Ruanne Dellal v Guy Dellal and Others
| Jurisdiction | England & Wales |
| Judge | Mr Justice Mostyn |
| Judgment Date | 01 April 2015 |
| Neutral Citation | [2015] EWHC 907 (Fam) |
| Docket Number | Case No: FD14F00212 |
| Court | Family Division |
| Date | 01 April 2015 |
[2015] EWHC 907 (Fam)
Mr Justice Mostyn
Case No: FD14F00212
IN THE HIGH COURT OF JUSTICE
FAMILY DIVISION
Royal Courts of Justice
Strand, London, WC2A 2LL
Robert Miles QC, Andrew Child & Seth Cumming (instructed by Harcus Sinclair) for the claimant
Tracey Angus QC & Jordan Holland (instructed by Mishcon de Reya) for the 1 st to 6 th & 8 th defendants
Eason Rajah QC & Leon Pickering (instructed by Charles Russell Speechlys) for the 7 th defendant
Hearing dates: 19 & 20 March 2015
This case concerns a claim under the Inheritance (Provision for Family and Dependants) Act 1975 in respect of the estate of the legendary property dealer Jack Dellal who died on 28 October 2012 aged 89. I shall refer to the deceased as Jack in this judgment. The claimant is his widow, now aged 61. She married Jack on 1 February 1997 following 10 years' cohabitation. It was his second marriage, her first. They had two children now aged 15 and 12. The first to fourth defendants are the children of Jack's first marriage to Zehava, who are all now middle aged. The fifth and sixth defendants are Jack's children of a non-marital relationship. They too are middle aged. The seventh defendant is Jack's sister, Violet. She lives in Switzerland and is aged 96, having been born on 18 August 1918. The eighth defendant is the son of the first defendant and is one of a number of grandchildren of Jack. He is aged 31.
In all Jack had 9 children. His daughter Suzanne tragically died aged 25 in 1983.
Jack's obituaries make interesting reading. He was born in the Chorlton area of south Manchester to parents who had emigrated here from Baghdad and who joined the Sephardic community which made its living on the edges of the city's textile industry. According to the obituary in the Daily Telegraph:
"He was educated at Heaton Moor College, and set to work in the post-war years buying and selling cloth and dabbling in local property, before moving to London. He first came to wider prominence in the early 1970s as the force behind a fast-growing, Knightsbridge-based "fringe bank", Dalton Barton Securities, which he and his business partner, Stanley Van Gelder, sold for £58 million in late 1972 to Keyser Ullmann, the bank chaired by Edward du Cann, MP."
On any view Jack was phenomenally successful. The Sunday Times Rich List stated that he was worth £580m in 2008, £480m in 2009, £500m in 2011 and £445m in 2012. Based on these, and other, rich lists, as well as on other evidence (to which I will refer), the claimant says that at the time of his death Jack personally held, or ought to have held, a vast fortune.
Jack's will dated 15 November 2006 to all intents and purposes left his entire estate to the claimant 1. However the disclosed assets which comprise his estate amount only to £15.4m comprising overwhelmingly realty and personalty. There was only minimal cash and no income generating assets. The claimant says that this is an absurd presentation of the true scale of his personal wealth at his death. If it had shrunk to £15.4m then in the period before his death he must have given most of it away to the defendants without her knowledge.
Therefore she commenced this claim on 10 March 2014. Her principal claim is for reasonable provision to be made for her from Jack's estate pursuant to section 2 of the 1975 Act. Obviously she does not seek an order under section 2 against the actual death estate as identified and declared to HMRC as that was, effectively, left to her alone. She seeks an order under section 2 against the deemed "net estate" as defined
by the 1975 Act. This is not the same as the actual death estate. Sections 8 and 9 treat certain property as forming part of the "net estate" which would not in fact form part of the actual death estate. And section 25 defines the "net estate" as not only including property captured by sections 8 and 9 but also to include any sum of money or property which is ordered under section 10 to be provided for the purpose of making provision under the 1975 Act. In this case the claimant's real substantive claim is her application made under section 10 of the 1975 Act, as supplemented by section 13.The decision of Campbell J in Morrow v Morrow [1995] NIJB 46 shows that, while uncommon, the fact that a claimant stands to inherit whatever may fall into the actual death estate does not preclude an order being made under sections 10 and 2 in her favour.
So far as is material to this case sections 10 and 13 of the 1975 Act provide:
10. Dispositions intended to defeat applications for financial provision.
(1) Where an application is made to the court for an order under section 2 of this Act, the applicant may, in the proceedings on that application, apply to the court for an order under subsection (2) below.
(2) Where on an application under subsection (1) above the court is satisfied—
(a) that, less than six years before the date of the death of the deceased, the deceased with the intention of defeating an application for financial provision under this Act made a disposition, and
(b) that full valuable consideration for that disposition was not given by the person to whom or for the benefit of whom the disposition was made (in this section referred to as "the donee") or by any other person, and
(c) that the exercise of the powers conferred by this section would facilitate the making of financial provision for the applicant under this Act,
then, subject to the provisions of this section and of sections 12 and 13 of this Act, the court may order the donee (whether or not at the date of the order he holds any interest in the property disposed of to him or for his benefit by the deceased) to provide, for the purpose of the making of that financial provision, such sum of money or other property as may be specified in the order.
…
(4) Where an order is made under subsection (2) above as respects any disposition made by the deceased which consisted of the transfer of property (other than a sum of money) to or for the benefit of the donee, the amount of any sum of money or the value of any property ordered to be provided under that subsection shall not exceed the value at the date of the death of the deceased of the property disposed of by him to or for the benefit of the donee (or if that property has been disposed of by the person to whom it was transferred by the deceased, the value at the date of that disposal thereof) after deducting therefrom any capital transfer tax borne by the donee in respect of the transfer of that property by the deceased.
…
(6) In determining whether and in what manner to exercise its powers under this section, the court shall have regard to the circumstances in which any disposition was made and any valuable consideration which was given therefor, the relationship, if any, of the donee to the deceased, the conduct and financial resources of the donee and all the other circumstances of the case.
13. Provisions as to trustees in relation to ss. 10 and 11.
(1) Where an application is made for—
(a) an order under section 10 of this Act in respect of a disposition made by the deceased to any person as a trustee, or
(b) an order under section 11 of this Act in respect of any payment made or property transferred, in accordance with a contract made by the deceased, to any person as a trustee,
the powers of the court under the said section 10 or 11 to order that trustee to provide a sum of money or other property shall be subject to the following limitation (in addition, in a case of an application under section 10, to any provision regarding the deduction of capital transfer tax) namely, that the amount of any sum of money or the value of any property ordered to be provided—
(i) in the case of an application in respect of a disposition which consisted of the payment of money or an application in respect of the payment of money in accordance with a contract, shall not exceed the aggregate of so much of that money as is at the date of the order in the hands of the trustee and the value at that date of any property which represents that money or is derived therefrom and is at that date in the hands of the trustee;
(ii) in the case of an application in respect of a disposition which consisted of the transfer of property (other than a sum of money) or an application in respect of the transfer of property (other than a sum of money) in accordance with a contract, shall not exceed the aggregate of the value at the date of the order of so much of that property as is at that date in the hands of the trustee and the value at that date of any property which represents the first-mentioned property or is derived therefrom and is at that date in the hands of the trustee.
Section 10 is similar in its language to section 37 of the Matrimonial Causes Act 1973 although there are real conceptual and structural distinctions between the two provisions. I endeavoured to explain these differences in my decision of AC v DC & Ors (Financial Remedy: Effect of s37 Avoidance Order) (No 1) [2012] EWHC 2032 (Fam), [2013] 2 FLR 1483. The effect of an order under section 37 is to annul or "avoid" the transaction under attack. Moreover, the bad intention to defeat the principal ancillary relief claim is presumed for transactions done within the three year period before the avoidance claim. There is no time limit on attackable transactions. A transaction done 20 years earlier is, at any rate in theory, capable of being annulled. By contrast, a claim under section 10 of the 1975 Act does not affect the validity of the disposition under attack. If relief is...
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