11/11/2022

Trust claim over Swiss bank account struck out 

Yesterday, the Chancellor, Sir Julian Flaux, handed down judgment in Margulies v Margulies [2022] EWHC 2843 (Ch). The Chancellor struck out the claim, in which the claimant alleged that the defendant, his brother, had concealed the existence of a trust over monies in a Swiss bank account said to have been created by their late father, who established the company which now runs the Sekonda, Accurist and Limit watches businesses.

The primary basis for strike out was that the claimant had previously litigated the same claim in proceedings issued in 1997. On that occasion, the claimant’s claims had been struck out as inarguable by Carnwath J. That decision was upheld on appeal in March 2000, with Nourse LJ delivering the judgment of the Court. The appeal was argued over three days by Mr Terence Etherton QC (for the claimant) and Mr Geoffery Vos QC (for the defendant). The Chancellor rejected the claimant’s submission that the present claim was materially distinguishable, holding that, on analysis, the ‘new’ claim was entirely subsumed within those brought in the 1997 proceedings and so barred by cause of action estoppel.

The Chancellor held that, if there were not a cause of action estoppel, the claim was clearly barred by issue estoppel. The critical first step in establishing the causes of action asserted by the claimant was the same in both cases, namely whether, at some point in his lifetime, the parties’ father had manifested an intention to create a trust over some or all of his assets. The Court of Appeal held that he had not done so. Contrary to the claimant’s submission, the allegedly new evidence before the Court came nowhere near establishing special circumstances which would render it unjust to give preclusive effect to the Court of Appeal’s determination.

The Chancellor went on to consider the defendant’s further alternative case based on the principle in Henderson v Henderson, holding that, if the claimant’s claim was not barred by res judicata, it was abusive because it could and should have been brought in the earlier proceedings.

These findings meant that it was strictly unnecessary to consider the defendant’s application for summary judgment. Nonetheless, the Chancellor held that, even if the claim were not barred by res judicata or otherwise to be struck out as an abuse of process, it had no real prospect of success on the evidence so that the defendant would have been entitled to summary judgment in any event.

James Gardner appeared for the successful defendant, led by Conall Patton KC of One Essex Court, instructed by Jonathan Tickner and Holly Buick of Peters & Peters Solicitors LLP.

Read the judgment.

The case has already been reported in the media, including:

The Lawyer