Disruptions and delays: fighting off an attempt to claim the majority of an estate's shares

Withers acts for Elena Klein, the widow of Alexander Klein.  Alexander died in March 2020 leaving a Will which appointed his long-term business associate, Ms Adler, as executrix, and left her a share in his estate.  He left his wife £300,000.

His estate was valued at over £9,000,000, primarily consisting of shares in a number of property investment companies.  Elena therefore proposed to bring an Inheritance (Provision for Family and Dependants) Act 1975 claim for financial provision.  However, Ms Adler failed to progress the estate administration and so, in 2021, Elena successfully applied to remove her as executrix (see link to judgment).  The Court replaced her with an independent trust corporation (and ordered her to pay Elena's costs).  The administrator experienced difficulties, meaning there were delays and Elena was only able to issue her claim for financial provision in 2023.   Given it was already three years since her husband died by this point, Elena also applied for interim provision to meet ongoing financial needs pending the trial.  

The Family Court listed an interim provision hearing for November 2023, and a trial for February 2024.  However, just days before the interim provision hearing, Ms Adler issued a claim in the Chancery Division, for the first time asserting that the estate's shares, comprising most of the £9 million estate value, were actually hers.  This claim directly contradicted the evidence Ms Adler had given in the removal proceedings.  Until this point, everyone had proceeded on the basis Alexander's shares belonged to his estate.  The Chancery Claim was highly disruptive as the 1975 Act claim had to be paused because the question of who owned the shares was central to the determining the estate's value (which is in turn central to Elena's 1975 Act claim). 

The Chancery Claim narrowly avoided strike out.  At that point the claim was based on five single page documents purportedly dating back to 2011, but Ms Adler said that further corroborative evidence would be forthcoming, in particular from the companies' former accountant.  

Ms Adler claimed Alexander had drafted the five documents, the combined effect of which was that the estate's shares were held for her, and that was the intention behind the documents when Alexander prepared them.   

The key document purported to direct that Alexander's shares should pass to Ms Adler on his death.  But it did not have two witnesses and so it did not satisfy s9 of the Wills Act 1837 meaning and, we said, (even if Alexander had drafted it) it was a failed attempt at a testamentary document.  

Shortly before trial, Ms Adler dispensed with her legal team.  She then asked the Court to adjourn the trial 'for two to three months' for medical reasons without producing any medical evidence.  And in what appeared to be a final attempt to frustrate proceedings she did not turn up to the trial.  The former company accountant also did not attend the trial so could not be cross examined.  

The judge, Chief Master Shuman, decided to proceed with the trial as she was satisfied it was in the interests of justice that there be no further delay.  The Chief Master then found that the documents did not have the effect that Ms Adler contended and, in particular, that the failed testamentary document had no effect (because it failed for want of formalities) which meant Ms Adler's claim that together they gave her the estate's shares failed.  

The Chief Master was deeply critical of what she described as the 'cynical use' of the Chancery Claim to delay the 1975 Act proceedings.  She awarded Elena her costs on the indemnity basis, including the costs of the failed strike out. 

Having determined the position that the deceased's shares do indeed belong to his estate, Elena's claim for reasonable financial provision can finally proceed to trial in the Family Division – a year after it was first listed. 

The Withers team acting for Elena is Paul Hewitt, Alexandra Dix and Rebecca Edwards, instructing Mark Baxter of 5 Stone Buildings.