Mahtani & Anor v Sippy & Ano

The second defendant in this case (“Mrs Sippy”) asks that the court strike out proceedings brought against her by her sisters, the first claimant (“Mrs Mahtani”) and the second claimant (“Mrs Panjabi”). The claimants say that their claim should not be struck out. They rely if necessary on proposed amendments for which they seek permission.

Mr Stuart Cakebread, who appears on behalf of the claimants, reminds me of the general principle that if a claim maybe saved by amendment it should not be struck out. Ms Clare Reffin, who appears on behalf of Mrs Sippy, does not contest the principle. She submits, however, that the proposed amendments cannot save the claim. For convenience, in the remainder of this judgment I shall use the expression “the claim” to refer to the claim as set out in the claimant’s draft amended particulars of claim.

There is no appearance on behalf of the first defendant (“Sascha Sippy”), who is Mrs Sippy’s son. Service of proceedings against him by utilising Mrs Sippy’s London address was held by Norris J in December 2012 to have been invalid. Master Bowles has now given permission, on a without notice basis, for the proceedings to be served upon Sascha Sippy in Dubai.

The claim can be conveniently divided into two parts. Both are founded on what is described as a “family settlement under the laws of the Republic of India relating to Hindus.” Mrs Sippy, Mrs Mahtani, and Mrs Panjabi are the daughters of Mr. Tikamdas Sobhraj Chulani (“Mr Chulani”) and his wife Mrs Nirmla Chulani (“Mrs Chulani”). It is common ground that the three daughters are Hindus, that Mr Chulani was a Hindu, and that on 4 April 2009 Mr Chulani, who was by then a widower, executed three documents. These documents are said by the claimants to evidence a family settlement under the laws of the Republic of India relating to Hindus, which they refer to as “the Family Arrangement”.

In section B below I give an account of what is said about the Family Arrangement. In section C below I discuss the first part of the claim, which concerns an apartment located in the United States of America. In section D below I discuss the second part of the claim, which concerns an allegation that has been made on behalf of Sascha Sippy in relation to funds which are said to have been held by Mr Chulani. In broad terms the allegation (“the trust funds allegation”) is that the funds in question represented the balance of transfers which had been made by Sascha Sippy’s father, Vijay Sippy, to Mr Chulani, and which Mr Chulani had agreed to hold on behalf of Sascha Sippy. I shall refer to this part of the claim as “the non-liability claim”. Section E of this judgment sets out my conclusions.

Part of the background to the Family Arrangement concerns property in England and in the USA. It is common ground that Mrs Sippy has at all material times resided at a flat in London, W2. The claim refers to this property as “the London Flat”. It is also common ground that Mr and Mrs Chulani purchased three apartments in a block in Miami, Florida. At one stage one of these apartments was intended for Sascha Sippy. The apartment in question is referred to in the claim as “the Florida Flat”. Another of the flats belongs to Mrs Panjabi. I shall refer to it as “Mrs Panjabi’s flat”.

Having noted that Mrs Sippy (who is referred to as “Laila Sippy”) and Sascha Sippy are respectively the daughter and grandson of Mr Chulani, the claim identifies those whom it refers to as “the Other Descendants”. They are Mrs Mahtani, and her sons, Ranjeet and Mahesh, and Mrs Panjabi and her children Kirran and Angeli.

The claim, at paragraphs 6 to 15, describes the making of the Family Arrangement in this way:

6.

In or about April 2009, Mr. Chulani, a wealthy businessman who was then 90 years of age, decided to agree with Laila Sippy, Sascha Sippy, and the Other Descendants how his estate and assets were to be divided before he died.

7.

To this end, in early April 2009 Mr. Chulani met with the Other Descendants, Laila Sippy, and Sascha Sippy at the Wellington Mews Hotel, Mumbai in the Republic of India where they discussed their claims and wishes over a period of days with a view to reaching a Family Settlement family settlement under the laws of the Republic of India relating to Hindus.

8.

Following the negotiations described in paragraph 87 and by a family settlement under the law of the Republic of India relating to Hindus among the Other Descendants, Mr. Chulani, Sascha Sippy, and Laila Sippy, the parties agreed that Mr. Chulani would divide up and dispose of all his real and personal property by gifts to Laila Sippy and to certain Trusts that were held for the benefit of the Claimants and their heirs and that all the parties would accept the same in full and final settlement of all rights, entitlements and claims each of the parties might have whatsoever against the estates of Mr. Chulani and his late wife, Nirmla Chulani deceased: [“the Family Arrangement”]. Sascha Sippy and Laila Sippy received advice from their lawyers, D M Harish & Co, in respect of the said Family Arrangement prior to entering into the same.

9.

In respect of Laila Sippy and Sascha Sippy, the said Family Arrangement was evidenced, inter alia, by an inter vivos declaration of irrevocable gift dated 4th April 2009 finalised under the laws of the Republic of India relating to Hindus by Sascha Sippy’s and Laila Sippy’s lawyer, D M Harish & Co, under which Mr. Chulani agreed to transfer to Laila Sippy:

a.

US $10,000,000;

b.

the said London Flat (which at the material time was held for Mr. Chulani in the name of Chulani (Jamaica) Ltd); and

c.

UK £50,000 towards the renovation and refurbishment of the said London Flat

in full and final settlement and release of all claims and rights by Laila Sippy and her heirs (including Sascha Sippy) as against the estates of Mr. Chulani and his late wife and further that Laila Sippy will cause and Sascha Sippy agreed to transfer back to Mr. Chulani the property known as… the Florida Flat...

10.

Further the Claimants plead herewith and will rely on for their full terms, true meaning and effect:

a.

A Declaration of Irrevocable Gift dated 4th April 2009 which was confirmed by each of Mr. Chulani, Sascha Sippy, and Laila Sippy;

b.

A Memorandum of Intent dated 4th April 2009;

c.

Declaration of Transfer dated 4th April 2009 from Chulani (Jamaica) Limited to Laila Sippy.

11.

In clause 1 of the said Memorandum of Intent dated 4th April 2009, Mr. Chulani recorded:

“Due to various considerations, I intend to make a special provision for my daughter, Laila Sippy different from the provisions that I will make for my other daughters. In essence, I intend to provide the following for the benefit of my daughter Laila Sippy to be given during my lifetime or as soon as practicable after my death with the intention of fully satisfying the all the inheritance or other rights my daughter Laila Sippy and her descendants may have over my and my wife’s estates”.

12.

Sasha Sippy is and was, at all material times, a descendant of Laila Sippy within the meaning of clause 1 of the Memorandum of Intent.

13.

Under clause 4 of the Declaration of Irrevocable Gift dated 4th April 2009 which was confirmed by each of Mr. Chulani, Sascha Sippy and Laila Sippy, it is provided:

My family consists of (1) my wife, Nirmla Chulani who recently passed away; (2) my daughter Usha Mahtani and her two sons, Mahesh and Ranjeet; (3) my daughter Veena Panjabi, her husband Ramesh and her two children Kirran and Angeli, and (4) my daughter Laila Sippy and her son Sascha.

14.

Clause 5 of the Declaration further provided as under:

I have been concerned about making an equitable and fair distribution of my wealth and assets so that after my demise there is no disharmony and confusion amongst my legal heirs and my business which I have built up during my lifetime should be preserved and enhanced.

15.

Under clause 6 of the Declaration of Irrevocable Gift dated 4th April 2009 which was confirmed by each of Mr. Chulani, Sascha Sippy and Laila Sippy, it is provided:

With this object in mind I have been discussing this matter with my children and grandchildren to ascertain their future plans and desires and have come to the conclusion that I would like to settle / gift a lump sum amount of money on my youngest daughter and also gift to her the London Flat which she and her son Sascha have been occupying for over thirty years. This is by the way of her share of inheritance which I am giving to her presently in my lifetime and in consideration of which she has undertaken to give up her right in any other assets and properties and business owned by me or my wife which will devolve upon my heirs as per separate documents.

The legal effect of the Family Arrangement is said in paragraphs 16 to 18 of the claim to have been as follows:

16.

The said Family Arrangement was subject to the laws of the Republic of India.

17.

Under the law of the Republic of India and in particular under the decisions of the Supreme Court of India in Kale & Others v Dy Director of Consolidation & Others AIR 1976 SC 807, Sahu Madho Das v Mukand Ram (1955) 2 SCR 22, AIR 1955 SC 41, Ram Charan Das v Girijandini Devi AIR 1966 SC 323 and S Shanmugan Pillai v K Shanmugan Pillai AIR 1972 SC 2069 and the decision of the Delhi High Court in Amarjeet Lal Suri v Moti Sagar Suri and Others 119 (2005) Delhi Law Times 2069, the Family Arrangement operated as between each of Mrs. Laila Sippy, Sascha Sippy and the Other Descendants, inter alia, as follows:

a.

The Family Arrangement was subject to a particular equity peculiar to itself;

b.

The Family Arrangement operated by a mutual relinquishing of all claims to the property of Mr Chulani other than that falling to the beneficiary’s share and recognising the right of others to the portions allotted to them respectively;

c.

It operated to compromise and to settle all present and possible claims between family members or those with any claims, antecedent titles and spes successionis on the fair, equitable and voluntary distribution of Mr Chulani’s property;

d.

The consideration for such settlement was the expectation that such a settlement would establish or ensure the goodwill of the person bearing relationship to one another;

e.

That provided the Family Arrangement had been acted upon, it did not matter that a party was not a signatory to the settlement to be bound by its terms;

f.

The terms of the Family Agreement Arrangement were enforceable by one beneficiary as against another;

g.

Laila Sippy has a duty to ensure that the Family Arrangement is adhered to not only by herself but also by her heirs and her assigns, including, without limitation, her son Sascha Sippy. In the event Sascha Sippy fails to comply with or recognize the full extent of the Family Arrangement. Laila Sippy is liable for such a failure. Laila Sippy had entered into the Family Arrangement for herself as well as for her heirs and her assigns, including, without limitation, Sascha Sippy, and Sascha Sippy being a consenting party personally, having witnessed the Family Arrangement, cannot claim against any of the family members, directly or indirectly, other than Laila Sippy, nor can he claim against anyone or any entity that any funds ever held by Mr Chulani in supposed trust or otherwise belong to him.

18.

Further or alternatively, by reason of the fact the Family Arrangement was entered into in reliance of on the fact that it represented the complete partition of Mr. Chulani’s estate and the mutual surrender by each of Mrs Laila Sippy, Sascha Sippy, and the Other Descendants of any claim, spes, right or entitlement against the estate of Mr. Chulani, the Family Arrangement operated:

a.

As a representation by each of Laila Sippy, Sascha Sippy, and the Other Descendants that they and their heirs had no separate claim, spes, right or entitlement against the estate of Mr. Chulani other than those already provided for under the Family Arrangement;

b.

As an oral agreement, alternatively, a collateral warranty by each of Laila Sippy, Sascha Sippy, and the Other Descendants that they each agreed to carry into effect the terms of the Family Arrangement;

c.

As an accord and satisfaction of each and every claim, spes, right or entitlement against the estate of Mr. Chulani that may have been held by any of by each of Mrs. Laila Sippy, Sascha Sippy and the Other Descendants against the estate of Mr. Chulani;

d.

As a proprietary estoppel preventing each of Mrs. Laila Sippy, Sascha Sippy, and the Other Descendants from reneging from the terms of the Family Arrangement;

e.

As an irrevocable disclaimer of any interest held by Laila Sippy and her heirs and assigns, including, without limitation, Sasha Sippy and Laila Sippy in the estate of Mr. Chulani and their agreement that that the Claimants are the heirs of the estate of Mr Chulani.

The course of events up to and including the death of Mr Chulani is described in paragraphs 19 to 22 of the claim:

19.

Pursuant to the said Family Arrangement, Mr. Chulani:

a.

Paid the US 10,000,000 to Laila Sippy by transferring a bank account at Dresdner Bank, Frankfurt, Germany number 0104590800 containing US $5,520,000 and by paying the further sum of US $4,480,000;

b.

Caused the said London Flat to be transferred by Chulani (Jamaica) Limited to Laila Sippy;

c.

Paid UK £50,000 towards the renovation and refurbishment of the said Flat.

20.

Thereafter, Mr. Chulani settled the remainder of all his real and personal property to the Claimants on trust for the Other Descendants.

21.

In the premises, inter alia, the entitlement to the said Florida Flat under the said Family Arrangement now vests in the Claimants.

22.

On 14^th September 2011, Mr. Chulani died intestate in London.

What is said at paragraph 23 of the claim is:

In breach of the said Family Arrangement, both of Sascha Sippy and Laila Sippy has have failed to transfer and/or cause to be transferred to the Claimants the said Florida Flat. The value of the said Florida Flat is US $ 500,000.

This assertion, combined with what is said at paragraph 21 and in earlier sections of the claim about the Family Arrangement, is said to warrant relief sought in the prayer as follows:

(3)

A declaration that the true meaning and effect of said Family Arrangement was to vest the entitlement to the said Florida Flat on the Claimants.

(7)

An order that Laila Sippy and Sascha Sippy do transfer/cause to be transferred and / or Sascha Sippy do transfer the said Florida Flat to the Claimants and mesne profits to be assessed from the date of the said Family Arrangement until delivery up or pay its value US $500,000 to the Claimants together with interest thereon as set out above under section 35A of the Senior Courts Act 1981.

In a witness statement dated 5 October 2012 Mrs Sippy records that she received a letter from Zaiwalla & Co. (“Zaiwalla”) dated 20 December 2011. This letter referred to what were described as “draft Particulars of Claim” in relation to Sascha Sippy’s “alleged claim”. On behalf of the Panjabi and Mahtani families, and the estate of Mr Chulani, Zaiwalla set out a number of complaints about the draft Particulars of Claim, asserting among other things that they were inconsistent with what is now described as the Family Arrangement. No mention was made of any claim in relation to the Florida Flat.

Mrs Sippy replied to Zaiwalla on 2 February 2012 saying, in effect, that the matters they raised were matters which concerned Sascha Sippy rather than herself. On 6 February 2012 Zaiwalla responded, stating that they would address matters directly to Sascha Sippy.

Mrs Sippy heard nothing further from Zaiwalla until 1 June 2012 when they delivered a package to the London Flat enclosing the claim form and Particulars of Claim in this matter. What was said in those documents led her to contact her solicitors, Gallant Maxwell. In correspondence with Zaiwalla, Gallant Maxwell stated, and in her witness statement of 5 October Mrs Sippy confirmed, that in relation to the Florida Flat she had understood that Mrs Panjabi’s son Kirran was going to contact her if anything was needed on her side, and he never did so. She identified certain specific conversations with Kirran in that regard.

In her witness statement Mrs Sippy added that she had never, to her knowledge, had any ownership interest of any kind in the Florida Flat. She had been able to find a document described as a “Special Warranty Deed” dated 3 March 1982 between Brickell-Biscayne Corporation (described as “the grantor”) and her late parents (who were described as “the grantee”) in relation to the three apartments. In old files there was a lawyer’s memorandum with a draft declaration of trust. This suggested that the intention was that each flat would be held in trust by Mr and Mrs Chulani for the children of their respective daughters. Mrs Sippy explained that she had understood that the Florida Flat was in a trust for Sascha Sippy, but neither she nor he had seen a signed declaration of trust. Sascha had told her that his grandparents never discussed the ownership of the Florida Flat with him save that he told Mr Chulani upon the Declaration of Irrevocable Gift on 4 April 2009 that he would relinquish any claims he had to the Florida Flat.

Mrs Sippy stated that neither she nor her son wished to assert any beneficial interest or any other type of interest in the Florida Flat. It had been used by her parents when they were visiting the area, and she would stay there when visiting Miami so that she could be with them. She believed that her son had stayed there perhaps two or three times over the years but never for more than a few days, and that the last time he did so was prior to April 2009. She had a set of keys for the Florida Flat but was not sure that they still worked. Her belief was that the locks had been changed by her sisters. Her son had told her that he had never had his own set of keys.

In her witness statement Mrs Sippy said that, with one exception, utility and similar bills for the Florida Flat had not been in her name. The exception was a hurricane insurance document signed by Mr Chulani on 24 June 2008. She had been dealing with the insurance company on her father’s behalf and that was why they had put her name on the policy. Utility bills for the apartment were paid from a bank account in Miami in the names of her parents and herself. She was an authorised signatory on the bank account as her father was elderly and did not want to deal with day to day matters. There had been a Direct Debit from the account in favour of the Condominium Association, and the hurricane insurance had been paid for using the same account. Mrs Sippy explained that her understanding was that the account was now frozen and formed part of her father’s estate. She did not know who had paid outgoings on the Florida Flat since her father’s death.

For the avoidance of doubt, in her witness statement Mrs Sippy confirmed what had been stated on several occasions by Gallant Maxwell, namely that she was ready, willing and able to do whatever she could to achieve a transfer of the Florida Flat to whoever may be entitled to it, but she did not know what needed to be done and her sisters’ solicitors had declined to tell her.

In response to the statement of 5 October 2012 Ms Pavani Reddy, managing partner of Zaiwalla, made a third witness statement on behalf of the claimants. In it she said that Kirran Panjabi accepted that he had told Mrs Sippy that he would “try and locate them” [presumably a reference to the relevant legal documents] but they were not in his possession. He said that he had advised Mrs Sippy to do the same as the onus was on her to comply with the Agreement. He denied saying that Mrs Sippy should not worry about what needed to be done and that he would deal with it.

After noting various of the things that had been said by Mrs Sippy in relation to the Florida Flat, Ms Reddy at paragraph 14 of her witness statement said this:

The court may therefore conclude that absent compulsion she will not carry out her contractual obligation. She has in effect walked away from her obligation to cause the property to be transferred and simply asserted that she has no objection to the transfer and seeks to claim no interest in it. That is not the fulfilment of her contractual promise.

On 19 November 2012 Mrs Sippy made a second witness statement confirming what she had said in her first witness statement and giving more detail about discussions between her and both Kirran and Mahesh Panjabi in relation to the Florida Flat.

On 20 November 2012 Mr Simon Gallant of Gallant Maxwell made a witness statement on behalf of Mrs Sippy. He recorded that, following receipt of Ms Reddy’s third witness statement, he had instructed a firm of US attorneys in Florida to see if it was possible to obtain any further information as to the ownership of the Florida Flat. They had sent him an extract from the property register of Miami-Dade County, a publicly available register, in which the owners were stated to be “TS & NL Churani Trs”.

Also on 20 November 2012 a fourth witness statement was made by Ms Reddy. She recorded that Kirran Panjabi did not recall making a statement which had been described in Mrs Sippy’s second witness statement, and that the onus was on Mrs Sippy to “cause the transfer” of the Florida Flat. Ms Reddy asserted that it was clear that notwithstanding the positive obligation imposed on Mrs Sippy under the Family Settlement to transfer the Florida Flat, Mrs Sippy had taken no concrete steps to do so.

On 23 January 2013 Mr Gallant made a second witness statement. He exhibited an opinion dated 6 December 2012 from Edwards Wildman, US attorneys based in Florida. The opinion had been provided to Zaiwalla on 7 December 2012. The opinion stated that title to the Florida Flat was vested in Mr and Mrs Chulani “as trustees”. Under Florida statute 689.07, a conveyance to individuals as “trustees,” without reference to the beneficiaries of the trust, the nature or purpose of the trust, or the identification of a specific trust, invests fee simple title to the property on the grantees individually and not as trustees. As the grantees were married to each other, the deed created a tenancy “by the entireties”, which meant that upon the death of one of the parties, title to the property passed to the survivor by law without the requirement of probate. It would be customary to record a death certificate with an appropriate affidavit in order to convey title to the survivor, but although Mrs Chulani had pre-deceased Mr Chulani, no search of the public records had disclosed the recording of a death certificate for Mrs Chulani. A search of the probate records for Miami-Dade County had not disclosed a probate proceeding for either Mrs Chulani or Mr Chulani. It would be necessary to have a probate proceeding in Miami-Dade County in order to clear title to the Florida Flat from Mr Chulani into either the beneficiaries under any will, or in the event that he died without a will, to his three daughters to whom the title would pass by intestate succession. If there had been no will, then the three sisters would be the personal representative and would have to jointly commence the probate proceeding, following which Mrs Sippy could file a disclaimer of interest in the property. Edwards Wildman noted that if Mr Chulani had not died domiciled in the United States, “the country of his residency could have an impact on the disposition of the interest in the property…”.

Mr Gallant commented that the report made it absolutely clear that there was nothing that Mrs Sippy could presently do to cause transfer of the Florida Flat to the claimants. She would disclaim any interest in any proceedings in Florida, but so far as she was aware no such proceedings had been instituted by the claimants.

Ms Reffin submitted that the declaration claimed at paragraph (3) of the prayer was a declaration which this court has no jurisdiction to make. She relied upon the established principle that this court has no jurisdiction to entertain proceedings for the determination of the title to immovable property situated outside England and Wales. Mr Cakebread did not dispute the principle. He submitted that the relief sought at paragraph (3) of the prayer merely concerned entitlement to the Florida flat, and did not require a “determination of the title to” the Florida flat. In my view this is a distinction without a difference. It follows that paragraph 21 of the claim and paragraph (3) of the prayer must be struck out.

As to paragraph (7) of the prayer, Ms Reffin submitted that the proposed order requiring Mrs Sippy to transfer or cause to be transferred was pointless. There was nothing that Mrs Sippy could do. Title was already vested in Mr Chulani. If an appropriate person sought probate in Florida, and a disclaimer was required in order to ensure that title to the Florida flat vested in those to whom it belonged, then Mrs Sippy would do so. She was willing to give an undertaking in that regard, but no such undertaking was necessary.

Mr Cakebread submitted that the primary obligation was upon Mrs Sippy to ensure that free title was conveyed to Mr Chulani. That responsibility had been taken on in return for the very substantial benefits bestowed upon Mrs Sippy under the Family Arrangement. He did not dispute what was said in the Edwards Wildman opinion. Nevertheless he submitted that Mrs Sippy had failed to ensure that free title was conveyed to Mr Chulani, and that this failure had, on Mrs Sippy’s own evidence, led to complications as a result.

In my view Mr Cakebread’s submissions are shown by the evidence to be without foundation. The evidence is clear: nothing needs or was needed to be done by Mrs Sippy in order to fulfil the promise pleaded at paragraph 9 of the claim, which was simply to cause her son “to transfer back to Mr Chulani” title to the Florida Flat. The transfer had already occurred. The result is that paragraphs 21 and 23 of the claim, and paragraphs (3) and (7) of the prayer, must be struck out. Moreover, if it were relevant (which it is not), there is no basis whatever to suggest that Mrs Sippy would fail to do anything required in order to seek probate, but what is clear is that she cannot do this on her own. Nor is there anything to suggest that, once probate is sought, Mrs Sippy would fail to do anything that may be necessary in order to renounce any claim to the Florida flat. The notion that the court would grant an injunction in these circumstances is no more than fanciful.

The prayer at paragraph (7) also seeks mesne profits “to be assessed from the date of the said Family Arrangement until delivery up” or that Mrs Sippy “pay its value $500,000 to the claimants together with interest.” As was pointed out by Ms Reffin, there is simply no evidence in support of either of these claims. They, too, must be struck out.

The obvious lack of utility of these proceedings so far as paragraphs (3) and (7) of the prayer are concerned, combined with the failure to raise any concern in this regard prior to the issue of proceedings, leads me to conclude that this part of the claim is an abuse of the process of the court.

The second part of the claim identifies a different alleged failure to comply with the Family Arrangement. Mr Cakebread concedes that without the proposed amendments this part of the claim must be struck out. After incorporating very substantial proposed amendments, this part of the claim is described in paragraph 24 of the claim in this way:

24.

Further in breach of the said Family Arrangement and notwithstanding that:

a.

No monies are owed to Sascha Sippy or Laila Sippy by the estate of Mr. Chulani;

b.

Mr Chulani fully and finally discharged his obligations to Laila Sippy and her heirs and her assigns, including, without limitation, Sascha Sippy;

c.

Even if Sascha Sippy had any valid claim against Mr Chulani prior to the Family Arrangement (which is denied) the Family Settlement Arrangement was in full and final settlement of any claims that Sascha Sippy may have had whether by way of allegation of Mr Chulani’s holding property on trust for him otherwise;

d.

Under Indian law no trust could arise in respect of payments (which are denied but as alleged by Sascha Sippy) in breach of the Foreign Exchange Regulation Act 1973;

e.

Any claim against the estate of Mr. Chulani fails on the basis of pleni administravit;

f.

Each of Laila Sippy and her heirs and her assigns, including, without limitation Sascha Sippy and Sascha Sippy had by virtue of his their permitting himself themselves to become bound by the said Family Arrangement,

i.

Represented to the Other Descendants that Laila Sippy and her heirs and her assigns, including, but without limiktation, Sascha Sippy and Sascha Sippy he had no separate claim, spes, right or entitlement against the estate of Mr. Chulani other than those already provided for under the Family Arrangement;

ii.

Entered into an oral agreement, alternatively, a collateral warranty with the Other Descendants that each of Laila Sippy and her heirs and her assigns, including, without limitation, Sascha Sippy, and Sascha Sippy the Other Descendants that he agreed to carry into effect the terms of the Family Arrangement;

iii.

Entered into an accord and satisfaction of each and every claim, spes, right or entitlement against the estate of Mr. Chulani that each of Laila Sippy and her heirs and her assigns, including, but without limitation, Sascha Sippy and Sascha Sippy he may have been held against the estate of Mr. Chulani;

iv.

Become estopped from reneging from the terms of the Family Arrangement;

v.

Irrevocably disclaimed of any interest beyond that provided for under the Family Arrangement in the estate of Mr. Chulani and agreed that that the Claimants are the heirs of the estate of Mr Chulani.

1)

Sascha Sippy asserts and has asserted by his agent, Brian Healy, that he has a trust claim against and demands payment from the estate of Mr. Chulani and, through it, from the Other Descendants and from companies owned by the Other Descendants in the sum of US $8,437,814 inclusive of compound interest arising because Sascha Sippy’s father, Mr. Vijay Sippy, an Indian national and resident, transferred from India to Mr. Chulani sums totalling either US $350,000 or US $500,000 on a date or dates unknown in or around 1970 to 1975.

2)

Laila Sippy has:

a.

Caused Sascha Sippy to bring and/or threaten to bring his claim against the Claimants and/or

b.

Assisted him in bringing the said claim and/or

c.

Permitted Sascha Sippy to bring the said claim and/or

d.

Failed to prevent and/or take all reasonable steps to prevent Sascha Sippy from bringing his claim against the Claimants as set out above

Particulars

i.

Laila Sippy has supported Sascha Sippy's claim by purporting to provide evidence to this court which is inconsistent with her agreement to the Family Arrangement, inter alia asserting that Sascha Sippy has a moral claim against Mr Chulani’s estate.

ii.

Laila Sippy has provided practical support by providing email addresses to Sascha Sippy in furtherance of his claim

iii.

Laila Sippy has communicated with the said Brian Healy to assist Sascha Sippy and it is believed by the Claimants that he has been acting on her instructions as well as those of Sascha Sippy

iv.

Laila Sippy has failed to prevent Sascha Sippy from bringing and/or threatening to bring his claim and has wrongfully stated that she is under no obligation to do so and/or cannot do so.

v.

Laila Sippy has failed to undertake to indemnify the Other Descendants from any or all costs, expenditures or other losses, including the costs of defending and/or bringing any action against Sascha Sippy, incurred due to Sascha Sippy’s actions.

3)

Further, alternatively, the Claimants are entitled to be indemnified by Laila Sippy and Sascha Sippy for any costs, expenditure or other losses, including the costs of defending and/or bringing any action against Sascha Sippy in relation to or arising from the Family Arrangement and/or his breach and/or threatened breach thereof by virtue of her failure to ensure that Sascha Sippy abides by his obligations as set out above arising from the Family Arrangement.

The assertions in paragraph 24, combined with those earlier in the claim, are said to warrant the following relief:

(1)

In each case, a declaration that the estate of Mr. Chulani, of which the Claimants are the sole legal heirs under the law of St. Maarten, is not impressed with any trust in favour of Sascha Sippy whether in the sum claimed or any sum for the reasons (or any of them) set out at paragraphs 2224(a) to (f) hereinabove.

(2)

In each case, a declaration that Sascha Sippy has no claim for an interest in any of the funds and assets held by the estate of Mr. Chulani and / or transferred under the said Family Arrangement to any of the Other Descendants whether in the sum claimed or any sum.

…

(4)

A declaration that the Claimants are entitled to indemnity from each of Laila Sippy and Sascha Sippy in relation to any costs, expenditure or other losses arising from or connected with any breach and/or threatened breach by Sascha Sippy of the Family Arrangement.

(5)

An order restraining Sascha Sippy from bringing any claim against the Claimants in relation to the estate of Mr Chulani.

(6)

An order restraining Laila Sippy from causing, permitting or assisting Sippy Chulani in bringing a claim against the estate of Mr Chulani.

Paragraphs (1) and (2) of the prayer ask the court to declare, not that the claimants have any particular rights, but that there is no trust in favour of Sascha Sippy and that he has no rights. Ms Reffin recognises that a negative declaration can perform a positive role: see Messier-Dowty Limited v Sabena [2000] 1 WLR 2040. The principle which she submits should be adopted is that described by Lord Woolf MR in paragraph 42 of his judgment in that case: the court should be willing to grant a negative declaration when it is useful to do so. The present case, submits Ms Reffin, is a case in which it is abundantly clear that there is no useful purpose in granting, as against Mrs Sippy, the negative declarations sought.

Among other things, Ms Reffin points to what was said by Mrs Sippy in her witness statement of 5 October 2012:

42.

… I accept, and have always accepted, that the Family Arrangement is legally binding. I do not dispute its validity nor have I ever done so. I readily accept (and always have done) that I have no further claims against the estate of my late father; nor have I ever held or expressed any intention to claim more from the estate or otherwise breach its terms. With hindsight, my only wish is that it had been made clear in the documents constituting the Family Arrangement precisely what documents needed to be prepared or signed by me, or what other actions were necessary, to give effect to my father’s instructions in relation to the Miami Property.

43.

That aside, I do happen to believe that Sascha does have at least a moral claim against my late father’s estate - in respect of monies belonging to Sascha, having been given to him by his father, Vijay, but held by my late father on Sascha’s behalf. I have no legal expertise and do not know what systems of law may apply to such a claim, nor whether it is valid in law. Sascha is a grown man and I have no control whatsoever over what he does or may do to enforce that claim.

44.

I have done nothing to warrant the issue of these proceedings against me nor have I indicated any aggressive intent. I seek no quarrel with my sisters. These proceedings have made me extremely anxious, especially because of the mounting legal costs. My fervent wish is that the action against me should come to an end with the minimum of further trouble and expense…

Ms Reddy’s third witness statement of 12 November 2012 said in relation to the Family Arrangement:

5.

I note that Mrs Sippy agrees that it is a common practice in Hindu culture to enter into family settlement agreements during the lifetime of an individual, so that there are no claims on the estate in future, and I agree with this. The Family Arrangement Agreement titled “Declaration of Irrevocable Gift” applied to and was agreed on behalf of all of Mr Tikamdas Sobraj Chulani’s family members. Paragraph 4 of the family Gift deed provides that:

“4.

My family consists of (1) my wife, Nirmla Chulani who recently passed away; (2) my daughter, Usha Mahtani and her two Sons, Mahesh and Ranjeet; (3) my daughter Veena Panjabi, her husband Ramesh and her two children Kirran and Angeli, and (4) my daughter Laila Sippy and her son Sascha.

5)

I have been concerned about making an equitable and fair distribution of my wealth and assets between my three daughters and their respective children so that after my demise there is no disharmony and confusion amongst my legal heirs and my business….”

[underlining added]

6.

From the above it is clear that the Family Arrangement Agreement was to include both Mr Chulani’s ‘wealth’ and his ‘assets’, which he distributed between his daughters and their respective children. This arrangement was signed by both Defendants.

7.

It is pertinent to note that both Defendants agreed under the Family Arrangement Agreement that the arrangement would settle all of their claims on Mr Chulani’s estate. I draw the Court’s attention to paragraph 11 of the Family Arrangement agreement which states:

11)

After receiving her own independent legal advice and being fully aware of the extent of my and my wife’s estate, Laila Sippy on behalf of herself and all of her heirs or assigns has agreed...”

8.

The Memorandum of Intent also states that:

“… due to various considerations I intend to make a special provision for my daughter Laila Sippy different from the provisions that I will make for my other daughters. In essence, I intend to provide the following for the benefit of my daughter Laila Sippy to be given effect during my lifetime or as soon as practicable after my death with the specific intention of fully satisfying all of the inheritance or other rights my daughter Laila Sippy and her descendants may have over my and my wife’s estate”. [underlining added]

In response to this Mrs Sippy’s second witness statement dated 19 November 2012 said:

5.

I do not know whether any such claims are governed by Indian law, as Ms Reddy asserts in her paragraph 9. As I hope I have already made clear, both in my letter to Zaiwalla & Co dated 2 February 2012 (p26 of “LS1”), and in my first witness statement, I have no control over Sascha’s actions and no wish to take a position on whether anything in the Family Arrangement prevents Sascha from claiming, a question on which I have no expertise.

6.

If Ms Reddy intends in her paragraph 10 to allege that I have breached the Family Arrangement, I reject that allegation. I have already stated that I had no involvement in instructing Mr Healy, other than providing him with the contact details for some of my family members. I did so by way of the email exhibited at PR3. Mr Healy had no authority to represent me nor do I have any reason to believe that he did so.

In her fourth witness statement dated 20 November 2012 Ms Reddy made reference to the acknowledgment by Mrs Sippy in paragraph 6 of her second statement that she had provided the family’s email contact details, including those of her sister, to Sascha Sippy and to Mr Healy. Ms Reddy produced as an exhibit Mrs Sippy’s email dated 7 December 2011, and commented that it was sent to Mr Healy but not to Sascha Sippy. Ms Reddy asserted:

It is clear from this correspondence that [Mrs Sippy] was involved and was instructing Mr Healy.

Ms Reddy added:

7.

I have also been informed by Mr Kirran Panjabi that he and Mr Healy had met personally. At this meeting Mr Healy sought to impress that he was instructed by both the Defendants when he made an offer to settle the alleged claim and had suggested to Mr Panjabi that he should consider the offer and Mr Healy had said he would talk to “them” and persuade them to accept a lower sum in settlement. Mr Panjabi believes that when Mr Healy said “them” he meant Mr Sascha Sippy and Mrs Laila Sippy.

8.

It is clear that Mr Healy was acting on behalf of Mrs Laila Sippy and the offer he had made to Mr Panjabi was on behalf of both Mr Sippy and Mrs Laila Sippy.

9.

Mr Kirran Panjabi has now retrieved a voice message which was left on his telephone by Mr Healy. This message was left by Mr Healy soon after the above referred meeting between Mr Panjabi and Mr Healy. This voice message has been recorded in a CD exhibited to this witness statement as “PR5”. I have quoted the message below for the reference of the Court:

“Kirran its Brian … there is one thing that I forgot to mention and that is Laila Sippy has asked me to say that there is any papers that you need her to sign in relation to the Miami apartment she is more than happy to facilitate that administrative issue, so that the ownership can be formally transferred because she’s made it clear that she had already agreed that but she just wants to make sure that she can help deal with those administrative issue. So if there is any papers you want to send to me or call me and I will be happy to get that signed and sent back to you. Thank you bye bye”. [emphasis added].

10.

It is evident from the above that Mr Healy had authority from Mrs Sippy to represent her and he was liaising on her behalf. The voice message confirms that at the meeting when Mr Healy said “them” he meant both Mr Sasca Sippy and his mother Laila Sippy because in his above voice message he states “there is one thing i forgot to mention that Liala Sippy has asked me to say...

11.

In light of the strong evidence that Mr Panjabi has now produced, it can hardly be correct that Mrs Sippy’s interests were not being represented by Mr Healy.

Ms Reffin submitted that it was clear that Mrs Sippy was an unwilling defendant. She did not want to argue points which concerned whether or not her son, rather than she herself, had any claim which had survived the Family Arrangement. There was, Ms Reffin submitted, no utility at all in requiring Mrs Sippy to take a stance.

Mr Cakebread did not dispute that the court should take the approach identified by Lord Woolf in the Messier-Dowty case. He asserted that the Family Arrangement was intended to provide harmony and to prevent disputes later – among them the trust funds allegation. It was, submitted Mr Cakebread, clear that Sascha Sippy intended to pursue the trust funds allegation, and that Mrs Sippy intended to assist him. It might well be that unless the present action continued, both Sascha Sippy and Mrs Sippy would bring proceedings in support of the trust funds allegations. The claimants did not know where such proceedings might be brought, but they would be hanging over the heads of the claimants until the trust funds allegation was finally resolved.

To my mind the submissions on behalf of the claimants do not answer the points made by Ms Reffin. The claimants make an assertion that Mrs Sippy was bound pursuant to the Family Arrangement to ensure that her son made no claim of the kind envisaged by the trust funds allegation and was not entitled to do the things they complain of. For the reasons I explain below, that is no more than assertion and has no such sufficient basis as would justify the grant of permission to amend. In those circumstances I conclude that it is plain that the grant of the declarations sought at paragraphs (1) and (2) of the prayer would serve no useful purpose. It follows that those paragraphs of the prayer must be struck out and that permission should be refused for corresponding paragraphs in the claim which are sought to be introduced by amendment.

At paragraph (6) of the prayer an order is sought restraining Mrs Sippy “from causing, permitting or assisting” Sascha Sippy in bringing a claim against the estate of Mr Chulani. As with a declaration, an injunction will only be granted by the court where it is useful to do so. For the reasons which I have identified in section D2 above no useful purpose would be served by forcing Mrs Sippy to take a stance as to whether her son’s claim is or is not permissible under the Family Arrangement. In all the circumstances I consider it clear that there is no need for the injunction which is sought. The result is that the amendments to introduce paragraph (6) of the prayer and corresponding paragraphs of the claim must be refused.

The amendments proposed would include a declaration at paragraph 4 of the prayer that:

… the Claimants are entitled to indemnity from each of Laila Sippy and Sascha Sippy in relation to any costs, expenditure or other losses arising from or connected with any breach and/or threatened breach by Sascha Sippy of the Family Arrangement.

No obligation of indemnity on the part of Mrs Sippy in this regard was asserted in the original particulars of claim. The declaration sought can only be made if permission is granted in order to allow the claimants to rely upon the assertion at paragraph 17g of the claim, an assertion which did not feature originally. Mr Cakebread, in support of the application for permission, says that the assertions at paragraph 17g have an arguable basis, as set out in an opinion of Mr Sunil Mittal dated 5 February 2012. Mr Mittal qualified as an Indian advocate in July 1979. He specialises in Indian family law and has been practising in this field for over 33 years. In ordinary circumstances I would not expect, on an application to amend particulars of claim, that the court should be asked to dismiss an opinion expressed by a foreign lawyer of Mr Mittal’s standing.

I intend no disrespect to Mr Mittal when I say that these are not ordinary circumstances. Ms Reffin draws attention to the fact that the original assertions of Indian law pleaded at paragraphs 17a to 17f were said to be supported by the series of Indian decisions identified at the outset of paragraph 17. Mr Cakebread acknowledges that those decisions do not support the assertions at the proposed new paragraph 17g. The only support for them is this. Mr Mittal records that earlier in January this year he was instructed by Zaiwalla & Co to answer the following questions:

I. Paragraph 12 of the Family Arrangement provides that Laila Sippy will not challenge the same in any manner or bring any claims whatsoever against Mr Chulani and his wife’s assets. Does that mean that she would be in breach of this arrangement if she caused, encouraged or permitted or assisted her son to bring proceedings against the estate?

II. The second paragraph on page 2 of the Deed of Intent provides that “I intend to provide the following for the benefit of my daughter Laila Sippy to be given effect during my lifetime or as soon as practicable after my death with the specific intention of fully satisfying all of the inheritance or other rights my daughter Laila Sippy and her descendants may have over my and my wife’s estates”. Since the family arrangement includes Laila Sippy and her descendants, is it breach of the family agreement for both of Laila and Sascha to bring claims against the Estate?

III. It does appear that the alleged trust amounts have been transferred to the family bank account a part of which she received as her share of estate. Does the fact that Mr Sascha Sippy counter-signed the Family Arrangement, mean that he agreed not to bring any future proceedings against the Estate of Mr Chulani for any alleged Trust amounts purported to be held by his late father with his grandfather, late Mr Chulani?

IV. Would the claim against Estate include a claim against estate for monies allegedly held in trust?

Mr Mittal’s opinion deals with those questions in this way:

I have considered the facts and the relevant position under Indian Law and my answer to the questions put forth by my instructing Solicitors are as follows:

The Settlement Deed is binding on both Laila Sippy and Sascha Sippy. Further Laila Sippy has a duty to ensure that the Settlement Deed is adhered to not only by herself but also by her son Sascha Sippy. Even though the settlement deed does not provide for an indemnity clause, in the event Sascha Sippy fails to comply with the Settlement Deed, Laila Sippy is liable for such a failure. Laila Sippy had entered into a Settlement for herself as well as for Sascha Sippy, and Sascha Sippy being a consenting party, having witnessed the Settlement Arrangement, cannot claim against any of the family members other than Laila Sippy

Answers to the Questions

Coming to the questions posed to me via email dated January 08, 2013, my replies to the questions are as follows:

1.

Laila Sippy would be in breach of the family arrangement if she causes or permits her son to bring proceedings against the estate of late Shri Tikam Das Chulani.

2.

The claim brought about by Sascha Sippy against the estate of late Shri Tikam Das Chulani is in breach of the family arrangement.

3.

My opinion is in the affirmative. Any encouragement, agreement or assistance that Laila Sippy may provide to Sascha Sippy in his attempt to proceed against the estate of late Shri Tikam Das Chulani would amount to a breach of the family arrangement.

4.

The fact that Sascha Sippy is a counter signatory to the family arrangement, amounts to his confirmation to his mother Laila Sippy agreeing to the family arrangement for herself and also for her descendents including himself. I have not been provided information regarding the age of Sascha Sippy as at the time when the family arrangement was made. Therefore I presume that Sascha Sippy had attained the age of majority as on the relevant date. If on the facts Sascha Sippy was a minor, then as per Indian Law, he could have repudiated the family arrangement made by his mother within a period of three years of his attaining the age of majority. By being a confirming party to the family arrangement he is precluded from bringing any future proceedings against the estate of Shri Tikam Das Chulani.

5.

In the declaration of Intent Mr. Chulani has said the following:

“due to various considerations I intend to make special provision for my daughter Laila Sippy different from the provision that I will make for my other daughters…..”

In my view, the family arrangement in respect of the estate of Shri Tikam Das Chulani and his wife, agreed to by Laila Sippy and counter signed by Sascha Sippy includes the monies that may have been held in ‘trust’ by Shri Chulani.

The passages which I have set out above are the sum total of what is said by Mr Mittal on the relevant points. Far from providing any reasoned basis for the assertions which it is proposed to advance in paragraph 17g, the only basis upon which those assertions are sought to be advanced is that they should be permitted because Mr Mittal says that they are right. That is a completely inadequate basis for an amendment application of the present kind.

For all these reasons I refuse permission to amend in the manner proposed.

For the reasons given in section C above, the claims currently advanced against Mrs Sippy in relation to the Florida Flat must be struck out. It is conceded that the other claims against Mrs Sippy currently advanced cannot be maintained without the proposed amendments. For the reasons given in section D above I refuse permission for the proposed amendments. The result is that, as against Mrs Sippy, these proceedings must come to an end.