Post-death property transaction leads to Court of Appeal dispute over a banker's estate
The Court of Appeal has this week reserved their judgment after hearing both sides in a protracted dispute between the daughter of a deceased banker, and his girlfriend, over a £2.2 million property transaction.
Rainer Kahrmann, an investment banker, died unexpectedly in 2014. He was still with his long-term girlfriend, Hilary Harrison-Morgan, when he passed away, and had two sons with her, and two daughters with his former wife Christiane De Muller. It is understood that at the time of his death, he and a business partner had been in the process of negotiating a property deal relating to the purchase of the leasehold enfranchisement for various properties in London, including the home that he had shared with Hilary before he had returned to Germany. Part of the deal ended up in litigation in the Supreme Court, and was only settled after his death.
On completion of the deal, the £4.4m sale proceeds, were split with Hilary received £2.2m, and his daughters £1.1m each. They were all named as parties to the sale agreement, with the shares determined within that. It is understood that the daughters, in turn, paid their shares into their father’s estate, to be split between the children.
Mr Kahrmann’s daughter, Alice, brought a claim against Hilary to try and recover this money, arguing that she felt it should pass into his estate, for distribution to the four children. Hilary believes that she is entitled to the money as a payment for leaving her home of more than 20 years to allow it to be sold, telling the appeal judges: “I was paid to get out, it was really simple.”
The case was previously heard in the High Court in July 2018, when the High Court dismissed the claim, finding that the sale agreement signed at the time, after Mr Kahrmann had died, made it clear that any proceeds would not be payable to Mr Kahrmann’s estate, and there was no expectation of such by the parties. The daughter’s had understood the terms of the agreement, and had received independent legal advice prior to signing it, and none the less, agreed for the sale proceeds to be split in the way they were.
Alice did not accept the decision of the High Court, and issued an appeal to the Court of Appeal, who have heard further arguments on the claim this week. It is now thought to have cost the parties around £1m in legal costs, to bring it to the Court of Appeal. The Court of Appeal has reserved their judgment, and their decision is awaited with anticipation.
This is a very unusual case, involving transactions that took place after the deceased passed away, and a dispute over where to allocate the proceeds of those transactions. It would appear from the reported facts that the parties all had the benefit of legal advice when they signed and became parties to, the sale agreement, and knew at that point how it would be distributed. It will be interesting to see whether the Court of Appeal come to a different decision to that of the High Court. This case does however highlight the weight given by the Court to written contracts/sale agreements, in particular where the parties have had legal advice.
Ms Kahrmann, 37, was joined in the High Court case by her mother, but Ms De Muller died in January aged 70. Yesterday Ms Kahrmann, a writer, continued the fight alone in the Court of Appeal.”
