• March 28, 2024
 The power of number 10 in contested probate claims

The power of number 10 in contested probate claims

Tara McInnes, associate in the Dispute Resolution team at Gardner Leader Solicitors talks about the power of section 10 of the Inheritance Act 1975 but how it is being under-utilised by solicitors.

Whilst it is now commonplace for solicitors to bring claims for applicants under the Inheritance (Provision for Family & Dependants) Act 1975 (the Act), section 10 of this Act is somewhat under-utilised. S.10 of the Act provides the court with powers to set aside gifts made by the Deceased for up to six years prior to their death, where it can be shown that these ‘gifts’ were made with the intention of defeating a claim under the Act. A recent case has demonstrated the effectiveness of section 10 if used by the courts.

Ruanne Dellal v Guy Dellal & Ors [2015] EWCH 907 concerned the estate of property tycoon Jack Dellal. Jack sadly passed away in 2012 and left all of his estate to his wife of 15 years, Ruanne Dellal.

Ruanne only received £15.4 million against what was reported as an estate worth £400 million. Ruanne, as Jack’s widow therefore claimed under the Act on the grounds that she had not been provided with ‘reasonable provision’ in his will dated November 2006. This is despite Mrs Dellal already being in receipt of assets to the value of £41 million in her own name.

Jack also had children from a previous marriage and a sister. Ruanne believed that prior to his death he had secretly given away his wealth to avoid any claims against his estate. So as part of her claim for financial provision, (as a wealthy spouse can still bring a claim) she also requested that the court invoke its Section 10 powers and bring the gifts back into the estate. Jack’s children and sister contested this.

If the court agreed with Ruanne then this would mean that the recipients of Jack’s property would be ordered to pay a sum of money or transfer other property back to the estate, for the purposes of making an award of financial provision to her.

Such orders can only be made if:

  • The disposals were made by Jack six years before his death
  • He made the disposals with the intention of defeating an application from Ruanne for financial provision
  • The disposals were not made for full valuable consideration
  • It would facilitate the making of the financial provision order

The court would therefore have to consider all the circumstances concerning; how the disposition was made, whether any consideration was provided, the relationship between Jack and his children, the conduct and financial resources of any recipient that Jack may

have disposed to, and all other circumstances of the case. Whilst, the burden of proving that Jack’s intention was to dispose assets, rests with Ruanne.

In this instance, the children and sister applied to have Ruanne’s application ‘struck out’ but this was dismissed. Proceedings then had to be adjourned pending disclosure of any documents that Jack’s children and sister held which supported the transfer of Jack’s money or property, to or from them in the six years before Jack’s death.

This decision was given because Mr Justice Mostyn was concerned that an application for summary judgment could not be properly determined until Mrs Dellal had an opportunity to see whether any evidence could be obtained to support her submissions of the alleged dispositions.

Due to the power of a successful Section 10 application, it is most likely that this matter will now reach an out of court settlement. Jack’s children and sister are unlikely to fully declare any assets that they did receive from Jack, as the risk is too great if a judgment is found in Ruanne’s favour.

Nevertheless, this case should act as a reminder to practitioners of the potential benefit of raising an argument to the court to consider such an effective claw-back power. In particular, if there is a large disparity between the probate figure and reported wealth, then practitioners should make enquiries to see if such applications are appropriate.

Tara McInnes, Contentious Wills and Estates, The Burnside Partnership