In the case of Dellal v Dellal  EWHC 907 (Fam) Jack Dellal’s widow was expecting his estate to be worth over £450m. However, after probate was granted it became clear the estate was in fact only worth £15.4m. The Court had to decide whether the wife could pursue claims against Jack’s children and grandchildren from other relationships and other family members for compensation for assets he had allegedly disposed of to them, apparently to defeat the widow’s claims. The trouble for the Court was that there was no evidence to support the wife’s claims. Despite the lack of evidence, the Court refused to strike out the claims or issue summary judgment in the defendant’s favour.
Jack Dellal was described in the judgment as a “legendary property dealer”. He was known to be wealthy, but the question was how wealthy. The evidence showed that in 2006 he lost £3.4m gambling, £1.7m of that in one night. In 2012 the Sunday Times estimated his net worth as £450m. However, after his death on 28 October 2012, his estate was found to be worth only £15.4m. Partly in reliance on the Sunday Times estimate, his widow (his second wife and the mother of two of his eight surviving children) brought claims against his children and sister claiming that Jack had dissipated his assets to them within six years prior to his death so as to defeat her claims under the Inheritance (Provision for Family and Dependants) Act 1975 (“Act”) (Hong Kong has very similar legislation).
The Act permits certain family members of a deceased person, such as his spouse or children, and dependants to bring claims against the estate for “reasonable financial provision” from the estate. “Reasonable financial provision” is defined in the Act in relation to a claim by a spouse as being such financial provision as it would be reasonable in all the circumstances for the spouse to receive, whether or not that provision is required for her maintenance. Under the Act, the claimant may ask the Court to bring back into the estate any sum of money disposed of by the deceased to any other person within six years of the date of his death, provided the Court is satisfied that the deceased made the disposition to defeat the claims of the claimant under the Act.
Other than weak hearsay evidence (such as the Sunday Times assessment of Jack’s worth) the wife produced no evidence in support of her claims that Jack had ever personally had assets worth more than £15m or that he had disposed of assets to his children and sister within six years prior to his death so as to defeat her proceeding under the Act. The defendants applied to strike out the widow’s claims, or alternatively for summary judgment in their favour on the basis that the widow’s claims were completely without foundation. Jack had been known to use companies and trusts to acquire and invest property on his behalf. Some of these investments had been owned by his children and sister for decades.
The Judge cautioned the wife and her legal advisors against placing too much reliance on the Sunday Times assessment:
It is very dangerous to rely on these lists as an accurate or even approximate statement of an individual’s wealth. Anyone who has practiced in the field of big money ancillary relief knows how wildly inaccurate they can be, both in terms of overall quantum and also as to the division between wealth held by the individual and wealth held by members of his or her family or by family trusts or similar structures.
The Judge also commented that as well as inheriting the whole £15.4m estate, the widow also had her own assets worth over £25m at the time of Jack’s death. These had reduced in value since Jack’s death, but the Court found that the reduction in value was as a result of the widow’s own mismanagement and unwise speculation since Jack’s death. The Court found that with assets worth that much, it was improbable that she would be awarded anything further, even if Jack had disposed of assets to his family members to defeat her claims. The Judge reached this conclusion because he felt that the widow had been reasonably financially provided for by Jack during his lifetime and from his estate.
However, the Court was sufficiently sympathetic to the widow’s position that it ordered the defendants to provide all documents relevant to any transfers of assets from Jack to them in the six years prior to his death. The Court also refused to strike out the claims. However, it adjourned the application for summary judgment in the defendants’ favour pending the disclosure by the defendants.
As is clear from the above summary, this case is at an early stage. It may well be that the Court will now either order summary judgment in the defendants’ favour, or find that the widow now has sufficient evidence to support her claims that the case can proceed.
As noted above, the Court was clearly sympathetic to the widow’s position that Jack had had access to significant funds, which did not appear to form part of his estate. However, the Court was also skeptical as to whether those assets had been owned by Jack in the last six years of his life, or whether they had already been transferred to trusts or other family members.