Lord Beaverbrook's elderly daughter-in law testified Monday that valuable paintings at the Beaverbrook Art Gallery belong to the charitable foundation in her family's name.

Lady Violet Aitken gave evidence at the arbitration hearing that will resolve ownership of 133 paintings stored at the Fredericton art gallery, worth an estimated $100 million.

Lord Beaverbrook, also known as William Maxwell Aitken, died in 1964.
(CBC)

The British-based Beaverbrook Foundation, administered by Lady Aitken's son, Sir Maxwell Aitken, is claiming the paintings have been on loan to the gallery for the last several decades.

The gallery contends the paintings were an outright gift from Lord Beaverbrook, also known as William Maxwell Aitken, a newspaper baron who grew up in Newcastle, N.B. He made a fortune in the British newspaper business and was close friends with Sir Winston Churchill. He died in 1964.

Paintings valued at $30 million

Lady Aitken, who is in her 80s, said the foundation asked for the return of two of the most valuable paintings in the collection in 2003 so it could renovate Beaverbrook's 30-bedroom estate in Surrey, England, known as Cherkley Court. 

That request for Lucien Freud's Hotel Bedroom and J.M.W. Turner's Fountain of Indolence, valued together at $30 million, triggered the dispute over the rest of the paintings.

Sir Maxwell Aitken told the hearing the foundation arranged to give the gallery $5 million after the sale.

He said gallery director Bernard Riordon agreed to the deal, but two months later the gallery began arguing that it, and not the foundation, owned the two paintings and more than a hundred others.

Lady Aitken told the hearing that she was "outraged" and "shocked" when gallery supporters suggested the Aitken family might profit from the return of the paintings. She explained that because the foundation is a charity, Lord Beaverbrook's descendants cannot profit from the sale of the art.

She said Lady Dunn, Lord Beaverbrook's second wife, left the 350-acre estate in disrepair when she died in 1994, and the family worried the local municipality might repair it and force the foundation to pay the bill, which is legal under British heritage laws. 

Lady Aitken says the family instead decided to renovate the building as a museum and tribute to Lord Beaverbrook's work.

She told the arbitration hearing that she was angered by media reports in Canada suggesting that the family was in financial trouble, and needed money from the sale of the paintings. "Not one single person stood up in our defence," she said. "I thought we had friends in New Brunswick, but obviously, I was wrong."

The paintings in dispute are estimated to be worth more than $100 million.

While the U.K. foundation is trying to get works from the gallery through arbitration, a second foundation based in Canada and headed by another Beaverbrook grandson is trying to win a share of the treasure through court action. That case has yet to be heard.