Widow seeks deceased husband’s 'secret assets'

Thursday, 02 April 2015

The widow of property developer Jack Dellal is bringing a family provision claim against his estate under the Inheritance (Provision for Family and Dependants) Act 1975, even though she is the sole beneficiary of his will.

Ruanne Dellal claims that the GBP15.4 million of assets declared in her husband's inheritance tax return is only a tiny fraction of his true estate. He put away most of his assets in secret trusts, bank accounts and gifts to his children from other relationships, she says.

The roots of Ruanne Dellal's claim lie in her husband's career. He was born in 1923 into a Jewish émigré family in Manchester, where he worked as a salesman in the textile industry. He soon began speculating in local property, and by the 1970s had become a well-known businessman in the City of London, where he made huge profits from various high-risk property deals. By 2012, the Sunday Times Rich List estimated his wealth at GBP445 million.

He married twice. The first marriage, in 1952, produced five children (one now deceased). The second, to Ruanne in 1997, produced two more. He also had two other children by an extramarital relationship.

Dellal died in October 2012 aged 89. His final will, executed in 2006, left virtually his entire estate to his widow. However, the assets comprising his disclosed estate, as declared by Ruanne Dellal to HM Revenue and Customs, amounted to GBP15.4 million. It included minimal cash and no business assets.

Ruanne Dellal considered that this was an 'absurd' presentation of the true scale of his personal wealth at his death. If it really did represent the extent of his possessions, he must have secretly given most of it away before his death, she said.

She has therefore launched a claim under section 10 of the Inheritance Act 1975, which includes provisions to counter lifetime dispositions made by testators in order to defeat the purpose of the Act. Sections 8 and 9 of the 1975 Act deem the deceased's estate to comprise not just the actual death estate, but also any other assets given away within six years of the death to frustrate a claim under the 1975 Act. If the court finds in the claimant's favour, the persons who received these gifts (or their trustees) may be ordered to give back an equivalent sum of money to the estate in order to satisfy the claimant's demands.

Ruanne Dellal's case is based on an analysis of some of her husband's business dealings. For example, soon after their marriage in 1997, he transferred all his remaining shares in his business, Allied Commercial, to his then living children. At that time the company was worth GBP56.4 million. Moreover, it is claimed that there was evidence that the family members conducted substantial transactions through single purpose vehicles, possibly trusts. There was also a Panamanian company that apparently handled all the cash used in Dellal's property deals.

Mrs Dellal also told the court that her husband had told her that he had a 'secret stash' of money, which she believed to be GBP50 million.

The defendants to Ruanne Dellal's claim are Jack Dellal's children by his first wife and by another woman, and his sister. They applied to the England and Wales High Court to have her claim summarily dismissed without a trial, largely because she had not identified any disposition to any of them within the six-year time limit before his death. They also said she had not established any 'bad motive' as is required by the 1975 Act, and she was in any case so wealthy that the 1975 Act did not apply to her case.

The judge, Mostyn J, was sceptical about Ruanne Dellal's estimates of her husband's true wealth, noting that rich lists are not reliable sources of information. He also noted that the evidence that outright dispositions were made to the defendants during the six-year period was very thin, and the claimant's case in this regard is almost entirely inferential.

However, he declined to strike out her claim. 'In my judgment the claimant has put up a strong prima facie case that at his death Jack had access to very considerable resources[...]It is a reasonable inference that most were held in trusts.'

The key questions, then, became whether these trusts really exist and if they were established within the six-year time limit. Mostyn J ordered the defendants to disclose any documents relevant to this. He adjourned the application for summary judgment until the disclosures had been made. The application to dismiss Ruanne Dellal's case will then be reconsidered (Dellal v Dellal & Others, 2015 EWHC 907 Fam).



The content displayed here is subject to our disclaimer. Read more