freezing order remains in force subject to variations made by consent on 15 January 2010 and ratified by the court on 20 January 2010. Substantive civil proceedings were commenced in Switzerland on 20 November 2008 and at present are stayed pending acceptance of jurisdiction by the English court and the outcome of these proceedings. These proceedings had been commenced the previous day and were described by Miss Rich on behalf of the Claimants as a “belt and braces” exercise.

5

It is accepted that Elisabeth, Philippe, Sophie and Lucrecia are the only people entitled on Jean's intestacy and that if the claim succeeds, the value of the joint account at the date of Jean's death will fall into his intestate estate. Lucrecia obtained a grant of letters of administration in Jean's estate on 28 March 2008.

Forum and Jurisdiction

6

The initial questions therefore, are whether this court has jurisdiction to determine the issues which have arisen in relation to the transfer of the Swiss accounts and if so, whether it is the proper forum. There was no dispute before me about either of the issues, Mr Waterworth on behalf of Lucrecia being happy to accept both the jurisdiction of this court and that it is the proper forum in this case. Nevertheless, as I must be satisfied of these matters, Miss Rich very helpfully referred me to the relevant materials.

7

In relation to the proper law to be applied to the issues which arise in this matter, I was referred to Dicey Morris & Collins “The Conflict of Laws” 14 th ed and 3 rd cumulative supplement at pages 37–8 at which the fundamental issues arising in choice of law questions are considered. The identification of the proper law was also considered in a different context from the one with which I am concerned, by Mance LJ in Raiffeisen Zentralbank Osterrieich AG v Five Star Trading LLD [2001] 1 QB 825 at paragraph 26. He held that it was a three stage process involving the characterisation of the issue in question, the selection of the rule of conflict of laws which lays down a connecting factor for that issue and the identification of the system of law which is tied by that connecting factor to that issue, the overall aim being to identify the most appropriate law to govern the particular issue. He went on to quote Auld LJ in Macmillan Inc v Bishopsgate Investment Trust plc (No 3) [1996] 1 WLR 387, 407:

“the proper approach is to look beyond the formulation of the claim and to identify according to the lex fori the true issue or issues thrown up by the claim and defence. This requires a parallel exercise in classification of the relevant rule of law. However, classification of an issue and rule of law for this purpose, the underlying principle of which is to strive for comity between competing legal systems, should not be constrained by particular notions or distinctions of the domestic law of the lex fori, or that of the competing system of law, which may have no counterpart in the other's system. Nor should the issue be defined too narrowly so that it attracts a particular domestic rule under the lex fori which may not be applicable under the other system …” (Emphasis added.)”

8

In this case, although in the Swiss interim injunction proceedings, the tribunal d'arrondissement de Lausanne accepted jurisdiction over interim measures on the grounds that the claim was based on inheritance law, it is now submitted by the Claimants and is not disputed on behalf of Lucrecia, that it is correct to characterise the true issue in question as one of the validity of lifetime instructions notwithstanding that in this case, those instructions have consequences in terms of succession. In other words, the issue should be characterised as a question of the validity of an assignment of intangible property, challenged on two separate grounds, being lack of mental capacity and undue influence. In my judgment this is the appropriate characterisation of the issue in this case.

9

The English conflict of law rules in relation to the choice of law in respect of an assignment of intangibles are considered at paragraph 24R-050 in Dicey, Morris & Collins. The learned editors refer to the Contracts (Applicable Law) Act 1990, (“the 1990 Act”) which enacts the 1980 Rome Convention on the Law Applicable to Contractual Relations in English law and which applied at the date of the transfer instructions. The preamble and Article 2 of the Rome Convention make clear that it is intended to establish a uniform set of rules and that any law specified under it is to be applied whether or not it is the law of a Contracting State. This is also reinforced by the terms of the Guiliano-Lagarde report which as a result of s3(3)(a) of the 1990 Act may be referred to when determining the meaning and effect of the Convention.

10

Article 12 of the Rome Convention provides that mutual obligations under a voluntary assignment of a right against a third party are governed by the law which under the Rome Convention applies to the contract between the assignor and the assignee. The editors of Dicey Morris & Collins conclude at paragraph 24–060 that there is no reason why Article 12 should not apply to assignments inter vivos by way of gift and state:

“In such a case, the law applicable to the transfer between donor and donee will be determined as if the transaction were a contract; and questions of the validity of the gift, e.g. whether it may be revoked for ingratitude, will be governed by the law which, according to the Rome Convention, governs the gift.”

11

Article 4 of the Rome Convention provides that in the absence of an express choice a contract and therefore, in this case, a gift, shall be governed by the law of the country with which it is most closely connected, which is presumed to be the place of the habitual residence of the person who is to effect the performance “which is characteristic to the contract.”

12

As it is not disputed that the performance which was characteristic to the contract in this case was the unilateral assignment of an interest in intangible property which was effected in England and England was Jean's country of habitual residence in the sense explained by Munby J in Marinos v Marinos [2007] EWHC 2047 (Fam), in my judgment, English law applies in relation to the assignment itself and questions as to its validity including that of undue influence. In any event, the remedies in relation to undue influence are equitable and operate in personam. There is no doubt in this case that Lucrecia, against whom the allegation is made, has submitted to the jurisdiction of this court.

13

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