Legal

Community Of Property And Trusts – Expect A Slew Of New Cases

Michael Wells-Greco, Maitland, Partner, Geneva, 13 June 2013

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Michael Wells-Greco, partner with Maitland in Geneva, explains why a recent UK Court of Appeal judgement is likely to drive an uptick in the number of cases relating to community of property and trusts.

Michael Wells-Greco, partner with Maitland in Geneva, explains why a recent UK Court of Appeal judgement is likely to drive an uptick in the number of cases relating to community of property and trusts.

The Court of Appeal of England and Wales handed down judgement on 1 May 2013 in the matter of Slutsker v Haron Investments Ltd & Anor [2013] EWCA Civ 430. Following this judgement, we are likely to see an increase in the number of court cases relating to community of property and trusts.

Vladimir Slutsker, a former Russian Senator, claimed a 50 per cent share in a London property on the basis that it had been purchased during his marriage to his ex-wife, Olga. The domicile of the marriage was Russia, and under Russian law the money used to purchase the property was regarded as joint family property. Mr Slutsker argued that he had not consented to the property being held on the terms of a Cayman law trust, under which he had limited and defeasible interests. However, last year Underhill J rejected Mr Slutsker’s claim, and the Court of Appeal has now upheld that decision.

The Court of Appeal held that the claimant had no beneficial interest in property purchased by his wife and transferred to the first defendant company. The claimant had not been entitled to rely on Russian law as that of the matrimonial domicile to establish an interest in money used to purchase the property and then seek to apply English domestic law to follow that interest through to the purchased property. The application of Russian law as that of the matrimonial domicile, under English conflict of law rules, had to be carried through to all stages of the relevant history, and, on the application of Russian law, the claim had to fail.

Carrying through

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