Home Information Cases In re Estate of K, deceased (2007)

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In re Estate of K, deceased (2007)

Summary

The deceased died in 1992. Claims by potential creditors had been intimated against the estate but had either never been pursued or litigation had stalled for a number of years. If certain of those claims were justified then the estate would have been insolvent. The administrators (one of whom was the residuary beneficiary and the other a solicitor) sought the directions of the Court as to whether to distribute to admitted creditors and beneficiaries without taking any further steps in respect of the intimated claims, or alternatively as to what steps should be taken.

Facts

The Court plainly took the view that the time period here was such that it could properly say enough was enough, given that the potential creditors would have rights of action to recover from the beneficiaries (at least) up to the amount received by them from the estate, and the admitted creditors and beneficiaries had already been kept out of their debts/inheritances for a considerable period. The judicial analysis of the limitation position demonstrates that passage of time is not necessarily sufficient where an estate has not been distributed. However, it is crucial that administrators obtain the protection of a Court order rather than simply assuming that claims will not be pursued.

Held

The administrators were directed to distribute to admitted creditors and beneficiaries, without taking any further steps in respect of the intimated claims, subject only to a retention to cover the cost of the estate / administrators defending any claims (whether by re-activation of existing litigation or by new litigation) against them. However, the administrators were protected against future claims by the Court order, so the amount of the retention could be relatively modest and time-limited. The Court considered the limitation position in relation to claims in some detail and found it arguable that these old claims were not limitation-barred.

Chancery Division
Richard Arnold QC
Judgment date
28 March 2007
References

​2007 WTLR 1007; The Times April 16, 2007