Freedman v Freedman & Ors

Freedman v Freedman & Ors

The claimant made a distinct and serious mistake regarding the tax consequences of the settlement, induced by incorrect legal advice, which fundamentally affected her ability to repay a loan and the nature of the transaction. It would be unconscionable for the beneficiaries to retain the property, warranting rescission of the settlement.

Parties
Claimant: Melanie Dawn Freedman; First Defendant: Michael Freedman; Second Defendant: Dorian Grant Nineberg; Third Defendant: Bradley Freedman; 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 / Judgment
Outcome
Settlement set aside on the ground of equitable mistake.
Legal Topics
Equitable Mistake, Rescission of Voluntary Settlement, Inheritance Tax, Asset Protection, Unconscionability
Equity Trusts Tax Equitable Mistake Rescission of Voluntary Settlement Inheritance Tax Asset Protection Unconscionability

Case Brief

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Parties

Melanie Dawn Freedman

Claimant

Michael Freedman

First Defendant

Dorian Grant Nineberg

Second Defendant

Bradley Freedman

Third Defendant

Rosalind Nineberg

Fourth Defendant

The Commissioners for Her Majesty’s Revenue and Customs

Fifth Defendant

Procedural Posture

Part 8 Claim / Judgment

Legal Issues

  1. 1 Whether the settlement should be set aside on the ground of equitable mistake
  2. 2 Whether the mistake was sufficiently distinct and grave 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 regarding the tax consequences of the settlement, induced by incorrect legal advice, which fundamentally affected her ability to repay a loan and the nature of the transaction. It would be unconscionable for the beneficiaries to retain the property, warranting rescission of the settlement.

Court Disposition

Settlement set aside on the ground of equitable mistake.

Orders

  • The settlement dated 4 February 2013 is set aside.