A Russian businessman and former senator has failed in an appeal against a ruling rejecting his claim to a half share in his ex–wife’s multi–million pound South Kensington property.
The Court of Appeal upheld Underhill J’s decision last September in which he rejected Vladimir Slutsker’s claim to be entitled to a 50% beneficial share of 3 The Boltons, London SW10, which his former wife Olga bought for £6m in 2000.
In a case which required the court to apply the Russian matrimonial property regime to English law, Lloyd LJ rejected Mr Slutsker’s claim to a resulting trust.
In his ruling last year, Underhill J said that the dispute followed the couple’s “extremely acrimonious” divorce, with the financial provisions still to be decided by the Russian courts.
He found that the house had been Mrs Slutsker’s “project”, intended as a home for her and their children, and that the “concept” had been that it would be held on trust for the children, with Mr Slutsker having no right to a share. As a result, he said that Mrs Slutsker became sole settlor of the trust that owned the property and first life tenant.
He said that it may seem “harsh” at first sight that Mr Slutsker was excluded from any interest in a property bought with family money, and still more so as the money was possibly generated exclusively by his business rather than Mrs Slutsker’s.
However, he added that the true position was “not so straightforward.
Mrs Slutsker was not technically a party to the litigation, which Mr Slutsker brought against the company in whose name the house was registered and against trustees, but the judge said the interests principally involved were those of Mr and Mrs Slutsker.
Lloyd LJ said that Haron Investments Ltd holds the whole of the beneficial interest on trust for the trustees of the Misha Trust, which was established in the Cayman Islands for the benefit of both Mr and Mrs Slutsker and their children.
Mr Slutsker – a former senator in the Russian Duma – had argued that, during the marriage, all property was subject to the Russian matrimonial regime and therefore held jointly between them, including the money used to buy the house. That, he said, gave rise to a conventional resulting trust in his favour.
However, lawyers for Mrs Slutsker successfully argued that it was not correct to translate the joint ownership under Russian law into a beneficial tenancy in common under English law.
They argued that Mr Slutsker had a right to challenge the disposition of the money by Mrs Slutsker, but only if he did not consent to it and within a strict time limit under Russian law.
Lloyd J ruled that Mr Slutsker’s claim involved an “impermissible reference to English domestic law on a point which is to be determined by Russian law as the law of the matrimonial domicile”.
He said that, by reference to Russian law, Mr Slutsker gave his consent to the transaction and the use of funds from the Misha Trust and that he failed to challenge it in time.
Slutsker v Haron Investments Ltd and anr Court of Appeal (Lloyd, Patten and Black LJJ) 1 May 2013
David Brownbill QC and Adam Cloherty (instructed by Taylor Wessing LLP) for the claimant/appellant
Gilead Cooper QC and Richard Wilson (instructed by Berwin Leighton Paisner) for the defendants/respondents
