Family Law Hub

Musa & Ors v Holliday & Ors [2012] EWCA Civ 1268

  • In a tweet: The desirability of a clean break was overwhelming in this I(PFD)A case.

    Summary: This was an application for permission to appeal brought by five appellants; they had been the respondents in an action brought under the Inheritance (Provision for Family and Dependants) Act 1975 ("I(PFD)A 1975") by Diane Holliday ("Diane") and her adult son Kevin Holliday ("Kevin"). 

    The deceased was Mr Guney. He had died intestate and left an unusually complex succession problem. He had had six children by his late wife and one (Houssein - now aged about 13) with Diane. Along with Houssein, Mr Guney had had two other dependants - Diane and her son from a previous marriage, Kevin. The court had previously found that Mr Guney had died domiciled in England and Wales and so the intestate succession to his movable assets, as well as to his real property in England and Wales, was governed by English law. However, he also had had significant connections with Northern Cyprus,and owned land there; the succession to that was governed by local law. 

    Under English law, Mr Guney's statutory next-of-kin were his seven children and, subject to the I(PFD)A1975 claim, his English estate was to be divided equally between them. Under the law applicable in Northern Cyprus, as the court understood it, Mr Guney's land there was to be inherited by his six legitimate children, presumably in equal shares. Houssein was barred from inheriting because he had been born out of wedlock. 

    The assets in the overall estate were:

    • land in Northern Cyprus, about which the first instance judge thought that she knew less than was to be known and the value of which could be adversely affected by claims brought by any Greek-Cypriot former owners;
    • properties in England;
    • shares in Brookwood Cemetery Ltd and Brookwood Park Ltd;  and
    • other negligible assets. 

    Rather extraordinarily, Mr Guney's adult children (who were entitled between them to six-sevenths of the English estate) declined for reasons that were not made clear (but possibly sheer obstructiveness) to take out letters of administration to the estate. This meant that Diane had had to take out the letters of administration despite not being entitled as of right to any part of the estate so as to be able to bring her I(PFD)A 1975 claim. Indeed, the relationship between Diane and the adult children was strained to say the least. Despite having worked at the cemetery for a number of years, the children had ensured that Diane was dismissed for gross misconduct and fraud thereby hindering any opportunity she had of obtaining another job. One of the children was also serving a prison sentence for attempting to procure Diane's murder. 

    Within the I(PFD)A 1975 proceedings (which had commenced in 2007), the adult children had accepted that Diane and Kevin were entitled to some award; the dispute was over the size of the net estate and the quantification of their claims. 

    At first instance, the judge found that the net estate was worth about £1million once various imponderables had been taken into account (including a possible HMRC liability of £500,000, a proprietary estoppel claim brought by one of the children against one of Mr Guney's properties and tax and administration costs of about £1million). The judge ordered that the family home Mr Guney, Diane and Houssein had lived in should be transferred to Diane outright, mortgage free. She also ordered the outright transfer of Mr Guney's shares in the Brookwood companies to Diane which would provide her with an income of in the region of £60,000. The judge balanced her award to Diane by stating that the adult children would benefit from both the English and Cypriot estates. She ordered that one property be sold so as to enable Diane to pay off the mortgage on the family home with the balance of the net sale proceeds being divided between Mr Guney's seven children. Insofar as Kevin was concerned, she found that he was  entitled to a sum from the English estate to enable him to pay any tuition fees, enrolment fees and expenses on his road to qualification as a lawyer. 

    At the appeal, no issue was taken with the provision made for Kevin. The appeal was focussed on the quantification of Diane's needs both present and foreseeable. The adult children argued that whilst the judge had identified that Diane had a degree of need now because Houssein was still at school, her needs would reduce as Houssein became independent and that should be taken into account. They submitted that, in the future, Diane's income of £60,000 should be reduced and that the family home should not be given to her outright but on trust. 

    Held: Permission to appeal was granted against that part of the order dealing with Diane's provision but the consequent appeal was then dismissed (subject to a clarification over the burden of the testamentary and administrative expenses).

    The first instance judge could not be criticised for reaching the decision she did and the substantial award was upheld. The judge had properly exercised her judicial discretion in the face of a very difficult and complex set of facts. Her approach to assess the size of the net estate and then to assess Diane and Kevin's need and make an appropriate award to them was not plainly wrong. Moreover, the idea that there should be some ongoing connection between Diane and the Mr Guney's adult children was a recipe for disaster; no matter how well drafted the trusts or how robust the trustees, a clean break was desperately needed.

Case note, published: 19/11/2012


See also

Published: 19/11/2012


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