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England and Wales Court of Appeal (Civil Division) Decisions
You are here: BAILII >> Databases >> England and Wales Court of Appeal (Civil Division) Decisions >> Musa & Ors v Holliday & Ors  EWCA Civ 1268 (15 October 2012)
Cite as:  EWCA Civ 1268
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ON APPEAL FROM THE HIGH COURT OF JUSTICE
HER HONOUR JUDGE KUSHNER Q.C.
Strand, London, WC2A 2LL
B e f o r e :
LORD JUSTICE LLOYD
LORD JUSTICE SULLIVAN
| (1) GULEN MUSA (2) ONER GUNEY
(3) ERKIN RAMADAN GUNEY (4) ALEV KANLI
(5) ZERIN KORKMAZER
|- and -
|(1) DIANE LINDA HOLLIDAY (2) KEVIN HOLLIDAY
|(3) HOUSSEIN RAMADAN GUNEY (a minor) (4) JOHN HANDLEY OWEN (5) GONUL SEMA GUNEY
for the Appellants
Ulick Staunton (instructed by Hunters) for the Claimant Respondents
The Defendant Respondents were not represented
Hearing date: 3 July 2012
Crown Copyright ©
Sir Nicholas Wall, President of the Family Division:
"4.16 Accordingly, although the evidence is presently far from perfect, and the result will therefore be less easy to calculate on a reliable basis, further delay will not perfect the flaws or gaps in the information unless there is an adjournment for a lengthy and indefinite period. This is unacceptable.
4.7. Further, as I refer to later in his judgment, I feel that [the family] have been sparse in their disclosure and have filed scant evidence at the very last moment ..."
i) 62, Victoria Road, Knaphill, Woking, Surrey (62, Victoria Road). This was the former home of the deceased and the first applicant. It had been acquired in September 2003, and Diane has continued to live there with Houssein. It was worth in the order of £450,000 and had an indebtedness of approximately £170,000 secured on it, as well as other debts. The judge estimated its equity at £260,000 (see paragraph 19 below).
ii) The deceased's shares in the Brookwood cemetery (the cemetery). This was the major asset. There was a professional valuation of the cemetery in the sum of £1.2 million;
iii) In addition there two other properties, numbers 58 and 60 Green Lanes. I will say something about these at paragraph  below.
"5.2.35 Given the terms of the original mortgage, Diane needs the funds to be able to repay it now to enable her to remain in the property.
5.2.36 She will also need to pay for the incidental maintenance of the property, including outside help to clean and keep the garden in a decent condition. Naturally she will need to pay for fuel, telephone bills and the like.
5.2.37 Diane needs a reliable vehicle, reflecting her lifestyle hitherto and also to transport Houssein around for school and leisure activities. She and Houssein would expect to have annual holidays abroad once a year and be able to have meals out on occasion. Diane would expect to be able to entertain her friends and also those of her son. She should expect to be able to dress to a reasonable standard and provide uniform, clothing and for activities for Houssein which reflect his talents and the activities of his peers. She should expect to be able to fund private health insurance for herself and Houssein, something which was paid for by the cemetery company when Ramadan was alive, but which was withdrawn when she was removed from the business.
5.2.38 Diane also needs to be in a position to fund Houssein's school fees at around the level of those presently paid, namely £12,000 a year and, no doubt, rising, as opposed to the level of over £24,000 argued for. I have given my reasons for this when dealing with Houssein's needs later in this judgment. She will also need to pay for his music lessons and the "extras" that usually arise from activities through a private school.
5.2.39 I anticipate that Houssein will progress to university and later perhaps qualify in some profession. This would mean that he would need to be maintained by his mother and his education paid for until he was at least 21 and perhaps significantly older, namely at least another 9 years.
5.2.40 Although Houssein has his own share of his father's UK estate, this has been used up, by my calculation, as the personal representatives have borrowed against it for the purpose of paying his school fees and general care. Therefore, although one could argue that he has had to contribute in a substantial way to his own maintenance, the fact remains that henceforth, Diane will be the provider for both of them.
5.2.41 Taking all this into account and bearing in mind the standard of living she had when Ramadan was alive, I would agree with Mr Staunton's calculation that an income of £60,000 a year is the appropriate sum as a starting point for Diane."
The Value of the Assets in the UK
"5.5.26 Mr Staunton [counsel for Diane] has attempted to set out and calculate the total value of the UK assets in his opening skeleton. He calculated that it was worth some £2,345,000.
5.5.27 However, there has to be significant adjustment to reflect the finding that only some £75,000 plus £27,000 extra interest from the proceeds of sale of 58 Green Lanes forms part of Ramadan's estate and also to reflect that the valuation of 60 Green Lanes is possibly much less than the anticipated £435,000 in the event that the property cannot be sold with vacant possession.
5.5.28 Taking that into account the estate will be worth £2,000,000 before taking into account the devaluation if the Claimants fail in their possession action.
5.5.29 I am grateful to Mr Staunton for his breakdown of the Inheritance Tax due now or which will fall due in the fullness of time.
5.5.30 However, this is only of limited assistance given the imponderables of the estate as outlined and the distribution of the assets as a result of this judgment.
5.5.31 All that can be said is that the estate has a liability attributable to tax of in excess of £397,500. Costs of the administration of the estate were £489,000 as of July 2010, and estimated at £580,000 as at the date of the hearing. This would mean that the net estate was in the region of £1m rather than Mr Staunton's figure of £1,458,437.
5.5.32 This is somewhat short of Miss Allardice's [counsel for the family] net valuation of the estate. However, she has placed greater values on 62 Victoria Road and 60 Green Lanes and had taken the costs of the administration of the estate at the later, greater total.
5.5.33 Although counsel for both sides have been of great assistance and assiduous in their calculations of the net value of the UK estate, in fact, in the event, this has been of less significance than they may have been.
5.5.34 First, the only liquid asset is the proceeds of sale of 58 Green Lanes, of which I have decided less than a quarter forms part of the UK estate.
5.5.35 Of the other assets, the value of 60 Green Lanes is not established as it is not yet known whether it comes with vacant possession.
5.5.36 The value of the major asset, namely the cemetery, although subject to an independent valuation by Mr Plumb, is subject to the possible contingent liability of outstanding tax, fines and penalties, the extent of which will not be known for some time."
"5.6.16 However, the real relevance is the impact his actions must have had on Diane and even worse, on Houssein, who only knew that Erkin had approached someone to kill Diane. I cannot express my disgust at Erkin's actions strongly enough. As a result, he was incarcerated yet again which had a knock-on effect, no doubt on his immediate family and their finances, not to mention having all the psychological issues to deal with.
5.6.17 Further, I also take into consideration that the actions of the family have in effect stripped Diane of any realistic opportunity to gain employment. She did not merely have to leave the job she had been doing for several years with her partner at a time when it must have been a struggle for her, but she was dismissed for misconduct, and fraud at that. Moreover, there were attempts to deprive not only her, but also Houssein, of their home at this very vulnerable time. This was more despicable conduct in all the circumstances."
"7.4. I have decided that the imperative of mortgage-free accommodation for Diane and Houssein means that this shortfall will be provided from the proceeds of sale of 60 Green Lanes, when that can be effected. Of these sums, what would normally be his one seventh share will be given to Houssein the remainder will be awarded to Diane. Any resulting tax will be borne by each of them pro rata."
"7.11 The disadvantage for Diane is that there is the unknown tax liability which is being investigated. If the "worst case scenario" put forward as a realistic possible by the Defendants is correct, and it is borne by the cemetery business, the net value of the company will not be £1.2 million, but as little as £700,000, less penalties and interest.
7.12 I had considered whether, by giving Diane the most substantial capital asset of the UK estate, together with the income from it, the award would be disproportionately large. However, in the context of all the assets in Ramadan's estate both here and in Northern Cyprus, I do not think that the transfer of the Brookwood companies to Diane will be excessive. Moreover, by providing an income for her it will avoid having to transfer more capital assets to ensure the level of income she requires for herself and Houssein. Finally, of course she has to bear the unquantifiable risk that the cemetery is not worth its present estimate due to any tax liability.
7.13 I make one exception to the transfer of all the companies' assets, namely the off-site interests, loosely valued by Mr Plumb at £75,000. They will be earmarked as going to Ramadan's seven children to sell and produce more capital for them. Each will bear any tax resulting from his or her share of the sale.
7.14 The "quid pro quo" for Diane is that Brookwood will bear all the risk of any liability to HMRC.
7.15 The value of the estate in Northern Cyprus and the value of 60 Green Lanes are uncertain. However, I am sure that there will be significant funds for all the adult children of the deceased from these two sources together with their share in the proceeds of 58 Green Lanes, more than adequate to satisfy their needs.
7.16 In relation to 60 Green Lanes, the property shall be sold. Of the proceeds, Houssein shall receive his one-seventh share. Thereafter, the first £123,571.51 of the proceeds shall be transferred to Diane to make up the sum due to repay the mortgage on 62 Victoria Road. The balance of the net proceeds shall be divided among the First to Sixth Defendants as remaining beneficiaries in the normal way. All seven of the children will be responsible for any tax that may ensue in relation to their respective shares. Of course any of the Defendants will be at liberty to raise the sum to pay Diane and buy out the shares of the others and thus avoid a sale.
7.17 So far as Kevin is concerned, I find that he is entitled to a sum or sums from Ramadan's UK estate to pay any tuition fees, enrolment fees and expenses to which I refer above to enable him to qualify as a lawyer. This should be met by Diane paying one half of those fees; the other half will be met by the adult Defendants within 30 days of any request by Kevin together with an invoice or other proof that the fees or expenses are due."
Lord Justice Lloyd
Lord Justice Sullivan