England v Italy – a succession dispute

This isn’t another article about Euro 2020, but an overview of the judgement of HHJ Paul Matthews in Pescatore v Valentino & Ors [2021] EWHC 1953 (Ch). The matter involved an application for an interim anti-suit injunction restraining Italian proceedings in a succession dispute, which straddled both a common law jurisdiction (England) and a civil law jurisdiction (Italy).

The judgment is a useful summary of the criteria involved in applications for anti-suit injunctions, but also serves to remind that trying to solve English succession problems with reference to Italian concepts (and vice versa) is rather difficult. 

HHJ Paul Matthews stated: “my understanding of the many differences in civil law and common law property and inheritance systems tells me above everything else is the importance of not trying to find analogies, let alone equivalents, in one's own system for what happens in another, and accordingly the greater value of issues of property and inheritance law being decided by judges in the relevant systems, rather than in foreign ones.”

In other words the systems are not comparable so don’t try comparing them.

Background

The deceased, Italian born, came to England in 1960, worked and married twice in England and died in England. The deceased was a British citizen (as well as Italian), held a British passport and drivers’ licence, ran a business in England, paid tax in England and made three English wills.  He had small interests in Italian real estate, visited Italy on occasion and voted in Italian elections. When he died, he left an estate of circa £2m in England and €200k in Italy.

The deceased’s widow sought to admit his last will to probate, but the children of the first marriage were unhappy with the will and blocked probate, eventually withdrawing their objection in early 2019, allowing probate to be granted in July 2019.

By this time, they had already taken Italian advice and had initiated Italian legal proceedings. The Italian claim sought relief along the lines of 1) The Italian court had jurisdiction 2) Italian law applied to the whole of the worldwide succession 3) the widow was unable to inherit due to her “unworthiness” and 4) the compulsory Italian inheritance rights of the children had to be honoured (including “reconstituting” the estate by clawing back transfers made to the widow in the Deceased’s lifetime).  It was the latter that likely prompted the Italian proceedings on the basis that the share of the estate (including “clawback”) would likely exceed what the children would otherwise get under the will.

The widow successfully applied for an anti-suit injunction to restrain the Italian proceedings.

Analysis

HHJ Mathews emphasised the fact that anti-suit injunctions are in personam and aimed at those over whom the court has personal jurisdiction, rather than being directed at foreign courts.  He also recapped the position in cases not involving arbitration or exclusive jurisdiction clauses or those guided by the EU Judgments Regulation or the Brussels Convention.  The English common law rules stipulate that:  1) it must be necessary in the interests of justice to grant such an injunction 2) the foreign proceedings must be sufficiently “vexatious”, “oppressive” or “unconscionable” and 3) England must have a sufficiently close connection and therefore be the natural forum to hear the matter.  The mere existence of parallel proceedings isn’t enough to justify an injunction.  It may well be that two sets of proceedings is necessary or affords some benefit to one of the parties.

In the event it was conceded that England was the natural forum and the only issue for determination was whether it was in the interests of justice to restrain the children from pursuing their Italian claim, the following was considered:

1.     Would the children be deprived of a personal legitimate advantage if the injunction was granted against them?  There were no personal advantages in this case as the children lived and worked in England and apparently spoke little or no Italian. There was no evidence that Italian litigation would be more convenient for them.   

2.     Would the children be deprived of a juridical advantage? There were claims available under Italian law that were not available under English law, e.g. the “unworthiness” claim and the compulsory share claim, but HHJ Matthews concluded that these claims had little weight when considering the position on the basis that they would be difficult to enforce in England. Italian judgments in rem would only be enforceable in England where the asset was located in Italy and in personam judgments would likely only be enforceable where the jurisdiction of the Italian court was accepted by the widow (not the case here) and where a final money judgment was given.

3.     Even aside from point 2 though, it is clear cut that on any analysis English law would apply to the devolution of the English immoveable (the bulk of the estate).

4.     With regards to moveables, if it was determined that the deceased was domiciled in England, English law would apply and any Italian judgment would not be recognised or enforced.

5.     Even if the deceased was declared to be Italian domiciled, such that Italian law applied to the devolution of moveables, it would only apply to assets held by the deceased at the date of his death. There would be no clawback of lifetime transfers as the English conflict of laws rules do not recognise those gifted assets as forming part of the succession. 

6.     An allegation of “institutional bias” on the part of the Italian system (towards foreigners) was raised, but HHJ Matthews concluded that there was no evidence before him of any such bias.

7.     Covid was cited as rendering the Italian proceedings “vexatious” or “oppressive,” but there was again no evidence of this, being that the widow had been able to instruct Italian lawyers and to participate in video links.

8.     Mention was made of the fact that the Italian claim was initiated before the English claim, but it was concluded that the timing of proceedings is not necessarily determinative, rather the issue is whether the natural forum is correctly seized.  However in any event it appears that the application for probate did pre-date and indeed likely prompt the Italian proceedings anyway. There had been engagement with the caveat process, impliedly accepting jurisdiction, whereas when the widow was served with the Italian proceedings, she immediately objected.

It was considered that in all the circumstances of the deceased choosing to live and make his life in England, it was oppressive to force the widow to defend proceedings in Italy, where there was no explanation given as to why the children now sought to apply Italian law and where there was some doubt as to whether the Italian proceedings were necessary at all, given all issues could be resolved in English proceedings. English proceedings were necessary on any analysis due the need to determine the ownership of the English real estate.

Conclusion

While it might feel that the world shrunk a little over the last 18 months or so, there is no doubt that cross border succession litigation hasn’t gotten simpler.  This judgment does however set out a useful summary of the factors to take into account.

Alison Regan is a partner at Russell Cooke.