Freedman v Freedman & Ors [2015] EWHC 1457 (Ch) (21 May 2015)

Freedman v Freedman & Ors [2015] EWHC 1457 (Ch) (21 May 2015)

The claimant made a distinct and serious mistake, induced by incorrect legal advice, as to the inheritance tax consequences and her ability to repay a loan, which was sufficiently grave and central to the transaction. It would be unconscionable for the beneficiaries to retain the property under the settlement. The settlement is set aside on the ground of equitable mistake.

Citation
[2015] EWHC 1457 (Ch)
Parties
Claimant: Melanie Dawn Freedman; First Defendant: Michael Freedman; Second Defendant: Dorian Grant Nineberg; Third Defendant: Bradley Freedman (A Child by Ruth Freedman his litigation friend); Fourth Defendant: Rosalind Nineberg; Fifth Defendant: The Commissioners for Her Majesty's Revenue and Customs
Jurisdiction
England and Wales
Judgment Date
21 May 2015
Procedural Posture
Part 8 Claim (chancery Division) / Judgment After Hearing of Application to Set Aside Settlement
Outcome
Settlement set aside on the ground of equitable mistake.
Legal Topics
Equitable Mistake, Rescission of Voluntary Disposition, Inheritance Tax, Trust Law, Mistake as to Tax Consequences
Equity Trusts Tax Law Equitable Mistake Rescission of Voluntary Disposition Inheritance Tax Trust Law Mistake as to Tax Consequences

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Parties

Melanie Dawn Freedman

Claimant

Michael Freedman

First Defendant

Dorian Grant Nineberg

Second Defendant

Bradley Freedman (A Child by Ruth Freedman his litigation friend)

Third Defendant

Rosalind Nineberg

Fourth Defendant

The Commissioners for Her Majesty's Revenue and Customs

Fifth Defendant

Procedural Posture

Part 8 Claim (chancery Division) / Judgment After Hearing of Application to Set Aside Settlement

Legal Issues

  1. 1 Whether the settlement should be set aside on the ground of equitable mistake
  2. 2 Whether the mistake was sufficiently grave and causative to warrant rescission
  3. 3 Whether it would be unconscionable for the donees to retain the property under the settlement

Ratio Decidendi

The claimant made a distinct and serious mistake, induced by incorrect legal advice, as to the inheritance tax consequences and her ability to repay a loan, which was sufficiently grave and central to the transaction. It would be unconscionable for the beneficiaries to retain the property under the settlement. The settlement is set aside on the ground of equitable mistake.

Court Disposition

Settlement set aside on the ground of equitable mistake.

Orders

  • The settlement dated 4 February 2013 is set aside.
  • Relief granted as sought in the Part 8 claim.