The High Court has just dealt with summary judgment and strike out applications against a widow’s claim under the Inheritance (Provision for Family and Dependants) Act 1975. The widow in question is Mrs Ruanne Dellal, the second wife of the legendary property developer Jack Dellal who died in 2012 at age 89. His estate at the date of his death was valued at approximately £445 million.
Under the terms of her husband’s will Mrs Dellal should have inherited his entire fortune. However, the value of the disclosed assets for probate purposes was stated to have been £15.4m which Mrs Dellal described as an “absurd presentation of the true scale of his personal wealth at the date of his death”.
She applied for reasonable financial provision against the deemed “net estate”, as defined in the section 25 of the 1975 Act. The Act describes the net estate as all personal and real property captured by sections 8 and 9 as well as the property which is available for the purposes of facilitating an award to the claimant under section 10.
In paragraph 9 of his judgment, Mr Justice Mostyn usefully recapitulates the distinction between the effect of an order under section 10 of the IHA and section 37 of the Matrimonial Causes Act, which on the face of it appear similar. Under section 10 of the 1975 Act the Court can order that the net estate should comprise the value of money or property that appears to have been disposed of within 6 years of the date of death with the intention of defeating the claimant’s claim against the estate. Under section 37 of the MCA the Court can look back 10 years at disposition, which would appear to have been made in order to defeat a spouse’s claim to the asset upon divorce.
A finding under section 10 does not void the disposition. Rather, the disponee of the property or money can be required to make a payment to the estate to compensate for the money received from the deceased. Conversely, under section 37 of the MCA the disposition is voided by a Court’s finding.
The onus falls on Mrs Dellal to prove that there were dispositions before Mr Dellal’s death to each of the Defendants, who are Mr Dellal’s family members; and that the transactions were not for fair value; and that they were intended to defeat her claim (though this does not have to be the dominant purpose – unlike in section 37).
The Defendants claimed that Mrs Dellal had failed to identify the specific transactions complained of, and that the claim form did not set out with sufficient particularity what she was seeking. The Court refused the strike out her claim. There was no basis for a strike out pursuant to the provisions of CPR. Summary judgment would only be given where there was no real prospects of success by Mrs Dellal or where there was some other compelling reason why the case should not be disposed of at trial. The Court held that it would be unfair to deprive Mrs Dellal of the opportunity of considering the disclosure, especially when the principles relating to summary judgment as set out by Mr Justice Lewison in Easy Air Limited v Opal Telecom Limited address the possibility that evidence may emerge which fortifies the claimant’s claim before trial.
The Court held that Mrs Dellal should be given an opportunity to scrutinise the financial evidence of the defendants, though he found that the evidence of dispositions which had been disclosed at pre-action stage suggested that Mrs Dellal’s claim was heavily inferential. He would not go as far as to say that the claim was a speculative punt and accordingly, adjourned the summary judgment application with liberty to restore, and specific disclosure was ordered. Watch this space.