A recipe for litigation: Colicci & Ors v Grinberg & Anor PT-2021-000834 - Boodle Hatfield

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16 Jun 2023

A recipe for litigation: Colicci & Ors v Grinberg & Anor PT-2021-000834

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Mark Lindley View profile
3 min read

On 18 May 2023 judgment was handed down by Recorder Mark Anderson KC in Colicci & Ors v Grinberg & Anor [2023] EWHC 1177 (Ch), a matter which clearly high-lights the difficulties that can arise where the estate includes an interest in a 'family' business, particularly when the family dynamics change over time.

The dispute concerned the estate of Ernesto "Ernie" Colicci, a successful businessman who established a catering company, ECSI Limited, in 1982 alongside his first wife, Josephine Colicci. The company began selling ice cream from a single van and grew to become a catering business operating over thirty sites in London. Ernie and Josephine had two children, Robert and Rosanna.

Ernie and Josephine divorced in 2011 but remained in business together until Ernie's death. As part of their divorce settlement, they had entered into a shareholders' agreement which dictated that they held the shares in the company equally.

In 2014 Ernie married Nora Grinberg, the first defendant. He made a will in March 2016 which left his shares in ECSI Limited to his three children; namely Robert and Rosanna and his then anticipated third child with Nora. The will provided for the residue of his estate to be left to Nora.

Despite the fact that he had remarried and made his March 2016 will in these terms, in June 2016 Ernie and Josephine entered into a deed in which they covenanted that on their deaths their respective shares in ECSI Limited would pass to Robert and Rosanna. Ernie apparently did not tell Nora about the 2016 deed and nor did he tell his first family about his March 2016 will.

In May 2016, Ernie and Nora made new wills which, as far as Ernie's interest in ECSI was concerned, reflected the content of his March 2016 will, which did not comply with the requirements of the 2016 deed.

To add to the confusion, in 2017 Ernie and Josephine gifted some of their shares in ECSI to Robert and Rosanna and they entered into a new shareholders' agreement. The terms of the 2017 agreement provided that it would "supersede any arrangements, understanding or previous agreement" between Ernie and Josephine.

Following Ernie's death in January 2021, a dispute arose between Josephine, Robert and Rosanna, and Nora, as executrix of Ernie's estate, as to who should inherit Ernie's shares.

The court was tasked with deciding (i) whether the 2017 agreement revoked the 2016 deed; (ii) and, if it did, whether the 2017 agreement should be rectified so as to leave the 2016 deed in force.

It was common ground at the trial that the 2016 deed, if it wasn't revoked before Ernie's death, meant that to the extent that Ernie's shares were not required to pay debts of his estate, Nora (as executrix) would hold the shares for Robert and Rosanna. In short, the conclusion was that the 2017 agreement did not expressly revoke the 2016 deed and was not inconsistent with it. If the parties had intended to revoke or replace the terms of the 2016 deed, the terms of the 2017 agreement would have done so. There was no evidence that Ernie contemplated the 2017 agreement would revoke the earlier one.

The consequence of the judgment is that Ernie's shares in the company are to be inherited by his adult children, Robert and Rosanna. It remains to be seen whether Nora will issue a claim for herself or her child for greater financial provision from Ernie's estate under the Inheritance (Provision for Family and Dependants) Act 1975. The judge made clear that he made no findings in relation to whether such a claim might be brought or whether permission for that claim should be granted.

The subject matter of the 2016 Deed was a mutual promise that any Shares still held by Ernesto and Josephine at death would pass to the adult children, and a promise to make wills to that effect. It created testamentary obligations. It removed Ernesto's and Josephine's freedom to dispose of their Shares on death.

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