Harley v Harley [2022] WTLR 953

Analysis

The pursuer was the son of the deceased who had not been provided for in his father’s will. The defender was the widow and remaining executrix-nominate of the deceased. The pursuer obtained a legal rights calculation from the defender’s solicitors in the sum of £227,542.24 and averred this was finalised save for professional fees to be calculated by an independent auditor of court and law accountant. The calculation was based in the main on an ‘in house’ valuation of shares held by the deceased in Alexander Harley Seeds Ltd, which made no provision for a minority shareholder discount, but which had been lodged with Companies House. After assessment the legal rights claim calculation was £226,460.84. The pursuer’s solicitors purported to accept the sum sued for. The defender subsequently obtained a valuation from an independent third party which applied a minority discount of 75% in view of the deceased’s 15% shareholding, resulting in a calculation of £61,049.93. The defender averred this calculation was correct and no agreement had been reached on calculation.

Held:

1. (1) The pursuer’s proposition that as a matter of law the legal rights were dependent on the net moveable estate as calculated by the inventory, being the value of the testator’s net moveable estate as at the date of the testator’s death, was wrong, unfounded in law and not supported by a sustainable plea in law.
2. (2) There was no binding agreement as to the value to be placed on the shareholding on the face of the correspondence and pleadings.
3. (3) The challenge to the defender’s valuation lacked specification or alternative mechanisms or means by which the court could determine the appropriateness of the defender’s valuation.
4. (4) The correct approach to valuation where the asset has not been realised is the date of death valuation, to be determined by ascertaining in the best way possible what would have been the amount if a diligent but prudent realisation for the best advantage had actually taken place. That process may be best achieved by the instruction of experts.

JUDGMENT SHERRIFF GILLIAN A WADE QC: The Sheriff having resumed consideration of the cause, sustains the defender’s first and second pleas in law, repels the pursuer’s first plea in law and dismisses the action appoints parties to be heard on all questions of expenses and assigns 6 April 2022 as a diet therefore. Procedural background …

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