Kliers v Schmerler & Anor (Rev 2) [2018] EWHC 1350 (Ch) (30 April 2018)

Kliers v Schmerler & Anor (Rev 2) [2018] EWHC 1350 (Ch) (30 April 2018)

The court found that Mordechai Schmerler held the property as bare trustee for Miriam and Shlomo Kliers, based on the common intention and financial contributions, with beneficial interests apportioned 75% to Miriam and 25% to Shlomo. The illegality of the arrangement (mortgage and benefit fraud) did not bar relief, applying the flexible approach in Patel v Mirza, given the undue influence exerted on Miriam and the need to remedy, not perpetuate, the fraud. The court refused to allow the debarred defendant to cross-examine or make further submissions, finding no sufficient justification.

Citation
[2018] EWHC 1350 (Ch)
Parties
Claimant: Miriam Kliers; First Defendant: Mordechai Schmerler; Second Defendant: Shlomo Kliers
Jurisdiction
England and Wales
Judgment Date
30 April 2018
Procedural Posture
Chancery Division Property Trusts and Probate / Trial Judgment Following Debarring of Defendants
Outcome
Declarations granted in favour of Miriam Kliers; beneficial ownership apportioned 75% to Miriam Kliers and 25% to Shlomo Kliers; undertakings required for disclosure and repayment to authorities; further submissions to be heard on consequential orders.
Legal Topics
Resulting and Constructive Trusts, Beneficial Ownership, Illegality in Civil Claims, Undue Influence, Relief From Sanctions, Debarring Orders
Equity and Trusts Property Law Civil Procedure Resulting and Constructive Trusts Beneficial Ownership Illegality in Civil Claims Undue Influence Relief From Sanctions +1 more

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Parties

Miriam Kliers

Claimant

Mordechai Schmerler

First Defendant

Shlomo Kliers

Second Defendant

Procedural Posture

Chancery Division Property Trusts and Probate / Trial Judgment Following Debarring of Defendants

Legal Issues

  1. 1 Whether the property at 94 Kyverdale Road was held on trust by Mordechai Schmerler for Miriam and Shlomo Kliers
  2. 2 Whether the beneficial interests should be apportioned 75:25 between Miriam and Shlomo Kliers
  3. 3 Whether the illegality of the transaction (mortgage and benefit fraud) bars relief to the claimant

Ratio Decidendi

The court found that Mordechai Schmerler held the property as bare trustee for Miriam and Shlomo Kliers, based on the common intention and financial contributions, with beneficial interests apportioned 75% to Miriam and 25% to Shlomo. The illegality of the arrangement (mortgage and benefit fraud) did not bar relief, applying the flexible approach in Patel v Mirza, given the undue influence exerted on Miriam and the need to remedy, not perpetuate, the fraud. The court refused to allow the debarred defendant to cross-examine or make further submissions, finding no sufficient justification.

Court Disposition

Declarations granted in favour of Miriam Kliers; beneficial ownership apportioned 75% to Miriam Kliers and 25% to Shlomo Kliers; undertakings required for disclosure and repayment to authorities; further submissions to be heard on consequential orders.

Orders

  • Declaration that Mordechai Schmerler holds the property on trust for Miriam and Shlomo Kliers in 75:25 proportions
  • Claimant to provide undertakings for disclosure to Bank of Scotland and social security authorities and for repayment of benefits/mortgage as appropriate