You Can't Take it With You

Last year the High Court of Justice in England decided a case called WA v Executors of the Estate of HA and others.

Ms A was described as a "fabulously wealthy heiress". She married Mr A when they were both in their forties, neither of them worked in paid employment during their marriage, which broke down after 17 years, leaving four children, and a pile of money.

Relatively quickly, they settled their dispute. Ms A had property worth a net £242 million ($486,714,770), Mr A £2.1 million ($4,222,930) and the settlement reached was that Ms A was to pay Mr A £17.34 million ($34,865,678) in two instalments. The first instalment was paid, and 22 days after the court orders were made by consent, the husband killed himself.  The second instalment was not paid.

Despite the interment of her former husband, Ms A was undeterred from undertaking an appeal. Bear in mind that the court orders were by consent, but she appealed them nonetheless. The essence of her appeal was that her late husband's entitlement was based on his needs. If the court had known that his needs would last for only 22 days, he would have got nothing from the court. And nobody could of course foresee his death. 

Mr A's estate opposed the appeal. The estate said that the order was not only needs based but he had a claim against property partly because some of it was their matrimonial home, and he had earned his share. 

The Judge decided that the husband's suicide was neither foreseen nor foreseeable. He was sad following the breakdown of the marriage and admitted himself to hospital but discharged himself some hours later. He was referred by his psychiatrist to the authorities and his gun licence was revoked. His contact with the children was interrupted. However there was a psychiatrist's report that was positive and his suicide was at best a theoretical possibility. 

The Judge then decided that Mr A's claim was primarily needs based. He then asked himself the question: "If I had been deciding this case, knowing that the husband was to die in less than a month, what would I have given him?"  The answer, it turned out was £5 million ($10,052,604) or £227,272 ($456,935) per day.  So Ms A's appeal succeeded, and her payment obligations were very substantially reduced.

It would be a grave error to think that this could not happen in Australia: under the law here, it could.

Contact PE Family Law to discuss property and financial settlements.