Personal Representatives
Succession Act
PART IV
Grants of Representation
Grants of probate.
[1857 (c. 79) s. 6]
26.—(1) The High Court shall have power to grant probate to one or more of the executors of a deceased person, and a grant may be limited in any way the Court thinks fit.
(2) The High Court shall have power to revoke, cancel or recall any grant of probate.
Grants of administration.
[1357 (st. 1. c. 11); 1537 (c. 18); 1959 (No. 8) s. 12]
27.—(1) The High Court shall have power to grant administration (with or without will annexed) of the estate of a deceased person, and a grant may be limited in any way the Court thinks fit.
(2) The High Court shall have power to revoke, cancel or recall any grant of administration.
(3) Subject to subsection (4), the person or persons to whom administration is to be granted shall be determined in accordance with rules of the High Court.
(4) Where by reason of any special circumstances it appears to the High Court (or, in a case within the jurisdiction of the Circuit Court, that Court) to be necessary or expedient to do so, the Court may order that administration be granted to such person as it thinks fit.
(5) On administration being granted, no person shall be or become entitled without a grant to administer any estate to which that administration relates.
(6) Every person to whom administration is granted shall, subject to any limitations contained in the grant, have the same rights and liabilities and be accountable in like manner as if he were the executor of the deceased.
[1857 (c. 79) ss. 75, 76, 77]
(7) Where any legal proceedings are pending touching the validity of the will of a deceased person, or for obtaining, recalling or revoking any grant, the High Court may grant administration of the estate of the deceased to an administrator, who shall have all the rights and powers of a general administrator, other than the right of distributing the estate of the deceased, and every person to whom such administration is granted shall be subject to the immediate control of the Court and act under its direction.
(8) The Court may, out of the estate of the deceased person, assign to an administrator appointed under subsection (7) such reasonable remuneration as the Court thinks fit.
(9) This section applies whether the deceased died before or after the commencement of this Act.
F15[
Entitlement to grant of probate or administration.
27A.—For the purpose of the application of section 26 or 27 in respect of the estate of a deceased person, the deceased shall be presumed, unless the contrary is shown, not to have been survived by any person related to him whose parents have not married each other or by any person whose relationship with the deceased is deduced through a person whose parents have not married each other.]
Annotations:
Amendments:
F15
Inserted (14.06.1988) by Status of Children Act 1987 (26/1987), s. 30, commenced as per s. 1(2)(b).
F16
Inserted by Children and Family Relationships Act 2015 (9/2015), s. 66 (a) and (c), not commenced as of date of revision.
F17
Substituted by Children and Family Relationships Act 2015 (9/2015), s. 66(b), not commenced as of date of revision.
Modifications (not altering text):
C13
Prospective affecting provision: section renumbered as subs. (1) and amended, and subss. (2) and (3) inserted by Children and Family Relationships Act 2015 (9/2015), s. 66, not commenced as of date of revision.
27A.—F16[(1)]F17[Subject to subsection (2), for the purpose of the application] of section 26 or 27 in respect of the estate of a deceased person, the deceased shall be presumed, unless the contrary is shown, not to have been survived by any person related to him F17[whose parents have not married each other or whose parents are not civil partners of each other] or by any person whose relationship with the deceased is deduced through a person F17[whose parents have not married each other or whose parents are not civil partners of each other].
F16[(2) Subsection (1) shall not apply in relation to a person whose parents have not married each other or whose parents are not civil partners of each other where—
(a) the person has been adopted by a cohabiting couple—
(i) under an adoption order, or
(ii) outside the State, where that adoption is recognised by virtue of the law for the time being in force in the State,
or
(b) they are the parents, under section 5 of the Act of 2015, of the person.
(3) In this section—
“‘Act of 2010’ means the Adoption Act 2010;
‘adoption order’ has the same meaning as it has in section 3(1) of the Act of 2010;
‘cohabiting couple’ has the same meaning as it has in section 3(1) (amended by section 102 of the Act of 2015) of the Act of 2010.]
Editorial Notes:
E6
The shoulder note displayed above (Entitlement to a grant of probate or administration.) is the shoulder note belonging to the amending provision. The amending provision does not include a shoulder note for s. 27A.
Representation of real and personal estate separately or together.
[1959 (No. 8) s. 15]
28.—(1) Representation may be granted either separately in respect of real estate and in respect of personal estate, or in respect of real estate together with personal estate, and may be granted in respect of real estate although there is no personal estate, or in respect of personal estate although there is no real estate.
(2) Where the estate of the deceased person is known to be insolvent, the grant shall not be severed except as regards a trust estate.
Power to grant representation where no estate.
[1959 (No. 8) s. 16]
29.—The High Court shall have jurisdiction to make a grant of representation in respect of a deceased person, notwithstanding that the deceased left no estate in the State, and to make a de bonis non or other form of grant in respect of unadministered estate, notwithstanding that there is no unadministered estate of the deceased in the State.
Power to grant representation to a trust corporation.
[New. Cf. 1928 (No. 9)]
30.—(1) The High Court may—
(a) where a trust corporation is named in a will as executor, whether alone or jointly with another person, grant probate to the corporation either solely or jointly with another person, as the case may require, and
(b) grant administration to a trust corporation, either solely or jointly with another person,
and the corporation may act accordingly as executor or administrator, as the case may be.
(2) Representation shall not be granted to any person on behalf of a trust corporation.
(3) Any officer authorised for the purpose by a trust corporation or the directors or governing body thereof may, on behalf of the corporation, swear affidavits, give security and do any other act or thing which the Court may require with a view to the grant to the corporation of representation, and the acts of an officer so authorised shall be binding on the corporation.
(4) In this Act, “trust corporation” means—
(a) a corporation appointed by the High Court in any particular case to be a trustee;
(b) a corporation empowered by its constitution to undertake trust business, and having a place of business in the State or Northern Ireland, and being—
(i) a company established by Act or charter, or
(ii) an Associated Bank under the Central Bank Act, 1942, or
(iii) a company (whether registered with or without limited liability) within the definition contained in the Companies Act, 1963, or within the meaning of the corresponding law of Northern Ireland, having a capital (in stock or shares) for the time being issued of not less than £250,000, of which not less than £100,000 has been paid up in cash, or
(iv) a company (registered without limited liability) within the definition contained in the said Companies Act or within the meaning of the said law of Northern Ireland, one of the members of which is a corporation within any of the previous provisions of this paragraph; or
F18[(v) a building society authorised under the Building Societies Act, 1989; or]
(c) a corporation which satisfies the President of the High Court that it undertakes the administration of any charitable, ecclesiastical or public trust without remuneration, or that by its constitution it is required to apply the whole of its net income for charitable, ecclesiastical or public purposes and is prohibited from distributing, directly or indirectly, any part thereof by way of profits, and is authorised by the President of the High Court to act in relation to such trusts as a trust corporation.
(5) Where a body corporate, as defined by section 4 of the Bodies Corporate (Executors and Administrators) Act, 1928, is named as executor in a will executed before the commencement of this Act, probate may be granted to that body corporate under this section, notwithstanding that it is not a trust corporation as defined in subsection (4).
Annotations:
Amendments:
F18
Inserted (01.09.1989) by Building Societies Act 1989 (17/1989), s. 29(6), S.I. No. 182 of 1989.
Grant of special administration where personal representative is abroad.
[1857 (c. 79) s. 79; 1859 (c. 31) s. 14]
31.—(1) If at the expiration of twelve months from the death of a person any personal representative of the deceased person to whom a grant has been made is residing out of the jurisdiction of the High Court, the High Court may, on the application of any creditor or person interested in the estate of the deceased person, grant to him in such form as the High Court thinks fit special administration of the estate of the deceased person.
(2) The Court may, for the purpose of any legal proceedings to which the administrator under the special administration is a party, order the transfer into court of any money or securities belonging to the estate of the deceased person, and all persons shall obey any such order.
(3) If the personal representative capable of acting as such returns to and resides within the jurisdiction of the High Court while any legal proceedings to which a special administrator is a party are pending, that personal representative shall be made a party to the legal proceedings, and the costs of and incidental to the special administration and the legal proceedings shall be paid by such person and out of such fund as the court in which the proceedings are pending may direct.
Administration during minority of executor.
[1818 (c. 81); 1857 (c. 79) s. 79; 1859 (c. 31) s. 14]
32.—(1) Where an infant is sole executor of a will, administration with the will annexed shall be granted to his guardian, or to such other person as the High Court thinks fit, until the infant attains the age of twenty-one years and applies for and obtains a grant of probate or letters of administration with the will annexed, and on his attaining that age, and not before, probate of the will may be granted to him.
(2) Where a testator by his will appoints an infant to be an executor, the appointment shall not operate to transfer any interest in the property of the deceased to the infant or to constitute him a personal representative for any purpose unless and until probate is granted to him under this section.
Continuance of legal proceedings after revocation of temporary administration.
[1857 (c. 9) s. 81]
33.—If, while any legal proceedings are pending in any court by or against an administrator to whom a temporary administration has been granted, that administration is revoked, that court may order that the proceedings be continued by or against the new personal representative in like manner as if the proceedings had been originally commenced by or against him, but subject to such conditions and variations, if any, as that court directs.
Administration bonds.
[1959 (No. 8) s. 14]
34.—(1) Every person to whom a grant of administration is made shall give a bond (in this section referred to as an administration bond) to the President of the High Court to inure for the benefit of the President of the High Court for the time being and, if the High Court, the Probate Officer or (in the case of a grant from a district probate registry) the district probate registrar so requires, with one or more surety or sureties conditioned for duly collecting, getting in, and administering the estate of the deceased.
(2) (a) An administration bond shall be in a penalty of double the amount at which the estate of the deceased is sworn, unless the High Court, the Probate Officer or (in the case of a grant from a district probate registry) the district probate registrar shall in any case direct it to be reduced, in which case the Court, the Probate Officer or the district probate registrar may do so.
(b) The High Court, the Probate Officer or (in the case of a grant from a district probate registry) the district probate registrar may also direct that more administration bonds than one shall be given, so as to limit the liability of any surety to such amount as the Court, the Probate Officer or the district probate registrar (as the case may be) shall think reasonable.
(3) An administration bond shall be in such form as the President of the High Court may prescribe by rules, and shall include a provision for payment of all death duties payable in respect of the estate of the deceased for which the personal representative is accountable and a further provision for the payment of all income tax and sur-tax payable out of the estate of the deceased.
(4) Where it appears to the satisfaction of the High Court that the condition of an administration bond has been broken, the High Court may, on application in that behalf, order that the bond be assigned to such person as may be specified in the order, and the person to whom the bond is assigned in pursuance of the order shall be entitled to sue thereon in his own name as if it had been originally given to him instead of to the President of the High Court and to recover thereon as trustee for all persons interested the full amount recoverable in respect of the breach of the condition thereof.
(5) Nothing in this section shall require the Chief State Solicitor or the Solicitor for the Attorney General, when applying for or obtaining administration for the use or benefit of the State, to give an administration bond.
[New]
(6) Sureties to administration bonds shall not be required when the grant is made to a trust corporation.
[New]
(7) An administration bond issued by a guarantee society or insurance company approved by the President of the High Court shall be acceptable for the purposes of this section whether the application for the grant is made in person or by a solicitor.
Annotations:
Modifications (not altering text):
C14
Interpretation of inheritance tax clarified (21.02.2003) by Capital Acquisitions Tax Consolidation Act 2003 (1/2003), s. 113, commenced on enactment. This provision replaced Capital Acquisitions Tax Act 1976, s. 68.
Tax, in relation to certain legislation.
113.—(1) Inheritance tax shall not be a duty or a death duty for the purposes of section 9 of the Succession Act, 1965, but it shall be a death duty for the purposes of—
(a) section 34 (3) of that Act;
(b) the definition of pecuniary legacy in section 3 (1) of that Act; and
(c) paragraph 8 of Part II of the First Schedule to that Act.
Editorial Notes:
E7
Previous affecting provision: Capital Acquisitions Tax Act 1976 (8/1976), s. 68(1)(b), repealed (21.02.2003) by Capital Acquisitions Tax Consolidation Act 2003 (1/2003), s. 118(1).
Applications for grants and revocations.
[1857 (c. 79) ss. 50, 63]
35.—(1) An application for the grant or revocation of representation may be made to the Probate Office or the district probate registry for the district where the deceased, at the time of his death, had a fixed place of abode.
[R.S.C., O. 79, r. 3; O. 80, r. 3]
(2) The application may be made either in person or through a solicitor.
(3) Where, in any contentious matter arising out of an application to the Probate Office, the High Court is satisfied that the Circuit Court has jurisdiction in the matter, the High Court may remit the matter to the judge of the circuit where the deceased, at the time of his death, had a fixed place of abode and the said judge shall proceed in the matter as if the application had been made to the Circuit Court in the first instance.
Grants in district probate registries.
[1857 (c. 79) ss. 50, 52, 54]
36.—(1) A grant may be made in common form by a district probate registrar in the name of the High Court and under the seal of the registry where the deceased, at the time of his death, had a fixed place of abode within the district where the application for the grant is made.
(2) No grant shall be made by a district probate registrar in any case in which there is contention until the contention is disposed of, or in any case in which it appears to him that a grant ought not to be made without the direction of the Court.
(3) In any case where it appears doubtful to a district probate registrar whether a grant should or should not be made, or where any question arises in relation to a grant, or an application for a grant, the district probate registrar shall send a statement of the matter to the Probate Office for the directions of a judge of the High Court for the time being exercising probate jurisdiction, and the judge may direct the district probate registrar to proceed with the matter in accordance with such instructions as the judge thinks necessary, or may forbid any further proceedings by the district probate registrar in relation to the matter, leaving the party applying for the grant to apply to the High Court through the Probate Office or, if the case is within the jurisdiction of the Circuit Court, to that court.
[1857 (c. 79) ss. 53, 55, 56; 1859 (c. 31) ss. 21, 22]
(4) A district probate registrar shall send to the Probate Office a notice in the prescribed form of every application made in the registry for a grant as soon as may be after the application has been made, and no grant shall be made by him until he has received from that Office a certificate that no other application appears to have been made in respect of the estate of the deceased.
(5) The certificate shall be forwarded as soon as may be to the district probate registrar.
(6) All notices so transmitted to the Probate Office shall be filed and kept in that Office.
(7) Where any such notice is received from any district probate registry, the Probate Officer shall examine all notices of applications for grants received from the several other district probate registries and all applications for grants made at the Probate Office, so far as may be necessary for the purpose of ascertaining whether more than one application for a grant in respect of the estate of the same deceased person has been made, and shall communicate with the district probate registrar as occasion may require in relation thereto.
(8) A district probate registrar shall, twice in every month, transmit to the Probate Office a list in the prescribed form of the grants made by him and not included in a previous return, and also copies of the wills to which the grants relate, certified by him to be correct.
(9) A district probate registrar shall file and preserve all original wills of which probate or administration with the will annexed has been granted by him, subject to such regulations with respect to the preservation and inspection of the wills as may from time to time be made by the President of the High Court.
(10) The President of the High Court may from time to time give directions for the disposal, whether by destruction or otherwise, of such of the notices kept in the Probate Office in pursuance of this section, as have, in his opinion, ceased, owing to lapse of time, to be of any public value.
Second and subsequent grants.
[1859 (c. 31) s. 16]
37.—Second and subsequent grants shall be made in the Probate Office or district probate registry, as the case may be, from which the original grant issued.
Caveats.
[1857 (c. 79) s. 57]
38.—(1) A caveat against a grant may be entered in the Probate Office or in any district probate registry.
(2) On a caveat being entered in a district probate registry, the district probate registrar shall immediately send a copy thereof to the Probate Office to be entered among the caveats in that Office.
Calendars of grants.
[1959 (No. 8) s. 17]
39.—(1) The President of the High Court shall from time to time cause to be prepared in the Probate Office calendars of grants made in the Probate Office and in the several district probate registries for such periods as the President of the High Court may direct.
(2) Every such calendar shall contain a note of every probate or administration with the will annexed and of every other administration granted within the period specified in the calendar, setting forth—
(a) the date of the grant,
(b) the place (being the Probate Office or a district probate registry) in which the grant was made,
(c) the name and address and the date of death of the testator or intestate,
(d) the names and descriptions of the executors or administrators, and
(e) the value of the estate, if any.
(3) A copy of every calendar so prepared shall be sent by post or otherwise to every district probate registry, and every copy so sent shall be kept in the district probate registry to which it is sent.
(4) Calendars and copies may be inspected in accordance with the directions of the President of the High Court.
Copies of wills, etc., to be delivered to Revenue Commissioners.
[1857 (c. 79) s. 100]
40.—Subject to any arrangements which may from time to time be made between the President of the High Court and the Revenue Commissioners, the Probate Office and every district probate registry shall, within such period after a grant as the President may direct, deliver to the Commissioners or their proper officer the following documents—
(a) in the case of a probate or of administration with a will annexed, the Inland Revenue affidavit and a copy of the will (if required);
(b) in the case of administration without a will annexed, the Inland Revenue affidavit;
(c) in every case of administration, a copy or extract of the administration;
(d) in every case, such certificate or note of the grant as the Commissioners may require.
Issue of grants of representation in case of Circuit Court decrees.
[1857 (c. 79) s. 59]
41.—On a decree being made by the Circuit Court for the grant or revocation of representation the Probate Officer or the district probate registrar shall, on the application of a person entitled thereto, grant representation in compliance with the decree or, as the case may require, recall or vary, according to the effect of the decree, any representation already granted.
Deposit and inspection of wills and other documents.
[1857 (c. 79) s. 71]
42.—(1) The following documents—
(a) all original wills of which representation is granted in the Probate Office,
(b) copies of all wills the originals of which are to be preserved in district probate registries, and
(c) such other documents as the President of the High Court may direct,
shall be deposited and preserved in the Probate Office under the control of the President of the High Court and may be inspected in accordance with his directions.
(2) Subsection (1) shall have effect subject to the provisions of the Public Records (Ireland) Act, 1867, which provides for the ultimate removal of records to the Public Record Office for safe keeping.
Official copies of wills and grants.
[1857 (c. 79) s. 74]
43.—(1) An official copy of the whole or any part of a will, or of a grant of representation, may be obtained from the Probate Office or district probate registry where the will has been proved or the representation granted.
(2) An official copy of a grant of representation shall be sufficient evidence of the grant. This subsection applies whether the grant was made before or after the commencement of this Act.
Trial by jury of questions of fact.
[1857 (c. 79) s. 41]
44.—(1) The court may cause any question of fact arising in any proceedings under this Act to be tried by a jury, and such question shall be so tried in any case where all the parties to the proceedings concur in an application to the court for a jury.
(2) Where any party makes an application for a jury without the concurrence of the other party and the court refuses the application, the refusal of the court shall be subject to appeal.
Annotations:
Modifications (not altering text):
C15
Application of section restricted (1.03.1972) by Courts Act 1971 (36/1971), s. 6, in force as per s. 25(4).
Abolition of juries in civil cases in Circuit Court.
6.—Notwithstanding section 94 of the Act of 1924 or section 44 of the Succession Act, 1965, a civil action in the Circuit Court or a question of fact or an issue arising in the action or a question of fact arising in any proceedings in the Circuit Court under the Succession Act, 1965, shall not be tried by a jury.
PART V
Administration of Assets
Estate of deceased to be assets for payment of debts and legal right.
[1285 (c. 19); 1357 (st. 1.c.11); 1695 (c. 12) ss. 7, 8; 1833 (c. 104); 1869 (c. 46)]
45.—(1) The estate, whether legal or equitable, of a deceased person, to the extent of his beneficial interest therein, and the estate of which a deceased person in pursuance of any general power disposes by his will, are assets for payment of the funeral, testamentary and administration expenses, debts (whether by specialty or simple contract) and liabilities, and any legal right, and any disposition by will inconsistent with this section is void as against the creditors and any person entitled to a legal right, and the court shall, if necessary, administer the property for the purpose of the payment of the expenses, debts and liabilities and any legal right.
(2) This section takes effect without prejudice to the rights of incumbrancers.
Administration of assets.
[New]
46.—(1) Where the estate of a deceased person is insolvent, it shall be administered in accordance with the rules set out in Part I of the First Schedule.
(2) (a) The right of retainer of a personal representative and his right to prefer creditors may be exercised in respect of all assets of the deceased, but the right of retainer shall only apply to debts owing to the personal representative in his own right whether solely or jointly with another person, and shall not be exercisable where the estate is insolvent.
(b) Subject to paragraph (a), nothing in this Act affects the right of retainer of a personal representative, or his right to prefer creditors.
(3) Where the estate of a deceased person is solvent, it shall, subject to rules of court and the provisions hereinafter contained as to charges on property of the deceased, and to the provisions, if any, contained in his will, be applicable towards the discharge of the funeral, testamentary and administration expenses, debts and liabilities and any legal right in the order mentioned in Part II of the First Schedule.
(4) Nothing in subsection (3) affects the rights of any creditor of the deceased or the legal right of a spouse.
(5) Where a creditor, a person entitled to a legal right or a personal representative applies an asset out of the order mentioned in Part II of the First Schedule, the persons entitled under the will or on intestacy shall have the right to have the assets marshalled so that a beneficiary whose estate or interest has been applied out of its order shall stand in the place of that creditor or person pro tanto as against any property that, in the said order, is liable before his own estate or interest.
(6) A claim to a share as a legal right or on intestacy in the estate of a deceased person is a claim against the assets of the estate to a sum equal to the value of that share.
Charges on property of deceased to be paid primarily out of the property charged.
[1854 (c. 113), 1867 (c. 69) and 1877 (c. 34) extended to personalty]
47.—(1) Where a person dies possessed of, or entitled to, or, under a general power of appointment, by his will disposes of, an interest in property, which at the time of his death is charged with the payment of money, whether by way of legal or equitable mortgage or charge or otherwise (including a lien for unpaid purchase money), and the deceased person has not by will, deed or other document signified a contrary or other intention, the interest so charged shall, as between the different persons claiming through the deceased person, be primarily liable for the payment of the charge; and every part of the said interest, according to its value, shall bear a proportionate part of the charge on the whole thereof.
(2) Such contrary or other intention shall not be deemed to be signified—
(a) by a general direction for the payment of debts or of all the debts of the testator out of his estate, or any part thereof, or
(b) by a charge of debts upon any such estate,
unless such intention is further signified by words expressly or by necessary implication referring to all or some part of the charge.
(3) Nothing in this section affects the right of a person entitled to the charge to obtain payment or satisfaction thereof either out of the other assets of the deceased or otherwise.
Causes of action surviving on death.
48.—The personal representatives of a deceased person may sue and be sued in respect of all causes of action which, by virtue of Part II of the Civil Liability Act, 1961, survive for the benefit of, or against, the estate of the deceased, subject to the provisions of that Act and the rules of limitation under the Statute of Limitations, 1957, or otherwise.
Distribution of assets after notice to creditors.
[1859 (c. 35) s. 29]
49.—(1) Where the personal representatives have given such notices to creditors and others to send in their claims against the estate of the deceased as, in the opinion of the court in which the personal representatives are sought to be charged, would have been given by the court in an administration suit, the personal representatives shall, at the expiration of the time named in the said notices, or the last of them, for sending in such claims, be at liberty to distribute the assets of the deceased, or any part thereof, amongst the parties entitled thereto, having regard to the claims of which the personal representatives have then notice.
(2) The personal representatives shall not be liable to any person for the assets or any part thereof so distributed unless at the time of such distribution they had notice of that person’s claim.
(3) Nothing in this section shall prejudice the right of any creditor or claimant to follow any such assets into the hands of any person who may have received them.
(4) This section applies whether the deceased died before or after the commencement of this Act.
Powers of personal representatives to sell and to act as trustees.
[1959 (No. 8) s. 18]
50.—(1) The personal representatives may sell the whole or any part of the estate of a deceased person for the purpose not only of paying debts, but also (whether there are or are not debts) of distributing the estate among the persons entitled thereto, and before selling for the purposes of distribution the personal representatives shall, so far as practicable, give effect to the wishes of the persons of full age entitled to the property proposed to be sold or, in the case of dispute, of the majority (according to the value of their combined interests) of such persons so, however, that—
(a) a purchaser shall not be concerned to see that the personal representatives have complied with such wishes; and
(b) it shall not be necessary for any person so entitled to concur in any such sale.
(2) Subject to section 20, it shall not be lawful for some or one only of several personal representatives, without leave of the High Court, to exercise any power conferred by this section or section 60 to dispose of any land.
(3) F19[…]
Annotations:
Amendments:
F19
Repealed (1.12.2009) by Land and Conveyancing Law Reform Act 2009 (27/2009), s. 8(3) and sch. 2 pt. 5, S.I. No. 356 of 2009.
Protection of purchasers.
[1959 (No. 8) s. 19]
51.—(1) A purchaser from the personal representatives of a deceased person of any property, being the whole or any part of the estate of the deceased, shall be entitled to hold that property freed and discharged from any debts or liabilities of the deceased, except such as are charged otherwise than by the will of the deceased, and from all claims of the persons entitled to any share in the estate, and shall not be concerned to see to the application of the purchase money.
(2) (a) This subsection applies to all property other than property the ownership of which is registered under the Registration of Title Act, 1964.
(b) A purchaser of any property to which this subsection applies, being the whole or any part of the estate of a deceased person, which has been conveyed by the personal representatives to any person shall be entitled to hold that property freed and discharged from the claims of creditors of the deceased and from any claims of the persons entitled to any share in the estate.
(3) This section applies whether the deceased died before or after the commencement of this Act.
General provisions as to assent or transfer by personal representatives.
[1959 (No. 8) s. 20]
52.—(1) In this section and in section 53—
(a) references to the land of a deceased person are references to land to which he was entitled or over which he exercised a general power of appointment by will;
(b) “person entitled” includes, in relation to any estate or interest in land—
(i) the person or persons (including the personal representatives of the deceased or any of them) who (whether by devise, bequest, devolution or otherwise) may be beneficially entitled to that estate or interest, and
(ii) the trustee or trustees or the personal representative or representatives of any such person or persons.
(2) Without prejudice to any other power conferred by this Act on personal representatives with respect to any land of a deceased person, the personal representatives may at any time after the death of the deceased execute an assent vesting any estate or interest in any such land in the person entitled thereto or may transfer any such estate or interest to the person entitled thereto, and may make the assent or transfer either subject to or free from a charge for the payment of any money which the personal representatives are liable to pay.
(3) Where an assent or transfer under subsection (2) is made subject to a charge for all moneys, if any, which the personal representatives are liable to pay, all liabilities of the personal representatives in respect of the land shall cease, except as to any acts done or contracts entered into by them before the assent or transfer.
(4) At any time after the expiration of one year from the death of an owner of land, if the personal representatives have failed on the request of the person entitled to transfer, by assent or otherwise, the land to the person entitled, the court may, if it thinks fit, on the application of the person entitled and after notice to the personal representatives, order that the transfer be made, and, in default of compliance with that order within the time specified therein by the court, may make an order vesting the land in the person entitled as fully and effectually as might have been done by a transfer thereof by the personal representatives.
(5) An assent not in writing shall not be effectual to pass any estate or interest in land.
(6) The statutory covenants implied where a person is expressed in a deed to convey as personal representative shall also be implied in any assent signed by a personal representative unless the assent otherwise provides.
(7) Subject to section 20, it shall not be lawful for some or one only of several personal representatives, without leave of the court, to make an assent or transfer under this section.
(8) This section shall not operate to impose any stamp duty in respect of an assent.
Annotations:
Modifications (not altering text):
C16
Application of section not restricted (1.12.2009) by Land and Conveyancing Law Reform Act 2009 (27/2009), s. 80(4), S.I. No. 356 of 2009.
Covenants for title.
80.— …
(4) Without prejudice to section 52(6) of the Act of 1965, where in a conveyance a person conveying is not expressed to convey “as beneficial owner”, “as trustee”, “as mortgagee”, “as personal representative”, under an order of the court or by a direction of a person “as beneficial owner”, no covenant on the part of the person conveying is implied in the conveyance.
…
Special provisions as to unregistered land.
[1959 (No. 8) s. 21]
53.—(1) An assent to the vesting of any estate or interest in unregistered land of a deceased person in favour of the person entitled thereto shall—
(a) be in writing,
(b) be signed by the personal representatives,
(c) be deemed, for the purposes of the Registration of Deeds Act, 1707, to be a conveyance of that estate or interest from the personal representatives to the person entitled,
(d) operate, subject to the provisions of the Registration of Deeds Act, 1707, with respect to priorities, to vest that estate or interest in the person entitled subject to such charges and incumbrances, if any, as may be specified in the assent and as may otherwise affect that estate or interest,
(e) subject to the provisions of the Registration of Deeds Act, 1707, be deemed (unless a contrary intention appears therein) for all purposes necessary to establish the title of the person entitled to intervening rents and profits to relate back to the death of the deceased, but nothing in this paragraph shall operate to enable any person to establish a title inconsistent with the will of the deceased.
(2) Any person in whose favour an assent or conveyance of any unregistered land is made by personal representatives may at his own expense require the personal representatives to register that assent or conveyance in the Registry of Deeds pursuant to the Registration of Deeds Act, 1707.
[New]
(3) An assent or conveyance of unregistered land by a personal representative shall, in favour of a purchaser, be conclusive evidence that the person in whose favour the assent or conveyance is given or made is the person who was entitled to have the estate or interest vested in him, but shall not otherwise prejudicially affect the claim of any person originally entitled to that estate or interest or to any mortgage or incumbrance thereon.
(4) This section applies to assents and conveyances made after the commencement of this Act whether the deceased died before or after such commencement.
Special provisions as to registered land.
54.—(1) An assent or transfer made by a personal representative in respect of registered land shall be in the form required under section 61 of the Registration of Title Act, 1964, and shall be subject to the provisions of that Act.
(2) The Registration of Title Act, 1964, is hereby amended by the substitution of the following subsection for subsection (3) of section 61:
“(3) (a) An application for registration made by a person who claims to be by law entitled to the land of a deceased registered full owner, accompanied by an assent or transfer by the personal representative in the prescribed form, shall authorise the Registrar to register such person as full or limited owner of the land, as the case may be.
(b) On the determination of the estate or interest of an owner who is registered as limited owner of land pursuant to such an assent or transfer, the assent or transfer shall, on application being made in the prescribed manner, authorise the Registrar to register, as full or limited owner, as the case may be, the person in whose favour the assent or transfer was made, or the successor in title of that person, as may be appropriate.
(c) It shall not be the duty of the Registrar, nor shall he be entitled, to call for any information as to why any assent or transfer is or was made and he shall be bound to assume that the personal representative is or was acting in relation to the application, assent or transfer correctly and within his powers.”
Powers of personal representatives as to appropriation.
[New]
55.—(1) The personal representatives may, subject to the provisions of this section, appropriate any part of the estate of a deceased person in its actual condition or state of investment at the time of appropriation in or towards satisfaction of any share in the estate, whether settled or not, according to the respective rights of the persons interested in the estate.
(2) Except in a case to which section 56 applies, an appropriation shall not be made under this section so as to affect prejudicially any specific devise or bequest.
(3) Except in a case to which section 56 applies, an appropriation shall not be made under this section unless notice of the intended appropriation has been served on all parties entitled to a share in the estate (other than persons who may come into existence after the time of the appropriation or who cannot after reasonable enquiry be found or ascertained at that time) any one of which parties may within six weeks from the service of such notice on him apply to the court to prohibit the appropriation.
(4) An appropriation of property, whether or not being an investment authorised by law or by the will, if any, of the deceased, shall not (save as in this section mentioned) be made under this section except with the following consents:
(a) when made for the benefit of a person absolutely and beneficially entitled in possession, the consent of that person;
(b) when made in respect of any settled share, the consent of either the trustee thereof, if any (not being also the personal representative), or the person who may for the time being be entitled to the income.
(5) If the person whose consent is so required is an infant or a person of unsound mind, the consent shall be given on his behalf by his parents or parent, guardian, committee or receiver, or if, in the case of an infant there is no such parent or guardian, by the court on the application of his next friend.
(6) No consent (save of such trustee as aforesaid) shall be required on behalf of a person who may come into existence after the time of appropriation, or who cannot after reasonable enquiry be found or ascertained at that time.
(7) If no committee or receiver of a person of unsound mind has been appointed, then, if the appropriation is of an investment authorised by law or by the will, if any, of the deceased, no consent shall be required on behalf of the person of unsound mind.
(8) If, independently of the personal representatives there is no trustee of a settled share, and no person of full age and capacity entitled to the income thereof, no consent shall be required to an appropriation in respect of such share provided that the appropriation is of an investment authorised as aforesaid.
(9) Any property duly appropriated under the powers conferred by this section shall thereafter be treated as an authorised investment, and may be retained or dealt with accordingly.
(10) For the purposes of such appropriation, the personal representatives may ascertain and fix the values of the respective parts of the estate and the liabilities of the deceased person as they may think fit, and may for that purpose employ a duly qualified valuer in any case where such employment may be necessary; and may make any conveyance which may be requisite for giving effect to the appropriation.
(11) Unless the court on an application made to it under subsection (3) otherwise directs, an appropriation made pursuant to this section shall bind all persons interested in the property of the deceased whose consent is not hereby made requisite.
(12) The personal representatives shall, in making the appropriation, have regard to the rights of any person who may thereafter come into existence, or who cannot after reasonable enquiry be found or ascertained at the time of appropriation, and of any other person whose consent is not required by this section.
(13) This section does not prejudice any other power of appropriation conferred by law or by the will, if any, of the deceased, and takes effect with any extended powers conferred by the will, if any, of the deceased, and, where an appropriation is made under this section, in respect of a settled share, the property appropriated shall remain subject to all trusts for sale and powers of leasing, disposition and management or varying investments which would have been applicable thereto or to the share in respect of which the appropriation is made, if no such appropriation had been made.
(14) If, after any property has been appropriated in purported exercise of the powers conferred by this section, the person to whom it was conveyed disposes of it or any interest therein, then, in favour of a purchaser, the appropriation shall be deemed to have been made in accordance with the requirements of this section and after all requisite notices and consents, if any, had been given.
(15) In this section, a settled share includes any share to which a person is not absolutely entitled in possession at the date of the appropriation and also an annuity.
(16) This section applies whether the deceased died intestate or not, and whether before or after the commencement of this Act, and extends to property over which a testator exercises a general power of appointment, and authorises the setting apart of a fund to answer an annuity by means of the income of that fund or otherwise.
(17) Where any property is appropriated under the provisions of this section, a conveyance thereof by the personal representatives to the person to whom it is appropriated shall not, by reason only that the property so conveyed is accepted by the person to whom it is conveyed in or towards the satisfaction of a legacy or a share in residuary estate, be liable to any higher stamp duty than that payable on a transfer of personal property for the like purpose.
(18) The powers conferred by this section may be exercised by the personal representatives in their own favour.
Right of surviving spouse to require dwelling and household chattels to be appropriated.
[New]
56.—(1) Where the estate of a deceased person includes a dwelling in which, at the time of the deceased’s death, the surviving spouse F20[or civil partner] was ordinarily resident, the surviving spouse F20[or civil partner] may, subject to subsection (5), require the personal representatives in writing to appropriate the dwelling under section 55 in or towards satisfaction of any share of the surviving spouse F20[or civil partner].
(2) The surviving spouse F20[or civil partner] may also require the personal representatives in writing to appropriate any household chattels in or towards satisfaction of any share of the surviving spouse F20[or civil partner].
(3) If the share of a surviving spouse F20[or civil partner] is insufficient to enable an appropriation to be made under subsection (1) or (2), as the case may be, the right conferred by the relevant subsection may also be exercised in relation to the share of any infant for whom the surviving spouse F20[or civil partner] is a trustee under section 57 or otherwise.
(4) It shall be the duty of the personal representatives to notify the surviving spouse F20[or civil partner] in writing of the rights conferred by this section.
(5) A right conferred by this section shall not be exercisable—
(a) after the expiration of six months from the receipt by the surviving spouse F20[or civil partner] of such notification or one year from the first taking out of representation of the deceased’s estate, whichever is the later, or
(b) in relation to a dwelling, in any of the cases mentioned in subsection (6), unless the court, on application made by the personal representatives or the surviving spouse F20[or civil partner], is satisfied that the exercise of that right is unlikely to diminish the value of the assets of the deceased, other than the dwelling, or to make it more difficult to dispose of them in due course of administration and authorises its exercise.
(6) Paragraph (b) of subsection (5) and paragraph (d) of subsection (10) apply to the following cases:
(a) where the dwelling forms part of a building, and an estate or interest in the whole building forms part of the estate;
(b) where the dwelling is held with agricultural land an estate or interest in which forms part of the estate;
(c) where the whole or a part of the dwelling was, at the time of the death, used as a hotel, guest house or boarding house;
(d) where a part of the dwelling was, at the time of the death, used for purposes other than domestic purposes.
(7) Nothing in subsection (12) of section 55 shall prevent the personal representatives from giving effect to the rights conferred by this section.
(8) (a) So long as a right conferred by this section continues to be exercisable, the personal representatives shall not, without the written consent of the surviving spouse F20[or civil partner] or the leave of the court given on the refusal of an application under paragraph (b) of subsection (5), sell or otherwise dispose of the dwelling or household chattels except in the course of administration owing to want of other assets.
(b) This subsection shall not apply where the surviving spouse F20[or civil partner] is a personal representative.
(c) Nothing in this subsection shall confer any right on the surviving spouse F20[or civil partner] against a purchaser from the personal representatives.
(9) The rights conferred by this section on a surviving spouse F20[or civil partner] include a right to require appropriation partly in satisfaction of a share in the deceased’s estate and partly in return for a payment of money by the surviving spouse F20[or civil partner] on F21[his or her] own behalf and also on behalf of any infant for whom the spouse F20[or civil partner] is a trustee under section 57 or otherwise.
(10) (a) In addition to the rights to require appropriation conferred by this section, the surviving spouse F20[or civil partner] may, so long as a right conferred by this section continues to be exercisable, apply to the court for appropriation on F21[his or her] own behalf and also on behalf of any infant for whom the spouse F20[or civil partner] is a trustee under section 57 or otherwise.
(b) On any such application, the court may, if of opinion that, in the special circumstances of the case, hardship would otherwise be caused to the surviving spouse F20[or civil partner] or to the surviving spouse F20[or civil partner] and any such infant, order that appropriation to the spouse F20[or civil partner] shall be made without the payment of money provided for in subsection (9) or subject to the payment of such amount as the court considers reasonable.
(c) The court may make such further order in relation to the administration of the deceased’s estate as may appear to the court to be just and equitable having regard to the provisions of this Act and to all the circumstances.
(d) The court shall not make an order under this subsection in relation to a dwelling in any of the cases mentioned in subsection (6), unless it is satisfied that the order would be unlikely to diminish the value of the assets of the deceased, other than the dwelling, or to make it more difficult to dispose of them in due course of administration.
(11) All proceedings in relation to this section shall be heard in chambers.
(12) Where the surviving spouse F20[or civil partner] is a person of unsound mind, a requirement or consent under this section may, if there is a committee of F21[his or her] estate, be made or given on behalf of the spouse F20[or civil partner] by the committee by leave of the court which has appointed the committee or, if there is no committee, be given or made by the High Court or, in a case within the jurisdiction of the Circuit Court, by that Court.
(13) An appropriation to which this section applies shall for the purposes of succession duty be deemed to be a succession derived from the deceased.
[Cf. “dwelling” in 1960 (No. 42) s. 2 (1)]
(14) In this section—
“dwelling” means an estate or interest in a building occupied as a separate dwelling or a part, so occupied, of any building and includes any garden or portion of ground attached to and usually occupied with the dwelling or otherwise required for the amenity or convenience of the dwelling;
“household chattels” means furniture, linen, china, glass, books and other chattels of ordinary household use or ornament and also consumable stores, garden effects and domestic animals, but does not include any chattels used at the death of the deceased for business or professional purposes or money or security for money.
Annotations:
Amendments:
F20
Inserted (1.01.2011) by Civil Partnership and Certain Rights and Obligations of Cohabitants Act 2010 (24/2010), s. 70(a), S.I. No. 648 of 2010.
F21
Substituted (1.01.2011) by Civil Partnership and Certain Rights and Obligations of Cohabitants Act 2010 (24/2010), s. 70(b), S.I. No. 648 of 2010.
Modifications (not altering text):
C17
Application of section affected (3.04.2010) by Capital Acquisitions Tax Consolidation Act 2003 (1/2003), s. 45AA, as inserted by Finance Act 2010 (5/2010), s. 147, commenced on enactment.
[
Liability of certain persons in respect of non-resident beneficiaries
45AA.— (1) Where—
(a) property passing under a deceased person’s will or intestacy or under Part IX or section 56 of the Succession Act 1965 , or otherwise as a result of the death of that person, is taken by a person or persons who is or are not resident in the State,
…
then, the personal representative or one or more of the personal representatives, as the case may be, and the solicitor referred to in section 48(10), shall be assessable and chargeable for the tax payable by the person or persons referred to in paragraph (a) to the same extent that those persons are chargeable to tax under section 11. ]
Editorial Notes:
E8
Certification of payment of inheritance tax in respect of property passing under section provided for (23.02.2003) by Capital Acquisitions Tax Consolidation Act 2003 (1/2003), s. 108(2), commenced on enactment.
Appointment by personal representatives of trustees of infant’s property.
[New]
57.—(1) Where an infant is entitled to any share in the estate of a deceased person and there are no trustees of such share able and willing to act, the personal representatives of the deceased may appoint a trust corporation or any two or more persons (who may include the personal representatives or any of them or a trust corporation) to be trustees of such share for the infant and may execute such assurance or take such other action as may be necessary for vesting the share in the trustee so appointed. In default of appointment the personal representatives shall be trustees for the purposes of this section.
(2) On such appointment the personal representatives, as such, shall be discharged from all further liability in respect of the property vested in the trustees so appointed.
Annotations:
Modifications (not altering text):
C18
Meaning of “infant” subjected to transitional provision (1.03.1985) by Age of Majority Act 1985 (2/1985), s. 7(1) and sch. para. 4.
Powers of Personal Representatives During Minority of Beneficiary
4. In the case of a beneficiary whose interest arises under a will or codicil made before the commencement of this Act or on the death before that date of an intestate, section 2 shall not affect the meaning of “infant” in sections 57 and 58 of the Succession Act, 1965.
Powers of trustees of infant’s property.
[New]
58.—(1) Property vested under section 57 may be retained in its existing condition or state of investment or may be converted into money and invested in any security in which a trustee is authorised by law to invest, with power, at the discretion of the trustees, to change such investments for others so authorised.
(2) F22[…]
(3) A person who is sole trustee under section 57 shall be entitled to receive capital trust money.
(4) Persons who are trustees under section 57 shall be deemed to be trustees for the purposes of sections 42 and 43 of the Conveyancing Act, 1881.
(5) Without prejudice to any powers under the said sections 42 and 43, persons who are trustees under section 57 may at any time or times pay or apply the capital of any share in the estate to which the infant is entitled for the advancement or benefit of the infant in such manner as they may, in their absolute discretion, think fit and may, in particular, carry on any business in which the infant is entitled to a share.
(6) The powers conferred by subsection (5) may also be exercised by the surviving spouse F23[or civil partner] as trustee of any property of an infant appropriated in accordance with section 56.
Annotations:
Amendments:
F22
Repealed (1.12.2009) by Land and Conveyancing Law Reform Act 2009 (27/2009), S.I. No. 356 of 2009.
F23
Inserted (1.01.2011) by Civil Partnership and Certain Rights and Obligations of Cohabitants Act 2010 (24/2010), s. 71, S.I. No. 648 of 2010.
Modifications (not altering text):
C19
Meaning of “infant” subjected to transitional provision (1.03.1985) by Age of Majority Act 1985 (2/1985), s. 7(1) and sch. para. 4.
Powers of Personal Representatives During Minority of Beneficiary
4. In the case of a beneficiary whose interest arises under a will or codicil made before the commencement of this Act or on the death before that date of an intestate, section 2 shall not affect the meaning of “infant” in sections 57 and 58 of the Succession Act, 1965.
Right to follow property.
[Restates existing law relating to right to follow property; as to real estate, see 1830 (c. 47) 1839 (c. 60) and 1848 (c. 87)]
59.—(1) Property which has been conveyed by personal representatives to any person (other than a purchaser) shall, so long as it remains vested in that person, or in any person claiming under him (not being a purchaser), continue to be liable to answer the debts of the deceased and any share in the estate to the extent to which it was liable when vested in the personal representatives.
(2) In the event of a sale or mortgage of the property by a person (not being a purchaser) to whom it was conveyed by the personal representatives, or by any person claiming under him (not being a purchaser), the seller or mortgagor shall continue to be personally liable for such debts and for any share in the estate to the extent to which the property was liable when vested in the personal representatives.
(3) This section applies whether the deceased died before or after the commencement of this Act.
Powers to deal with estate, etc.
[Restates, clarifies and extends to real estate existing law relating to personal estate; as to real estate, see 1859 (c. 35) ss. 14 to 18]
60.—(1) The personal representatives of a deceased owner of land may, in addition to any other powers conferred on them by this Act—
(a) make such leases of the land as may be reasonably necessary for the due administration of the estate of the deceased owner; or
(b) with the consent of the beneficiaries, or with the approval of the court, make leases of the land for such term and on such conditions as the personal representatives may think proper; or
(c) make, on such terms and conditions as the personal representatives may think proper, F24[a sub-lease of the land] with a nominal reversion, where such F25[…] sub-lease amounts in substance to a sale and the personal representatives have satisfied themselves that it is the most appropriate method of disposing of the land in the course of the administration of the estate;
and, where personal representatives F25[…] lease any land pursuant to any power conferred on them by this subsection, they may sell F25[…] any reversion expectant upon the determination of any such lease.
(2) The right of the personal representatives to obtain possession of any premises demised by them pursuant to the power conferred by paragraph (a) of subsection (1) shall be exercisable notwithstanding anything to the contrary contained in the Rent Restrictions Act, 1960.
(3) The personal representatives of a deceased person may from time to time raise money by way of mortgage or charge for the payment of expenses, debts and liabilities, and any legal right and, with the approval of all the beneficiaries being sui juris or the court (but not otherwise), for the erection, repair, improvement or completion of buildings, or the improvement of lands forming part of the estate of the deceased.
(4) This section shall not prejudice or affect any power or duty of personal representatives to execute any document or do any other act or thing for the purpose of completing any transaction entered into by a deceased person before his death.
[1840 (c. 105) s. 61]
(5) The personal representatives of a deceased person may distrain upon land for arrears of rent due or accruing to the deceased in like manner as the deceased might have done had he been living.
[1840 (c. 105) s. 62]
(6) Such arrears may be distrained for after the termination of the lease or tenancy as if the term or interest had not determined, if the distress is made—
(a) within six months after the termination of the lease or tenancy;
(b) during the continuance of the possession of the lessee or tenant from whom the arrears were due.
The enactments relating to distress for rent apply to any distress made pursuant to this subsection.
[New]
(7) The personal representatives may distrain for arrears of a rentcharge due or accruing to the deceased in his lifetime on the land affected or charged therewith, so long as the land remains in the possession of the person liable to pay the rentcharge or of the persons deriving title under him, and in like manner as the deceased might have done had he been living.
[Enlarges powers conferred by 1893 (c. 53) s. 21]
(8) The personal representatives of a deceased person may—
(a) accept any property before the time at which it is transferable or payable;
(b) pay or allow any debt or claim on any evidence they may reasonably deem sufficient;
(c) accept any composition or security for any debt or property claimed;
(d) allow time for payment of any debt;
(e) compromise, compound, abandon, submit to arbitration, or otherwise settle, any debt, account, dispute, claim or other matter relating to the estate of the deceased;
(f) settle and fix reasonable terms of remuneration for any trust corporation appointed by them under section 57 to act as trustee of any property and authorise such trust corporation to charge and retain such remuneration out of that property,
and for any of those purposes may enter into such agreements or arrangements and execute such documents as seem to them expedient, without being personally responsible for any loss occasioned by any act or thing so done by them in good faith.
(9) This section shall not prejudice or affect any powers conferred by will on personal representatives, and the powers conferred by this section on the personal representatives of a deceased person who has died testate shall be exercised subject to any provisions contained in his will with respect to the disposal of his estate.
(10) This section applies whether the deceased died before or after the commencement of this Act.
Annotations:
Amendments:
F24
Substituted (1.12.2009) by Land and Conveyancing Law Reform Act 2009 (27/2009), s. 8(1) and sch. 1, S.I. No. 356 of 2009.
F25
Deleted (1.12.2009) by Land and Conveyancing Law Reform Act 2009 (27/2009), s. 8(1) and sch. 1, S.I. No. 356 of 2009.
Purchasers from personal representatives.
[Restates existing law: as to real estate, see 1859 (c. 35) s. 17]
61.—A purchaser from personal representatives shall be entitled to assume that the personal representatives are acting correctly and within their powers.
Time allowed for distribution.
[1695 (c. 6) s. 4]
62.—(1) The personal representatives of a deceased person shall distribute his estate as soon after his death as is reasonably practicable having regard to the nature of the estate, the manner in which it is required to be distributed and all other relevant circumstances, but proceedings against the personal representatives in respect of their failure to distribute shall not, without leave of the court, be brought before the expiration of one year from the date of the death of the deceased.
(2) Nothing in this section shall prejudice or affect the rights of creditors of a deceased person to bring proceedings against his personal representatives before the expiration of one year from his death.
Advancements to children to be brought into account.
[New]
63.—(1) Any advancement made to the child of a deceased person during his lifetime shall, subject to any contrary intention expressed or appearing from the circumstances of the case, be taken as being so made in or towards satisfaction of the share of such child in the estate of the deceased or the share which such child would have taken if living at the death of the deceased, and as between the children shall be brought into account in distributing the estate.
(2) The advancement shall, for the purposes of this section only, be reckoned as part of the estate of the deceased and its value shall be reckoned as at the date of the advancement.
(3) If the advancement is equal to or greater than the share which the child is entitled to receive under the will or on intestacy, the child or the issue of the child shall be excluded from any such share in the estate.
(4) If the advancement is less than such share, the child or the issue of the child shall be entitled to receive in satisfaction of such share so much only of the estate as, when added to the advancement, is sufficient, as nearly as can be estimated, to make up the full amount of that share.
(5) The onus of proving that a child has been made an advancement shall be upon the person so asserting, unless the advancement has been expressed in writing by the deceased.
(6) For the purposes of this section, “advancement” means a gift intended to make permanent provision for a child and includes advancement by way of portion or settlement, including any life or lesser interest and including property covenanted to be paid or settled. It also includes an advance or portion for the purpose of establishing a child in a profession, vocation, trade or business, a marriage portion and payments made for the education of a child to a standard higher than that provided by the deceased for any other or others of his children.
(7) For the purposes of this section, personal representatives may employ a duly qualified valuer.
(8) Nothing in this section shall prevent a child retaining the advancement and abandoning his right to a share under the will or on intestacy.
(9) Nothing in this section shall affect any rule of law as to the satisfaction of portion debts by legacies.
(10) In this section “child” includes a person to whom the deceased was in loco parentis.
Duty of personal representatives as to inventory.
[1357 (st. 1.c.11); 1537 (c. 18); 1695 (c. 6) s. 1]
64.—The personal representatives of a deceased person shall, when lawfully required to do so, exhibit on oath in the court a true and perfect inventory and account of the estate of the deceased, and the court shall have power to require personal representatives to bring in inventories.
Administration on behalf of the State.
[1884 (c. 71) ss. 2, 3]
65.—(1) Where administration of an estate is granted for the use or benefit of the State (whether to the Chief State Solicitor, the Solicitor for the Attorney General or any other person), any legal proceedings by or against the administrator for the recovery of the estate or any share thereof shall be of the same character and be instituted and carried on in the same manner, and be subject to the same rules of law and equity in all respects, as if the grant had been made to the administrator as a person beneficially entitled to a share of the estate.
(2) Proceedings on behalf of or against the State in respect of the estate of a deceased person or any share thereof or any claim thereon shall not be instituted except subject to the same rules of law and equity in and subject to which proceedings for the like purposes might be instituted by or against a private individual.
[New]
(3) Where the Chief State Solicitor for the time being is administrator of an estate for the use or benefit of the State, he shall cease to be administrator on ceasing to hold office and his successor in office shall become administrator in his place without further grant
Cases
O’Connor -v- Markey & Anor
[2006] IEHC 24 (24 January 2006)
JUDGMENT OF Mr. Justice Herbert delivered on the 24th day of January, 2006
THE ISSUES
Mr. Philip Markey, Publican, late of the “Stray Inn”, Mile Mill, Kilcullen, Co. Kildare, died at Curragh Lawn Nursing Home on 28th February, 2002, aged 87 years. A Certificate of his Death, No. T1884/24 was admitted in evidence. He was predeceased by his spouse in 1987 and was survived by two only children, Gerard Markey and Mary Markey the defendants in these proceedings. By his last Will and Testament, made the 24th day of January, 2000, he appointed Gerard Markey and Mary Markey to be executors and trustees thereof. He devised and bequeathed his residential licensed premises with the outhouses and ground attaching thereto and known as the “Stray Inn”, to Gerard Markey absolutely, but subject to his paying the sum of £150,000 (former currency), to the estate within one month of death, the same to be a charge on this property until paid. He devised and bequeathed a parcel of land, (agreed in evidence to comprise three acres, statute measure or thereabouts), near the “Stray Inn” to Mary Markey absolutely, together with a pecuniary legacy of £20,000 (former currency). After providing for a number of other pecuniary legacies, he gave, devised and bequeathed all the rest, residue and remainder of his property of every nature and kind, both real and personal, of which he might die possessed, to Mary Markey absolutely.
In the events which occurred, Letters of Administration with the Will Annexed, were granted, by Order of the High Court, made the 10th day of March, 2003, pursuant to the provisions of s. 27(4) of the Succession Act, 1965, to John O’Connor, Solicitor, of no. 168 Pembroke Road, Ballsbridge, Dublin, the Applicant in these proceedings. At Part 3 of the Inland Revenue Affidavit sworn by John O’Connor on the 25th day of June, 2003, the following sums, inter alia, were stated to be debts owing by the deceased to persons resident in the State, namely, –
Curragh Lawn Nursing Home €41,044.28.
Beechfield Healthcare Limited €2,446.98
Bernard Berney, Pharmacist €1,132.99
A.C.C. Bank, (joint account with Gerard Markey) €14,336.93
By Order of the High Court, made on the 2nd day of February, 2004, Issues were directed to be tried on oral evidence between the defendants. These Issues were agreed and defined by a Notice of Issues filed by the defendants on the 9th day of March, 2004, as follows:-
“(i) Whether the outstanding account of Curragh Lawn Nursing Home in the sum of forty one thousand, one hundred and seven euro and seventy one cents (€41,107.71) at the date of death of the deceased is payable by the Estate of the deceased or by the first named Defendant personally.
(ii) Whether the outstanding account of Beechfield Healthcare Limited in the sum of two thousand, four hundred and forty six euro and ninety eight cents (€2,446.98) at the date of death of the deceased is payable by the Estate of the deceased or by the first named Defendant personally.
(iii) Whether the outstanding account of Bernard Berney, Pharmacy, in the sum of one thousand, one hundred and thirty two euro and ninety nine cents (€1,132.99) at the date of death of the deceased is payable by the Estate of the deceased or by the first named Defendant personally.
(iv) Whether the outstanding account of A.C.C. Bank Plc., in the sum of fourteen thousand, nine hundred and sixteen euro and sixteen cents (€14,916.16) at the date of death of the deceased is payable by the Estate of the deceased or by the first named Defendant personally.
(v) Whether interest is payable on the sum of one hundred and ninety thousand, four hundred and sixty euro and seventy one cents (€190,460.71) payable by the first named defendant from 28th March, 2002, and if so at what rate?
(vi) Whether the costs and expenses to include reserved costs and expenses of all the proceedings to date in the deceased’s Estate i.e. those under Record Nos. 2003/ and 2003/500SP, in full or in part should be borne by:-
(a) The first named Defendant personally; or
(b) The second named Defendant personally, or
(c) The Estate of the deceased.
THE FACTS
I find that the following facts were admitted, or were proved in evidence.
In November, 1993, Gerard Markey returned to work with his father in the “Stray Inn” on a part time basis. His father was then aged about 78 years and was suffering from hernia problems which ultimately resulted in his being admitted to hospital. His wife had died in 1987, since which time he had ceased to live over the business and resided instead with his daughter, Mary, the second named defendant, and her husband, at their home about 100 metres distant from the premises. Though he had also worked for considerable periods in the Motor Industry, Gerard Markey had extensive knowledge and experience of the licensed trade. No fixed wage was agreed and what he was paid by his father varied according to the number of hours he worked. On average his weekly wage worked out at approximately £180.00 (former currency). Gerard Markey was at this time separated from his wife who lived with their son in a property which had been transferred by his father to Gerard Markey in about 1982. Gerard Markey resided in rented accommodation in the neighbourhood of the “Stray Inn” paying a rent of about £40 (former currency) per week. He was in receipt of a Social Welfare Rent Allowance of in or about this amount. The late Philip Markey was the sole legal and beneficial owner of the licensed premises which he operated as a sole trader with part time assistance from the husband of his daughter, Mary, a saddler by occupation, from about 1986 onwards.
In October, 1995, the late Philip Markey became seriously ill and underwent major surgery for cancer of the colon. Post surgery Gerard Markey and Mary Markey were advised by Dr. M. Kelly and by Miriam McDonnell, a co-owner of Curragh Lawn Nursing Home with Liam McDonnell, that their father’s life expectancy was not more than about three months. Philip Markey required intensive and constant medical care so his urgent admission to Curragh Lawn Nursing Home was arranged on 30th November, 1995. Gerard Markey admitted that he had been informed by Miriam McDonnell, that the nursing home charge was £1,060 (former currency), payable each calendar month in advance, until further notice. Gerard Markey gave evidence, which I accept, and which was not challenged, that before his father left for hospital, he had asked him to, “take care of the place”. I find that the sole income of Philip Markey was the profit derived from the operation of the “Stray Inn”. Gerard Markey gave evidence, that he told Miriam McDonnell that his father had asked him to take over the running of the business and that he would arrange to pay the nursing home fees out of that. This was not confirmed by Miriam McDonnell, who did not give evidence, or by her brother and co-owner, Liam McDonnell, who did give evidence.
In 1997, as a result of a Health Board recommendation, the McDonnell’s arranged for contracts in writing to be executed by all residents in the nursing home or by their legal representatives. On 24th November, 1997, Gerard Markey executed such a written agreement. This agreement was proved by Liam McDonnell and was admitted into evidence without challenge. I find the terms of this agreement, relevant to the instant case to be as follows:-
“Residents are accepted on the following terms and conditions, and subsequent to admission this Agreement is required to be signed by the resident or the resident’s Legal Representative or such person being empowered to sign on behalf of the resident.”
“The resident shall from his/her own resources or personal allowance be responsible for the payment of medical requisites not covered by the Medical Card.”
“I confirm that I have read and understood the terms set out in the agreement and agree to them.”
“Name of Resident. Mr. Philip Markey.
Room No. 10
From September, 1997.
Signed: Gerard Markey (Son) 24/11/97.”
The fee specified in this agreement was £1,060 (former currency), until further notice, payable, “calendar monthly in advance”. Liam McDonnell told the Court, and this was not questioned, that this fee changed to £1,675 (former currency) in January, 2001 and remained at that rate up to the death of Philip Markey on 28th February, 2002.
Mr. Liam McDonnell told the Court, that he and Miriam McDonnell knew that Philip Markey was the owner of the “Stray Inn”. He said that they had to have someone who was responsible for a resident’s account and that Gerard Markey accepted responsibility for his father’s account. Neither he nor Miriam McDonnell had made any enquiry as to the source of the funds from which the account might be paid by Gerard Markey and were not concerned about it. This evidence was not questioned by either Gerard Markey or Mary Markey.
Liam McDonnell told the Court that any payments made of nursing home fees in respect of Philip Markey were made on “Stray Inn cheques” signed by Gerard Markey. This was accepted by Gerard Markey. Mr. McDonnell gave the following history of payments to Curragh Lawn Nursing Home which was accepted by Gerard Markey.
30/11/1995 to 31/11/1997 All fees paid.
January, 1998 to December, 1998 Two payments missed (£2,120).
January, 1999 to December, 1999 Four payments missed (£4,240).
January, 2000 to December, 2000 Four payments missed (£4,240).
January, 2001 to December, 2001 Only one payment made at the
old rate (£19,040).
January, 2002 to February, 2002 No payment made (£3,350).
Philip Markey was fortunate to obtain a significant remission of his serious illness but continued to require a level of nursing care which necessitated his remaining on as a resident at Curragh Lawn Nursing Home.
In or about March or April of 1996 his father agreed with Gerard’s proposal that he, Gerard, should take up residence in some of the former family rooms over the business, and Gerard moved into occupation of the these rooms in May, 1996. In that year the Revenue Commissioners refused to furnish the Tax Clearance Certificate necessary to obtain the annual renewal of the Intoxicating Liquor Licence. The Revenue Authorities advised Gerard Markey that no Tax Returns had been filed for the period 1989 to 1995 inclusive. Gerard Markey informed his father of this problem, which was an extremely serious one. His father instructed a firm of Solicitors, (whom I shall refer to hereafter as the, “Meath Solicitors”), to recover all Financial Papers from his existing Accountants. These Accountants asserted a lien over these papers for work claimed to have been done on behalf of Philip Markey in the previous two years for which they alleged they had not been paid.
For reasons which it is not relevant to consider in this case, Gerard Markey persuaded his father to go back to a Firm of Solicitors who had acted for him on previous occasions. His father agreed and in September, 1996, Gerard Markey made contact with Mr. Michael O’Neill, Solicitor who agreed to accept instructions. Gerard Markey decided himself to consult Mr. Billy Mulhern, principal of J.W. Mulhern and Company, Chartered Accountants and Registered Auditors of Naas, Co. Kildare, about these tax problems and the financial position generally.
Mr. Mulhern told the Court that as a result of an urgent approach from Gerard Markey, in October, 1996, he prepared accounts for the “Stray Inn” from the year ending 31st March, 1992, to the ten months ending 28th February, 2002, inclusive. These accounts were accepted by the Revenue Authorities without query.
Mr. Michael O’Neill gave evidence that he discovered that Philip Markey was a resident in Curragh Lawn Nursing Home and that his son Gerard Markey was dealing with affairs for him. Mr. O’Neill said that he was authorised on 23rd September, 1996, to deal with the Revenue Authorities and with the issue of fees alleged to be due to the former Accountants and fees due to the “Meath Solicitors”. A sum of £11,000 (former currency) was found due by Philip Markey to the Revenue Authorities in respect of Income Tax.
The evidence of Gerard Markey and Mr. Michael O’Neill showed that a borrowing of £20,000 to £25,000 (former currency) was necessary to deal with these three claims. The branch of the Bank of Ireland, with which Philip Markey had dealt, declined to advance this money. With the assistance of Mr. Billy Mulhern, Gerard Markey obtained a loan of £20,000 (former currency), from the Naas Branch of A.C.C. Bank, to discharge the amounts ultimately agreed to be owing and which Mr. O’Neill confirmed to the bank by a letter dated 5th March, 1997. I am satisfied from the evidence that Gerard Markey had no capital of his own and while Philip Markey had fixed assets in the form of the licensed premises and the three acres of land, he had no free capital either. A.C.C. Bank required a mortgage over the licensed premises and the lands to secure this loan and insisted that Gerard Markey, though he had no legal or beneficial interest in either property, should join in the Deed of Mortgage as he was the person actually then running the business. Mr. Michael O’Neill corresponded with the Bank and handled all legal aspects of the transaction. Mr. O’Neill arranged for Gerard Markey to execute the mortgage and it was taken to Curragh Lawn Nursing Home where it was executed by Philip Markey. This mortgage is dated 27th March, 1997. In September, 1998, Philip Markey and Gerard Markey, at the behest of the Bank further executed a declaration that the properties were not a Family Home. The amount of the loan was credited to a business account opened in the Bank. Gerard Markey told the Court that repayments were never permitted to fall into arrears and that the entire loan was fully repaid by April, 2005.
I find that in respect of this transaction as well as all other matters relevant to these proceedings, Mr. Michael O’Neill, Solicitor, was acting solely as Solicitor for Philip Markey and not for Gerard Markey or, for Philip Markey and Gerard Markey jointly. I am unable to accept the contention of Gerard Markey that Mr. O’Neill was retained by him as his solicitor and I accept the evidence of Mr. O’Neill that his client was at all times Philip Markey and that Gerard Markey had contacted and instructed him in the course of looking after his father’s affairs. I accept the evidence of Mr. O’Neill that the only time he had acted as solicitor for Gerard Markey was in relation to a Road Traffic Claim in the period 1997 to 1999. I find on the evidence, that Anthony Barry and Company Solicitors, of Athlone, Co. Westmeath and, Quinn and Company, Solicitors of Tallaght, Dublin 24, were at all material times the Solicitors acting on behalf of Gerard Markey.
Gerard Markey commenced running the business on his own in November, 1995, at an agreed salary of £500 (former currency) per month. In 1997 or 1998 his father agreed to Gerard Markey and his new partner taking up residence in the entire living area over the business. At Christmas 1998, after a son had been born to Gerard Markey and his new partner, Philip Markey agreed to increase the salary of Gerard Markey to £700 (former currency) per month. There was no dispute with regard to these figures during the course of the hearing.
Commencing at Christmas 1995 and continuing thereafter for a number of years, Gerard Markey employed Mary O’Sullivan as a part-time assistant in the business, mostly at weekends. He employed Brendan O’Neill, a college student in one particular year during the summer vacation. He employed Sharon O’Brien, on another occasion as a part-time assistant for five or six months. Gerard Markey stated that in May or June, 1999, he was experiencing problems because of pain in his back and attended Dr. M. Kelly, who prescribed “Brufen” for the problem. This is a non steroidal anti-inflammatory drug used commonly in the treatment and management of Musculo-Skeletal pain and inflammation.
Gerard Markey gave evidence that he told his father that he needed a full-time helper in the business and his father had agreed. There was no express evidence of this agreement. Gerard Markey stated that he had advertised for a suitable person in a local newspaper and in May or June, 1999, had employed Noel Gunning who continued to work as a full-time barman in the business until March or April, 2005. Mary Markey corroborated the evidence of her brother that their father was brought by him to visit the “Stray Inn” on a number of occasions up to early 2001. I consider that it is a reasonable inference to draw that Philip Markey was aware of the employment of Noel Gunning as a full-time barman at the “Stray Inn”, and there is no evidence that he complained about his being so employed to Mary Markey or to Mr. Michael O’Neill. At the end of 1999, Gerard Markey decided to also employ his new partner, at an initial wage of £150 (former currency) per week, to assist in cleaning and cooking and to provide general assistance in the business, particularly on Saturdays and Sundays.
Gerard Markey assured the Court that the non-payment of two months fees due to the Nursing Home in 1998, was accidental. No reminder was sent by the Nursing Home which only provided an Invoice on an annual basis. Liam McDonnell did not take issue with this and told the Court that he and his sister did not really become concerned until early 2001, when the arrears had mounted to more than £10,600, (former currency). Mary Markey stated in evidence that Miriam McDonnell had mentioned arrears to her in 1999. However, this does not accord with the evidence of Liam McDonnell or of Mr. Michael O’Neill who recalled that in May, 2001, Mary Markey told him that ten monthly payments to the Nursing Home had not been paid and that the owners were asking for payment. Mr. O’Neill presided over a meeting at his office on 24th May, 2001, at which Mary Markey and Gerard Markey were present, to discuss these arrears. This meeting was followed by two other meetings with them at his office on 10th July, 2001 and 11th September, 2001, at which latter meeting Mr. Billy Mulhern was also present in the interest of Gerard Markey. In the circumstances I find that there was either no mention of arrears by Miriam McDonnell to Mary Markey in 1999 or, if there was, it was of such a casual nature that Mary Markey did not feel it necessary to take any action. I find that the late Philip Markey was never at any time aware that any of the monthly payments remained unpaid and, that not even a suggestion of any difficulty regarding the payment of the Nursing Home fees was made to him by the McDonnells, Gerard Markey, Mary Markey or Mr. Michael O’Neill.
In September, 1999, Gerard Markey offered to purchase the “Stray Inn”, without the three acres of land, from his father for a sum of £150,000, (former currency). He gave evidence that he told his father that he was experiencing financial pressure in the business and that from a conversation with another resident in Curragh Lawn Nursing Home he felt that if his father were to sell the business to him, his father might be treated for Social Welfare purposes, as a person of no means and, become entitled to a Government subvention in respect of the Nursing Home fees and to the old age pension as well. Mr. Michael O’Neill proved in evidence a letter dated 9th November, 1999, which he had received from Quinn and Company Solicitors, Tallaght, acting on behalf of Gerard Markey.
In this letter they state that they understood that certain matters had been discussed between Gerard Markey and Philip Markey with regard to the transfer of the “Stray Inn” to Gerard Markey at a consideration of £150, 000, (former currency). They advised Mr. O’Neill that Gerard Markey had obtained full loan approval for that sum and asked that Mr. O’Neill take instructions from Philip Markey.
Mr. Michael O’Neill went to see Philip Markey at Curragh Lawn Nursing Home on 6th December, 1999. He proved in evidence a note which he had made during this meeting. This note records, inter alia, the following:-
“2. 85 years of age.
3. Under value – could be 300/400/500 – Milltown Inn, Lawlors Naas, Mannor Inn – £170,000 previously offered – man with plenty of money.
4. £1,000 per month to Nursing Home.
6. Auctioneer’s Valuation (McEvoy).”
Mr. Michael O’Neill again visited Philip Markey at Curragh Lawn Nursing Home on 16th December, 1999. Mary Markey was there when he arrived and handed him a note of things which she said her father wished to discuss with him and then she left. This note was proved in evidence by Mr. O’Neill and reads as follows:-
“Ph. 897805.
£150,000 – Joint A/C???
VAT. Bill paid.
Nursing Home paid.
Solicitor’s Fees or any fee in relation to same.
New Will (1) put Ross in (2) pay Alice Field”.
The “Ross” referred to in this note is the son of Gerard Markey by his new partner.
Mr. Michael O’Neill gave evidence that immediately on his return to his office he had made a three page memorandum of what had taken place at this meeting. This memorandum was proved in evidence by Mr. O’Neill and no objection was taken to its introduction into evidence. It notes, inter alia the following:-
“The writer enquired from Mr. Markey as to whether or not he wished to deal with the licensed premises and his other property in alternative ways, such as by creating a life interest in the licensed premises in his own favour with the remainder to Ger and to which Mr. Markey replied that he did not. The writer then enquired as to whether or not he wished to transfer the licensed premises to both Ger and Mary in equal terms, and to which Mr. Markey replied that Mary had no interest in the business. The writer also enquired as to the sale of the property and a division of the sale proceeds, and to which Mr. Markey replied that he did not wish to take this course but interestingly remarked that when there were proposed sales of the property in the past, Ger “ran everyone” and which the writer took to mean that Ger put prospective purchasers off purchasing. In conclusion it was agreed that we would continue with the valuation of the premises through McEvoy’s and also obtain the relevant accounts through Ger’s new Solicitors and then the writer would then come back to Mr. Markey to finalise matters. Mr. Markey instructed the writer that his son Gerard was to continue to be responsible for payment of the expenses due to Curragh Lawn Nursing Home while Mr. Markey remained a patient and was also to be responsible for the discharge of all Tax payments in relation to the licensed premises and other liabilities in respect of the pub. He is also to be responsible for all legal costs in relation to the proposed transfer of the licensed premises to him.
Mr. Markey also indicated his desire to make a new will. He pointed out that there was also land, and which the writer incorrectly assumed adjoined the licensed premises, but, in fact, is nearer to Mary’s home property. He indicated that this land was to be given to Mary. He further directed that the following legacies were to be made namely:-”
On the 24th January, 2000, Mr. O’Neill again visited Philip Markey at Curragh Lawn Nursing Home. He advised him that Mr. Colm McEvoy, M.I.A.V.I., had valued the “Stray Inn”, exclusive of the land, at £400,000 (former currency). Mr. O’Neill showed Philip Markey the accounts prepared by Mr. Billy Mulhern for the year ending 30th April, 1999, which showed a turnover of £136,353 (former currency) and told Mr. Philip Markey that Mr. Mulhern had advised him that the turnover for the year ended 30th April, 2000, was £192,000 (former currency) inclusive of VAT., or approximately £150,000 (former currency) exclusive of VAT. Gerard Markey gave evidence that just prior to Christmas 1999, his father told him that he was not going ahead with the sale of the “Stray Inn” to him. When he asked his father why was this, his father told him that he had given different instructions to Mr. Michael O’Neill who is taking care of things.
Having considered the above valuation and accounts which were produced in evidence, the late Philip Markey advised Mr. O’Neill that he did not wish to increase the sum of £150,000 (former currency) which the new will provided should be paid by Gerard Markey and Philip Markey executed this will in accordance with law. He told Mr. O’Neill that Gerard Markey was running the pub well and had improved it and was most entitled to it and he repeated that in any event Mary had no interest in it. Mr. Michael O’Neill told the Court, and I accept his evidence as true and accurate, that at this time he did not know that the Nursing Home payments were in arrears and that he did not learn of this until May, 2001. At a later date in or about January or February, 2000, Mr. O’Neill said that he had mentioned to Mary Markey and Gerard Markey that Philip Markey had made a will and, without revealing any of its contents, told them that, “they could be comfortable with it”. The court accepts Mr. O’Neill’s explanation of why he said this to Mary Markey and Gerard Markey.
Gerard Markey accepted that in May, 2001, Mary Markey had contacted him to discuss the arrears of fees due to the Nursing Home and he agreed that he had attended three meetings with her at the offices of Mr. Michael O’Neill in May, July and September, 2001. Mr. Michael O’Neill proved in evidence a note which he had made during the meeting of 24th May, 2001. It reads as follows:-
“£160,075 (X) 2 = 20,100 per annum.
£45,000 to break even before payment to Nursing Home.
£35,000 figures dropped to such.
Foot and Mouth: competition – “Weighroom”, “Hideout”, O’Connells.
Rory Fahy – A.C.C. Naas.
Full discussions.
Engaged one and a quarter hours.
24/5/01.”
Gerard Markey denied his sister’s evidence that he had refused her offer to care for their father if Gerard Markey paid her £500, (former currency) per month, on the basis that he would not be entitled to claim Tax relief on these payments. He told the court that he had refused because their father was then bed bound and needed a colostomy bag and he felt that his sister would not be able to cope. On the balance of probabilities I find this recollection implausible and I prefer the recollection of Mary Markey. Gerard Markey accepted that she had stated that if he got rid of the full-time barman there would be sufficient income from the business to pay the Nursing Home monthly charges as they arose. He had rejected adopting this course, she said, because he contended that he felt unable any longer to do all the hours. This meeting appears to have ended, as recollected by Gerard Markey, with his agreeing to take steps to make the business pay. Unfortunately, the arrears were not paid and further arrears continued to mount. A second meeting was held, – again at the behest of Mary Markey, – on the 10th July, 2001, at the office of Mr. Michael O’Neill. Mr. Michael O’Neill gave evidence that he was now very seriously concerned at the level of the indebtedness to the Nursing Home. Gerard Markey was insisting that he could get no more out of the business and stated that the Bank was not interested in giving him a further loan. Mr. Michael O’Neill proved in evidence notes he had taken during the course of this meeting. Mr. O’Neill told the court that he put it to Gerard Markey that others were being paid out of the income of the business at the expense of his father’s care bill. He told Gerard Markey that the debt could not be left to the estate to be dealt with after his father had died and, that he genuinely felt that this was what was going on. Gerard Markey, he said, assured him that this was not so and, he accepted that the business was liable for the Nursing Home fees but stated that the income was simply not there.
Mr. O’Neill insisted that Philip Markey’s Nursing Home bills had precedence over all other matters. He said that while he accepted that Gerard Markey had improved the “Stray Inn” he was concerned that this had been at the expense of the Nursing Home Fee’s. Neither Gerard Markey nor Mary Markey challenged any part of this recollection of Mr. O’Neill as to what had transpired at the meeting. Mr. O’Neill said that he had put to Gerard Markey that the “Stray Inn” was a good pub, – that it always had a good name and was well liked, – and that if he was having difficulties they should consider leasing it to somebody else. Mr. O’Neill told the court that Gerard Markey would not hear of such a suggestion. Mary Markey recalled that her brother said that he was running the place for their father and could not let it go to anyone else and that, he was sure that the business would pick up and he would be able to pay the Nursing Home fees. Gerard Markey told the court that he could not agree to Mr. O’Neill’s proposal of leasing the “Stray Inn” to a third party because of all the work and effort he had put into the business and, because of the amount of Nursing Home fees he had already paid. In those circumstances he felt that he was entitled to a chance to continue to run the business.
Mary Markey offered to pay £10,650 (former currency) if Gerard Markey agreed to repay her this sum. She told the court the he had agreed to this and accordingly she paid the sum of £10,650 (former currency) to Curragh Lawn Nursing Home in December, 2001. She said that despite his agreement her brother did not repay her for more than two years. Gerard Markey told the court in evidence that he accepted that he had agreed to repay his sister this sum of £10,650 (former currency). He said that he stood by this but that he was not personally liable for the Nursing Home fees and that she and the McDonnells well knew that the money had to come out of the profits of the business. I am satisfied that Gerard Markey right up to the commencement of the oral evidence before this Court in these proceedings maintained that he had no obligation to repay this sum of £10,650, (former currency) to his sister.
A further meeting about the continuing non payment of fees to the Nursing Home took place at the offices of Mr. Michael O’Neill on 11th September, 2001. Mr. Billy Mulhern F.C.A. attended this meeting in the interests of Gerard Markey, who also attended, as did Mary Markey. Mr. Michael O’Neill described this meeting as a terribly unpleasant experience. As the £10,650, (former currency) had not yet been paid to the Nursing Home the arrears then due to Curragh Lawn Nursing Home amounted to £25,675, (former currency). Mr. O’Neill recalled that the discussion at the meeting had ranged over turnover figures, actual and projected, for the business, the cost of the improvements and repairs carried out by Gerard Markey and, the cost of the security upgrading required by Thorntons, Loss Adjusters on behalf of the Insurers and by Sergeant Corcoran on behalf of Naas Garda Síochána as a result of the robbery at the “Stray Inn” on 16th October, 1999. The issue of the employment by Gerard Markey of a full-time barman and other bar staff at the “Stray Inn” was also discussed as were the repayments on foot of the A.C.C. Bank loan. Mr. O’Neill told the Court that he had insisted, very forcibly, that something would have to be done immediately and urgently. He said that he had again asserted that the business should be let to a third party which in his opinion would produce a return of up to £2,000, (former currency) per month which would be sufficient to pay the Nursing Home. He said that Gerard Markey would not agree to this.
Gerard Markey told the Court that by a letter dated 28th August, 2001, Mr. Billy Mulhern had sought an additional loan of £20,000, (former currency) from A.C.C. Bank. A copy of this letter was proved in evidence by Mr. Mulhern. I accept the evidence of Mr. Michael O’Neill that this letter was not, as Gerard Markey contended, sent to him and, that the first he knew about it was when he was furnished with a copy of the letter at this meeting on 11th September, 2001. It had been suggested to the bank that the proposed new loan and the other borrowing could be consolidated and repaid over an extended period, (a term of over 15 years was discussed at the meeting), in order to keep down the interest levels and therefore the amount of the monthly repayments. Gerard Markey proposed to the meeting that he be given a lease of the “Stray Inn” for the period of these repayments. Mr. Michael O’Neill told the Court that neither he nor Mary Markey would agree to this suggestion from Gerard Markey. He said that at this meeting Mary Markey was again very critical of her brother employing a full-time barman at the “Stray Inn” and she also suggested that he had carried out unessential repairs and improvements at the expense of not paying for their father’s keep at the Curragh Lawn Nursing Home.
Arising out of this meeting, Mr. Michael O’Neill wrote to Miriam McDonnell by letter dated 19th September, 2001, in the following terms:-
“Dear Mrs. McDonnell,
I refer to my telephone conversation with you in this matter on 13th instant. You have advised that Mr. Markey’s outstanding account is in the sum of £25,000 odd. You have furthermore advised me that you have indicated to Ger Markey that the discharge of the account will have to be addressed as a matter of urgency, as otherwise you will be obliged to request the removal of Mr. Markey from the Nursing Home. As indicated to you, I have been aware of the position and very conscious of the outstanding debt. As a result, I have had meetings with both Ger Markey and his sister Mary Markey and as late as 11th instant met with both these parties and also Mr. Billy Mulhern, Accountant of J.W. Mulhern & Company, Accountants, 13/14 South Main Street, Naas. As a result of the most recent meeting, steps are now being taken to address the issues of the outstanding account and with a view to the total discharge of same. It is also intended to put in place a structure of payment of the account on a monthly basis e.g. the setting up of a direct debit in favour on the Nursing Home. I would hope to be in a position to revert to you shortly and in the meanwhile you might perhaps bear with me pending my finalising the necessary arrangements.
Yours sincerely.”
I find that none of these meetings were disclosed to the late Philip Markey. As a result of correspondence between Mr. Michael O’Neill and the Legal Services Department of A.C.C. Bank, during November, 2001, the bank agreed to advance this additional sum of £20,000, (former currency) on the security of the Original Mortgage which was sufficient to secure sums of up to £200,000, (former currency). Gerard Markey told the Court that he did not proceed with this additional borrowing, “due to problems with paperwork I think” and events were overtaken by the death of his father on 28th February, 2002. Mary Markey told the Court, and I accept her evidence, that she was totally unaware of the original A.C.C. Bank loan or of the Deed of Mortgage executed to secure its repayment.
Mary Markey told the Court that she firmly believed that if her brother had not spent so much on unessential repairs and improvements and had not employed a full-time barman at the “Stray Inn”, there would be sufficient income from the business to pay the Nursing Home. She accepted that some of the improvements and renovations to the business premises needed to be done but insisted that the question of whether there was money available to do them was a matter which could only have been determined after provision had been made for the payment of the Nursing Home fees. She believed that from November, 1995 to 28th February, 2000, her brother had pursued a programme of works and had engaged staff without giving any consideration to the necessity to pay the Nursing Home fees. She said that in this same spirit he had even replaced his original car with a brand new Jeep. She said she accepted that it was her father’s own money from his business which was to pay the Nursing Home and that it was not her brother’s responsibility to pay the Nursing Home fees out of his own pocket. She agreed with her brother that no one had anticipated that her father would survive for so long. She accepted in cross examination that she had not been told by her father and did not know on what basis her brother was managing the pub but said that she knew that he was doing it for their father and was being paid a weekly wage for doing it. She told the Court that she believed that Gerard Markey should have paid the bills due to Beechfield Healthcare Limited and Bernard Berney, Pharmacy out of the profits of the business. Her father, she said, had a Medical Card but with a threshold of €42 per month. When Miriam McDonnell had told her that their father needed a special mattress to prevent bedsores she told her brother about this and his response was that the Nursing Home should pay for it. However, she said, about two or three months later he had told her that he would pay for it. She accepted that he did not mean that he would pay for it personally but he would ensure that it was paid for out of the income of the business.
I find that no work or renovation had been carried out to the “Stray Inn” since 1978 when the lounge bar, store room and, new toilets had been constructed. The overhead accommodation had become quite dilapidated since the death of Mrs. Markey in 1987 and, two of the rooms and a spirits store had been damaged by smoke as a result of a fire in the premises.
In March, 1996 Gerard Markey personally cleaned, re-wallpapered and renovated an upstairs bedroom and bathroom for his own use. In 1996 he employed a painting contractor to repaint the outside and the inside of the licensed premises. Also, in 1996, he himself re-wallpapered the lounge bar and laid a new timber floor in the area behind the bar. At a date or dates of which the Court cannot be certain, he installed a new counter in the bar with the assistance of two tradesmen; replaced the ceiling in the poolroom and in the snug; replaced the timber wall sheeting and shelving in the bar and in the poolroom and, replaced the back of the counter in the lounge bar. In 1998 and 1999 he replaced part of the floor in the snug and did some other work in the lounge bar. In September, 1998 with the assistance of friends, he completed the repair and renovation of all of the upstairs apartments before his new partner joined him in residing there. In March, 1999, he repaired and remounted toilet facilities which had been damaged by vandals. In April, 1999 he personally re-laid the surface of the bottle yard in concrete. In the same year he devoted a week to carrying out work to the roof valley of the building. In 1999 also, the licensed premises was rewired by Elite Electrical Limited using materials purchased from Wesco and this work was checked and approved on behalf of the Electricity Supply Board.
On 16th October, 1999, there was a robbery at the, “Stray Inn” and, the entire weekend cash float was taken. The insurers insisted on a security upgrading at the premises. Changes were made in the alarm system, new security lights were installed and, a security wall, twenty five feet in length and ten feet in height was built at the rear of the yard in January, 2000. This wall took four months to complete and Gerard Markey gave evidence that he did eighty percent of the labour involved. In 2000 or in 2001 he purchased a new television set for the premises. He purchased a number of second hand bar stools and tables and refurbished them himself. He claimed that he had kept a record of and invoices and vouchers for all the work carried out at the “Stray Inn”, – the principal part of which I have identified, and furnished these to J. W. Mulhern and Company, his accountants. His handwritten record and these invoices and vouchers were proved and examined in evidence. I accept the evidence of Gerard Markey that he is a keen D.I.Y. enthusiast and has the knowledge, skill and equipment necessary to carry out a wide variety of work which would otherwise require the services of skilled artisans and craftsmen.
Gerard Markey gave evidence, which was not disputed, that he had paid for most of the repairs, renovations and improvements to the upstairs accommodation at the “Stray Inn”, out of the damages awarded to him in the road traffic accident case. Mr. Michael O’Neill recalled that this compensation was received in 1999. Gerard Markey told the Court that he had spent somewhere between £7,000 and £8,000 (former currency) on this work and this figure was not really challenged in cross-examination. It was put to Gerard Markey in cross-examination that he had spent in the period November, 1995 to the 8th February, 2002, somewhere between £50,000 and £72,000 in carrying out various work at the “Stray Inn”, excluding the value of his own work. He did not disagree with this suggestion. In cross-examination it also was established that these figures, the larger of which is computed by reference to his own records and the lesser calculated by Mr. John Eddison, Chartered Accountant, of the firm Upton Ryan and Company, in a Report commissioned by the Applicant, did not include certain payments made in cash, (for example, in respect of casual labour), and, that other items had been accidentally omitted by Gerard Markey from his lists. The total amount of these unincluded items and cash payments could, he accepted, be in the region of £3,500 to £6,500 (former currency).
Gerard Markey told the court that in each of the years 2001 and 2002 he had sponsored the local Pitch and Putt Golf Tournament at a cost of €1,000 per year. He stated and, I accept his evidence, that this purchased very valuable advertising and general goodwill for the business. He gave evidence that he had also revived the Sunday night music sessions which had been a very popular feature of the “Stray Inn” in the past but which had been let slip by his father when he became ill. Gerard Markey gave evidence that the average cost of the musicians was approximately £100 (former currency) per night and this was not challenged.
Gerard Markey accepted in cross-examination, that in the accounting year ended 30th April, 2000, he had spent more than twice what he had spent in each of the preceding years ending 30th April, 1999, and 30th April, 1998. He did not deny that a lot of this work was carried out at the time he was endeavouring to purchase the, “Stray Inn” from his father for £150,000 (former currency).
Gerard Markey accepted that between 1995 and 2002 the income from the business had almost tripled. He accepted that he had embarked on a total overhaul of the “Stray Inn” but, insisted that this was necessary to keep its existing customers and to attract new customers. He said that he did not appreciate in advance how much it all was going to cost. In hindsight he would accept that all of the work may not have been necessary to maintain and to improve the customer base, but that at the time it seemed to him that it was necessary. Gerard Markey admitted that he did expect to inherit the, “Stray Inn” and, had actively discouraged the three different potential purchasers when they had come to inspect the premises. He accepted, when it was put to him in cross-examination, that it was part of the agreement between him and his father that he would discharge the nursing home accounts as they fell due out of the profits of the business. He also accepted that his father did not know of the non-payment of the nursing home fees when he had approved of the works that had been carried out and of the way in which the business was being run.
Gerard Markey told the court that he had hurt his back lifting beer kegs in 1997. He said that in 2000 he had attended a Mr. Brian Moore, a chiropractor practising in Carlow and another spineologist. He had made about six visits in all. No documents were produced to vouch this treatment and the persons who provided it did not give evidence.
Mr. John Eddison proved in evidence a Report dated 3rd June, 2004, which he had furnished to the Solicitors for the Applicant. In evidence he told the Court, that having carefully examined the accounts for the “Stray Inn”, prepared by J. W. Mulhern and Company, he had reached a number of conclusions. Up to the end of the accounting year ended 30th April, 2001, (and also in the ten months thereafter up to the death of Philip Markey on 28th February, 2002), the income of the business had increased each year even though the amount of that increase fluctuated considerably. He was satisfied that there was no indication in the accounts of any undisclosed sales transactions. He considered that the figures for “repairs and maintenance” in the accounts seemed high for a small licensed premises. The figure entered for the value of the premises in the Balance Sheet did not change much over the years so that actual “improvements” may have been written down as “repairs” which enjoyed a much more advantageous tax regime.
The following pattern merges from the accounts:-
Year
Income Increase on Previous Year
Wages and Salaries
Repairs and Maintenance
1997 £36,000 (estimate) £10,299 £4,631
1998 £60,033 £13,886 £7,817
1999 £31,805 £19,588 £8,936
2000 £26,739 £38,137 £12,135
2001 £5,779 £50,523 £10,798
This pattern of income, wages and salaries and repairs and maintenance continues for the subsequent period of ten months up to the death of Philip Markey on 28th February, 2002. There is a huge jump in wages and salaries in the accounting years ending 30th April, 2000, and 30th April, 2001. The accounts year ending 30th April, 1997, was the first full accounting year in which Gerard Markey was sole manager of the “Stray Inn”. The accounting year ending 30th April, 2001, was the first full year in which Mr. Gunning was employed as full time barman. The income increase for the accounting year ending 30th April, 1997, is estimated. The income increased from £160,637 for the previous twenty five months, to £113,074 (former currency) for the twelve months ending on 30th April, 1997. Mr. Eddison accepted that Gerard Markey’s own wages as shown by the accounts were modest.
Mr. Billy Mulhern, confirmed that he had prepared the Accounts for the, “Stray Inn” at the request of Gerard Markey and, proved these in evidence. He stated that he was satisfied that the vast majority of the figures in the accounts were properly vouched. He accepted that some cash payments had been made for which no invoices or receipts were available but he felt that this was almost inevitable where any form of building work was concerned and, was not at such a level as to require adverse comments. The Revenue Authorities had accepted the accounts without query.
These accounts showed that in the two year period ending on the 30th of April, 1994, the Philip Markey had only drawn £8,795 (former currency) in total from the business. In Mr. Mulhern’s opinion, after the year ending 30th April, 1997, the net profits of the business could not sustain the level of drawings being made. He was unable to comment on why the figures for repair and maintenance were at the level they were or why they continued to rise.
He was present at the meeting on 11th September, 2001, in the office of the Mr. Michael O’Neill but did not take notes at the meeting or prepare a memorandum immediately afterwards. In his view it was doubtful whether at that time the business could have sustained a long term loan. Competition, he said is very keen in the licensed trade. He is aware of this because he acts for a number of owners of licensed premises. All rural public houses were affected by the foot and mouth crisis to some extent. He agreed with Mr. Michael O’Neill’s recollection of what occurred at this meeting. He recalled Mary Markey’s sense of outrage at her brother having employed a fulltime barman while nursing home fees were in arrear. He also recalled Mr. Michael O’Neill pressing for the premises to be leased to a third party if Gerard Markey continued to insist that enough income could not be generated to pay the nursing home fees. He said he clearly recalled that the meeting was at all times a most serious one and that it had become very distasteful towards the end.
He did not negotiate with A.C.C. Bank or with any other bank for an additional credit line for the business after this meeting. He recalled that he had been told by Gerard Markey sometime that autumn that he was negotiating with a bank for a loan. At all times he had only dealt with Gerard Markey. He had never met, had never written to and had never received any instructions from Philip Markey. As an accountant he said he would tend to regard the creation of a beer garden; the changing of a grocery store to a poolroom; the establishment of a smoking area; the setting up of a refrigerated keg store; the making of a secure spirits storage room upstairs in the premises and, the building of a kitchen downstairs at the rear of the premises to produce food for consumption in the public house, as “repairs and replacements”
rather than as “improvements”. He accepted that while certain works had to be
carried out at the “Stray Inn” for health, safety and security reasons, a considerable amount of the work undertaken was not required for any of these reasons and would probably be regarded outside the field of tax treatment as constituting an improvement. He did not know why motoring expenses were so high, (£5,022) in the year ending 30th April, 1999. He said that he did not recommend the lease-purchase of a new Jeep by Gerard Markey in September, 1998 but felt that this would make good financial sense if the business could otherwise afford it. The trade-in of £3,053.96 which Gerard Markey had received for his old vehicle was shown in the accounts for the year ending 30th April, 1999.
CONCLUSIONS
Central to the determination of the first four issues in this case are the terms upon which Gerard Markey assumed the sole management of the “Stray Inn” when
his father became a resident in Curragh Lawn Nursing Home on the 30th November, 1995. I find that Gerard Markey agreed to manage the business on behalf of his father. I find that this agreement was made orally between the late Philip Markey and Gerard Markey without the advice, assistance or presence of any third party either lay or expert. Gerard Markey, at all times during his evidence, fully accepted that he had entered into occupation and remained in occupation of the “Stray Inn” and ran the business as a manager for his father and in no other capacity or title whatsoever. It was established by the evidence that no lease, tenancy agreement, licence or franchise was entered into between the late Philip Markey and Gerard Markey in respect of the “Stray Inn” I find that Gerard Markey did not execute the Deed of Mortgage made
with A.C.C. Bank on 27th March, 1998, as agent for the late Philip Markey so as to bind him. As was disclosed by the evidence, Gerard Markey executed this Indenture at the behest of the Bank as a principal on his own behalf as the person managing the business and not as agent for his father who separately executed it.
I find that Gerard Markey was authorised by Philip Markey to carry on the business of the “Stray Inn” as a general agent on his behalf of the type aptly described by Bowstead and Reynolds on Agency, (17th Edition: 2001: London, Sweet and Maxwell), article 29 page 106 et seq., as a, “managerial agent”. In my judgment it
was an express and a fundamental term of the contract between them that Gerard Markey would, out of the profits of the business, discharge all sums due to Curragh Lawn Nursing Home in respect of his father as they became due. The income derived from the licensed premises was Philip Markey’s sole income. I am satisfied that it
was clearly understood between them that the sole reason why Gerard Markey was given the management of the “Stray Inn” by Philip Markey was to ensure that
sufficient income was generated by the business to maintain Philip Markey in Curragh Lawn Nursing Home.
I find that Gerard Markey’s overriding obligation was to manage the “Stray
Inn” in such a manner as to provide sufficient income to pay the nursing home
charges in respect of his father as they became due. I find that if he was bona fide unable to achieve this he should have considered that the agency was terminated and the whole issue of providing for the support of his father in the nursing home subject to reappraisal. I am satisfied that Gerard Markey did not assume any obligation to pay the nursing home from his own resources and I am further satisfied that in any event he had no assets or free capital which would have enabled him to assume such an obligation, nor did his sister Mary Markey. I am satisfied that Gerard Markey signed the Agreement with Curragh Lawn Nursing Home on 24th November, 1997, as an agent for a disclosed principal and did not assume any personal liability to the nursing home on foot of that agreement.
In my judgment Gerard Markey did not have either express or implied authority to improve the fabric of the “Stray Inn” or to execute works or to adopt measures designed to maintain or to increase its custom at the expense of failing to pay the fees due to Curragh Lawn Nursing Home. This is obvious when one considers what would almost certainly have occurred had the McDonnells, as they were fully entitled to do, served notice of termination of residency on Philip Markey at any time during 1999. I am satisfied that only such expenditure as was essential to the day to day trading of the “Stray Inn” had, by necessary implication, priority over
the obligation to produce and to retain sufficient income to pay the nursing home fees. By “essential expenditure” I mean, such matters as the costs of renewal of the intoxicating liquor licence; the costs of essential services such as light, heat, water, sanitation and power; the cost of trade goods and equipment; insurance in respect of fire, theft, public and employers liability; non deferrable repairs and maintenance, of buildings, fixtures and trade equipment; the wage agreed to be paid to Gerard Markey and, central and local government taxes. This does not purport to be an exhaustive list of what might properly be included in the term, “essential expenditure” but is intended rather to be illustrative of the extremely narrow range of expenditure which of necessity to enable any business to be conducted had to be afforded priority over the nursing home fees in the allocation of available income. If, after meeting this essential expenditure the income from the business was not sufficient to meet the expenses of maintaining Philip Markey in Curragh Lawn Nursing Home then the entire matter would have to be reconsidered and alternative solutions found, such as an outright sale of the “Stray Inn” or, a lease of the business to another party as suggested by Mr. Michael O’Neill at the meetings on 10th July, 2001, and 11th September, 2001.
In my judgment expenditure on other matters, whether in the form of nonessential repairs, maintenance improvements or staffing, however otherwise desirable or convenient, or even necessary from a long term perspective, could not be incurred without a breach of contract so long as this expenditure resulted in the diversion of income from what was necessary to pay the nursing home fees as they fell due. I find that the decision of Gerard Markey in 1999 to employ a fulltime barman and also to employ his new partner at a weekly wage, was non-essential expenditure of this nature. If Gerard Markey had suffered from back problems from 1997 onwards, as to which I remain unconvinced, they certainly were not such as to so incapacitate him that he could only manage this small rural licensed premises with the assistance of a fulltime barman and other paid assistance from his new partner and other casual and part-time employees. No medical or other evidence was led in support of this claim. His own evidence of his physical activities throughout 1998 and 1999 together with his account of the medical treatment he received are in my judgment inconsistent with the existence of any significant back pain or limitation of movement. But even if he was seriously incapacitated after 1997 he had no right to continue to insist on managing the “Stray Inn” in a manner which resulted in insufficient income being available to pay his father’s nursing home bills. I find on
the balance of probabilities that the reason why Mr. Gunning was employed as a full-time barman was that Gerard Markey decided that he no longer wanted to work all the hours necessary to manage the business on his own with part-time or occasional assistance. To this end he employed the increased income of the business without considering or disregarding his fundamental obligation to pay the nursing home fees as they fell due.
I am satisfied that a great deal of the expenditure by Gerard Markey on the various works carried out by him, whether properly described as “repairs,
maintenance or improvements” and, which attracted the attention of Mr. Eddison as being high for a small rural public house, were non-essential as I have defined that term for the purpose of this case, and should not have been carried out and, by being carried out left insufficient income available from the business to pay the nursing home fees.
In my judgment, while I am fully satisfied that Philip Markey did approve of the works carried out at the “Stray Inn” by Gerard Markey and, also approved of the manner in which Gerard Markey was running the business, this was not a fully informed approval and consent. The evidence establishes that Philip Markey was not at any time aware that nursing home fees remained unpaid or that there were serious problems in relation to them. Despite his apparent attitude to income tax arrears and the issue of fees due to other professionals, I am satisfied from the evidence that Philip Markey must have been very conscious of the extent to which he was dependent on the care supplied by Curragh Lawn Nursing Home and the only proper inference to be drawn is that he certainly would not have approved of either these works or of the management of the business by Gerard Markey had he known of the huge arrears of fees due to the McDonnells.
I find that Gerard Markey was at all material times, fully aware of the cost of his father’s residence at the nursing home and that he solemnly undertook on behalf of his father that these costs would be paid as they fell due. Despite this, I am satisfied that he engaged staff and carried out works which he knew would deplete the income of the business to the point where he was unable to pay the nursing home fees. I am satisfied from the evidence that Gerard Markey was determined to become the owner of the, “Stray Inn” whether by purchase or inheritance. I am satisfied that he openly discouraged potential purchasers of the property and, would not give up the management of the business and agree to the “Stray Inn” being leased to a third party at a rent sufficient to pay the nursing home fees despite his own claimed inability to pay those fees. In my judgment Gerard Markey spent income from the Stray Inn which should have gone to paying his father’s nursing home bills, to his own immediate and prospective benefit.
I accept that the various works disclosed by the evidence as having been carried out by Gerard Markey were to the benefit of the “Stray Inn”. While the cross-examination of Gerard Markey disclosed certain inaccuracies and omissions in the accounts, I am satisfied that there is no evidence on which a court could make a finding of any deliberate or fraudulent distortion of the record of expenditure incurred, whether by a way of suppression or inflation. I find that all the work stated to have been carried out was in fact done and all the money claimed to have been spent on that work was so spent. In my judgment, one is driven to conclude on the evidence that considerably more was spent on carrying out these various works, which I have found were largely non-essential works, than the sum of £72,000 (former currency) indicated by the records maintained by Gerard Markey. In other circumstances this expenditure might well have been regarded as both prudent and justifiable, but on the facts of the instant case, it was a breach of a fundamental term of the contract of agency, because it resulted in there being insufficient income remaining to provide for the upkeep of Philip Markey in the nursing home, which on the evidence was crucial to his welfare and even to his continued survival.
I accept that the security works required to be carried out by the insurers must be regarded as essential works. However, I am satisfied that the sum of £10,125 (former currency) claimed to have been spent on these works was inflated by at least £4,000 (former currency). While I accept the explanation offered for this I cannot but firmly disapprove of it. I am satisfied that the apparent difference of €10,395.59, between the sums shown in the accounts for Legal and Professional Fees, (€20,085) and, the sum of the vouchers proved in evidence by Gerard Markey, (€9,689.41), is accounted for by excise and revenue fees incurred in connection with the annual renewal of the intoxicating liquor licence and fees due to a firm called Computerised Stock Control Limited for monthly and year end stock taking at the “Stray Inn”.
While I accept that this stocktaking was essential to the running of the business, there was no evidence from which I could conclude that it necessarily had to be done by an outside agency at a cost of several thousand euro at the time when it was being asserted that the income from the business was insufficient to pay the nursing home fees.
While I accept that Mr. Mulhern probably did indeed advise Gerard Markey that it was more tax efficient to lease-purchase a new Isuzu Trooper Jeep in 1998, I am satisfied that the decision to purchase such a vehicle was that of Gerard Markey alone. His justification for this purchase was that he was experiencing difficulties with members of An Garda Síochána on Traffic Patrol when carrying cases of spirits in his former car for use in the “Stray Inn” and, business at the “Stray Inn” was particularly buoyant because “Kildare was in the Finals in 1998”. His explanation
that the non payment in 1998 of two monthly instalments of fees due to the nursing home was due to a mere oversight, leads one to ask why this oversight was never noticed and corrected. While the evidence established that an Annual Invoice only was issued by Curragh Lawn Nursing Home, it did not indicate whether or not this invoice was issued at the start or at the end of the year or, whether the invoice issued at the end of 1998 or at the start of 1999, whichever may have been the case, indicated that two out of the twelve payments previously due had not been paid.
In my judgment, as agent for his father in the management of the business, Gerard Markey owed a duty to act in good faith, to act within the limits of his actual and implied authority as a managerial agent and, not to act so as to benefit himself without the fully informed consent of his father. However, in my judgment the evidence takes the matter much further and, I am satisfied that a fiduciary relationship is shown to have existed between Gerard Markey and Philip Markey in relation to the management of the “Stray Inn”. The court accepts that many, if not all, managerial agencies involve a reliance by one party on the other party properly performing the obligations assumed without those expectations giving rise to a fiduciary relationship between them. I find, however, the position in the instance case to have been very different. Though undoubtedly relating to a commercial matter – the running of a licensed premises – the agreement between Philip Markey and Gerard Markey could not reasonably be described as an ordinary, at arms length, commercial contract of agency based upon freedom of choice, commercial reputation, assessment of risk, contract terms, third party supervision, remedies for breach and, other similar considerations which to a greater or lesser extent inform and lie behind all such agreements.
On the contrary, I find that the agreement between Philip Markey and Gerard Markey, in relation to the management of the “Stray Inn”, was based upon necessity, kinship and trust. I am satisfied on the clear evidence of Gerard Markey, Mary Markey and Mr. Michael O’Neill that the late Philip Markey was both autocratic and secretive in relation to his business affairs and by reasonable inference would have retained total control over the running of the business for so long as it was at all possible for him to so do. I find that the managerial agency in the instant case only arose because an elderly and possibly even terminally ill parent had no real option but to entrust the immediate running of his business, which produced his income and was his principal asset to his only son, who prior to that had been assisting him in the business.
In addition to the intimate and confidential nature of the relationship between Gerard Markey and Philip Markey, because of his very serious illness and his being confined to the nursing home, Philip Markey was obliged to repose total trust in his son to run the business for him and to pay the nursing home fees. In my judgment the facts of this case are far more akin to those pertaining to the Court of Appeal decision of Re Coomber [1911] 1 Ch. D. 723, than to the commercial situations contemplated by Lord Mustill in the case of Re Goldcorp Exchange, [1995] 1 AC 74 at 98.
I find that Gerard Markey was not entitled to deal with the income of the business as he considered appropriate within the scope of the usual powers implied in the case of a managerial agent running a public house business. I find that it was an express and fundamental term of the management agreement and, a fiduciary duty which he solemnly undertook to discharge, that so much of the money of the business would be set aside each month, after the cost of essential items as I have already described them, as was necessary to discharge the fees due to the nursing home as they arose in priority to all other considerations.
I do not mean to suggest that Gerard Markey was obliged to establish an exclusive fund or account for this purpose in some financial institution where this portion of the income of the business would be maintained as a separate fund until paid over to the nursing home. However, I am satisfied that Gerard Markey was more than a mere debtor of his father in relation to this money and was in fact a constructive trustee of the money for his father. In my judgment, he acted not only in breach of contract but also and, more importantly, in breach of trust in applying that portion of the income of the business which he should have expended in paying the nursing home fees on other matters, despite the fact that such expenditure might in other circumstances possibly fall within the scope of his implied authority as manager of the licensed premises on behalf of his father. In the circumstances of this case he ceased to act in good faith and in the interests of his principal by failing to pay the nursing home fees and acting for his own immediate benefit and also for his prospective benefit as heir presumptive of the business, without fully and properly informing his father of what was occurring and the actual or probable consequences of it so far as the payment of the nursing home account was concerned.
The total of the sums due to Curragh Lawn Nursing Home, Beechfield Healthcare Limited and Bernard Berney Chemist, amounting to €31,164.97 were paid by the Applicant by consent of this Court granted by Order (Carroll J.) made the 2nd February, 2004, for the purpose, I infer, of preventing threatened litigation against the estate and to avoid claims for interest. In my judgment the estate and the Applicant are entitled to be fully indemnified by Gerard Markey in respect of the total amount so paid.
Beechfield Healthcare Limited furnished Invoice 015996, in the sum of €2,446.98, dated 2nd April, 2002, addressed to, “Accounts Department, Mr. Ger Markey, “The Stray Inn”, Mile Mill, Kilcullen, Co. Kildare”. It relates to the delivery
of an Emerald (Twin Cell) Mattress Replacement System at a cost of €2,022.30 with VAT at the rate of twenty one percent in the sum of €424.68, delivered to Curragh Lawn Nursing Home.
I accept the evidence of Mary Markey that Miriam McDonnell told her that Philip Markey required this special mattress if the occurrence of bed sores was to be prevented. I accept the evidence of Mary Markey that she told Gerard Markey about this and that he ultimately, after a delay of some months, agreed to pay for it out of the income of the business. The items covered by the nursing home fee are set out in the agreement signed by Gerard Markey on behalf of his father on 24th November, 1997, as including only:-
“(a) Full Board and Lodging.
(b) 24 Hour Care Cover by Qualified Nurses and Auxiliary Staff.
(c) Meals cooked to required medical dietary prescription.
(d) Occupational Therapy.
(e) Colour TV in all bedrooms.”
I find that the provision of this special mattress was absolutely necessary to the proper care of Philip Markey in Curragh Lawn Nursing Home and, as such, was an item payable by Gerard Markey out of the income of the business with exactly the same priority as the nursing home fee itself.
The Invoice raised by Bernard Berney M.P.S.I., Pharmaceutical and Veterinary Chemist, Kilcullen, Co. Kildare is dated the 17th January, 2002, and is addressed to Mr. Phil Markey, and is in the sum of £892.30 (former currency), “Euro Total €1,132.99”. The invoice unfortunately does not give an itemised breakdown of this sum. I accept the contention of Mr. Michael O’Neill, as set out in his letter dated 6th June, 2002, to Quinn and Company, Solicitors for Gerard Markey, that this account should have been discharged by Gerard Markey from the income of the licensed premises in similar fashion to the nursing home account. As regards the creditor the account is a debt payable by the estate of Philip Markey pursuant to s. 45 of the Succession Act, 1965, however, as regards the beneficiaries inter sè, the Invoice is clearly an account of pharmaceutical products furnished to Philip Markey while a resident at Curragh Lawn Nursing Home. These would clearly be “specialist charges”, not included in the nursing home fee. Clause 10 of the Agreement signed
by Gerard Markey on behalf of his father on 24th November, 1997, expressly provides that:-
“the resident shall from his/her own resources or personal allowance be responsible for the payment of medical requisites not covered by the Medical Card.”
I am satisfied that whatever items were covered by this invoice they were sought and furnished as an essential part of the proper medical management and care of Philip Markey in the nursing home. Had the cost of each individual component part of the account to be met as the need for it arose there could not be the slightest doubt that these items would have had to be paid by Gerard Markey out of the income of the “Stray Inn” as there was no other source of income from which to pay them.
The time and the manner in which the account was rendered does not, in my judgment, alter this obligation.
The evidence establishes that as a consequence of the disagreements between Gerard Markey and Mary Markey, the executors nominated in the will of Philip Markey, deceased, an application was made to this court pursuant to the provisions of section 27(4) of the Succession Act, 1965 for a grant of administration to the estate in the special circumstances arising. Mr. John O’Connor, Solicitor, the Applicant
herein, was by Order of the Court made on the 10th day of March, 2003, given leave to apply for a Grant of Letters of Administration with the Will Annexed to the estate of Philip Markey deceased. This grant was issued by the Probate Registry on the 14th day of October, 2003. I find on the evidence that on the 10th December, 2003, the sum of €190,460.71, being the equivalent of £150,000 (former currency), was paid to the Applicant by Gerard Markey.
By his Last Will and Testament, dated 24th January, 2000, the late Philip Markey made the following devise in favour of his son Gerard Markey:-
“I give devise and bequeath my residential licensed premises with outhouses and ground attaching known as The Stray Inn, Mile Mill, Kilcullen, Co. Kildare to my son, Gerard Markey absolutely subject to him paying the sum of One Hundred and Fifty Thousand Pounds to my estate within one month of the date of my death and which payment shall be a charge on the said property until discharged.”
In my judgment, the intention of the testator was not to create a trust of this sum binding upon Gerard Markey, or to impose a mere personal liability on Gerard Markey to pay the sum, or to make a devise to Gerard Markey subject to a condition – whether precedent or subsequent – but rather to create a charge on the property devised for the purpose of securing the payment of the sum of £150,000 (former currency) by Gerard Markey. The fact that the gift is made absolutely and that there is an absence of any gift over signifies that time was not intended by the testator to be of the essence as regards the “month of the date of my death”, stipulated by him as the time within which the payment was to be made. I am satisfied that the intention of the testator was to ensure that there should be no unreasonable delay on the part of Gerard Markey in paying this sum of £150,000 (former currency) to the estate. I find, on the balance of probabilities that this sum was intended to provide a fund out of which the funeral, testamentary and administration expenses, debts, liabilities and general legacies could be paid with any remaining money, (if any), falling into the residuary bequest in favour of Mary Markey.
In the events which occurred, because of this litigation, it was not until the 14th October, 2003, that there was someone who could give a valid and effective receipt for the sum of €190,460.71. In my judgment, Gerard Markey was entitled to a reasonable time after that date within which to make the payment. What was reasonable must be judged by reference to the fact that the Order giving liberty to the Applicant to apply for a Grant of Letters of Administration with the Will Annexed was made on the 10th March, 2003. I find that in the circumstances, seven clear days would have been sufficient and reasonable so that the money ought to have been paid by Gerard Markey on or before Thursday the 23rd day of October, 2003.
By Order 55 rule 43 of the Rules of the Superior Courts, 1986, general legacies are payable and carry interest from the end of one year after the death of the testator at the rate provided by s. 26 of the Debtors (Ireland) Act, 1840, unless otherwise ordered or unless the Will directs a different time and/or rate. By the provisions of Statutory Instrument 12 of 1989, the rate of interest is fixed at eight percent. In order to place all parties in the same position they would have been in had Gerard Markey paid the sum of €190,460.71 not later than the 23rd October, 2003, I find that interest should be paid on so much of that sum as is necessary to pay the general legacies at the rate of eight percent from 1st March, 2003, to 10th December, 2003, inclusive and additionally, interest should be paid on the sum of €31,164.97 from 23rd October, 2003, or the date of borrowing of this sum, – whichever is the later, – to 10th December, 2003, inclusive at the rate charged by the lender to the estate of Philip Markey deceased in respect of that borrowing.
Gerard Markey admitted in evidence, that despite what was averred by him at paragraph 13(b) of the Affidavit sworn by him on the 7th January, 2003, that neither Mary Markey nor the estate of his late father, were liable to reimburse him for any part of the sum of €14,916.16 which was outstanding to A.C.C. Bank on the 28th February, 2002. The evidence established that after the death of Philip Markey on the 28th February, 2002, Gerard Markey continued in occupation of the “Stray Inn” and continued to run the business and repaid the entire of this sum to the bank out of the income of the business. The bank issued a Letter of Discharge dated 22nd April, 2005, and this letter was proved in evidence. Gerard Markey admitted that this claim ought not to have been made and accepted that it was a serious error on his part. He also accepted in evidence that the averment at paragraph 14 of that affidavit sworn on 7th January, 2003, to the effect that Mr. Michael O’Neill had intermeddled in the estate and had never been instructed by him to extract a Grant of Probate to the late Philip Markey and was also totally incorrect.
The Court will hear the parties on the issue of the costs and expenses, to include all reserved costs and expenses of this action and of the other related proceedings.
In re Samuel Smith, Deceased
Dowzer v Dowzer
High Court of Justice.
Chancery Division.
23 November 1914
[1914] 48 I.L.T.R 236
Barton J.
Nov. 16, 23, 1914
Barton, J.
It is quite clear that in some administration cases it is to the interests of all parties that there should be administration within the twelve months, and there may be cases in which such proceedings are very desirable—that is, before the expiration of the year. But in an ordinary case where a legatee seeks to be paid his or her legacy and where there is nothing more in it it should be clearly understood that it is not the practice that a legatee should, as a matter of course, bring his summons and have payment before the expiration of the twelve months. If that were not so there would be a very large number of such cases by legatees taking proceedings before the end of the year, and if payment of legacies were allowed that would be to encourage a practice which has not been usual and which, as I gather from the report of Ryan v. Tobin, 29 Ir. L. T. & S. J. 252, has not been approved of. In this particular case it does not appear that there was any necessity for administration as disclosed on the affidavits. No doubt, from the legatees’ point of view, there were large legacies; there was a farm which had to be sold, of which farm the defendant was in possession and was working. I think, however, that the order suggested by Mr. Swayne is the right order to make—no rule on the summons and no costs. One reason for this is that in the correspondence there is a letter written by Mr. Swayne’s client which is not exactly a very reasonable letter, and another reason is what is stated in the defendant’s affidavit—namely, that he would not pay the legacies before the end of the year, and that he had a claim against the plaintiff in the nature of a cross action. That, I think, to some extent, may possibly be the excuse for the plaintiff going on with the proceedings. I think the best order is—No order on the summons; no order as to costs.
Cases Intermeddling
Bank of Ireland v Matthews
[2018] IEHC 335
Introduction
1. Two principal issues arise for decision in this case:
(1) Is the plaintiff entitled to sue the defendant as executrix of the deceased borrower when she has not taken out a grant of probate?
(2) Are the proceedings statute barred?
The facts
2. The plaintiff is seeking an Order for Possession of the premises known as 16 The Glen, Inse Bay, Laytown, County Meath, registered as Folio 50183F of the Register of Freeholders for the County of Meath (“the Property”). The defendant is sued as executrix or, in the alternative, as executrix de son tort, of the late John Melsop (otherwise Melsopp) deceased, late of the Property; and in her own right as the occupant of the Property.
3. On the 24th March 2005, the deceased entered into a Mortgage Loan Agreement with the plaintiff’s predecessor in title, the ICS Building Society (“the Society”) under which the Society agreed to provide the deceased with a loan in the sum of €234,000.00 repayable monthly over 15 years, to be secured, inter alia, by way of a first legal Mortgage over the Property. The deceased executed a mortgage and charge on 27th April, 2005 securing the monies advanced under the loan agreement. The mortgage and charge was duly registered as a burden on the Folio on 23rd June 2005. On 4h May 2005, the full amount of the loan was drawn down by the deceased.
4. Between July 2009 and the deceased’s death on 14 February 2013, the deceased defaulted in a number of monthly payments under the Mortgage Loan Agreement and, at the time of his death, there were arrears of €31,890.32 on the Mortgage Loan Agreement. However, notwithstanding the foregoing, the deceased had continued to make regular and substantial payments in respect of the Mortgage Loan Agreement up to the date of his death. The Society had accepted these and had not terminated or called in the loan prior to the deceased’s death.
5. The deceased died testate and named his partner, the defendant, executrix in his will. The defendant held herself out as executrix of the estate of the deceased and engaged with the Society in respect of his affairs. She wrote to her solicitors on 25th February, 2013 authorising them to write on her behalf to the Society regarding the deceased’s mortgage and asked them to clarify the position regarding arrears. She said “ as you are aware, I am the Executrix in the Will of my late partner John Melsopp and therefore entitled to make enquiries about his affairs ”. She continued to reside in the Property. Following the death of the deceased, payments continued to be made by the defendant on foot of the Mortgage Loan Agreement. The last such payment was made on 28th January, 2014.
6. On 10th March, 2014, the defendant’s solicitor wrote to the Society advising that the defendant had “ decided to agree to the extraction of the Grant of Probate and following on from that, the sale of the property at 16, The Glen, Inse Bay, Laytown ”.
7. With effect from 1st September, 2014, the loan facility and associated security were transferred by statutory transfer from the Society to the plaintiff.
8. On 13th February, 2015 the defendant’s solicitor wrote to the plaintiff stating that the defendant’s son would be prepared to buy the Property at a particular price so as to enable the defendant to continue to reside in the Property. This offer was not accepted.
9. On 21st September, 2015, the defendant’s solicitor wrote to the plaintiff and, inter alia, stated that: “ Ms Mathews has advised this office that she does not want to proceed with taking out a Grant of Probate in the estate of John Melsopp deceased and she intends to reside in the property for the foreseeable future .” The letter went on to explain that the solicitors firm hold “ the original Will of John Melsopp deceased and were prepared to act for Ms Mathews if she wished to extract a Grant of Probate, however as this is no longer the case we have no further involvement in the matter ”.
10. On 16th August, 2016, the plaintiff made formal demand for full repayment of the loan facility and, when repayment was not forthcoming, by letter of 8th September, 2016, the plaintiff’s solicitor demanded possession of the Property. The said demands were made upon the defendant in her capacity as Personal Representative of the deceased and, in relation to possession of the Property, also as occupant of the Property. The defendant continues to reside in the Property.
11. The within proceedings were commenced by Special Summons issued on 9th December, 2016, some 3≪ years after the date of death of the deceased.
The first issue
12. The first issue to be determined is whether the plaintiff is entitled to sue the defendant as either the executrix or the executrix de son tort of the deceased.
13. The deceased died testate. The defendant confirms that she was named executrix in his last will and testament. Initially she was prepared to take out a grant of probate but she has not done so. In her replying affidavit in these proceedings she describes herself as the executrix of the deceased. She has not renounced her entitlement to take out a grant of probate. In a letter written by her solicitors to the plaintiff on the 21st September, 2015 it was indicated that she did not want to proceed with taking out a grant of probate in the estate of the deceased and she intends to reside in the Property for the foreseeable future.
14. As an executrix, her title to the estate of the deceased stems from the will and the estate vested in her immediately upon the death of the deceased. An executor’s acceptance of the office may be implied by the performance of acts by the appointee which are referable to the functions of an executor. Acts of intermeddling in the estate of a deceased which make a stranger an executor de son tort are similar to those which imply acceptance of the office by an executor named in the will (see Brady’s Succession Law in Ireland 2nd ed. 1995 para. 9.40).
15. In The Goods of Hanlon [1894] 1 I.R. 551 the court held that the executor named in the will of the deceased had interfered with the assets of the testatrix in such a way that he could not repudiate the office of executor and that he was bound to extract a grant of probate of the will. The court said:
“He was the person entitled; he knew that he was executor named in the will at the time, and he was acting in a way which he could not properly have done if he was not executor.”
16. The defendant is in the same position as the executor in Hanlon’s case. She was the named executrix and she knew that she was the executrix named in the will at all times. She acted in a way which she could not properly have done if she was not the executrix of the deceased. By letter dated the 25th February, 2013 she wrote to her solicitors regarding the loan account the subject of these proceedings in the following terms:
“Dear Jim,
I, Janet Matthews, was the partner of John Melsopp deceased for the past fourteen years. I hereby authorise you to write to the ICS Building Society on my behalf re the above mortgage account number to clarify the position re the mortgage and outstanding arrears.
As you are aware, I am the Executrix in the Will of my late partner John Melsopp and therefore entitled to make enquiries about his affairs.”
The following year on the 10th March, 2014 her solicitor wrote to the plaintiff about the mortgage account of John Melsopp deceased and the property stating that the executrix “has decided to agree to the extraction of the grant of probate and following on from that, the sale of the property … I would ask that ICS furnish up to date redemption figures for the outstanding mortgage at your earliest convenience.”
17. On the 13th February, 2015 her solicitor made an offer to the plaintiff for the purchase of the property by the defendant’s son. The offer was not accepted and the defendant indicated that she would not be taking out a grant of probate and intended to reside in the property for the foreseeable future.
18. It is common case that the defendant has remained to this day in occupation of the property. Taking possession of a deceased’s lands has been held to constitute the person an executor de son tort. See McAllister v. McAllister 11 L.R. Ir 533; Earl of Westmeath v. Coyne [1896] 2 I.R. 436. There is ample evidence that the defendant has intermeddled in the estate of the deceased and that she has acted in a manner which she could not properly have done if she were not the executrix. Following Hanlon’s case , she may not now renounce the office.
19. In her replying affidavit the defendant states that she was granted the deceased’s interest in the property in his will. She makes no reference to any other entitlement to the property in her affidavit, though I should point out for the sake of completeness that in the letter of the 13th February, 2015 her solicitor asserted:
“My client contributed at the time the property was purchased a sum of €10,234 to assist Mr. Melsopp to purchase the property, she has also made many improvements to the property as in i.e. bathroom with shower unit; kitchen units, etc.”
20. In submissions to the court, counsel for the defendant asserted that she had an interest in the property and therefore her actions did not amount to intermeddling in the estate of the deceased. She could not be an executrix de son tort and therefore she could not be deemed to have accepted the office of executrix. He relied upon Femings v. Jarrat (1795) 1 Esp NPC 336. In that case the deceased bought sails for his ship from the plaintiff but had not paid for them by the time of his death. The plaintiff sued the defendant as executor de son tort of the estate of the deceased for the price of the sails. It was alleged that the defendant had taken possession of the ship and had thereby constituted himself executor de son tort of the deceased. The defendant said that he had taken possession of the ship by virtue of a bona fide assignment made by the deceased during his lifetime. Therefore, his interference with the ship did not make him an executor de son tort. Lord Kenyon held that if the defendant came into possession of the ship by colour of a legal title, though he had not made out such title completely in every respect, he should not be deemed an executor de son tort.
21. In this case the defendant has not established, or even adduced any evidence, that she had a right to the property other than as a beneficiary of the deceased’s will. Her affidavit makes no reference to any equitable claim to the property. The letter of her solicitor is not evidence of the facts referred to, particularly where she has the opportunity to depose to the facts herself and fails to do so. It follows that she cannot rely upon Feming’s case to say that she has not committed acts that would constitute her executrix de son tort and therefore that Hanlon’s case does not apply.
22. I conclude that the defendant is correctly sued as executrix. While she did not extract a grant of probate, by her actions she implied that she accepted the office of executrix and she may not now resile from that position.
Did the defendant validly renounce?
23. It was submitted on behalf of the defendant that the letter of her solicitor of the 21st September, 2015 addressed to the plaintiff constituted renunciation by the defendant of the office of executrix. This argument is without merit. Renunciation must be in writing, signed and witnessed and filed in the Probate Office. It is required to be in the form of Form No. 18 of Appendix Q of the Rules of the Superior Courts. Further, it is not possible to renounce after an executor has intermeddled with the estate of the deceased. It follows that the letter of the 21st September, 2015 written by the defendant’s solicitor after she had intermeddled in the estate since 25th February, 2013 cannot constitute a valid renunciation by the defendant.
The Land and Conveyancing Law Reform Act, 2013
24. The defendant argues that, by virtue of s.3 of the Land and Conveyancing Law Reform Act, 2013, proceedings brought by a mortgagee seeking an order for possession of land which is the principal private residence of the mortgagor of the land concerned must be brought in the Circuit Court. The defendant says that the property is her principal private residence and, by reference to the definition of mortgagor in the deed of mortgage, she is the mortgagor of the land concerned. At Clause B (14) of the deed, mortgagor is defined as “ the person or persons named as such in Recital A.1 of the Mortgage Particulars and the personal representative or personal representatives of the Mortgagor and the person or persons deriving title under the Mortgagor to the Mortgaged Property.”
25. The plaintiff submits that s.3 of the Act of 2013 should not be construed by reference to the particular definition of a mortgagor in a particular deed as the term is defined in the Land and Conveyancing Law Reform Act, 2009 and so s.3 of the Act of 2013 should be construed by reference to the definitions in the 2009 Act. In s.3 of the Act of 2009, mortgagor is defined as “ any person deriving title to the mortgaged property under the original mortgagor or entitled to redeem the mortgage .” This is similar to the definition in s.2 of the Conveyancing Act, 1881. Until a personal representative has taken out a grant of probate or administration they are not entitled to redeem the mortgage of the deceased mortgagor. In this case, the defendant has not taken out a grant of probate and she is not entitled to redeem the mortgage within the meaning of s.3 of the Act of 2009. Therefore, she is not a mortgagor of the land within the meaning of s.3 of the Act of 2013.
26. I agree with counsel for the plaintiff. The relevant definition for the purpose of s.3 of the Act of 2013 is to be found in s.3 of the Act of 2009 and not in the mortgage deed. That being so, as a matter of fact the defendant is not a mortgagor and therefore the provisions of s.3 of the Act of 2013 have no application to these proceedings.
Accrual of the cause of action
27. The principal ground upon which the defendant opposed these proceedings was on the basis that the cause of action had accrued prior to the death of the deceased. If the cause of action had accrued prior to his death then the limitation period was that provided by s.9(2) of the Civil Liability Act, 1961:-
“No proceedings shall be maintainable in respect of any cause of action whatsoever which has survived against the estate of a deceased person unless either –
(a) proceedings against him in respect of that cause of action were commenced within the relevant period and were pending at the date of his death, or
(b) proceedings were commenced in respect of that cause of action within the relevant period or within the period of two years after his death, whichever period first expires.”
If the defendant is correct, it is common case that these proceedings were commenced more than two years after the date of death of the deceased and therefore would be statute barred. The answer to this question depends upon the true construction of the deed of mortgage and charge of the 27th April, 2005.
Provisions of the Mortgage
28. Clause B (8) defines event of default as “ any of the events stipulated in paras. (a) – (j) inclusive of sub clause 7.01 hereof” . For the purposes of these proceedings the relevant events are those set out in paras. (a) and (e). They read as follows:
“(a) default is made in payment of any monthly or other periodic payment or in payment of any other of the secured moneys hereunder…
(e) the Mortgagor being an individual …dies”.
By Clause 1.01 “ the mortgagor hereby covenants with the Society to pay to the Society on demand the secured monies …”
Clause 1.02 and 1.03 provides:
“All moneys remaining unpaid by the Mortgagor to the Society and secured by this Mortgage shall immediately become due and payable on demand to the Society on the occurrence of any of the following events, that is to say:
(a) On the happening of any event of default …
And the Mortgagor hereby further covenants with the Society to pay to the Society forthwith the sum so demanded together with further interest thereon…
The demand herein referred to shall mean a demand for payment of the secured monies made by the Society or on behalf of the Society by any law agent or solicitor, Secretary, manager or other officer of the Society upon the Mortgagor and may be made when or at any time after the Society become entitled to call for payment of the moneys and separate demands may be made in respect of separate accounts at different times.”
29. Two other clauses of the deed must be considered. Clause 6 is headed ‘The Society’s Powers’ and provides as follows:
“6.01 At any time after the execution of this Mortgage, the Society may without any further consent from or notice to the Mortgagor or any other person, enter into possession of the Mortgaged Property or any part thereof or into receipt of the rents and profits of the Mortgaged Property or any part thereof.
6.02 The Society shall have all the statutory powers conferred on mortgagees by the Conveyancing Acts as varied and extended by this Mortgage including the power to appoint a receiver and in particular subject to the following variations and extensions, that is to say:
(a) the secured moneys shall be deemed to have become due within the meaning and for all purposes of the Conveyancing Acts on the execution of this Mortgage.”
30. Clause 7 is headed the ‘Exercise of the Society’s Powers’ and Clause 7.01 provides:
The Society shall not exercise any of the powers provided for in Clause 6 hereof or conferred by statute until any of the following events shall occur.”
The relevant sub paras. are (a) and (e) which I have cited above.
The construction of the deed
31. Clause 1.02 of the mortgage provides that all monies remaining unpaid by the mortgagor to the Society and secured by the mortgage immediately become due and payable upon demand by the Society on the occurrence of an event of default. An event of default is defined in Clause B (8) which refers to the events stipulated in Clause 7.01. These include the death of the mortgagor (e) and default in payment of any monthly or other periodic payment or in payment of any other of the secured monies under the mortgage (a). The monies do not immediately become due and payable on the occurrence of an event of default. Upon the occurrence of an event of default the Society may make demand for payment of the remaining unpaid monies and it is upon the making of the demand that the monies remaining unpaid and secured by the mortgage become immediately due and payable to the Society.
32. Clause 1 is clear that a demand is necessary before the mortgagor is obliged to pay the monies remaining unpaid and secured by the mortgage. Clause 1.01 comprises a covenant by the mortgagor to pay to the Society on demand the secured monies. In Clause 1.02 the mortgagor further covenants with the Society to pay forthwith the sum so demanded i.e. the monies remaining unpaid and demanded by the Society upon the happening of an event of default. Clause 1.03 then clarifies precisely what is meant by a demand. It specifies that a demand “may be made” when or at any time after the Society becomes entitled to call for payment of the monies. The happening of an event of default entitles the Society to call for payment of the monies and the Society may at its discretion make a demand for payment of the secured monies. Unless and until such demand is made, the mortgagor is not obliged to pay all monies remaining unpaid to the Society i.e. the principal sum outstanding is not due.
33. The issue raised in argument by the defendant was whether Clauses 6 and 7 of the mortgage deed varied the provisions of Clause 1. By Clause 6.01, the Society is given power at any time after the execution of the mortgage without any further consent from or notice to the mortgagor or any other person to enter into possession of the mortgaged property. By Clause 6.02 the Society has all statutory powers conferred on mortgagees by the Conveyancing Acts as varied and extended by the mortgage. In particular, it is subject to the express variation and extension that the secured monies “ shall be deemed to have become due within the meaning and for all purposes of the Conveyancing Acts on the execution of [the] mortgage ”.
34. This clause confers powers on the Society. Clause 6.02 is expressly concerned with the statutory powers conferred on mortgagees by the Conveyancing Acts. The secured monies are deemed to have become due upon the execution of the mortgage “for all purposes of the Conveyancing Acts”. The clause does not state that the secured monies are deemed to have become due on the execution of the mortgage. They are deemed to have become due for all purposes of the Conveyancing Acts on the execution of the mortgage.
35. This is to ensure that the Society shall have all the statutory powers conferred on mortgagees by the Conveyancing Acts from the date of the execution of the mortgage, just as it is entitled under Clause 6.01 to enter into possession of the mortgaged property at any time after the execution of the mortgage. These provisions have long been included in mortgages for the purpose of protecting third parties dealing with mortgagees. They do not alter the fundamental terms of the agreement between the mortgagor and the mortgagee. On the construction contended for by the defendant, on the date of the execution of the mortgage, the mortgagee would be entitled to go into possession of the secured property and the entire of the monies secured by the mortgage would be due to the mortgagee on that date. Aside from the fact that this flies in the face of the purpose of the entire transaction, it makes the provisions of Clause 1 of the mortgage in relation to a demand otiose. Construing the deed as a whole, I am satisfied that the defendant’s construction of the deed is not correct.
36. Further, the Society’s powers set out in Clause 6 are expressly limited by Clause 7. Clause 7.01 clearly states that the Society shall not exercise any of the powers provided for in Clause 6 or conferred by statute until any of the specified events shall occur. The specified events are the events of default. This means that, until an event of default occurs, the Society may not go into possession of the mortgaged property under Clause 6.01 and the Society may not exercise any of the statutory powers conferred by the Conveyancing Acts. So while Clause 6.02 (a) deems the secured monies to have become due for the purposes of the Conveyancing Acts, Clause 7.01 (a) provides that the Society shall not exercise any of the powers provided for in Clause 6 until there is an actual default in payment of any monthly or other periodic payment or in payment of any other of the secured monies due under the mortgage. Upon default in payment of monies due under the mortgage the prohibition on exercising the powers set out in Clause 6 ceases to apply. It does not mean that the secured monies become immediately and automatically due.
37. I conclude that under the terms of the mortgage in these proceedings the principal sum secured by the mortgage became due when the Society lawfully demanded repayment of the sum and not before. The occurrence of an event of default was simply a necessary precondition to the Society’s right to make the demand and did not render the deceased immediately liable to repay the secured monies.
The cause of action
38. The plaintiff seeks possession of the property pursuant to s.62(7) of the Registration of Title Act, 1964. This provides:
“62(7) When repayment of the principal money secured by the instrument of charge has become due, the registered owner of the charge or his personal representative may apply to the court in a summary manner for possession of the land or any part of the land, and on the application the court may, if it so thinks proper, order possession of the land or the said part thereof to be delivered to the applicant, and the applicant, upon obtaining possession of the land or the said part thereof, shall be deemed to be a mortgagee in possession.”
39. It is clear that it is only once repayment of the principal money secured by the instrument of charge has become due that the registered owner of the charge may apply to court for relief under s.62(7). See Start Mortgages Limited v. Gunn & Anor. [2011] IEHC 275; Irish Life v. Dunne [2015] IESC 46.
40. Section 9(2) of the Civil Liability Act, 1961 provides that no proceedings shall be maintainable in respect of any cause of action which has survived against the estate of a deceased person unless the proceedings have been commenced within the relevant period. But this claim was not maintainable until after a demand was made. It follows no cause of action arose until such demand was made. No demand had been made prior to the death of the deceased and it follows that s.9(2) does not apply to the plaintiff’s claim.
41. This conclusion follows the decision in Bank of Ireland v. O’Keeffe [1987] I.R. 47. Barron J. held it was necessary to establish that the plaintiff’s cause of action was one which subsisted at the date of death of the guarantor. He found that no cause of action existed whereby the plaintiff could sue the guarantor either, while he was alive, or his estate, after his death, until demand on foot of the guarantee had been made. Since the demand was not made until after his death, it followed that there was no cause of action subsisting against the guarantor and therefore the case was not barred by virtue of the provisions of s.9(2) of the Act of 1961. See also Bank of Ireland v. Stafford & Ors. [2013] IEHC 546.
42. The demand for the repayment of the principal sum secured by the mortgage was made on 16th August, 2016. It follows that the plaintiff’s cause of action only accrued on that date, after the date of death of the deceased. Accordingly, s.9(2) does not apply to this case and the plaintiff’s claim is not statute barred.
43. Incidentally, I should note that it is only as executrix of the deceased that the defendant could have standing to raise this defence and to the extent that she does advance it, she is acting inconsistently with her first ground of defence to these proceedings.
Conclusion
44. The plaintiff was entitled to sue the defendant as the executrix of the estate of the deceased. The plaintiff’s claim is not statute barred by the provisions of s.9(2) of the Civil Liability Act, 1961 as it does not apply on the facts of this case. The plaintiff’s proofs are in order and it is entitled to an order for possession under s.62(7) of the Act of 1964.
Kennedy v M’Evoy
Circuit Cases.
25 October 1892
[1893] 27 I.L.T.R 11
Gibson J.
Gibson, J.
The defendant was employed as auctioneer to sell certain stock on the farm of John Blue, deceased. The sale took place on the farm, and the auctioneer (upon whose evidence the whole question turned) swore that he did not deliver over any of the stock, and that the purchase-money was received directly on the spot by his employer, young Blue, whom he believed to be the owner. In my opinion, on these facts, Nulty v. Fagan, 22 L. R. Ir. 604, and Consolidated Co. v. Curtis (1892), 1 Q. B. 495, do not apply, and the defendant cannot be held liable as executor de son tort; he was a mere conduit pipe and agent. From his decision it is not improbable that the evidence before the County Court Judge was presented in a different way, and it may have since undergone a certain process of adaptation. The testimony given before me is, however, such that the case is taken out of the authorities, and I must, therefore, reverse the decision below, and dismiss the process with costs.
Representation
Humble v Morrisey
Queen’s Bench Division.
25 January 1898
[1899] 33 I.L.T.R 51
Kenny J.
Kenny, J.
[You say she has constituted herself an assignee.]
Wakely, contra. —The defendant has pleaded plene administravit in her defence, and further, that the land yielded no profit, the rent being too high, according to the form in Bullen & Leake, Ed. 1868, p. 583, and the lands have since been recovered by ejectment.
[Kenny, J.—If the lands were not worth the rent, should she not have surrendered them? My recollection is that it is necessary for the defendant to aver that she was willing, and offered to give up the lands.]
There is no such statement given in the form in Bullen & Leake, and I submit it is only a matter of evidence: Williams on Executors, Last Edition, 1636; Remnant v. Bremsidge, 8 Taunt. 191; Rubery v. Stephens, 4 B. & A. 241, 247; Hopwood v. Whaley, 6 C. B. 744.
Moloney, in reply.—Defendant is not assignee solely by virtue of being executrix, she is both, and we are entitled to sue her in either capacity. The passage referred to in “Williams” only relates to a person in possession solely as representative of the deceased. Further, she should state that she applied her husband’s assets solely to the payment of rent.
Kenny, J.—I think the plaintiff is entitled to final judgment. Defendant is sued as executrix de son tort of her husband, and also in respect of her own occupation of the lands by reason of having entered into possession. From Sept., 1893, to 1897 she has paid no rent. Mr. Moloney says he does not ask judgment against her qua executrix but de bonis propriis. Now, according to the plea in Bullen & Leake, the defendant should show that she “has not at any time since the death of the said Thomas Morrisey received or derived, nor could she during any part of that time receive or derive, any profit from the said demised premises, and the said demised premises have not since the death of the said Thomas Morrisey yielded any profit whatever;” now I cannot spell out from the affidavit of the defendant any averment which brings it within that. She states that she paid not only the landlord, but also whatever other liabilities her husband left. I will grant judgment against the defendant de bonis propriis, and the defendant being entitled to the costs of her defence, as it was entered before notice of this motion was served on defendant, I will set off such costs against the costs of the motion.
Cases Removal Executor
Scally v Rhatigan
[2012] IEHC 140
Judgment of Miss Justice Laffoy delivered on 28th day of March, 2012.
1. The issues/pleading
1.1 In my judgment in this matter delivered on 21st December, 2010 [2011] 1 IR 639 (the 2010 Judgment), I dealt, by consent of the parties, with the first three issues to be tried in this matter and I found:
(a) that the will dated 19th May, 2005 (the Will) of Brian Rhatigan (the Testator) was executed in accordance with the formalities required by s. 78 of the Succession Act 1965 (the Act of 1965);
(b) that the Testator knew and approved of the contents of the Will; and
(c) that at the time of executing the Will the Testator was of sound disposing mind and had capacity to make a valid will.
1.2 While the second module of the proceedings with which judgment is concerned was expected to deal with the remainder of the issues, which, having regard to the manner in which the case was pleaded, were all raised in the defendant’s counterclaim and which, as I had stated in the 2010 Judgment (at para. 2), go beyond the issues which would usually be raised in a probate action, in fact, the focus at the hearing of the second module was much narrower. Accordingly, having regard to the position adopted by the parties at the hearing, the principal issue which requires to be determined at this stage is whether the Court should make an order in the terms sought in paragraph 5 of the prayer in the counterclaim, in which the defendant seeks an order declaring that, by her conduct, the plaintiff is not an appropriate person to act as an executor of the Testator’s estate. If the Court makes a declaration to that effect, obviously, the Court has to address the question of to whom letters of administration with the Will of the Testator annexed should issue, given that the plaintiff is the sole surviving executrix of the Testator, the other executor nominated by the Testator, Dan O’Donoghue, having died on 6th April, 2008. In that connection, one of the reliefs which the defendant has sought in the counterclaim is an order giving the defendant liberty to apply for and extract a grant of letters of administration.
1.3 The basis on which it was asserted that the plaintiff is not an appropriate person to act as executor of the Testator’s estate, as pleaded in the counterclaim, was, in part, as follows:
(a) that the firm of Amorys, Solicitors, of which the plaintiff is the principal and has at all relevant times been a partner, at all times acted in connection with all of the property transactions carried on in Ireland for and on behalf of the Testator, in his personal capacity, and for and on behalf of companies, including, inter alia, York Securities Ltd. (York), TAM Enterprises Ltd. (TAM) and Unit 33 Nominees Ltd. (Unit 33), which are controlled by, or used as nominees for transactions by, the Golden Promise Trust; and
(b) that the plaintiff, by reason of her personal involvement in the affairs of the Testator prior to his death and, in particular, having acted on behalf of the Testator in his personal capacity and for and on behalf of the companies in which the Testator had an interest and which are connected with the Golden Promise Trust, has a conflict of interest in acting as executor of the estate of the Testator and is not an appropriate person to carry out the necessary inquiries for and on behalf of the Testator’s estate.
1.4 In addition to the allegation of a conflict of interest, which, it is contended, renders her inappropriate to act as executor of the Testator’s will, it was also pleaded in the counterclaim that, while the plaintiff had full details of all the property held directly or indirectly by the Golden Promise Trust, the associated companies, the structure behind the Golden Promise Trust and the terms of the trust, she had failed to disclose the full extent of the Testator’s assets, failed to carry out all relevant inquiries, and failed to gather in the Testator’s assets and that she had demonstrated that she was not willing to conduct the necessary inquiries and to take the necessary steps to recover the Testator’s assets for the benefit of the estate.
1.5 I have emphasised the distinct bases on which it was pleaded that the plaintiff is not an appropriate person to act as executor of the Testator’s estate because, while the issues as set out in the Master’s order of 5th May, 2010, which was made with the consent of the parties, raise questions as to whether the plaintiff has failed to carry out proper inquiries into the extent of, or has failed to take reasonable or sufficient steps to recover, the assets of the Testator, or has been guilty of gross, inordinate and inexcusable delay in the administration of the Testator’s estate, the focus of the evidence adduced on behalf of the defendant at the hearing of the second module of the proceedings was on the plaintiff being unsuitable to fulfil the role of executor because, it was contended, she is conflicted in her professional capacity. Accordingly, it is that contention which will be primarily addressed in this judgment.
1.6. In the reply and defence to counterclaim delivered by the plaintiff, issue was joined with all of the assertions made by the defendant in her defence. As regards the elements of the counterclaim which are now being addressed, it was admitted that the plaintiff was instructed in respect of property transactions by the Testator, in his stated capacity as project manager engaged by York and in his personal capacity, and also in respect of property transactions concluded by, inter alia, York, TAM and Unit 33, although it was stated that it was not known whether she acted in respect of all such property transactions carried out in Ireland. Further, it was admitted that the plaintiff acted for the Testator in his personal capacity during his lifetime and that she acted for companies with whom the Testator had an association, although it was not admitted that he had an “interest” in the said companies. However, it was denied that the plaintiff had any conflict of interest by reason of the foregoing or otherwise in acting as executrix of the Testator and it was denied that the circumstances pleaded in the counterclaim disclosed any such conflict of interest. As regards the allegations that the plaintiff failed to carry out the necessary inquiries and failed to take the necessary steps to recover the Testator’s assets, it was admitted that the plaintiff had not completed her inquiries into the extent of the Testator’s assets, by reason, inter alia, of the fact that they had been interrupted or hampered by the institution of these proceedings. It was denied that she had failed to carry out such inquiries as might reasonably have been expected.
2. The law
2.1 Before considering the relevant authorities, I think it is pertinent to reiterate that under the terms of the Will, as recorded at para. 14 of the 2010 Judgment, the plaintiff was appointed both executor and trustee of the Will. As regards the Testator’s residuary estate, the executors and trustees thereby appointed were given the type of broad discretions and the type of broad powers one would expect to find in a discretionary trust established to distribute the residuary estate among the beneficiaries of the trust, whom I have identified at para. 18 of the 2010 Judgment. Given the ongoing Revenue investigation referred to at para. 11 of the 2010 judgment, it is not possible to form a view at this stage as to the extent of the assets of the residuary estate, if any, which will be subject to the discretionary trusts created by the Will. Indeed, the plaintiff expressed the view that there is a significant chance that the estate may be insolvent. In any event, as I have stated, the primary issue for consideration at this juncture is whether a grant of probate of the Will should issue to the plaintiff.
2.2 The powers of the High Court in relation to granting probate are governed by ss. 26 and 27 of the Act of 1965. Section 26(1) confers power on the High Court to grant probate to one or more executors of a deceased person, and the grant may be limited in any way the Court thinks fit. Section 27(4) provides that where by reason of any special circumstances it appears to the High Court to be necessary or expedient to do so, the Court may order that administration be granted to such person as it thinks fit. Section 10 (3) of the Act of 1965 provides:
“The personal representatives shall be the representatives of the deceased in regard to his real and personal estate and shall hold the estate as trustees for the persons by law entitled thereto.”
2.3 The leading authority in this jurisdiction on the jurisdiction of the Court to remove an executor is the decision of the Supreme Court in Dunne v. Heffernan [1997] 3 I.R. 431. In that case, the defendant, who was the sole surviving executrix of the estate of the testatrix in issue, had extracted a grant of probate. The plaintiff, who was a beneficiary on a partial intestacy of property of the testatrix which was not dealt with in the will, sought an order revoking and cancelling the grant of probate which had issued to the defendant. The dispute between the plaintiff and the defendant centred on the fact that the defendant had valued preference shares in a company, Dunnes Holding Company, which passed under the will of the testatrix, at IR£265 on the Inland Revenue affidavit furnished to the Revenue Commissioners, which the plaintiff, who had been a preference shareholder of that company, contended was a gross undervalue and exposed him to capital gains tax liability in relation to the sale of his preference shares in the company for several million pounds, which had occurred prior to the death of the testatrix. In setting out his conclusions, Lynch J., with whom the other judges of the Supreme Court concurred, quoted from the judgment at first instance in which the trial judge had referred to the fact that, notwithstanding “severe differences between the litigants”, the defendant had not renounced her right to probate, and stated that the trial judge had approached the matter from the wrong perspective, that the executrix should have renounced in favour of some stranger to the family, and continued (at p. 442):
“The factors referred to, namely family differences, might well induce an independent executor such as the family’s solicitor or a friend of the family, if appointed, to renounce rather than risk getting embroiled in the family disputes. Such a person might reasonably decide to leave it to a member of the family to sort out such matters. The factors referred to by the learned trial judge are no reason at all why the defendant, a sister of the testatrix, should have contemplated renouncing rather than extracting probate. Moreover, these factors existed prior to the death of the testatrix who, nevertheless, chose the defendant to be her executrix.”
Later, in his judgment (at p. 442), Lynch J. summarised the law as follows:
“An order removing the defendant as executrix (which would be made by virtue of s. 26, sub-s. 2 and not s. 27, sub-s. 4 of the Succession Act, 1965) and appointing some other person as administrator with the will annexed by virtue of s. 27, sub-s. 4, is a very serious step to take. It is not justified because one of the beneficiaries appears to have felt frustrated and excluded from what he considered his legitimate concerns. It would require serious misconduct and/or serious special circumstances on the part of the executrix to justify such a drastic step.”
In this case, counsel for the parties were in agreement that the onus of establishing “serious misconduct” or “serious special circumstances” on the part of the plaintiff lies with the defendant.
2.4 One of the grounds which had been relied on by the plaintiff in Dunne v. Heffernan was that the defendant was “in a position of fundamental conflict of interest as executrix of the estate having regard to her position as a shareholder in, and director of Dunnes Holding Company … and as a beneficiary of the trust”. In relation to that ground, Lynch J. stated that he found it difficult to discern any conflict of interest. Later he summarised the position as follows (at p. 447):
“A fact of the matter is that the defendant has done nothing wrong in her capacity as executrix and the mistaken perception of the plaintiff that she has done wrong, cannot alter the position that she has not. The alleged conflict of interest is flimsy in the extreme. Any family business can raise similar situations to those arising in this case and it would be a strange state of affairs if a parent or a member of the family was not entitled to entrust the administration of their estate to a child or brother or sister just because of the nature and complications of the business enterprise.”
2.5 The principles laid down in Dunne v. Heffernan were applied by the High Court (Macken J.) in Flood v. Flood [1999] 2 IR 234. The defendant in that case was the executor of the will of the testator to whom a grant of probate had issued. The basis on which the plaintiff beneficiaries sought to have the grant revoked was that the defendant had borrowed monies from the deceased, which he was then refusing to pay back to the estate, and this created a conflict of interest between the defendant’s role as executor of the estate and as a possible debtor to that estate. Macken J. removed the defendant as executor holding that it was not possible to accept the defendant’s argument that no cause of action could exist. She stated (at p. 244):
“Having regard to the decision of the Supreme Court in Dunne v. Heffernan … above and although I am reluctant to take steps which would in any way have the effect of depleting the value of the estate, nevertheless I am also satisfied that a very serious matter arises in the administration of the estate, and the only way in which that can be dealt with is to remove the defendant as executor … and appoint an alternative to the defendant, pursuant to s. 27(4) ….”
2.6 The decision of the High Court (Barron J.) in Spencer v. Kinsella [1996] 2 ILRM 401 concerned an application to remove, as a body, the trustees of land in the town of Gorey used as showgrounds, which were the subject of trusts pursuant to a scheme made under the Irish Land Act 1903, as amended, on the grounds that they had persistently refused to act when called upon to do so. In his judgment, Barron J., having commented that, in all cases of trust, it is a truism to say that no trustee should allow his interests to conflict with his duty, went on to state (at p. 409):
“A trust is set up for the welfare of its beneficiaries. In my view, therefore before determining whether or not any trustee should be removed from his or her office it is necessary to determine whether his or her continuation in that office will be detrimental to such welfare.
In the present case the main problem lies in the failure of the trustees to execute agreements with the users of the trust. There is also the further problem that some of the trustees are too closely identified with the interests of some of those users to be regarded as being capable of being truly impartial in any decision making process involving the trustees. None of these faults have resulted from any deliberate or conscious conduct or misconduct on the part of the trustees. Nevertheless where a conflict of interest arises it is doubtful that a continuation by such persons in office could be remedied.
. . . The welfare of the beneficiaries is being affected by the present situation. There is a conflict of interest which I have identified and it would be difficult to reorganise with such conflict on the part of some of the trustees continuing to exist. It is accordingly appropriate that such persons should step down. It will however serve no purpose if they step down, but at the same time no other reorganisation takes place.”
Having stated that what was needed was the appointment of trustees who would be, so far as possible, impartial as between the user of the grounds, Barron J. stated that he did not propose to exercise the powers of the court at that point in time. As he saw it, it was essentially a matter for the people of Gorey and the Department of Agriculture, Forestry and Food to reorganise the administration of the trust and, accordingly, he adjourned the matter for six months to enable the administration of the trust to be placed on a proper footing. He made it clear that it was only if that could not be done that the court would consider how the exercise of its powers could be alleviate the then situation.
2.7 It is commented in Delany in Equity and the Law of Trusts in Ireland (5th Ed.) at p. 436 that the judgment of Barron J. is useful in that it confirms that the overriding principle to which the Court must have regard in exercising its power to remove trustees is the welfare of the beneficiaries, although it is implicit in the comment in footnote 38 on the same page that the approach adopted by the Supreme Court in Dunne v. Heffernan in relation to the removal of an executor is a stricter approach. Be that as it may, the feature which distinguishes this case from the authorities to which I have referred is that the basis upon which it is alleged that the plaintiff is conflicted in this case is that she is conflicted in her professional capacity, rather than in any personal capacity or because of any personal interest.
2.8 Of the authorities on which counsel for the defendant has relied, which address a conflict of interest in a professional capacity, that which I have found most helpful is the decision of the House of Lords in Hilton v. Barker Booth [2005] 1 All ER 651. What is interesting and instructive about that case is the manner in which the House of Lords applied the principles laid down in Moody v. Cox [1917] 2 Ch. 71. However, in order to understand those principles, it is necessary to explain the factual background to the earlier decision. The plaintiff, Moody, had contracted to purchase from Cox and Hatt, who were trustees, a portion of the trust property. Hatt was a solicitor and Cox was his managing clerk. Throughout the transaction, Hatt acted (through Cox) as solicitor for both vendors and purchaser. The purchaser was allowed to rescind because the evidence of Cox was that he knew that the price the client, Moody, was paying for the property was a good deal more than the value that had been placed on the property for probate purposes and that he, Cox, had not told the client, Moody, the amount of the probate valuation, on the basis that his duty to the vendors precluded him from so doing.
2.9 That evidence of Cox lead to the passage from the judgment of Scrutton L.J. which was quoted by Lord Scott in Hilton v. Barker Booth. Scrutton L.J., having summarised the evidence of Cox to the effect that he told Moody that the property was worth the purchase price, although he knew that it was not because he had been advised that it was worth a good deal less, and that he knew the value had depreciated since the probate valuation, but did not tell Cox the amount of the probate valuation, stated (at p. 91):
“A man who says that admits in the plainest terms that he is not fulfilling the duty which lies upon him as a solicitor acting for a client. But it is said that he could not disclose that information consistently with his duty to his other clients, the cestuis que trust. It may be that a solicitor who tries to act for both parties puts himself in such a position that he must be liable to one or the other, whatever he does. The case has been put of a solicitor acting for vendor and purchaser who knows of a flaw in the title by reason of his acting for the vendor, and who, if he discloses that flaw in the title which he knows as acting for the vendor, may be liable to an action by his vendor, and who, if he does not disclose the flaw in the title, may be liable to an action by the purchaser for not doing his duty as solicitor for him. It will be his fault for mixing himself up with a transaction in which he has two entirely inconsistent interests, and solicitors who try to act for both vendors and purchasers must appreciate that they run a very serious risk of liability to one or the other owing to the duties and obligations which such curious relation puts upon them.”
Lord Scott made the following comment on the principles expressed in that passage in Hilton v. Barker Booth (at p. 655):
“The reasoning in Moody v Cox did not depend on the circumstance that actual misrepresentations might have been made by the solicitors to their client. It depended on the failure by the solicitors to disclose to their client information that it was their contractual duty to him to disclose. The fact that the disclosure of the information would, or might, have placed the solicitors in breach of duties they owed to others did not relieve them of the contractual duties they had undertaken or of the legal consequences of their breach of those contractual duties.”
2.10 In Hilton v. Barker Booth, Lord Walker also quoted a passage from Moody v. Cox, being a passage from the judgment of Cozens-Hardy M.R. (at p. 81) to the following effect:
“A man may have a duty on one side and an interest on another. A solicitor who puts himself in that position takes upon himself a grievous responsibility. A solicitor may have a duty on one side and a duty on the other, namely, a duty to his client as solicitor on the one side and a duty to his beneficiaries on the other; but if he chooses to put himself in that position it does not lie in his mouth to say to the client ‘I have not discharged that which the law says is my duty towards you, my client, because I owe a duty to the beneficiaries on the other side’. The answer is that if a solicitor involves himself in that dilemma it is his own fault. He ought before putting himself in that position to inform the client of his conflicting duties, and either obtain from that client an agreement that he should not perform his full duties of disclosure or say – which would be much better – ‘I cannot accept this business’. I think it would be the worst thing to say that a solicitor can escape from the obligations, imposed upon him as solicitor, of disclosure if he can prove that it is not a case of duty on one side and of interest on the other, but a case of duty on both sides and therefore impossible to perform.”
In Hilton v. Barker Booth (at p. 664), Lord Walker went on to make the following comment on that passage:
“The thrust of this passage, and of all three judgments in Moody v Cox, is that if a solicitor puts himself in a position of having two irreconcilable duties (in that case, to his beneficiaries and to his client, Moody) it is his own fault. If he has a personal financial interest which conflicts with his duty, he is even more obviously at fault.”
2.11 The decision of the House of Lords in Hilton v. Barker Booth was considered in the Supreme Court by Hardiman J. in O’Carroll v. Diamond [2005] 4 I.R. 41 where he stated (at p. 52):
“There, a firm of solicitors acted for two separate persons engaged in a property development. The firm was privy to information about one of those persons (that he had served a prison sentence for a commercial offence) in respect of which they owed him a duty of confidentiality. Accordingly, they did not disclose it to their other client. The House of Lords held that if a solicitor put himself into a position of having two irreconcilable duties, that was his own fault. The solicitor who had conflicting duties to two clients could not prefer one to the other. He had to perform both as best he could and ‘this may involve performing one duty to the letter of the obligation, and paying compensation for his failure to perform the other. But in any case the fact that he has chosen to put himself in an impossible position does not exonerate him from liability’. I have no doubt that this is correct. … The impossible position referred to in Hilton v. Barker Booth …, and in other cases dating back to Moody v. Cox … , is that of accepting instructions from two persons with conflicting interests without disclosing that state of affairs.”
2.12 Counsel for the defendant also relied on a passage from the judgment of Barron J., giving judgment in the Supreme Court, in Carroll v. Carroll [1999] 4 I.R. 241. That case concerned an action by the personal representatives of a deceased donor to set aside a voluntary transaction made by the donor during his lifetime on the grounds that it was procured by undue influence and that it was an improvident transaction. There was evidence that the donor had not received independent legal advice. Counsel for the defendant emphasised that the role of a solicitor and what a solicitor should not do was outlined by Barron J. in the following passage, in which he addressed the position of the donee’s solicitor (at p. 266):
“Even if he had been the donor’s solicitor, what he did would not have saved the transaction. As I said before, a solicitor or other professional person does not fulfil his obligation to his client or patient by simply doing what he is asked or instructed to do. He owes such person a duty to exercise his professional skill and judgment and he does not fulfil that duty by blithely following instructions without stopping to consider whether to do so is appropriate. Having done so, he must then give advice as to whether or not what is required of him is proper. Here, his duty was to advise the donor to obtain independent advice. In the present case, whatever independence [the donee’s solicitor] may have had has been destroyed by his acting in the present proceedings as solicitor to the personal representative of the donee.”
That passage was echoed in the following passage from the judgment of Hardiman J. in O’Carroll v. Diamond where, having distinguished the facts of the case before him from the facts in Carroll v. Carroll, he stated (at p. 54):
“My decision should not be taken as implying that, in other circumstances, a solicitor necessarily discharges his duty merely by urging a person to take independent advice and blandly accepting a decision not to do so. Depending on the circumstances his obligations may be much greater and may include declining to act until such advice is taken.”
2.13 Notwithstanding that the main thrust of the defendant’s case was that the plaintiff is professionally conflicted, in their submissions counsel for the defendant addressed the fiduciary status of the plaintiff in her role as executrix of the Testator. In essence, what the plaintiff seeks in this case is the affirmation by the Court of her fiduciary status by the Court granting probate of the Will of the Testator to her. The position of a solicitor in a fiduciary capacity was considered by the Court of Appeal of England and Wales in Bristol and West BS v. Mothew [1996]4 All ER 698. Of particular relevance for present purposes is the following observation from the judgment of Millett L.J. (at p. 713):
“Finally, the fiduciary must take care not to find himself in a position where there is an actual conflict of duty so that he cannot fulfil his obligations to one principal without failing in his obligations to the other: see Moody v. Cox … If he does, he may have no alternative but to cease to act for at least one and preferably both. The fact that he cannot fulfil his obligations to one principal without being in breach of his obligations to the other will not absolve him from liability. I shall call this ‘the actual conflict rule’.”
3. Whether the plaintiff conflicted- the evidence
3.1 As stated at para. 10 of the 2010 Judgment, on the basis of the evidence adduced in the first module of these proceedings, I considered that it was reasonable to draw the following inferences:
(a) that the Testator had an interest, in the sense that he was in a position to determine the ultimate destination of its assets, in the Golden Promise Trust, which had been set up in Cyprus in 1999;
(b) that he also had an interest in the assets of the trust known as the Dolphin Trust, which appeared to have been set up in Guernsey in 1984.
Further, I noted that it had been established since his death that he was the beneficial owner of the assets of the trust known as the Doni Trust, which had been set up in the Isle of Man in 2002. As I stated, it was not possible at that stage to disentangle the labyrinthine network of offshore trusts, corporations, property developments and investments in which, prima facie, the Testator would appear to have had an involvement during his lifetime. The evidence adduced over six days during the second module of the proceedings has only marginally thrown further light on the assets in which the Testator had an interest, in the sense in which I have already used that expression at (a) above.
3.2 For the purposes of determining whether the evidence has shown that the plaintiff, in her professional capacity, would have conflicting duties, if a grant of probate of the Will was issued to her, the crucial task of the Court is to analyse and assess her professional position vis á-vis two categories of beneficiaries of the Testator’s bounty. Those categories are:
(a) the beneficiaries of assets the distribution of which falls to be determined in accordance with the terms of the Will, to which I will refer as the “estate assets”; and
(b) the beneficiaries of assets settled, in the sense that he was the arbiter of their ultimate destination, by the Testator, directly or indirectly, which do no fall within his estate, to which I will refer as “non-estate assets”.
It is important to emphasise at the outset that the defendant, as one of the principal beneficiaries of the estate assets, is vehemently opposed to a grant of probate issuing to the plaintiff.
3.3 The controversy between the defendant and the plaintiff commenced within six months of the death of the Testator. Although she had been de facto separated from the Testator for approximately eight years at the date of his death, there was no formal separation agreement in place between the defendant and the Testator, nor had any family law proceedings been initiated. As is set out in paragraph 15 of the 2010 Judgment, the Testator, having devised and bequeathed all his estate to his executors upon trust for sale, directed them, after payment and discharge of his funeral and testamentary expenses and debts, to “satisfy or provide for the satisfaction of the statutory right” of the defendant under the provisions of the Act of 1965. In other words, the defendant was to be the beneficiary of one-third share of the net estate of the Testator. The controversy between the defendant and the plaintiff was triggered by a letter dated 20th July, 2006 from the defendant to the plaintiff. That letter was a long, complicated letter. It is acknowledged that the defendant had the assistance of a solicitor in composing it.
3.4 In the letter of 20th July 2006, the defendant raised a large number of issues. However, I only propose adverting to some of them and to the plaintiff’s response, by letter dated 21st August 2006 from Amorys, in relation to those issues, as a preliminary to setting out what the evidence discloses as to the manner in which those issues were dealt with after the death of the Testator and the plaintiff’s involvement in dealing with them. Before concentrating on those issues, however, it is appropriate to record a number of exchanges which give a clear impression of how the plaintiff envisaged her professional role at the time. First, the defendant, who contended that she was a director of York, sought up to date accounts and books and records of that company. The response of the plaintiff, through the medium of Amorys, was that, whilst she acted for York, she had no power in her capacity as company solicitor to provide the defendant with any accounts, books or records of the company. Secondly, the defendant contended that there seemed to be “a substantial conflict of interest” and that the plaintiff appeared to be taking instructions from the Testator’s partner, Ms. Kiely. The response of the plaintiff was that there was absolutely no foundation for the assertion that there was a conflict of interest and she denied that there was in fact any conflict of interest and, for the avoidance of doubt, she stated that she was not “taking instructions from” Ms. Kiely either then nor had she been at any time. That statement has to be considered in the light of the evidence at the hearing of the second module of the proceedings in relation to the sale of “Chantilly”.
3.5 Apart from the plaintiff’s involvement in the sale of “Chantilly”, the issues raised by the defendant which I propose considering in the context of the alleged professional conflict are:
(a) the plaintiffs involvement in the sale of the property known as Kildare Enterprise Centre: and
(b) the discharge of a mortgage on the defendant’s family home known as “Bri-Odi”, Cabinteely in County Dublin.
3.6 The controversy continued after the defendant retained Matheson Ormsby Prentice (MOP) as her solicitors in June 2007. By letter of 28th June, 2007 the plaintiff was notified that MOP were acting for the defendant. The plaintiff has made clear both in correspondence and in her evidence that she is aggrieved by the acrimonious and confrontational tone of the correspondence which emanated from MOP and in the evidence adduced at the hearing. It is also the position of the plaintiff that the defendant’s solicitors have withheld significant information of direct relevance to the administration of the estate from her. There is no doubt but that the interaction between Amorys, on behalf of the plaintiff, and MOP, on behalf of defendant, has been very acrimonious. However, the acrimony was there from the start and it is evident in both the letter of 20th July, 2006 from the defendant to the plaintiff and the plaintiffs response in Amorys letter of 21st August, 2006. The acrimony was understandable because the defendant was contending from the outset that the plaintiff was conflicted and that her interest as a beneficiary was not being protected, while the plaintiff was denying that any such conflict existed.
3.7 Due to the efforts of MOP on her behalf, by virtue of a deed of appointment dated 15th July, 2009 made between Credit Suisse Trust Ltd., the trustee of the settlement dated 14th May, 1984 under which the so-called Dolphin Trust was created, and the defendant, the trustee appointed the Trust Fund, as defined in that settlement, to the defendant irrevocably and absolutely. The evidence established that after discharge of tax liability and the legal costs, which arose in various jurisdictions, the balance of the Trust Fund was, according to the defendant, split between her children and herself. In consequence, the defendant became solely and absolutely beneficially entitled to a very substantial sum of money. That may have tax implications for the estate of the Testator, which, in due course, may have to be addressed by his personal representative. However, I mention this aspect of the matter at this juncture because of the documentation which MOP received in February 2010 in connection with the distribution of the assets of the Dolphin Trust, which, apparently, was finalised in February 2010. MOP received files relevant to the assets of the Dolphin Trust from the entity in the Isle of Man which had been administering the assets. Among the files was what MOP described as “a partially executed copy of the Golden Promise Trust”. While this document did not resolve the issue as to the identity of the settler of the Golden Promise Trust, it clearly was, and is, of significance. It was furnished by MOP to the plaintiff with their letter of 28th April, 2010. The plaintiff has complained about the delay in furnishing this document, suggesting that it was a tactical move on the part of the defendant and was intended to undermine her position as executrix. In my view, the evidence does not bear out that allegation.
3.8 The reality of these proceedings is that they reflect a major contest between the defendant, as one of the principal beneficiaries of the very limited estate assets, on the one hand, and the beneficiaries of what appear to be very substantial non-estate assets, on the other hand. Such a contest is inevitably going to be played out in an acrimonious fashion. So it has been and so it continues in this case, in relation to the multiplicity of issues which have arisen between the defendant and the plaintiff in relation to assets over which the Testator may or may not have had ultimate control. The three issues which I have chosen from the issues which have arisen between the defendant and the plaintiff and between MOP and Amorys in assessing whether the plaintiff is professionally conflicted are issues which relate to matters in which the plaintiff has been professionally involved, through the medium of Amorys, since the death of the Testator. The firm Amorys have acted for the plaintiff in the prosecution of these proceedings.
4. “Chantilly”
4.1 “Chantilly” was the house at Rathmichael, County Dublin in which the Testator and Ms. Kiely resided from December 1999 until the Testator’s death and from which the Testator carried on his business from January 2004 until his death. I have outlined to some extent the title to “Chantilly” in the 2010 Judgment at para. 50 and, in particular, that it had been purchased in the name of Unit 33, a company incorporated in the Isle of Man, with the aid of a loan from Anglo Irish Bank plc. (Anglo). The plaintiff’s evidence in the first module of these proceedings was that she became aware that “a trust called the Chantilly Trust” had been set up, but she was not involved in setting it up. I have also outlined the circumstances in which in March 2005, the existing mortgage in favour of Anglo over “Chantilly” was discharged in the 2010 Judgment: Doni Limited, the trustee of the Doni Trust, the assets of which were beneficially owned by the Testator, granted a loan to Golden Promise Holding Ltd., the trustee of the Golden Promise Trust, in the sum of €2,750,000, of which €1,757,219.30 was paid to Anglo on condition that Anglo released the mortgage over “Chantilly”. That happened. The position, is that from, apparently, March 2005 onwards, “Chantilly” was unencumbered. A certain amount of information in relation to the sale of “Chantilly” after the death of the Testator emerged in the course of the evidence in the first module of the proceedings. However, the position became much clearer in the evidence given by the plaintiff at the hearing of the second module.
4.2 The contract for sale of “Chantilly” by Unit 33, as vendor, with the “Chantilly Trust”, which was described by the plaintiff as “a Charles Haccius scheme”, as purchaser, was prepared by Amorys on instructions received in August 2005, that is to say, some three months after the Will was executed. There was some delay, because the registration of the title to the property had to be completed. The plaintiff’s evidence was that she received instructions that the property was going to be sold in November 2005 but the contract was not signed or exchanged until after the death of the Testator in February 2006. As I understand it, the “Chantilly Trust” was not a legal entity and the purchasers from Unit 33 were John Kiely, the father of Ms. Kiely, and his partner, Veronica Lloyd, as trustees. The contract provided for a two year closing date. The purchase price was €3.5m. After the death of the Testator, “Chantilly” was sold on by the trustees of the “Chantilly Trust” to an independent sub-purchaser for €5m. Amorys acted for Unit 33 in the sale to “Chantilly Trust”. The trustees of the “Chantilly Trust” were represented by a different firm of solicitors in the sub-sale. Both transactions were closed in June 2006, whereupon Unit 33, a company known by the plaintiff to be part of the Golden Promise Trust network, received the consideration of €3.5m less capital gains tax and legal and other costs. The evidence which is recorded in the 2010 Judgment (at para. 50) was that €3.3m was available for distribution to Unit 33. Amorys paid the money received by Unit 33 into its bank account in this jurisdiction. Obviously, the trustees of the “Chantilly Trust” received the balance of the purchase price payable by the sub-purchaser, that is to say, €1.5m, subject, of course, to whatever capital gains tax and legal and other costs were payable out of it.
4.3 At the hearing of the first module of these proceedings, as I recorded in the 2010 Judgment (at para. 50), when it was put to her in a cross-examination that Ms. Kiely was the ultimate beneficiary of the proceeds of the sale of “Chantilly”, the plaintiffs response was that she could not say that. However, her evidence on the hearing of the second module of the proceedings was that she understood that Ms. Kiely got the benefit of some or maybe all of the sale proceeds of “Chantilly”. Apparently, Unit 33 has since been dissolved.
4.4 I think it is reasonable to infer that the motivation behind the procurement of the release of the mortgage on “Chantilly” and the setting up of the “Chantilly Trust” and the putting in place of the contract between Unit 33 and the trustees of the “Chantilly Trust” was to put in place a fund, of which, in due course, Ms. Kiely would become the sole beneficial owner. Moreover, I think it is reasonable to infer that the “driver” of that project was the Testator during his life. Given that Ms. Kiely was a young mother with two very young children, who was inevitably going to lose her partner in the short term, one can understand why those steps were taken. However, the issue for the Court is whether the plaintiff’s role, as solicitor for Unit 33 in the sale, which was completed after the Testator’s death, was in conflict with her role as executor of the Will, and as trustee of the Testator’s estate.
4.5 That issue leads to an issue raised on the defendant’s counterclaim to which reference has not been made previously. One of the reliefs claimed on the counterclaim is a declaration pursuant to s. 121 of the Act of 1965 that-
“… any assets settled by the (Testator] on settlements or trusts constitute a disposition within the meaning of section 121 … and the dispositions are null and void and of no legal effect as they were made for the purposes of defeating or substantially diminishing the legal right share of the [d]efendant.”
In the defence to the counterclaim, it was expressly pleaded, inter alia, that the plaintiff “does not oppose the application pursuant to s. 121 … but does not admit any of the facts” pleaded by the defendant in support of that claim. Sub-section (1) of s. 121 provides that the section applies to a disposition of property under which the beneficial ownership of the property vests in possession in the donee within three years before the death of the person who made it or on his death or later. Sub-section (2) in its original unamended form provided as follows:
“If the court is satisfied that a disposition to which this section applies was made for the purpose of defeating or substantially diminishing the share of the disponer’s spouse, whether as a legal right or on intestacy, … the court may order that the disposition shall, in whole or in part, be deemed, for the purposes of Parts VI and IX, to be a devise or bequest made by him by will and to form part of his estate, and to have had no other effect.”
4.6 As these proceedings are presently constituted, it is impossible for the Court to adjudicate on the issue raised by the invocation of s. 121, and it would be inappropriate to express any view on the outcome, if the claim based on s. 121 is persisted in, because the estate of the Testator is not properly represented in the proceedings in the absence of a grant of probate of the Will of the Testator. Apart from that, it would be necessary for the disponee of the disposition in issue to be a party to the counterclaim, either as a co-defendant or as a notice party. However, as I have stated earlier, it has been established since the death of the Testator that he was the beneficial owner of the assets of the Doni Trust and, accordingly, he was the beneficial owner of the monies used to pay off the mortgage on “Chantilly” in favour of Anglo. Although the title to “Chantilly” was in the name of Unit 33, which was part of the “network” of the Golden Promise Trust, which was constituted in Cyprus, it may be that the Testator was indirectly the beneficial owner of that property. In any event, as the defendant’s case is pleaded in the counterclaim, it is that the recovery of the loan from the Doni Trust to the Golden Promise Trust, which was used in part to discharge Unit 33’s indebtedness to Anglo, has to be pursued as a debt owing to the estate of the Testator from the Golden Promise Trust. The full loan of €2,750,000 has, in fact, been included in the Inland Revenue affidavit sworn by the plaintiff on 30th October, 2008 as a loan due for repayment by Golden Promise Trust to the estate of the Testator. In a letter dated 30th October from Amorys to the Revenue Commissioners, which accompanied the Inland Revenue affidavit, the position in relation to the debt of €2,750,000 was qualified as follows:
“With further reference to the sum of €2.75m referred to at paragraph 2 above, our client has been informed by a representative of the Doni Trust (but not by the Trustees) that the [Testator] was unequivocally entitled to these monies and that the same were loaned by him to the Golden Promise Trust on the instructions of the [Testator] in or around May 2005. This matter is also the subject of our client’s inquiries with the Golden Promise Trust and has been referred to her Cypriot lawyers. Unfortunately there does not seem to be any documentation to support either the existence of the loan or the terms thereof, nor does our client have any information such would enable her to assess her chances of recovering this asset for the benefit of the Estate, if indeed the Estate is entitled to the asset at all. We have nevertheless included these assets as an asset of the Estate for the moment.”
4.7 The evidence which emerged at the hearing of the second module raises further issues in relation to the transaction in which the plaintiff acted for Unit 33, which ultimately resulted in “Chantilly” being converted into €5m, apart from the discharge of the mortgage with a loan from the Doni Trust. The interest of the ultimate recipient of that money, which was facilitated by the sale by Unit 33 to the trustees of the “Chantilly Trust”, is in conflict with the interest of the defendant, as the surviving spouse of the Testator who, both under the Will and as a matter of law, has an entitlement to one undivided third share of the estate of the Testator. Having acted as a solicitor for Unit 33 in the first step of the sale of “Chantilly” unencumbered, in my view, the plaintiff would be professionally conflicted in acting as personal representative of the Testator and as trustee of his estate, having regard to the claims to which:
(a) the discharge of the mortgage on “Chantilly” with monies traceable to the Doni Trust,
(b) its effective transfer by the contract for sale to the trustees of the “Chantilly Trust”, and
(c) the sale on by way of sub-sale,
may give rise at the suit of the beneficiaries of the estate assets.
5. Kildare Enterprise Centre
5.1 Kildare Enterprise Centre was a commercial property, the title to which was vested in TAM, a company registered in the Isle of Man. In the interests of clarity, it is important to point out that the commercial units referred to as the Kildare Units in the 2010 Judgment (at para. 16) and which were devised by the Testator in the Will, do not form part of what is now referred to as the Kildare Enterprise Centre. The defendant raised with the plaintiff the issue of the sale of the Kildare Enterprise Centre in her letter of 20th July, 2006, where she stated that she had been told “through the grapevine” that the sale proceeds of the Kildare Enterprise Centre were due in August and she sought information in that regard. The response of the plaintiff in Amory’s letter of 21st August, 2006 was as follows:
“Can you please also provide me with full details of precisely what you mean by the contents of paragraph 7 of your letter? I would respectfully remind you that it is the duty of the Executors to call in and to collect all of the assets of the testator and to account for same in the Inland Revenue Affidavit which must be presented to the Revenue Commissioners before a Grant of Probate is applied for. It is imperative therefore that I have full information in regard to all of your late husband’s assets.”
The defendant’s evidence was that the source of the information she had was Mr. Paddy O’Sullivan, whose role in the Testator’s business is explained in the 2010 Judgment (at para. 30), who did not testify during the second module.
5.2 In any event, Amorys acted for TAM in the sale of the Kildare Enterprise Centre, which is what is relevant for present purposes. The evidence of the plaintiff was that agreement in principle in relation to the sale had been reached before the Testator’s death. However, she did not get instructions to prepare the contract for sale until after the Testator’s death, around June 2006, and the contract was signed in June 2006. She received her instructions from York via Mr. O’Sullivan. The plaintiff testified that, in the context of the defendant’s letter of 20th July, 2006, she was “concerned” in relation to the sale by TAM. She took advice from a senior counsel, who is not involved in these proceedings, as to whether, in the circumstances, where she was acting for TAM in the sale, her position was any more difficult in view of the fact that she was the executrix of the Testator. Her evidence was that the advice she got was that she had acted for TAM for many years, that company seemed to be the owner of the property, and that she had no alternative but to go ahead and follow the instructions of her client and, if she did not, her client could change solicitors. The sale by TAM closed in late November or early December 2006. The plaintiff’s position was that, if there was any question of her not wanting to act, Mr. Tom Keane, the Cypriot lawyer, whom she described as the owner of TAM, “would have been in like a shot”. The plaintiff’s evidence was that she was not getting instructions from Mr. Keane; she was taking her instructions from York, which was managing TAM. The net proceeds of the sale by TAM, which amounted to €5.7m, were lodged by Amorys to an account in the name of TAM in this jurisdiction. Amorys also accounted to the Revenue Commissioners for capital gains tax in the sum of €1.25m in connection with the transaction. While the evidence is somewhat unclear on this point, as I understand it, the full purchase price was €10m and the sum of €3.05m, being the difference between that figure and €6.95m (€5.7m plus €1.25m) was used to discharge a mortgage on the Kildare Enterprise Centre in favour of Irish Nationwide Building Society.
5.3 The plaintiff’s evidence was that, when TAM acquired the Kildare Enterprise Centre, circa. 2000, from Irish Nationwide Building Society (INBS) which, apparently, had repossessed it on foot of a mortgage given by a company controlled by the Testator, she was aware that TAM was owned by Golden Promise Holding Ltd., a Cyprus company, which, as I have recorded earlier, is the trustee of the Golden Promise Trust.
5.4 It was submitted on behalf of the defendant that the Kildare Enterprise Centre seems to have been sold with unseemly haste by Mr. O’Sullivan, acting for York, for a sum that was well below its true market value. The defendant adduced evidence of Mr. Rory Lavelle, a chartered surveyor, who estimated the market value of the Kildare Enterprise Centre as being somewhere between €16m and €20m in 2006. That evidence alone does not lead me to the conclusion that the property was sold by TAM at an undervalue in 2006. In any event, it is not pleaded by the defendant in the counterclaim that the Kildare Enterprise Centre was sold at an undervalue.
5.5 However, I do think that the plaintiff, in being sufficiently concerned to take advice in relation to her position, as the solicitor acting for TAM in the sale of the Kildare Enterprise Centre, as giving rise to a potential conflict with her role as executrix of the Testator was being wholly realistic, because there was an issue of a potential conflict. Not only did the defendant, in the letter of 20th July, 2006, raise the issue of the closing of the sale of the Kildare Enterprise Centre, as I have already indicated, but she also made the point that a schedule of assets prepared by the plaintiff on 30th March, 2006, which she had received, only contained “a small portion” of the Testator’s estate and she asserted that the Testator was “the beneficial owner and/or controller of various other substantial Companies, trusts and assets”. The plaintiff’s response to that was that she needed “full details, instructions and information” from the defendant. She pointed out that the schedule in question was only a “rough guesstimate” and did not constitute the final position on the Testator’s estate or indeed the extent of his assets.
5.6 I have come to the conclusion that the evidence shows that there was, and is, a conflict between the interest of the ultimate beneficial owners of the assets of TAM, being non-estate assets, and the beneficial owners of the estate assets in accordance with the terms of the Will. That conflict has the same ramifications as the conflict in relation to the monies used to procure the discharge of the mortgage on “Chantilly” and the disbursement of the proceeds of the sale of that property, in that, by acting as solicitor for TAM in the sale of the Kildare Enterprise Centre, the plaintiff has put herself in the position of being potentially conflicted in acting as personal representative of the Testator and as trustee of the Will.
6. Discharge of the mortgage on “Bri-Odi”
6.1 “Bri-Odi” had been the family home of the Testator and the defendant for most of their married life until their separation. Initially, the title had been in the sole name of the Testator, but after a business failure in the late 1980s, the title was transferred by the Testator to the defendant solely. Subsequently, in 1994, the Testator needed money to finance a venture referred to as Customs House Plaza, which, apparently, turned out to be very profitable. The defendant raised the money by way of loan from INBS and “Bri-Odi” was mortgaged to INBS as security for the loan. The defendant then advanced the money to the Testator. The defendant’s evidence was that the loan was to be repaid within two years. However, after the Testator’s death, when she began receiving correspondence from INBS, the defendant realised that the loan had not been discharged and the mortgage still affected “Bri Odi”. This was one of the issues raised by her in the letter dated 20th July, 2006 to the plaintiff. The defendant stated that she wanted the loan to be paid off forthwith. The response of the plaintiff in Amory’s letter of 21st August, 2006 was, in part, as follows:
“For the purpose of clarity, I need to make it absolutely clear that the repayment of this loan is a matter for you to deal with. I have no control over this issue. My function is as co-executor of the estate of your late husband and it is only in that capacity that I will hopefully be in a position to assist at a much later stage when the affairs of your late husband have been wound up leaving sufficient surpluses.”
6.2 The defendant raised the matter again in her next letter to the plaintiff, which was also composed with the assistance of a solicitor, and which was dated 27th September, 2006. She stated:
“I must insist that the Mortgage taken out by the [Testator] over my family home at his insistence and with regard to which you took up the title deeds, must be added as a debt on his Estate given that he acknowledged the debt and undertook to repay the Mortgage within two years of the monies being given to him in front of me, my daughter and yourself. The Mortgage has now reached the level of €440,000 and no payments have been made on this Mortgage in a number of years.”
The response of the plaintiff was in a letter of 8th December, 2006, from Amorys to Noel Smyth & Partners, Solicitors, who, at the time, were instructed by the defendant. The response was:
“As regards the outstanding mortgage in favour of INBS over your client’s family home, our clients are making inquiries and may consider your client’s request that the INBS mortgage debt be admitted as a liability of the Estate. We will revert to you in this regard at a later stage.”
That letter was headed: “Our clients- Dan O’Donohoe (sic) and Anor”, meaning, presumably, the executors named in the Will.
6.3 After MOP communicated to Amorys that they had been instructed by the defendant in relation to the estate of the Testator, Amorys wrote directly to the defendant by letter dated 27th July, 2007. One of the matters dealt with in that letter was the mortgage on “Bri-Odi”. In this regard, Amorys stated:
“You will be aware that the Golden Promise Trust recently arranged to discharge a loan due to the Irish Nationwide Building Society which loan was secured by a first legal mortgage over your family home at Bri-Odi …. This loan was guaranteed by the [Testator]. We understand that you are in communication with the INBS regarding the formal release of the Society’s Mortgage. This loan should have been discharged from the proceeds of a life policy on the life of the [Testator] which the [Testator] believed had been assigned to INBS but which had not in fact been properly assigned. Our clients will therefore have to consider admitting the amount of the outstanding INBS loan as a debt due by the Estate to the Golden Promise Trust. The amount was approximately €465,000.”
It is also clear from the heading on the letter that by our “clients” Amorys meant the executors of the will of the Testator.
6.4 Thereafter, there was a considerable amount of correspondence backwards and forwards between MOP and Amorys in relation to the discharge of the mortgage on “Bri-Odi”. Eventually, when the plaintiff submitted the Inland Revenue Affidavit dated 30th October, 2008, to the Revenue Commissioners, which was qualified by the contents of the letter dated 30th October, 2008 referred to earlier, the mortgage on “Bri-Odi” was dealt with as follows in the letter:
“The [Testator’s] spouse [the defendant], raised a substantial loan of approximately IR£300,000 from Irish Nationwide Building Society in or around 1998 using her dwelling house at “Bri-Odi” … as security. She then lent this money to the [Testator] who undertook to repay it to her. The Testator never repaid this amount. [The defendant’s] loan, together with accrued interest amounting to €456,535 was eventually repaid in or around 14th March, 2007 subsequent to the [Testator’s] death directly to Irish Nationwide Building Society by TAM … , an Isle of Man registered company which our client understands to be a wholly owned subsidiary of Golden Promise Holding Limited. This latter company is the corporate trustee of the Golden Promise Trust and is a Cypriot registered company. Without further information it is unclear as to whether this payment constitutes a taxable benefit of the Deceased’s estate. Once again, our client’s inquiries, in this regard are continuing.”
6.5 As the preceding paragraphs indicate, a variety of positions has been adopted by the plaintiff, as executor of the Testator, in relation to the discharge of the mortgage. Eventually, she appears to have recognised that the Testator’s estate was liable to discharge the sum due to INBS in order to procure the release of the mortgage. However, the sum in question was not included as a debt due by the estate on the Inland Revenue Affidavit, although she left open the question of the position of TAM, which it is acknowledged was her client both before and after the Testator’s death and, in particular, in 2006 in relation to the sale of the Kildare Enterprise Centre, vis-á-vis the Testator’s estate.
6.6 Normally there is no conflict of interest in an individual being both a beneficiary and a creditor of the estate of a deceased person, as frequently happens. As regards the discharge of the mortgage on “Bri-Odi”, however, unlike the normal situation, there could be an issue of the entitlement of the defendant to have the loan from INBS repaid by a third party, whether out of estate assets or out of non-estate assets. Having said that, I am not finding, and I am not even suggesting, that such an issue arises. I merely want to emphasise that the real difficulty created by the discharge of the mortgage on “Bri-Odi” relates to identifying the source of the funds used to discharge it and the beneficial ownership of those funds after the Testator’s death. Any question as to whether liability for the discharge of the mortgage on “Bri-Odi” attached to the estate assets or to the non-estate assets, gives rise to a conflict between the beneficiaries of the estate assets, on the one hand, and the beneficiaries of the non-estate assets, whoever they may be, and it would appear on the evidence that the defendant is not one of them, on the other hand. The fact that she was the solicitor for the Testator from 1986 until his death and acted on the Testator’s instructions for companies incorporated outside this jurisdiction, for example, TAM and Unit 33, which companies are acknowledged as being subsidiaries of the Cypriot company, Golden Promise Holding Ltd., which is the trustee of the Golden Promise Trust, it seems to me that the plaintiff must inevitably be drawn into the conflict which such question may ignite, if she remains as executor of the Will and as trustee of his estate of the Testator. In relation to the discharge of the loan secured on “Bri-Odi” the potential for conflict is compounded because Amorys acted both for the Testator and the defendant in connection with the creation of the mortgage in favour of INBS and such independent evidence as the defendant obtained in connection with that transaction was obtained from an assistant solicitor in that firm.
7. Conclusions on the conflict issue
7.1 In summary, the conclusions I have reached in relation to the plaintiff’s involvement in the three matters with which I have dealt with in paras. 4, 5 and 6 above are as follows:
(a) As regards the plaintiff’s involvement as solicitor for Unit 33 in the sale of “Chantilly” unencumbered, I find that such involvement must inevitably give rise to a professional conflict if she becomes the personal representative of the Testator, the kernel of the conflict being the issue as to whether the sum of €1,757,219.30 used to discharge the mortgage in favour of Anglo should be brought into the estate assets from the successors of Unit 33.
(b) As regards the plaintiffs involvement as solicitor for TAM in the sale of the Kildare Enterprise Centre, I find that such involvement must inevitably give rise to a professional conflict if the plaintiff becomes the personal representative of the Testator, the kernel of the conflict being whether the net proceeds of the sale should be brought into the estate on the basis that the Testator, albeit through TAM, was the beneficial owner of the Kildare Enterprise Centre.
(c) As to the circumstances of the discharge of the mortgage on “Bri-Odi”, with monies apparently provided by TAM, for which she acted as solicitor both prior to and after the death of the Testator, I find that her involvement must inevitably give rise to a professional conflict if she becomes the personal representative of the Testator, because the beneficial owners of TAM may have a claim against the estate of the Testator for recovery of the sum of €465,000 of its monies used in discharge of the defendant’s indebtedness to INBS.
Those three examples clearly indicate that the plaintiff would be in a position of having irreconcilable duties to the beneficiaries of the estate assets, on the one hand, and the beneficiaries of non-estate assets, on the other hand, if a grant of probate issued to her.
7.2 Apart from the foregoing examples, probably the most persistent and, I think it is fair to say, the most exasperating from the perspective of the defendant and her legal advisers, complaint made against the plaintiff alleging that she is conflicted has arisen from her non-acceptance of the fact that the Testator was the settlor, and the 36 sole person in control of the assets, of the Golden Promise Trust. They contend that the refusal of the plaintiff to acknowledge that the Testator was the source of control of that trust regulated in Cyprus, notwithstanding her involvement in the execution by the Testator of the “letter of wishes” in relation to the Golden Promise Trust after the execution of the Will on 19th May, 2005 as outlined in para. 52 of the 2010 Judgment, underlines her inability to act independently as executrix of the estate of the Testator. The position adopted by the plaintiff at the hearing of the second module was that there is no doubt that the Testator had “a very close connection” with the Golden Promise Trust and she accepted that there is probably a strong possibility that he will turn out legally to have been the settlor thereof. She also stated that it was of no particular or personal interest to her if he was the settlor, although it is a matter of concern for the estate.
7.3 However, I think that misses the point. It is her past professional involvement as solicitor for the Testator and for the multiplicity of corporate vehicles in which the assets of the Golden Promise Trust were vested which gives rise to the professional conflict, coupled with the justified opposition of the defendant, as a major beneficiary of the estate assets, which, in my view, precludes the plaintiff from acting as executor of the Will. That involvement goes way beyond the three examples I have addressed in detail in this judgment. While one can understand that the plaintiff would like to fulfil the task which the Testator reposed in her, I am of the view that it would be impossible for her to steer a non-conflicted passage between the beneficiaries of the estate assets, on the one hand, and the interest of the beneficiaries of the non-estate assets, on the other hand, so as to take all of the steps in the administration, including the protection of the assets, of the estate of the Testator and of the trusts created by the Will that require to be taken by the personal representative.
7.4 If a grant of probate of the Will issued to the plaintiff she would not only be conflicted as to her professional duties as a solicitor, but she would have a conflict of interest. As personal representative, she would hold the assets of the Testator as trustee for the persons by law entitled thereto by virtue of s. 10(3) of the Act of 1965 quoted earlier. In that fiduciary capacity she would be inevitably faced, as regards a myriad of issues, with making a choice between the beneficiaries of the estate assets, on the one hand, and the beneficiaries of the non-estate assets, on the other hand, which, in my view, would amount to what Millett L.J. in Bristol and West BS v. Mathew referred to as a breach of “the actual conflict rule”. As Millett L. J. stated, although obiter, (at p. 712), the fiduciary must prove that he made full disclosure of all material facts. The plaintiff, as personal representative of the Testator, would have to make full disclosure of all material facts in relation to the non-estate assets to and for the benefit of the beneficiaries of the estate assets. Having regard to her past professional involvement, it is possible to conclude on the basis of a probative standard that goes way beyond the standard which the defendant has to meet, that the plaintiff could not make full disclosure without breaching her duty of confidentiality to clients for whom she has acted in the past. The Court cannot allow that situation to arise.
7.5 I have no doubt that the conflicted position of the testatrix amounts to “serious special circumstances” in the sense intended by Lynch J. in Dunne v. Heffernan and that the welfare of the beneficiaries of the estate assets would not be protected by the estate of the Testator being administered by her. In the circumstances, I consider that it would be inappropriate to grant probate of the Will to the plaintiff. Therefore, it will be necessary for the court, pursuant to its power under s. 27(4), to appoint some person other than the plaintiff to administer the estate of the Testator.
8. Appointment of Administrator
8.1 While I have come to the conclusion that the plaintiff, who was chosen as executor by the Testator, has a conflict of duty and would have a conflict of interest if probate issued to her, I have also come to the conclusion that the defendant, who was not chosen by the Testator to administer his estate, has a conflict of interest, which precludes her acting in the administration of the Testator’s estate.
8.2 Therefore, I have come to the conclusion that the administrator should be a professional person who is wholly independent of the beneficiaries of the estate assets and of the beneficiaries of the non-estate assets. Given the complex issues which are likely to arise in the administration of the estate and, in particular, the fact that the Revenue investigation is ongoing, I have come to the conclusion that the ideal situation would be that the personal representative is an accountant by profession. I do not, however; consider that it would be appropriate to appoint a person who has had any previous professional relationship with either the defendant or her children or a connection with a firm which had such relationship. I propose to adjourn the proceedings for a short period in the hope that the parties can reach agreement on the choice of a suitable person, who is willing to act.
8.3 When an appropriate administrator has been identified, and evidence as to his or her suitability to act as administrator is put before the court, I propose making an order under s. 27(4) of the Act of 1965 granting that person administration of the Testator’s estate with the Will annexed.
9. Other Issues
9.1 The second relief sought by the defendant in her counterclaim is a declaration that the Testator at the date of his death held one half of his estate in trust for the defendant by reason of promises and representations made by the Testator to the defendant upon which the defendant relied to her detriment. As with the s. 121 issue, which I have addressed in the context of the question whether the plaintiff is conflicted, in my view, that issue cannot be determined in these proceedings as constituted because, there being no grant of probate or administration, the estate of the Testator is not properly represented. However, as court time was taken up with this issue, I propose to comment on it, although, obviously, not in a definitive manner.
9.2 The defendant’s evidence was that after the death of their son, Brian Rhatigan, Junior, who died in April 2003, the defendant and the Testator met in her daughter’s house and the plaintiff was also there. The defendant described the purpose of the meeting as being for her “to sign probate of my son’s estate”. I think the reality is that she was signing a renunciation of her entitlement to a grant of administration intestate. In any event, her evidence was that she asked the Testator why she should sign the document and what he was going to do for her. Her evidence was that his response was that she knew she was going to get “half of everything”. The defendant testified that she remembered jokingly saying “Is that half of Europe or half of a slice of cake”, at which the Testator winked at her. Her evidence was that the event occurred at a time after the Testator had become ill, but while he could still speak and while they were on friendly terms. Although the defendant stated that the plaintiff was present on that occasion, what is alleged to have happened was not put to the plaintiff. Moreover, the factual case made in the counterclaim on the basis of which it was pleaded that the Testator was constituted a trustee of one half of his estate for the benefit of the defendant was entirely different to the factual basis of the defendant’s evidence on the issue.
9.3 While there was some level of ambiguity, the defendant’s evidence, as I understand it, was that the occasion about which she testified was the only time when there was a discussion between the defendant and the Testator about how he intended dealing with his affairs. In particular, I consider that there was no evidence to support the argument made by counsel for the defendant in their submissions that agreement was reached between the Testator and the defendant in 1998, at the time of their separation, that she was entitled to half of his assets. Moreover, there is no basis on which one could conclude that, if it occurred, that the exchange outlined in the preceding paragraph gave rise to a trust or an equitable estoppel of the type recognised by the Supreme Court in Doran v. Thompson [1978] I.R. 223. Moreover, as I understand the evidence, the defendant did not act to her detriment as result of what transpired on that occasion. She received her share of the estate of her deceased son and merely renounced her right to a grant of administration. I mention this aspect of the evidence for the purpose of emphasizing that neither the facts pleaded in support of the contention that a trust exists in respect of one half of the Testator’s estate for the defendant, nor the evidence given by the defendant in support of that claim, has informed the conclusion I have reached that the plaintiff is professionally conflicted to an extent that she cannot act as executor of the estate of the Testator.
9.4 Further, in the interests of clarity, I would record that the issue which appears on the order of the Master, which was made by consent of the parties, as to whether the defendant’s claim to being the beneficiary of half of the estate is barred by operation of s. 9 of the Civil Liability Act 1961, was not addressed at all at the hearing of the second module.
9.5 In the light of the findings made as to her conflicted position, obviously, the plaintiff should resign as trustee of the Will. However, it would be premature at this stage to consider whether it is necessary to appoint trustees of the residuary estate, until the extent of the residuary estate is ascertained. Indeed, the position adopted by the parties was that the court should concentrate on the executorship. Therefore, I propose adjourning the issue of the trusteeship of the Testator’s residuary estate for further consideration later, if necessary.
Cawley v Lillis
[2012] IEHC 70
udgment of Miss Justice Laffoy delivered on 21st day of February, 2012.
1. This judgment concerns the costs of these proceedings in which I gave judgment on 6th December, 2011 ([2011] IEHC 515) on the questions raised in the special summons. When the matter was back before the Court on 24th January, 2012 the Court was told that the matter had been settled save in relation to costs. The terms of settlement were handed into Court and orders were made in the terms of the terms of settlement. For present purposes, it is only necessary to record that the implementation of the terms of settlement will create a fund arising from the realisation of the assets which were jointly held by the defendant and the late Celine Cawley (the Deceased) at the date of the death of the Deceased. I will refer to that fund as the ”joint fund” in this judgment. Submissions on where liability for the costs of the proceedings should lie were made by counsel for both sides on 14th February, 2012.
2. While the proceedings are entitled “In the matter of the Estate of the Deceased” and the original plaintiffs brought the proceedings as personal representatives of the Deceased, the reality of the situation is that the proceedings relate to the resolution of questions concerning the ownership of, and title to, assets which did not form part of the estate of the Deceased. Having said that, the proceedings were properly brought by way of special summons, involving as they did questions affecting the rights and interests of the estate of the Deceased on the one hand, and the defendant, on the other hand, in relation to those assets.
3. While I propose to analyse the nature of these proceedings in greater depth later, I think it is important to record first that I consider that the special jurisprudence in relation to payment of costs out of the estate in probate actions, which had developed in this jurisdiction for the reasons set out by Budd J. in In bonis Morelli; Vella v. Morelli [1968] 1 I.R. 11, and was applied by him in that case and was more recently considered by the Supreme Court in Elliott v. Stamp [2008] 3 IR 387, has no application to the circumstances of these proceedings. The rationale of the special jurisprudence was explained as follows by Budd J. (at pp. 34 to 35):
“In our country the results arising from the testamentary disposition of property are of fundamental importance to most members of the community and it is vital that the circumstances surrounding the execution of testamentary documents should be open to scrutiny and be above suspicion. Accordingly, it would seem right and proper to me that persons, having real and genuine grounds for believing, or even having genuine suspicions, that a purported will is not valid, should be able to have the circumstances surrounding the execution of that will investigated by the court without being completely deterred from taking that course by reason of a fear that, however genuine their case may be, they will have to bear the burden of what may be heavy costs. It would seem to me that the old Irish practice was a very fair and reasonable one and was such that, if adhered to, would allay the reasonable fears of persons faced with making a decision upon whether a will should be litigated or not. If there be any doubt about its application in modem times, these doubts should be dispelled and the practice should now be reiterated and laid down as a general guiding principle bearing in mind that, as a general rule, before the practice can be operated in any particular case the two questions posed must be answered in the affirmative.”
The two questions referred to in that passage are whether:
(a) there was reasonable ground for litigation, and
(b) whether it was conducted bona fide.
The guiding principle laid down by the Supreme Court in that case does not apply to these proceedings which are not concerned with execution of a testamentary document. That is not to say, however, that the Court, in the exercise of its discretion in relation to costs should not, where appropriate have regard to issues of the type involved in the questions posed by the Supreme Court.
4. While these proceedings raised a novel and a difficult point of law, in essence, they involved a contest between the estate of the Deceased, on the one hand, and the defendant, on the other hand, as to the beneficial ownership of the assets which had been jointly held by the Deceased and the defendant (the joint assets). As I stated in the judgment, the resolution of the issues which were raised in the proceedings turned on the application of established principles of law and equity, primarily, in the area of real property law.
5. The proceedings were properly brought by the original plaintiffs in their capacity as personal representatives of the Deceased, because in that capacity the plaintiffs had to protect the interests of the estate and, in particular, the interests of Georgia Lillis (the Beneficiary), who was joined as a plaintiff by order of the Court made on 27th June, 2011, but who had not attained her majority when the proceedings were initiated. The proceedings were unquestionably necessary. They were not initiated prematurely. On the contrary, prior to their initiation on 15th June, 2010, the personal representatives’ solicitors had sought to elicit information as to what claim, if any, the defendant was making to the joint assets in no less than five letters to the defendant’s solicitor between 23rd March, 2010 and 30th April, 2010, none of which was responded to. The defendant was a necessary party to the proceedings, being the only legitimus contradictor. Therefore, the personal representatives could not have attained a resolution of the issues concerning the joint assets without the defendant being a party to the proceedings.
6. Broadly speaking, the proceedings became a contest between the plaintiffs, who contended that the estate of the Deceased became solely beneficially entitled to the joint assets on her death caused by the criminal act of the defendant, and the defendant, who contended that he became solely beneficially entitled to the joint assets by right of survivorship. The Court resolved that contest by finding that the legal estate in the joint assets accrued to the defendant, who holds the same on a constructive trust for the estate of the Deceased and himself in equal shares. Against that background, in my view, on the issue of costs, the Court is bound by the relevant provisions of Order 99, rule 1 of the Rules of the Superior Courts 1986, as amended (the Rules).
7. The relevant portions of Order 99, embodying the changes introduced by S.I. 12 of 2008 with effect from 21st February, 2008, that is to say, the introduction of rule 1 A, now provide as follows:
“1. Subject to the provisions of the Acts and any other statutes relating to costs and except as otherwise provided by these Rules:
(1) The costs of and incidental to every proceeding in the superior courts shall be in the discretion of those courts respectively.
(2) …
(3) …
(4) Subject to sub-rule (4A), the costs of every issue of fact or law raised upon a claim or counterclaim shall, unless otherwise ordered, follow the event.
1A. (1) Notwithstanding sub-rules (3) and (4) of rule 1-
(a) …
(b) The High Court, in considering the awarding of the costs of any action (other than an action in respect of a claim or counterclaim concerning which a lodgment or tender offer in lieu of lodgment may be made in accordance with Order 22) or any application in such an action, may, where it considers it just, have regard to the terms of any offer in writing sent by any party to any other party or parties offering to satisfy the whole or part of that other party’s (or those other parties’) claim, counterclaim or application.
(c) …
(2) In this rule, an ‘offer in writing’ includes any offer in writing made without prejudice save as to the issue of costs.”
Apropos of the application of rule 1A, which reflects the jurisprudence which developed in relation to a so-called Calderbank letter, the Court’s attention has been drawn to two items of correspondence.
8. The earlier is a letter of 17th May, 2011 from the plaintiffs’ solicitors to the defendant’s solicitors, which is referred to in the judgment at para. 3.3. As I stated, there was a proposal made on behalf of the plaintiffs in that letter to the effect that, notwithstanding the personal representatives’ belief that there was a legal argument to the effect that in all of the circumstances the estate of the Deceased should be entitled to one hundred per cent of the joint assets, in an effort to resolve the matter, the plaintiffs would agree to the question raised on the special summons being answered on the basis that there was a severance of the joint tenancy. Because the Court was not concerned with the distribution of assets at that stage, it was not necessary to mention in the judgment the basis on which it was proposed that the joint assets would be distributed between the estate of the Deceased and the defendant. The proposal in relation to distribution did not entail an equal division of the joint assets according to their value. The defendant was invited to agree to the entire proposal, the terms of which were stated not to be severable. There was no response from the defendant’s solicitors to that letter.
9. The later letter from the defendant’s solicitor to the plaintiffs’ solicitors, which was dated 10th November, 2011, was brought to the attention of the Court in the context of the issue of costs. This letter was headed “without prejudice save as to costs”. In it the defendant’s solicitor stated:
“Without prejudice, save as to costs, we confirm that our client is willing in order to settle all matters present or future howsoever described between the above parties (with the exception of on-going legal proceedings in France) to agree to an equal division of the joint assets … between the plaintiffs taking one half and our client taking the remaining half. Each side to bear their own costs.”
The offer remained open until close of business on Tuesday, 15th November, 2011, but was not taken up by the plaintiffs. As counsel for the plaintiffs pointed out, subject to one exception, the proposal related to settling “all matters present or future”, not just the proceedings.
10. The position of counsel for the plaintiffs on the issue of costs was that there should be an order that the plaintiffs’ costs be paid out of the joint fund, but that there should be no order for costs made in favour of the defendant, so that the defendant would be liable for his own costs. In other words, as I understand the plaintiffs’ position, it is that the plaintiffs’ costs should “come off the top” of the joint fund and that the joint fund should then be distributed in accordance with the terms of the settlement. The position adopted by counsel for the defendant was that the defendant should be awarded his costs against the plaintiffs because the offer in the letter of 10th November, 2011, which was “an offer of a 50/50 split down the middle” was not responded to, as a result of which the hearing had to proceed, and, while at the hearing the defendant made a concession in the terms of his offer, the plaintiffs pursued their claim for one hundred per cent of the joint assets.
11. In their written submissions, counsel for the plaintiffs submitted that the proceedings were necessitated at their root by the criminal act of the defendant and that to award the defendant his costs from the joint assets would allow him to benefit from his criminal conduct. It was also submitted that it would allow the defendant to benefit from his lack of bona fides in conducting the proceedings. I have come to the conclusion that it would not be a proper exercise of the Court’s discretion, in determining where liability for costs lies, to penalise the defendant on account of the fact that the issue as to the ownership of the joint assets arose out of the tragic death of the Deceased at the hands of the defendant.
12. As regards the authorities from other jurisdictions considered in the judgment, which counsel for the defendant suggested the Court should have regard to, they provide little guidance on the issue of liability for costs. There was a range of issues in Re Pechar, decd. (referred to at para. 8.1 in the judgment). Apart from that distinguishing factor, the issue of costs was not dealt with in the judgment, although at the end of the judgment Hardie Boys J. did state that there was “ground for contending that Ante Grbic’s estate should bear the greater burden although not necessarily the whole burden of the court’s order for costs”. In Schobelt v. Barber (referred to at para. 7.1 in the judgment), Moorhouse J. stated, at the end of his judgment, that the defendant had resisted a claim which had been founded against him and costs should follow the event and be against the defendant in his personal capacity. Earlier in the judgment, Moorhouse J. recorded that the plaintiff’s claim was for an undivided one half interest in the parcel of real estate in issue.
13. Returning to the offers made in the correspondence outlined at paras. 8 and 9 above, traditiomilly the test applied in determining whether a Calderbank offer has been effective in relation to the costs of litigation is the test adumbrated by Sir Thomas Bingham M.R. in Roache v. News Group Newspapers Ltd. (1992) CA 2 1120-on the facts, who, as a matter of substance and reality has won. I have come to the conclusion that, if one were to apply that test strictly to the application of rule 1 A(1)(b) of Order 99 to the facts of this case the answer would be that it does not benefit either side in determining where liability for costs should lie. As regards the plaintiffs, the offer in the letter of 17th May, 2011 was stated not to be severable and, had it been accepted in its totality by the defendant, he would be in a much less advantageous position than he is as a result of the decision of the Court and the settlement as to the distribution of the joint funds which ensued. As regards the offer of the defendant in his letter of 10th November, 2011, I agree with the submission made by counsel for the plaintiffs that, given that the proceedings were listed for hearing on 16th November, 2011, that proposal came far too late to carry weight on the issue of where liability for costs should lie. Given that the matter was at hearing for one day only, the reality of the situation is that the vast bulk of the costs had already accrued before 10th November, 2010.
14. However, that is not the end of the matter. While, as a matter of substance and reality, in this case neither side achieved the optimum outcome aimed for, taking an overview of the matter, it is probable that, if the defendant had adopted a different and more reasonable approach from the outset, the proceedings would have been unnecessary or, at any rate, truncated and less expensive. His failure to engage at all with the plaintiffs’ solicitors before the proceedings were initiated, necessitated the initiation of the proceedings. More importantly, he persisted in his contention that, on the death of the Deceased, he became solely beneficially entitled to the joint assets until less than one week before the hearing, when it was too late to avoid the costs of the hearing. The defendant’s conduct of his defence of these proceedings also necessitated the joinder of the Beneficiary as a plaintiff in the proceedings. In the circumstances, I think the proper course is to accede to the plaintiffs’ application. Accordingly, there will be an order that the plaintiffs be paid their costs (including the reserved costs of the application to join the Beneficiary as a plaintiff) out of the joint funds before distribution. There will be no order in relation to the defendant’s costs. That I believe is a fair and just approach. It is also a practical approach having regard to the circumstances.
Approved: Laffoy, J
Dunne v Dunne
[2015] IEHC 607
JUDGMENT of Mr Justice CREGAN delivered EX TEMPORE on the 15th July, 2015
Introduction
1. The issue in this application is whether the Court should remove the defendant, Mr William Dunne, as legal personal representative of the deceased, on the grounds of a conflict of interest.
2. This application is brought by way of notice of motion in which the plaintiffs in these proceedings seek various orders, including,
1. An order pursuant to s 27 (2) of the Succession Act, 1965, revoking, cancelling and recalling the grant of letters of administration de bonis non dated 31st August, 2011 of the estate of the deceased.
2. Secondly, an order if necessary, pursuant to section 27 (4) of the Succession Act, 1965, giving liberty to such person(s) as to whom this Honourable Court seems fit to apply for, and extract letters of administration de bonis non of the estate of the deceased.
3. Thirdly, if necessary, a declaration that the defendant is conflicted in his role as legal personal representative of the deceased, or is otherwise an inappropriate person to act as such legal personal representative.
4. If necessary, an order permitting such amendments of the pleadings already had herein as may be necessary to seek the reliefs sought.
3. The application is grounded upon the affidavit of Cecil Dunne, one of the plaintiffs in the proceedings. There is a replying affidavit on behalf of the defendant and a second affidavit of Mr Cecil Dunne.
4. In order to assess this matter it is necessary to have regard to the underlying pleadings in this case.
The pleadings
5. The plaintiffs are nine of the fourteen children of Cecil Dunne deceased, and in the Equity Civil Bill they plead as follows:
1. At paragraph 1, that Cecil Dunne, hereinafter referred to as “the deceased”, late of Millicent Cross, Clane, Co. Kildare, Farmer, deceased, died on 29th March, 1995.
2. At paragraph 11, that the plaintiffs take these proceedings as next-of-kin and nine of the lawful children of the deceased and therefore beneficiaries of the estate of the deceased.
3. At paragraph 12, that the defendant is a driving instructor and resides at 108, Castletown Drive, Celbridge, Co. Kildare; that the defendant is sued in his capacity as legal personal representative of the estate of the deceased under Grant of Administration Intestate (de bonis non) which issued forth to him from the probate office on 31st August, 2011.
4. At paragraph 13, that the deceased died intestate a married man survived by his wife Eileen Dunne who has subsequently died and by fourteen lawful and only children and they set their names out therein.
5. At paragraph 14, that following the death of the deceased on 24th July, 1996, a Grant of Letters of Administration Intestate issued forth of the Probate Office to Eileen Dunne, the widow of the deceased, who after taking such administration upon herself, intermeddled in the estate of the deceased and afterwards on 20th October, 2010, died leaving part of the estate unadministered.
6. At paragraph 15, that the unadministered estate of the deceased comprised, to the knowledge of the plaintiffs, agricultural land at Moatfield, Clane, Co. Kildare, together with the dwelling house of the deceased at Millicent Cross, Clane, Co. Kildare, and the property adjacent thereto.
7. At paragraph 16, that following the death of Eileen Dunne, the plaintiffs called upon the defendant in his capacity as legal personal representative of the estate to administer the estate and to distribute to them their shares.
8. At paragraph 17, that despite being called upon to do so, and despite having acknowledged the entitlement of the plaintiffs in the estate of the deceased, the defendant has failed, neglected and/or refused to administer the estate.
9. At paragraph 18, that the defendant is also the legal personal representative of the estate of Eileen Dunne deceased and in that capacity is called upon to account for her administration of the estate of Cecil Dunne Deceased.
6. In the prayer, they seek:
1. An order that the defendant administer the estate of the deceased, properly, promptly and in accordance with law.
2. An order that the defendant account for the administration of the estate of the deceased.
3. In the alternative, an order revoking and/ or cancelling the grant of letters of administration intestate de bonis non which issued to the defendant.
7. In the defence, the defendant has pleaded as follows, at paras. 1 and 2, “Preliminary objections”:
“1. The plaintiffs’ claims to a share or interest in the estate of Cecil Dunne deceased are barred by operation of section 126 of the Succession Act, 1965 as substituted in section 45 of the Statute of Limitations, 1957.
2. Further or in the alternative and without prejudice to the generality of the foregoing insofar as the plaintiffs’ claim relates to any share in land comprised in the estate of the said deceased such claim is barred by the provisions of section 125 of the Succession Act, 1965 and by operation of the Statute of Limitations Acts, 1957 – 2000.”
8. At paragraph 8, the defendant pleads as follows;
“ The defendant pleads that following the death of the said deceased, the said Eileen Dunne and the defendant herein as persons entitled to shares in the lands comprised in the Estate of the said Deceased entered into possession of these said lands and remained in exclusive possession thereof for twelve years and upwards thereafter such that the said Eileen Dunne and the defendant acquired title by possession to the said lands as regards their own shares and also the respective shares of the plaintiffs and each of them. Consequently, the claims of the plaintiffs and each of them to any share or shares or interest in the Estate of the deceased are jointly and severally statute barred pursuant to the provisions of section 125 of the Succession Act, 1965.”
9. There is also a Reply to the Defence filed by the plaintiffs wherein at paras. 2 & 3 the plaintiffs join issue with the pleas on the Statute of Limitations. In essence therefore, the defendant is pleading that Eileen Dunne and the defendant entered into possession of the lands of the deceased and remained in exclusive possession thereof for twelve years and that Eileen Dunne and the defendant acquired title by adverse possession as regards his own share, and also that the plaintiffs’ shares are statute barred pursuant to section 125 of the Succession Act and section 18 of the Statute of Limitations.
10. The defendant may be right or wrong in that claim; that is not a matter for me to decide, that is a matter for the trial judge to decide at the full hearing of the action. The only issue I have to decide in this application is whether the defendant has a conflict of interest or not.
The legal principles
11. Many statutory provisions and case law have been opened to me in the course of this hearing. There is a somewhat complex statutory framework which governs this issue.
12. The relevant statutory provisions are as follows: section 10 of the Succession Act, 1965 provides at s. 10 (1) that “the real and personal estate of a deceased person, shall on his death, notwithstanding any testamentary disposition, devolve on and become vested in his personal representatives.” Subsection. 3 provides: “the personal representatives shall be the representatives of the deceased in regard to his real and personal estate and shall hold the estate as trustees for the persons by law entitled thereto.”
13. Section 27 (2) of the Succession Act provides that: “The High Court shall have power to revoke, cancel or recall any grant of administration.”
14. The third provision is section 123 (1) of the Succession Act which provides that “A personal representative in the capacity of personal representative shall not, by reason only of section 10, be a trustee for the purposes of the Statute of Limitations, 1957”.
15. Section 125 (1) of the Succession Act provides “Where each of two or more persons is entitled to any share in land comprised in the estate of a deceased person, whether such shares are equal or unequal, and any or all of them enter into possession of the land, then, notwithstanding any rule of law to the contrary, those who enter shall (as between themselves and as between themselves and those (if any) who do not enter) be deemed, for the purposes of the Statute of Limitations, 1957, to have entered and to acquire title by possession as joint tenants (and not as tenants in common) as regards their own respective shares and also as regards the respective shares of those (if any) who do not enter.” Section 125 (2) provides “Subsection (1) shall apply whether or not any such person entered into possession as personal representative of the deceased, or having entered, was subsequently granted representation to the estate of the deceased”.
16. Section 126 of the Succession Act amends s.45 of the Statute of Limitations by providing as follows: “The Statute of Limitations, 1957, is hereby amended by the substitution of the following section for section 45: ‘45. (1) Subject to section 71, no action in respect of any claim to the estate of a deceased person or to any share or interest in such estate, whether under a will, on intestacy or under section 111 of the Succession Act, 1965, shall be brought after the expiration of six years from the date when the right to receive the share or interest accrued.”
17. Section 24 of the Statute of Limitations 1957 provides “Subject to section 25 of this Act and to section 52 of the Act of 1891, at the expiration of the period fixed by this Act for any person to bring an action to recover land, the title of that person to the land shall be extinguished.”
18. I have also been referred to numerous cases in relation to applications to have personal representatives or executors removed and/or replaced. It is agreed between the parties that the leading case in this area, dealing with the removal and/ or replacement of executors is the Supreme Court decision in Dunne v Heffernan & Ors [1997] 3 I.R. 431.
19. In that case Lynch J gave a decision on behalf of a unanimous Supreme Court. The head note to that decision states at para. 2:
“That once an executor had been appointed, had proven a will and had thus accepted the duty of administering a testator’s estate, he or she could be removed… only if there were serious grounds or weighty reasons for overruling the wishes of the testator. Serious misconduct and/ or serious special circumstances on the part of the executor would be required in order to justify such a drastic step. The appointment of a new executor pursuant to s.27 ss. 4 of the Act of 1965 was not justified merely because one of the beneficiaries felt frustrated or excluded from his legitimate concerns.”
20. At page 442 of the report, Lynch J states as follows:
“An order removing the defendant as executrix… and appointing some other person as administrator with the will annexed (by virtue of s.27 ss.4) is a very serious step to take. It is not justified because one of the beneficiaries appears to have felt frustrated and excluded from what he considers his legitimate concerns. It would require serious misconduct and/or serious special circumstances on the part of the executrix to justify such a drastic step.”
21. I pause here to note that there appears therefore to be two possible grounds upon which an executrix or executor or personal representative could be removed: these are either (a.) serious misconduct or (b.) serious special circumstances. On the facts of this case, no serious misconduct has been alleged and the application is made on the grounds of serious special circumstances.
22. At page 447 of the report, Lynch J also states as follows:
“A fact of the matter is that the defendant has done nothing wrong in her capacity as executrix and the mistaken perception of the plaintiff that she has done wrong, cannot alter the position that she has not. The alleged conflict of interest is flimsy in the extreme. Any family business can raise similar situations to those arising in this case and it would be a strange state of affairs if a parent or a member of a family was not entitled to entrust the administration of their estate to a child or brother or sister just because of the nature and complications of the business enterprise.”
23. In Flood & Anor v Flood [1999] 2 IR 234, Macken J, in the High Court, did order the removal of the defendant as executor because there was a sufficient question mark over the transfers of monies in question to justify considering the appointment of an alternative person as administrator of the estate of the deceased. In that case, as is set out in the head note to the case, the defendant was the executor of the estate of the deceased, the plaintiff claimed that the defendant had borrowed monies from the deceased which he was now refusing to pay back to the estate. They claimed that this created a conflict of interest between the defendant’s role as executor to the estate and as a possible debtor to that estate. The defendant denied that the monies were owed to the estate and claimed that if any such monies were owing, the plaintiff’s claim was statute barred and no prudent executor would endanger the assets of an estate in litigation which had only a remote prospect of success.
24. The High Court held that there was a sufficient question mark over the transfer of monies in question to justify considering the appointment of an alternative person. Secondly it held that, as it was not possible at this state of the proceedings to determine the questions regarding the status of the monies at issue and the relevant limitation period, it was not possible to accept the defendant’s argument that no cause of action could exist. Thirdly, it held that given the defendant’s stated intention not to return the monies to the estate, there was a conflict between his role as executor and his position as a possible debtor to that estate. Fourthly, it held that removal of an executor was only justified where there was serious misconduct on the part of the executor and/or some other serious special circumstance and although the Court would be reluctant to take steps which might have the effect of depleting the value of the estate, the issues between the parties regarding the monies constituted sufficiently serious circumstances to justify the removal of the defendant from his position as executor.
25. At p. 242 of the decision Macken J stated as follows:
“Since the defendant has clearly stated – and this has been confirmed by the defendant’s solicitor – that he does not intend to return the monies to the estate, and intends to continue to claim it was a gift, it seems to me that the defendant is, on the facts, in a complete conflict between his role as executor, since as such executor he has no intention of ensuring the monies are returned to the estate, and his role as possible debtor to the estate.
In these circumstances, I have to consider finally whether, even accepting that there is a conflict, it would nevertheless not be appropriate to appoint an alternative person to administer the estate of the late Christopher Flood. The real basis for the defendant’s argument against such appointment is that one of the plaintiffs, or indeed an appointed administrator could not, as a prudent administrator, expend the monies in question on an action which, the defendant says, has little chance of success. Whereas I think it is proper to take into account the fact that a prudent administrator might not embark on such a course of action, nevertheless in the circumstances of this case, I am satisfied that the plaintiffs have set out and established sufficient facts to suggest that there is a serious matter to be considered.”
26. She then sets out some of the facts and on p. 243 she states:
“A court should not remove an executor from his role, unless it is satisfied that it is necessary so to do. It is clear from the decision in Dunne v Heffernan [1997] 3 I.R. 431, that the Supreme Court considers this should only occur where the court is satisfied it must be done and that Court made it clear that it is a very serious step to take. It is not justified because one of the beneficiaries appears to have felt frustrated and excluded, but requires serious misconduct and/ or serious special circumstances on the part of the executor to justify such a drastic step…
Having regard to the decision of the Supreme Court in Dunne v Heffernan [1997] 3 I.R. 431 above and although I am reluctant to take steps which would in any way have the effect of depleting the value of the estate, nevertheless I am also satisfied that a very serious matter arises in the administration of the estate, and the only way in which that can be dealt with is to remove the defendant as executor (pursuant to s. 26 (2) of the Succession Act) and appoint an alternative to the defendant, pursuant to s.27 (4) of that Act.”
27. The next relevant decision which I have considered is Kirby v Barden 12th March 1999 (Unreported), a decision of Carroll J. At p. 6 of the decision Carroll J states as follows:
“[that] the proper person to query the entitlement of the defendant to retain the £29,000 is the personal representative of Margaret Dill who is the defendant herself. There is no presumption of advancement to support her claim. This creates a conflict of interest that cannot be reconciled.”
28. At p. 7, the learned Judge states as follows:
“The conflict of interest between her claim to be beneficially entitled to the bulk of Margaret Dill’s liquid assets and the duty of a personal representative to get in the assets, can only be resolved by removing her as personal representative of Margaret Dill’s estate.”
And subsequently:
“I accept that the jurisdiction of the Court to remove a trustee should be exercised with caution [see Arnold v Arnold, (1924) 58 ILTR 145]. I consider the circumstances of this case amply justify such removal.”
29. The next relevant case which I have considered is the case of Gunning v Gunning Hameed 31st July 2003 (Unreported) a decision of Smith J. At p. 3 of the judgment Smith J states as follows:
“The primary obligation of any trustee is to protect in advance the interests of the beneficiaries. The case of Cowan v Scargill (1985) Ch 270 is the relevant legal authority supportive of this general proposition. Therein Megarry, VC stated that:-
‘The starting point is the duty of trustees to exercise their powers in the best interests of the present and future beneficiaries of the trust, holding the scales impartially between different classes of beneficiaries. This duty of the trustees towards the beneficiaries is paramount. They must, of course, obey the law; but subject to that, they must put the interest of their beneficiaries first. When the purpose of the trust is to provide financial benefits for the beneficiaries, as is usually the case, the best interests of the beneficiaries are normally the best financial interest.”
30. At p.7 of his decision, Smith J states as follows:
“In the instant case the defendant’s intention to have herself registered as owner of the premises is in complete conflict with her role as executrix. In my judgment it is a very necessary and serious step to take to remove the defendant from her role – but on the evidence I am satisfied that it must be done. It is the only way in which this matter can be dealt with properly and impartially.”
31. Another relevant case to which I have had regard is the decision in Scally v Rhatigan [2012] 2 I.R. 286 where Laffoy J held that it would be inappropriate to grant probate of the will to the plaintiff’s solicitor as her potentially conflicted position amounted to “serious special circumstances” in the sense intended by Lynch J in Dunne v Heffernan. If a grant of probate of the will were to have issued to the plaintiff, she might not only have been conflicted as to her professional duties as a solicitor, but she would have had a potential conflict of interest. The plaintiff might have been in a position of having irreconcilable duties to the beneficiaries of the estate assets, on the one hand, and the beneficiaries of the non- estate assets, on the other hand.
32. In that case, the court removed Ms Scally as personal representative because of a potential conflict of interest. In the present case, I am dealing with an actual conflict of interest, rather than a potential conflict of interest. In the Scally decision the court also removed the personal representative even though she did not seek to gain in any way under the estate, whereas here, the defendant is laying claim to the bulk of the Estate.
The conflict of interest raised in this case
33. The conflict of interest raised in this case can be stated in the following terms:
1. The defendant is the personal representative of the Estate; his duty is to gather in the appropriate assets of the estate and to distribute them.
2. The bulk of the assets in the estate are in fact being claimed by the defendant in his personal capacity. He says that he has acquired the bulk of the assets of the estate, namely land, by virtue of adverse possession and therefore has acquired possessory title which defeats the interests of the plaintiff.
34. The matter only has to be stated in these stark terms to reveal the clear conflict of interest. Thus, if the personal representative in this case took the view that the claim for adverse possession was not well – founded, he would issue proceedings against the person making that claim. In such a case, William Dunne, acting as personal representative, would be the plaintiff, and William Dunne, as the person making the claim for adverse possession would be the defendant. This shows in clear and unequivocal terms that Mr Dunne has a conflict of interest in his role as personal representative.
35. Mr Dunne’s claim for adverse possession may be a good, or a bad claim, that is not the point in this application. Again, as I stated above, that is a matter for the trial judge. The issue here, is whether he is in a conflict of interest situation and in my view, he is. The fact that this is so is also confirmed by the fact that both counsel confirmed, that in the event that Mr Dunne was replaced as personal representative, what would happen, is that a new personal representative would be appointed, that he or she would review the file and that he or she may decide not to plead the statute. However, it would then fall on William Dunne to hand back land to which he has claimed possessory title and if he did not do so, then it would result either in the new personal representative issuing proceedings against Mr Dunne, or, Mr Dunne issuing proceedings against the personal representative, seeking declaratory orders in relation to his alleged possessory title.
36. Again however, that would show clearly what an indefensible conflict of interest Mr Dunne has placed himself in, not, I emphasise, by claiming adverse possession but rather by seeking also to be the personal representative. Counsel for the defendant sought to argue that Mr Dunne had merely pleaded the statute in his defence and therefore there was no conflict of interest or misconduct; however, in my view that is to ignore the substance of these pleas in the defence.
37. The pleas, when taken in conjunction with para. 8 of the defence, raise a substantive plea: firstly that the defendant has been in adverse possession of the land for over twelve years; secondly, that the defendant has hereby acquired possessory title to these lands; thirdly, that this title defeats the claims of the plaintiff and; fourthly, that the defendant’s claims are statute barred. It is the substance of these pleas and the substance of his defence as a beneficiary, that puts him in a conflict of interest in his role as a personal representative. As personal representative, he must contest the claims of a beneficiary, to a large portion of the estate, if he is of the view that there are valid grounds for such a challenge. In this case, the beneficiary and the personal representative are the same person, so he would, in effect, be suing himself. This of course would never happen, and he is therefore not in a position to properly discharge his duties as a personal representative.
38. Moreover, I am satisfied on the affidavit evidence before the court, that there are bona fide and reasonable grounds upon which to challenge the claim for adverse possession. These claims are set out at para. 24 of the grounding affidavit of Cecil Dunne and para 24 states as follows:
“Argument Available to the Estate of Cecil Dunne
The circumstances and acknowledgments to which we refer above (and of which we are currently aware), which might be relied upon in support of the assertion on behalf of the estate of Cecil Dunne that its title was not extinguished by Eileen Dunne and/ or the defendant, may be summarised as follows:
(a) Eileen Dunne, in completing the Inland Revenue affidavit, identified herself and 14 children as the persons entitled to the estate.
(b) The Moatfield lands were vested by assent in Eileen Dunne, and she received them, expressly as trustee.
(c) As far as we are aware, Eileen Dunne never took steps to vest any of the deceased’s lands in herself.
(d) Some time shortly after 2000, Eileen Dunne wished to transfer a site… to her daughter Valerie… but decided against doing so when she encountered resistance/ non – co – operation from other children.
(e) Various statements have been made to by or on behalf of the defendant, as executor of Eileen Dunne, that we believe necessarily imply that her use or occupation of the land was as trustee for the estate. Thus:-
(i) By letter of the 20th April 2011 Patrick J Farrell Solicitors stated that they acted on behalf of Eileen Dunne in the administration of the estate… and the letter concludes as follows:
‘The matter of the one forty second share of the fourteen children in the estate of Cecil Dunne will be addressed when this grant of probate (of Eileen Dunne) issues and the estate can then be administered.’
(ii) By letter of 31st August 2011, Patrick J Farrell Solicitors stated (a) that they act for the executor of Eileen Dunne (being the defendant herein) and (b) that they acted for Eileen Dunne during her lifetime. The letter goes on to say that Eileen Dunne was entitled to a two thirds share of her husband’s estate on his intestate death and that his children were entitled to the balance between them (which is admittedly no more than a statement of fact). The letter goes on to say, however, that ‘ our client is aware of all of the above and when the grant of probate issues he will then be in a position to address the matter of the entitlement of the beneficiaries to their share of their father’s estate’ and that ‘our client’s hands are tied until the grant of probate issues to his mother’s estate.”
The affidavit continues:
“We believe that it is hard to read the foregoing as anything other than implied acknowledgment of the deceased’s childrens’ surviving entitlement to a share in the deceased’s estate.”
39. There are other paragraphs set out in the affidavit at paras. (iii), (iv), (v) and then at paras. (f) – (j) inclusive. It is not necessary for me to set out all of these in full. It is sufficient to note that there is, in my view, sufficient affidavit evidence put before this court to indicate that there is a reasonable argument available to contest the claim being made by the defendant for adverse possession of the land.
40. Again, to reiterate, the defendant’s claim may or may not succeed – that is a matter for another day – but it is clear that the defendant is in a conflict of interest in this situation. Clearly, these are matters which the personal representative needs to consider and to test Mr Dunne’s claim to his possessory title, to the bulk of the estate, by adverse possession. But it is clear that the personal representative cannot do this properly if he is the same person as the person who is claiming the right to the property under adverse possession.
41. I also note that the defendant accepts at para. 33 of their legal submissions, that the plaintiffs have evidence to adduce, and arguments to marshall, in support of their claim that their intestate share of the Estate of the deceased was at all times acknowledged.
42. However of course, these are arguments in evidence that should be deployed by the personal representatives, not the plaintiffs, against the person asserting the right of adverse possession – in this case, the defendant. Thus the defendant is defending an action as personal representative which arguably he should not be defending. The personal representative instead, should be the plaintiff in any action against William Dunne, in relation to the recovery of the lands.
43. It is indeed difficult to see, on what basis the defendant sought to defend his position. It is such an obvious conflict of interest- that Mr Dunne cannot be both plaintiff, and the defendant, in the same proceedings, and that he cannot sue himself.
44. Mr Dunne, as personal representative, is seeking to rely on the truthfulness of what Mr William Dunne, beneficiary, is saying with respect to the claim for adverse possession. This is clearly a conflict of interest situation. The consequences are that the defendant’s claims for adverse possession would not be properly challenged by the personal representative. That personal representative remains Mr William Dunne himself. That is a very serious situation which can only be resolved by Mr Dunne’s removal.
Conclusion
45. I would therefore conclude:
1. That Mr Dunne is in a serious, obvious and indefensible conflict of interest situation in his role as personal representative.
2. That this is a serious special circumstance to justify his removal within the terms of the Supreme Court decision in Dunne v Heffernan.
Muckian v Hoey
[2016] IEHC 688
JUDGMENT of Mr. Justice David Keane delivered on the 25th November 2016
Introduction
1. This is an action to remove an administratrix and to appoint in her place a firm of professional trustees.
2. The applicants are both daughters of Michael Hoey (‘the deceased’), who died intestate on the 13th October 2003, and Albina Hoey, the first respondent.
3. The first respondent is the widow of the deceased. She is the present administratrix and personal representative of his estate, having been granted letters of administration on the 22nd May 2009, some five and a half years after his death.
4. The four additional respondents are the other children of the marriage between the deceased and the first respondent. They are the siblings of the applicants.
Background
5. The evidence before the Court is quite limited. On the applicants’ side, it comprises the averments contained in, and documents exhibited to, the relatively short affidavit that the first applicant swore on the 17th July 2015 to ground the special summons on foot of which the present application is brought. On the respondents’ side, it amounts to the averments in, and exhibits to, a replying affidavit sworn by the first respondent on the 8th January 2016. From those affidavits, I gather that the following facts are not in dispute.
6. The first respondent swore an Inland Revenue affidavit on the 6th April 2009 in support of her application for a grant of administration intestate of the deceased’s estate. It identifies the place of death of the deceased as Newry, County Down and his domicile at the time of his death as Northern Ireland. The real property of the deceased within the State was valued at €1,220,000, representing farmlands in Counties Monaghan and Louth valued at €860,000 and a commercial premises in the town of Dundalk, County Louth, valued at €360,000. Bank accounts held by the deceased with a financial institution within the State contained funds then totalling €628,891.78. The real property of the deceased in Northern Ireland was valued at €1,698,528. As disclosed in that affidavit, it comprised a house, shop and yard in or near the village of Crossmaglen in County Armagh, then valued at €551,470, and farmlands at Culloville, County Armagh then valued at €1,147,058.
7. It would appear that, at the time of his death, the deceased was entitled to a one quarter share in the estate of his late father, John Hoey, who held farmlands in County Monaghan, and to a share in the estate of a deceased sibling, Thomas Hoey, who owned a cottage and lands also in County Monaghan. At the time of John Hoey’s death in 2000, the deceased had three surviving siblings: the said Thomas Hoey; Ann Ita Hoey; and Aimee Hoey. It seems that Thomas Hoey died in 2002, Aimey Hoey died in 2004, and Ita Ann Hoey died in 2013.
The deceased’s estate in Northern Ireland
8. On the 13th May 2009, the High Court of Justice in Northern Ireland granted letters of administration of the deceased’s estate in that jurisdiction to the first respondent.
9. On the 15th March 2011, the applicants issued proceedings in that court, seeking an Order under Article 35 of the Wills and Administration Proceedings (Northern Ireland) Order 1994, removing the first respondent as adminstratrix of that estate. In a judgment delivered on the 20th March 2014, the Northern Ireland High Court (in the person of Deeny J.) acceded to that application and appointed a firm of professional trustees, Cleaver, Fulton and Rankin Trustees Limited, as administrator of the estate in place of the first respondent. An approved copy of the text of that ex tempore decision is exhibited to the grounding affidavit of the first applicant. It is striking in its clear exposition and cogent analysis.
10. Deeny J. identified a number of points of serious concern regarding the first respondent’s purported discharge of her duties as administratrix of her deceased husband’s estate in Northern Ireland.
11. First, there was a considerable delay in the administration of the estate. It was then more than ten years after the death of Michael Hoey, and a draft distribution account had only recently been furnished by the first respondent in response to an express order of the court. The applicants had been prevailed upon to wait for some time after Michael Hoey’s death to enable matters to be put in hand, but when they wrote to the first respondent’s solicitors seeking details of the administration more than three years later, they received no reply. An inheritance tax account was not submitted to the appropriate authorities until January 2009, more than five years after Michael Hoey’s death. Letters of administration were not obtained until March 2009. These delays prompted the applicants to register cautions against the lands of the deceased in Northern Ireland in September 2009.
12. Second, as the first respondent acknowledges, two sons of the family have been given a farm each, as well as the use of the yard in Crossmaglen for the purpose of continuing to conduct the business previously operated by the deceased there. That business involves the sale of coal, meal and, perhaps also, oil. Five weeks after the applicants moved to register cautions against the Northern Ireland lands, they were for the first time offered monies purportedly representing their proper share of the proceeds of the sale of those properties to their brothers by the first respondent as administratrix. They rejected the payment offered as unsatisfactory.
13. Third, the first respondent was directed to provide a full inventory of the Northern Ireland estate by the Master of the High Court there on the 7th May 2010. When she did so, eleven months later, it became apparent that there was no personal representative’s bank account. It then transpired that the first respondent had not received payment as administratrix for the lands that the estate sold to certain of the other respondents but rather had determined that the relevant respondent in each case should pay the applicants a sum equivalent to the share of each in the notional proceeds of the relevant transaction. The first respondent attempted to justify that course by reference to the existence of waivers signed by certain of the respondents but Deeny J. found that those waivers did not cover all of the properties concerned and did not explain the failure properly to account to the applicants, neither of whom had signed any of those purported waivers, for their share of the proceeds.
14. Fourth, it would appear that the first respondent’s solicitors in Northern Ireland received the sum of €732,650 that had by then accumulated in the deceased’s bank accounts within this jurisdiction but that, according to the relevant ledger account, instead of being placed in an administration account, €600,000 of that sum was simply paid out by those solicitors to the first respondent without any clear distribution or, indeed, evidence of any distribution at all.
15. Fifth, it emerged that it was the first respondent’s contention, as administratrix, that no benefit whatsoever had accrued to the estate by way of income or profit from the agricultural and other property holdings of the deceased during the period of more than 10 years that had elapsed since his death. The first respondent gave evidence that this was so because the income generated was matched by rates and other charges on those holdings. With commendable understatement, Deeny J. described the failure of that property to yield any benefit to the estate during so long a period as ‘very remarkable’, before pointing out that the root problem lies in the first respondent’s failure, as administratrix, to account for the relevant income and expenditure to each of the beneficiaries.
The basis for the application
16. The applicants contend that the first respondent has been guilty of excessive delay in the administration of the estate and has misunderstood her obligations as administratrix by, amongst other things:
(a) transferring lands without the consideration for such lands being collected into the estate of the deceased;
(b) sending a letter dated the 14th December 2004 to the Department of Agriculture and Food which misrepresented the interest of the deceased in his late father’s estate (as being a two thirds, rather than one quarter), and
(c) swearing an affidavit which omits reference to Ann Ita Hoey, and which exhibits a document authored by the first respondent which omits mention of the applicants.
17. I propose to examine each of those contentions in turn.
i. delay
18. When the present application came before this Court on the 27th April last, Michael Hoey had been deceased for over twelve years. A draft distribution account was produced for the first time as an exhibit to the affidavit sworn by the first respondent on the 8th January of this year.
19. The only explanation that the first respondent has offered for what is, by any measure, an extraordinary delay in the administration of the deceased’s estate is that ‘the circumstances of the deceased’s death and the range and extent of his estate involved considerable input of time and effort on the part of myself and my then solicitors so as to enable an application for a grant of administration….’ That explanation is too limited and too vague to be of any practical comfort or assistance.
ii. failure to collect and get in the estate
20. The applicants complain that the first respondent has transferred estate lands without gathering the consideration for those lands into the estate. The first respondent acknowledges that, in her capacity as administratrix of the deceased’s estate, she transferred the greater part, if not the entire, of the deceased’s farmlands in Counties Monaghan and Louth to the third respondent on the 14th September 2009 for a consideration of €400,000, and that she transferred the commercial premises in the town of Dundalk to the fourth respondent on the 12th August 2009 for an identical consideration.
21. While emphasising that those transfers were effected for consideration, the first respondent accepts, if only implicitly, that the relevant consideration was never gathered into the estate. Instead, just as Deeny J. found was done in relation to the transfer of estate property in the North, the first respondent appears to have determined that no money should be paid into the estate’s account but, rather, in respect of each property, the son who acquired it should tender to her solicitors a sum equivalent to the share of each of the applicants in the notional proceeds of sale, which sum her solicitors should (however belatedly) furnish her with a receipt for, before (or after) sending each of the applicants a cheque representing the share of each in those notional proceeds as part of their share in the deceased’s estate.
22. The first respondent avers that each of the respondents waived his or her claim to a share of each of those properties, although the waiver she exhibits in respect of the Monaghan and Louth lands is not signed by the second respondent and no such waiver is exhibited in relation to the Dundalk property. That is a striking omission in light of the difficulties that Deeny J. identified with the waivers that the first respondent sought to rely upon in respect of both certain estate property in the North and the monies on deposit within the State.
23. An equally fundamental concern is that, although the first respondent fails to address the issue in her replying affidavit, it is implicit in the averments that she does make that no personal representative’s account has been established within the State.
24. In addition, just as Deeny J. did in relation to the distribution account belatedly produced in respect of the administration of the deceased’s estate in Northern Ireland, I take the view that the long overdue draft distribution account exhibited to the first respondent’s replying affidavit last January raises as many questions as it answers.
25. To address only the most obvious of those questions, it seems that I am being asked to accept by implication that neither the Dundalk commercial premises nor the Monaghan and Louth farmlands generated any profit or income for the estate during the period of almost six years between the death of Michael Hoey and the sale of those properties by the first respondent. Equally, it seems that the first respondent is inviting the Court to proceed on the basis that the funds at bank of €628,891 when the Inland Revenue affidavit was sworn on the 6th April 2009 had precisely the same value to the estate when the first respondent swore her replying affidavit on the 8th January this year, almost seven years later. Of course, the deeper problem lies in the first respondent’s complete failure, as administratrix, to account to each of the beneficiaries (including the applicants) for the relevant income, expenditure and interest.
26. It is possible that the explanation for these significant shortcomings may be found in the first respondent’s apparent belief that, as the widow of the deceased and the mother of the other beneficiaries, she is at large in relation to the distribution of the deceased’s estate, subject only to her own conception of fairness, rather than bound, as administratrix of that estate, by the rules governing distribution on intestacy. That is certainly the impression conveyed by a significant portion of her affidavit, in which she sets out her understanding of the provision that the deceased sought to make for each of his children during his lifetime. But whatever the explanation, the duties imposed upon a personal representative by operation of law cannot be disregarded or disapplied in favour of some other conception of fairness, even one as beguiling as ‘mother knows best.’
27. For these reasons, I am satisfied that the first respondent has failed in her primary duty as administratrix properly to gather in the property of the estate. I am further satisfied that, in the context of the present application, the first respondent has failed properly to account to the beneficiaries of the estate for its assets and liabilities.
iii. errors in administration
28. The applicants place significant additional reliance on certain alleged errors that the first respondent made in correspondence in relation to the deceased’s estate in 2004. They point to a letter that the first respondent sent to the Department of Agriculture and Food on the 14th December 2004. In that letter, the first respondent asserted a claim to two thirds of the payment entitlement in respect of her deceased father-in-law’s lands, arising under the Single Payment Scheme then operated by that Department. The applicants point out that the deceased was only entitled to a one quarter share in his father’s estate, so that the first respondent’s entitlement to a two thirds share of the deceased’s estate on his intestacy would only entitle her to two thirds of one quarter (or one sixth) of that entitlement in her personal capacity or one quarter of that entitlement in her capacity as administratrix of the deceased’s estate.
29. The first respondent concluded the said letter by confirming her consent to the payment to her son, the third respondent, of her asserted entitlement to two thirds of that payment. The applicants complain that this enabled the third respondent to exhibit that letter to an affidavit that he swore on the same date, the 14th December 2004, in seeking that payment in full. The applicants point out that, while the said affidavit properly acknowledges the one third share of the deceased’s estate to which his six children are entitled, the said application was accompanied by a letter of waiver in that regard that was signed only by four of those children and not by the applicants.
30. In light of the conclusions I have already reached, it is not necessary to express any view on this particular complaint, beyond observing that no attempt appears to have been made by the first respondent to account for the value of the estate’s share of the relevant payment entitlement in the draft distribution account upon which she now seeks to rely.
The Law
31. In Wiley, Irish Land Law 5th edn. (Dublin, 2013), the general position of a personal representative in relation to a deceased person’s estate is neatly summarised as follows (at para. 18.27, p. 839):
‘A personal representative is under a duty (a) to collect and get in the estate and administer it according to law; (b) when required by the court, to exhibit on oath in court a full inventory of the estate and, when so required, to render an account of administration to the court; (c) when required by the High Court, to deliver up the grant of probate or administration.’
32. S. 27, sub-s. 2 of the Succession Act 1965 provides that the High Court shall have power to revoke, cancel or recall any grant of administration.
33. S. 27, sub-s. 4 of that Act states in material part:
‘Where by reason of any special circumstance it appears to the High Court …to be necessary or expedient to do so, the Court may order that administration be granted to such person as it thinks fit.’
34. In Dunne v Heffernan [1997] 3 I.R. 431, the Supreme Court considered the test for the removal of an executrix and the appointment of an administrator in her place. In giving judgment for the Court, Lynch J. declared (at pp. 442-3):
‘An order removing the defendant as executrix (which would be made by virtue of s. 26, sub-s. 2 and not s. 27, sub-s. 4 of the Succession Act, 1965) and appointing some other person as administrator with the will annexed by virtue of s. 27, sub-s 4, is a very serious step to take. It is not justified because one of the beneficiaries appears to have felt frustrated and excluded from what he considered his legitimate concerns. It would require serious misconduct and/or serious special circumstances on the part of the executrix to justify such a drastic step.’
35. However, later in the judgment, Lynch J. qualified that principle in the following way (at p. 444):
‘Where the person nominated to be executor renounces, or where no executor is appointed, or on an intestacy, the right to administration is determined by the Rules of the Superior Courts in O. 79, r. 5. In such a case, the person entitled to the grant of administration may be passed over more readily and someone else appointed pursuant to s. 27, sub-s. 4 than where an executor is appointed and accepts the appointment by proving the will when weighty reasons must be established before the grant of probate would be revoked and cancelled pursuant to s. 26, sub-s. 2 and the testator’s chosen representative thereby removed, and someone else not chosen by the testator appointed pursuant to s. 27, sub-s. 4 of the Act of 1965.’
36. What, then, amounts to a ‘special circumstance’ or ‘serious special circumstance’ that would render it necessary or expedient to replace an administratrix rather than, or more readily than, an executrix? Deeny J. found the answer to a closely analogous question in the judgment of Lord Blackburn in Letterstedt v Broers (1884) 9 App. Cas. 371 at 386, cited by Lewison J. in The Thomas and Agnes Carvel Foundation v Carvel [2008] Ch 395 at para [44]. In short, while not every mistake or neglect of duty or inaccuracy of conduct will require the replacement of an administrator or administratrix, acts or omissions that endanger the estate property, or show a want of honesty or a want of proper capacity to execute the duties, or a want of reasonable fidelity, may do so. The overriding consideration is, therefore, whether the estate is being properly administered; the main guide must be the welfare of the beneficiaries.
Conclusion
37. Applying the law as I have described it to the facts presented, my conclusions are as follows:
(a) A pronounced delay on the part of a personal representative in the administration of an estate could, alone or in combination with other factors, amount to a special circumstance warranting the removal and replacement of that person.
(b) A failure by a personal representative to discharge the fundamental duty to collect and get in the estate and administer it according to law can, depending on the gravity or extent of that failure, whether alone or in combination with other factors, amount to a special circumstance warranting the removal and replacement of that person.
(c) An administrator (or administratrix) may be replaced more readily in such circumstances than an executor.
(d) The factors identified at (a) and (b) above are both applicable in the circumstances of the present case and each demonstrates a want of proper capacity on the part of the first respondent to execute the duties of administratrix, amounting to a special circumstance.
(e) Considering those factors individually in this case, I am satisfied that it is appropriate, indeed necessary, by reference to each to replace the first respondent as administrator of the deceased’s estate. It is certainly necessary to do so on considering them in combination.
38. In exercise of the power conferred on the Court by s. 27, sub-s. 2 of the Succession Act 1965, I will therefore revoke the grant of administration to the first respondent and, in the special circumstances arising, I will order, pursuant to s. 27, sub-s. 4 of that Act, that administration of the deceased’s estate be granted to Cleaver, Fulton and Rankin Trustees Limited.
In Re Flood;
Flood v. Flood [1999] 2 I.R. 234 MACKEN J:
1. The Special Summons served in these proceedings seeks an order that the Court should remove the Defendant from his position as Executor of the estate of the late Christopher Flood, and appoint an alternative in his place because the Plaintiffs are dissatisfied with his administration of the estate.
Christopher Flood, of Borris, in County of Carlow, died on the 28 July 1996. He had made a will on the 11 July 1989, and probate issued on the 27 November 1997. While the will named three executors, two declined to act and probate issued to the Defendant as Executor.
Both the Plaintiffs and the Defendant are brothers and all three are children of the late Christopher Flood. There are several affidavits filed in the matter, all or almost all by children of the late Christopher Flood, and it is obvious that there is a clear dispute and what I might call a regrettable dividing line between several siblings on the one hand and other siblings (or their spouses) on the other hand.
Although there are reliefs listed in the Special Summons, for the moment, what I am asked to decide is whether at this stage, it is proper or appropriate that the Defendant should continue to act as Executor of the estate of the late Christopher Flood in circumstances where it is alleged the Defendant borrowed money from his late father. It is alleged by the Plaintiffs that the repayment of this loan is money now due to the estate, and that the Defendant has refused to acknowledge this. In the circumstances, it is said by the Plaintiffs that this stance of the Defendant is in conflict with his role as executor, because as such executor he is obliged to get in all the assets for the estate, being a trustee thereof for the beneficiaries.
The Plaintiffs submit that, if the Defendant were removed and another person appointed to act as administrator, it is the case that such person would then seek to recover the monies alleged by the Plaintiff to be due to the estate from the Defendant.
Mr Howard submits for the Plaintiff that the authorities on misconduct are sufficient to remove an executor, and cites In re: Loveday (1900) P 155 in support of the same, and the Irish cases of Spencer v Kinsella [1996] 1 ILRM 401 and Arnott v Arnott, 58 ILTR 145. Under this latter decision, it is open to the court to remove a trustee if his position is detrimental to the beneficiaries.
Mr Howard submits that the Plaintiffs position is prejudiced by the Executor’s current position, and the stance he has adopted and he relies on S 10 (3) of the Succession Act 1965.
Essentially, the dispute between the Plaintiffs and the Defendant boils down to this. In early 1989 or thereabouts, it is alleged that the late Christopher Flood transferred money to the Defendant. It amounted to a sum of more than £40,000.00 in total. It is not disputed that a sum of money passed from him to the Defendant, and the exact sum is not significantly in dispute.
What is certainly in dispute is the nature of the transaction between the Defendant and his late father Christopher Flood. It is claimed by the Defendant that the money was given as a gift, not as a loan, and that it is not money recoverable by the estate at all. In the circumstances it is said by the Defendant, no conflict could exist.
Numerous affidavits have been filed all from the several children of the late Christopher Flood, together with one affidavit from a Father Nicholas Moore, on behalf of the Plaintiffs, as to certain matters, which arose in 1994.
Leaving aside altogether the question as to whether the monies were a loan or a gift for the moment, the following factual matters can be gleaned from the affidavits and from the additional information, which I sought as to the purchase of lands referred to by the Defendant:
1. The late Christopher Flood had a bank account with The Bank of Ireland, in, I believe, Borris, Co Carlow.
2. In 1988 Mr Flood was discussing with his then Solicitors, John J Duggan & Co, of Carlow, his entitlement, if any, to secure a State pension.
3. Mr Flood had apparently spoken to his then bank manager as to the possible options, which he might consider if he wished to pursue his claim to a pension. Among these was one by which his money would remain mine” and would be released to the siblings (his children) on death.
4. In early January 1989, according to a copy of a withdrawal docket, he withdrew the sum of £37,000.
5. That £37,000 was then immediately lodged into a joint account in the names of Flood/Parsons bearing account number ‘– 33921″. This docket seems to me to be one, which was written, by a bank official because of the manner in which it was completed.
6. A duplicate statement of that account, being number 82033921, and in the name of “Mary Parsons” but headed (in hand) ‘-A/C Jack Flood & Mary Parsons” discloses that that account existed since 1984, and by’ the end of 1988 there was no money in the account. This statement shows the following additional information:
(a) an additional sum was transferred from Mr Christopher Flood’s account in the amount of £5432.42 making a total transfer by the end of January 1989 (Including interest) of £42687.36.
(b) from that account a sum of 40,000 was debited, and withdrawn or transferred in late 1989.
(c) the remaining sum continued to have interest accruing on it, and no withdrawals took place, at least until the end of 1994, the last date appearing on the statement.
7. Of the £40.000, £10.000 was lodged into an account in the name of “Jack Flood”, at the end of 1989, at the Bank of Ireland, where it remained, untouched but accruing interest until 1991, when the entire sum together with interest, was withdrawn. It amounted to £11.271.80.
8. The balance of 30,000 was sent to The Investment Bank of Ireland, by the Defendant, for investment into an IBI Lifetime Portfolio. Receipt for this was acknowledged by letter of the 25 October 1989 from the Bank.
9. The affidavits do not disclose when, if ever, this money was redeemed or realised, though this appears to have happened at some time prior to the death of the late Christopher Flood.
10. The Defendant purchased certain lands in Carlow. The date of the contract for the purchase of this was the 29 October 1991, and the date of closing was March 1993. The price was 177.000.
11. The Inland Revenue Affidavit filed on behalf of the Defendant avers to the fact that in 1989 the late Christopher Flood gave, by way of gift, the sum of £18,500 to each of the Defendant and Mary Parsons.
I now return to the affidavits. There is a conflict of fact on the affidavits. For the Plaintiffs, affidavits have been filed by Sylvester Flood, Brian Flood, Elizabeth Sheehan and Fr Nicholas Moore, and on behalf of the Defendants, by Jack Flood, Michael Flood, Mary Parsons, James Flood and Thomas Flood.
On behalf of the Plaintiff it is said that the true interpretation of the events which have occurred is that the monies were placed in an account where the late Christopher Flood had access to them, although in the names of two children, that there was no independent use of the funds for all the time they were in the joint names of the Defendant and his sister Mary Parsons, that there was never a gift to the Defendant, but that when the Defendant wanted to purchase lands in 1991 or in 1993, he sought and obtained a loan of the monies in question, and that this is due to the estate. It is also said by the Plaintiffs that the Defendant acknowledged, on more than one occasion, that the monies were a loan, both to his siblings — or some of them — and also to Father Nicholas Moore, who has sworn an affidavit to that effect.
The acknowledgement to Father Moore came in 1994, prior to the death of the late Christopher Flood in 1996 and not long after the closing of the sale of lands to the Defendant (in respect of which the Defendant admitted he used the monies). Further in relation to the purchase of the lands, Brian Flood has sworn on affidavit that he was approached by the Defendant seeking a loan for the purchase, agreed to give the money, but the matter did not come up again. The Defendant in his affidavit acknowledges that this occurred. Mr Brian Flood says that this approach was made in October 1991.
On behalf of the Defendant it is said that the monies were left to him and Mary Parsons. On affidavit the Defendant states that his father was “making a gift to us jointly of the said sum.” This appears to be at odds with the averment in the Inland Revenue Affidavit that a sum of £18,500 was given to each of Mary Parsons and Jack Flood. The Defendant and Mary Parsons say that Christopher Flood never controlled the monies once they were transferred in 1989. However, it does seem to be unusual that, if the monies were truly owned by the Defendant and Mary Parsons, it would be necessary at all for the Defendant to have asked another brother for monies which he admits he did, in the precise amount which was involved, namely, £30,000. If he owned one half of the full monies of nearly £43,000 it seems odd that that was not the first port of call for borrowing which the Defendant needed. I make no finding on this of course, but believe it is a matter for consideration at the end of the day.
The Defendant contends that in order to set aside the gift claim made by him it would be necessary to establish that the monies were given in trust, and that such a trust will not be implied but must be found in express words. It is argued on this point that a presumption lies in favour of the parties holding the monies in their own names, which would defeat a claim that a resulting trust had been created. The defendant therefore says that if it was a gift the limitation period has caused any cause of action to be extinguished.
The Defendant further says that he does not recall saying to any of the persons who claimed it to be so, that he had received the monies as a loan, although the Defendant is careful not to deny that he said so. The Defendant also swears he does not recall admitting to any of those parties, including Father Moore, that a sum of 7000 had been repaid.
What is curious about this sum of £7000 is that it is the exact sum, which the Defendant acknowledges he returned, not to his late father Christopher Flood, but to his sister Mary Parsons. I do not find it coincidental that this figure is reflected in both sets of affidavits. What is clearly not admitted by the Defendant on affidavit is that he said anything about the sum of £7000, even by way of repayment to Mary Parsons, although there would have been no difficulty in doing so, were the Defendant’s contention, and that of Mary Parsons correct, namely that monies were given as gift. Indeed, in the context of such a gift, the explanation that a sum had been borrowed from Mary Parsons, and a sum repaid to her, would not have gone amiss, and would be consistent with the Defendant’s contention.
The Defendant does, however, argue that there was no admission of the type, which is required to extend the limitation period pursuant to the provisions of the Statute of Limitations, because of course any such admission, must be made in writing and must be made to the person to whom the debt is owed. It is certain that there is no evidence that any such admission was made in writing, and also there is no evidence whatsoever that any such admissions was ever made to the late Christopher Flood, deceased. In these circumstances, it is said, that even if it was originally a loan, and therefore a debt, which would have been repayable, the time limit has expired and no cause of action exists in respect of those monies by virtue of any supposed extension of the limitation period arising from what the Plaintiff calls “an admission”.
I am unable to say, on the affidavit evidence that the sum was or was not given by the late Christopher Flood to the Defendant and his sister by means of a gift or by means of a loan. However, I am of the view that there is a sufficient question mark over the transfer of the funds to justify considering the appointment of an alternative person as administrator of the estate of the late Christopher Flood. It is not appropriate to do so, unless the circumstances do, in fact, warrant it, and the court should be slow to accede to such an application. Mr O’Doul on behalf of the Defendant argued that the Court’s jurisdiction to revoke a grant should only be exercised in circumstances of serious misconduct and that no such misconduct exits here. He also argues that it should not be invoked if the Plaintiffs evidence on the matter is not strong.
Before therefore acceding to the application, I now turn to further argument made on behalf of the Defendant that the court should not accede to the request, even if there were grounds to do so, because any claim, which did exist, has been extinguished by virtue of the Statute of Limitations.
This involves a consideration of the likely dates when the monies were advanced, or utilised, both before and after the death of the late Christopher Flood, and the effect, if any, of the claim that the Defendant acknowledged that it was indeed a loan and not a gift.
The key dates appear as follows:-
(a) In late 1989 a sum of money was transferred from the account of Christopher Flood into an account, at that time in the name of Mary Parsons, subsequently designated as being a joint account in the names of the Defendant and Mary Parsons;
(b) The monies were utilised in part to secure investment funds with growth value, and most of the balance remained in a separate account in the joint names, leaving a small sum in the original Mary Parsons account;
(c) No further transactions appear on the account(s) in question between then and 1991, when the second joint account, which held over £11,000, was closed. There is no indication as to where this last sum went.
(d) The balance of the monies in the original Mary Parsons account, amounting to over 4000, remained in that account at least to 1994;
(e) At some unspecified date, the £30,000, which had been deposited was withdrawn and utilised, in accordance with what the Defendant says towards the purchase of a farm by the Defendant.
(f) The contract was executed in 1991 and the contract closed in 1993.
(g) The late Mr Christopher Flood died on the 28 July 1996:
(h) Probate was granted on the 27 November 1997.
If monies were given in January 1989 by means of a gift, no claim could be made in respect of the same. If it were given by way of loan, at that time, the loan would be repayable by January 1995. If no demand was made for repayment during that period, and there was no acknowledgement of the debt within that statutory period, no claim could be made either by the late Christopher Flood while alive or by any other person on behalf of the estate, since there remained no debt after the January 1995 date. If the loan were acknowledged as being just that, namely a loan to the Defendant, then the limitation period would run from the time of acknowledgement. The claim, which is made, is that, even if the loan was given in 1989 an acknowledgement was made in 1994 and again in 1995, and therefore the debt was not extinguished after 6 years from the beginning of 1989, but a lot later.
If monies were given to the Defendant and Mary Parsons jointly or otherwise, but in circumstances where the money although held in their names nevertheless continued to belong beneficially to Christopher Flood, then the triggering date for the Statute is the date when the monies were “loaned”, or appropriated out of the full sums in favour of the Defendant. That appears to be either October 1991 when the contract was signed or March 1993 when closing occurred. It is acknowledged by the Defendant that he borrowed the monies, but says this was from Mary Parsons.
Since I cannot decide the outcome of this conflict at this time, it is certain that on one interpretation of events, the limitation period did not expire prior to the death of the late Mr Flood. In the foregoing circumstances, it is only where I hold that the monies were given as a gift in 1989, and remained as a gift, with no element of a beneficial interest remaining in Christopher Flood, that I could find the cause of action had expired.
Since I cannot do so with any degree of certainty it seems to me that the Defendant’s argument that the statute of limitation period expired and no cause of action could exist, cannot stand.
Since the Defendant has clearly stated — and this has been confirmed by the Defendant’s Solicitors — that he does not intend to return the monies to the estate, and intends to continue to claim it was a gift, it seems to me that the Defendant is, on the facts, in a complete conflict between his role as Executor, since as such Executor he has no intention of ensuring the monies are returned to the Estate, and his role as possible debtor to the estate.
In these circumstances, I have to consider finally whether, even accepting that there is a conflict, it would nevertheless not be appropriate to appoint an alternative person to administer the estate of the late Christopher Flood. The real basis for the Defendant’s argument against such an appointment is that the Plaintiff, or indeed an appointed administrator could not as a prudent administrator; expend the monies in question on an action, which, the defendant says, has little chance of success. Whereas I think it is proper to take into account the fact that a prudent administrator might not embark on such a course of action, nevertheless in the circumstances of this case, I am satisfied that the Plaintiff has set out and established sufficient facts to suggest that there is a serious matter to be considered. That serious matter arises from the following matters:-
(a) the fact that monies were transferred at a time when the late Mr Flood was being advised as to how he might avoid having directly in his hands, monies which might preclude him from securing a pension from the State;
(b) there is some “evidence” of this in a note, which appears to record the advices given by his bank manager at the time, or shortly beforehand; I do not suggest that this is “evidence” strictly so called, but it is an indicator in support of the Plaintiffs case;
(c) there is the fact that, at least until 1991 the monies remained entirely unexpended in the hands of the Defendant and Mary Parsons save for the investment of part of this in a fund, which, in turn, was not touched by either these persons:
(d) there is the fact that at a time when he was seeking monies for the purchase of a farm, the Defendant first went to his brother seeking a loan which is inconsistent with the claim made by him that he was given either a joint sum of money, or — as is alleged in the Inland Revenue Affidavit — a separate smaller, sum of money;
(e) there is the fact that, when he did not proceed with the request for the loan from his brother, he utilised monies from the funds which until then, had remained unexpended:
(f) there is the question of the acknowledgement allegedly made by him that it was at all times a loan from the late Mr Flood. It is easy to confuse the question of an acknowledgement of a debt for the purposes of the Statute of Limitations, which must comply with certain statutory requirements, with an acknowledgement that the monies were in the form of a loan as opposed to a gift. I am satisfied that, on the question as to whether the monies were advanced by way of loan or gift there is some evidence, including evidence of an independent person that the Defendant acknowledged it was a loan. That does not appear to me to be affected by the statutory requirement for acknowledgement for the purposes of the limitation period. It is simply a question of fact.
A Court should not remove an executor from his role, unless it is satisfied that it is necessary so to do. It is clear from the decision in Dunne v Heffernan, unreported November, 1997, that The Supreme Court considers this should only occur where the court is satisfied it must be done, and that court made it clear that it is a very serious step to take. It is not justified because one of the beneficiaries appears to have felt frustrated and excluded, but requires serious misconduct and/or serious special circumstances on the part of the executor to justify such a drastic step.
In a further, most unusual case, Glynn, Deceased: Ireland and The Attorney General v Kelly [1992] 1 IR 361, the circumstances were extraordinary, because the executor had murdered a sister of the deceased and would have thereby benefited prematurely from the will by reason of its terms. However, in that case it was said:
“The issue as to whether or not the gift or the remainder interest would be forfeited would have to be determined by proceedings between the estate of the testator and the person nominated to be executor personally.”
That appears to be the exact circumstances here, although of course, there is no suggestion that the seriousness of the present case is anything approaching that of the Kelly case.
Having regard to the decision of the Supreme Court in the Dunne case above, and although I am reluctant to take steps which would in any way have the effect of depleting the value of the estate, nevertheless I am also satisfied that a very serious matter arises in the administration of the estate and the only way in which that can be dealt with is to remove the Defendant as executor, pursuant to the provisions of Section 26(2) of the Act of 1965 and appoint an alternative to the Defendant, pursuant to Section 27(4) of the Act.
Since this is a matter, which could have the effect of further, alienating the parties to the present proceedings, I propose to adjourn the matter to a future date, for the purposes of hearing representations from each of the counsel, as to the name of an appropriate person to be so appointed, preferably by consent, and failing which the court will appoint a person to administer the estate of the late Christopher Flood.
MACKEN J:
1. The Special Summons served in these proceedings seeks an order that the Court should remove the Defendant from his position as Executor of the estate of the late Christopher Flood, and appoint an alternative in his place because the Plaintiffs are dissatisfied with his administration of the estate.
Christopher Flood, of Borris, in County of Carlow, died on the 28 July 1996. He had made a will on the 11 July 1989, and probate issued on the 27 November 1997. While the will named three executors, two declined to act and probate issued to the Defendant as Executor.
Both the Plaintiffs and the Defendant are brothers and all three are children of the late Christopher Flood. There are several affidavits filed in the matter, all or almost all by children of the late Christopher Flood, and it is obvious that there is a clear dispute and what I might call a regrettable dividing line between several siblings on the one hand and other siblings (or their spouses) on the other hand.
Although there are reliefs listed in the Special Summons, for the moment, what I am asked to decide is whether at this stage, it is proper or appropriate that the Defendant should continue to act as Executor of the estate of the late Christopher Flood in circumstances where it is alleged the Defendant borrowed money from his late father. It is alleged by the Plaintiffs that the repayment of this loan is money now due to the estate, and that the Defendant has refused to acknowledge this. In the circumstances, it is said by the Plaintiffs that this stance of the Defendant is in conflict with his role as executor, because as such executor he is obliged to get in all the assets for the estate, being a trustee thereof for the beneficiaries.
The Plaintiffs submit that, if the Defendant were removed and another person appointed to act as administrator, it is the case that such person would then seek to recover the monies alleged by the Plaintiff to be due to the estate from the Defendant.
Mr Howard submits for the Plaintiff that the authorities on misconduct are sufficient to remove an executor, and cites In re: Loveday (1900) P 155 in support of the same, and the Irish cases of Spencer v Kinsella [1996] 1 ILRM 401 and Arnott v Arnott, 58 ILTR 145. Under this latter decision, it is open to the court to remove a trustee if his position is detrimental to the beneficiaries.
Mr Howard submits that the Plaintiffs position is prejudiced by the Executor’s current position, and the stance he has adopted and he relies on S 10 (3) of the Succession Act 1965.
Essentially, the dispute between the Plaintiffs and the Defendant boils down to this. In early 1989 or thereabouts, it is alleged that the late Christopher Flood transferred money to the Defendant. It amounted to a sum of more than £40,000.00 in total. It is not disputed that a sum of money passed from him to the Defendant, and the exact sum is not significantly in dispute.
What is certainly in dispute is the nature of the transaction between the Defendant and his late father Christopher Flood. It is claimed by the Defendant that the money was given as a gift, not as a loan, and that it is not money recoverable by the estate at all. In the circumstances it is said by the Defendant, no conflict could exist.
Numerous affidavits have been filed all from the several children of the late Christopher Flood, together with one affidavit from a Father Nicholas Moore, on behalf of the Plaintiffs, as to certain matters, which arose in 1994.
Leaving aside altogether the question as to whether the monies were a loan or a gift for the moment, the following factual matters can be gleaned from the affidavits and from the additional information, which I sought as to the purchase of lands referred to by the Defendant:
1. The late Christopher Flood had a bank account with The Bank of Ireland, in, I believe, Borris, Co Carlow.
2. In 1988 Mr Flood was discussing with his then Solicitors, John J Duggan & Co, of Carlow, his entitlement, if any, to secure a State pension.
3. Mr Flood had apparently spoken to his then bank manager as to the possible options, which he might consider if he wished to pursue his claim to a pension. Among these was one by which his money would remain mine” and would be released to the siblings (his children) on death.
4. In early January 1989, according to a copy of a withdrawal docket, he withdrew the sum of £37,000.
5. That £37,000 was then immediately lodged into a joint account in the names of Flood/Parsons bearing account number ‘– 33921″. This docket seems to me to be one, which was written, by a bank official because of the manner in which it was completed.
6. A duplicate statement of that account, being number 82033921, and in the name of “Mary Parsons” but headed (in hand) ‘-A/C Jack Flood & Mary Parsons” discloses that that account existed since 1984, and by’ the end of 1988 there was no money in the account. This statement shows the following additional information:
(a) an additional sum was transferred from Mr Christopher Flood’s account in the amount of £5432.42 making a total transfer by the end of January 1989 (Including interest) of £42687.36.
(b) from that account a sum of 40,000 was debited, and withdrawn or transferred in late 1989.
(c) the remaining sum continued to have interest accruing on it, and no withdrawals took place, at least until the end of 1994, the last date appearing on the statement.
7. Of the £40.000, £10.000 was lodged into an account in the name of “Jack Flood”, at the end of 1989, at the Bank of Ireland, where it remained, untouched but accruing interest until 1991, when the entire sum together with interest, was withdrawn. It amounted to £11.271.80.
8. The balance of 30,000 was sent to The Investment Bank of Ireland, by the Defendant, for investment into an IBI Lifetime Portfolio. Receipt for this was acknowledged by letter of the 25 October 1989 from the Bank.
9. The affidavits do not disclose when, if ever, this money was redeemed or realised, though this appears to have happened at some time prior to the death of the late Christopher Flood.
10. The Defendant purchased certain lands in Carlow. The date of the contract for the purchase of this was the 29 October 1991, and the date of closing was March 1993. The price was 177.000.
11. The Inland Revenue Affidavit filed on behalf of the Defendant avers to the fact that in 1989 the late Christopher Flood gave, by way of gift, the sum of £18,500 to each of the Defendant and Mary Parsons.
I now return to the affidavits. There is a conflict of fact on the affidavits. For the Plaintiffs, affidavits have been filed by Sylvester Flood, Brian Flood, Elizabeth Sheehan and Fr Nicholas Moore, and on behalf of the Defendants, by Jack Flood, Michael Flood, Mary Parsons, James Flood and Thomas Flood.
On behalf of the Plaintiff it is said that the true interpretation of the events which have occurred is that the monies were placed in an account where the late Christopher Flood had access to them, although in the names of two children, that there was no independent use of the funds for all the time they were in the joint names of the Defendant and his sister Mary Parsons, that there was never a gift to the Defendant, but that when the Defendant wanted to purchase lands in 1991 or in 1993, he sought and obtained a loan of the monies in question, and that this is due to the estate. It is also said by the Plaintiffs that the Defendant acknowledged, on more than one occasion, that the monies were a loan, both to his siblings — or some of them — and also to Father Nicholas Moore, who has sworn an affidavit to that effect.
The acknowledgement to Father Moore came in 1994, prior to the death of the late Christopher Flood in 1996 and not long after the closing of the sale of lands to the Defendant (in respect of which the Defendant admitted he used the monies). Further in relation to the purchase of the lands, Brian Flood has sworn on affidavit that he was approached by the Defendant seeking a loan for the purchase, agreed to give the money, but the matter did not come up again. The Defendant in his affidavit acknowledges that this occurred. Mr Brian Flood says that this approach was made in October 1991.
On behalf of the Defendant it is said that the monies were left to him and Mary Parsons. On affidavit the Defendant states that his father was “making a gift to us jointly of the said sum.” This appears to be at odds with the averment in the Inland Revenue Affidavit that a sum of £18,500 was given to each of Mary Parsons and Jack Flood. The Defendant and Mary Parsons say that Christopher Flood never controlled the monies once they were transferred in 1989. However, it does seem to be unusual that, if the monies were truly owned by the Defendant and Mary Parsons, it would be necessary at all for the Defendant to have asked another brother for monies which he admits he did, in the precise amount which was involved, namely, £30,000. If he owned one half of the full monies of nearly £43,000 it seems odd that that was not the first port of call for borrowing which the Defendant needed. I make no finding on this of course, but believe it is a matter for consideration at the end of the day.
The Defendant contends that in order to set aside the gift claim made by him it would be necessary to establish that the monies were given in trust, and that such a trust will not be implied but must be found in express words. It is argued on this point that a presumption lies in favour of the parties holding the monies in their own names, which would defeat a claim that a resulting trust had been created. The defendant therefore says that if it was a gift the limitation period has caused any cause of action to be extinguished.
The Defendant further says that he does not recall saying to any of the persons who claimed it to be so, that he had received the monies as a loan, although the Defendant is careful not to deny that he said so. The Defendant also swears he does not recall admitting to any of those parties, including Father Moore, that a sum of 7000 had been repaid.
What is curious about this sum of £7000 is that it is the exact sum, which the Defendant acknowledges he returned, not to his late father Christopher Flood, but to his sister Mary Parsons. I do not find it coincidental that this figure is reflected in both sets of affidavits. What is clearly not admitted by the Defendant on affidavit is that he said anything about the sum of £7000, even by way of repayment to Mary Parsons, although there would have been no difficulty in doing so, were the Defendant’s contention, and that of Mary Parsons correct, namely that monies were given as gift. Indeed, in the context of such a gift, the explanation that a sum had been borrowed from Mary Parsons, and a sum repaid to her, would not have gone amiss, and would be consistent with the Defendant’s contention.
The Defendant does, however, argue that there was no admission of the type, which is required to extend the limitation period pursuant to the provisions of the Statute of Limitations, because of course any such admission, must be made in writing and must be made to the person to whom the debt is owed. It is certain that there is no evidence that any such admission was made in writing, and also there is no evidence whatsoever that any such admissions was ever made to the late Christopher Flood, deceased. In these circumstances, it is said, that even if it was originally a loan, and therefore a debt, which would have been repayable, the time limit has expired and no cause of action exists in respect of those monies by virtue of any supposed extension of the limitation period arising from what the Plaintiff calls “an admission”.
I am unable to say, on the affidavit evidence that the sum was or was not given by the late Christopher Flood to the Defendant and his sister by means of a gift or by means of a loan. However, I am of the view that there is a sufficient question mark over the transfer of the funds to justify considering the appointment of an alternative person as administrator of the estate of the late Christopher Flood. It is not appropriate to do so, unless the circumstances do, in fact, warrant it, and the court should be slow to accede to such an application. Mr O’Doul on behalf of the Defendant argued that the Court’s jurisdiction to revoke a grant should only be exercised in circumstances of serious misconduct and that no such misconduct exits here. He also argues that it should not be invoked if the Plaintiffs evidence on the matter is not strong.
Before therefore acceding to the application, I now turn to further argument made on behalf of the Defendant that the court should not accede to the request, even if there were grounds to do so, because any claim, which did exist, has been extinguished by virtue of the Statute of Limitations.
This involves a consideration of the likely dates when the monies were advanced, or utilised, both before and after the death of the late Christopher Flood, and the effect, if any, of the claim that the Defendant acknowledged that it was indeed a loan and not a gift.
The key dates appear as follows:-
(a) In late 1989 a sum of money was transferred from the account of Christopher Flood into an account, at that time in the name of Mary Parsons, subsequently designated as being a joint account in the names of the Defendant and Mary Parsons;
(b) The monies were utilised in part to secure investment funds with growth value, and most of the balance remained in a separate account in the joint names, leaving a small sum in the original Mary Parsons account;
(c) No further transactions appear on the account(s) in question between then and 1991, when the second joint account, which held over £11,000, was closed. There is no indication as to where this last sum went.
(d) The balance of the monies in the original Mary Parsons account, amounting to over 4000, remained in that account at least to 1994;
(e) At some unspecified date, the £30,000, which had been deposited was withdrawn and utilised, in accordance with what the Defendant says towards the purchase of a farm by the Defendant.
(f) The contract was executed in 1991 and the contract closed in 1993.
(g) The late Mr Christopher Flood died on the 28 July 1996:
(h) Probate was granted on the 27 November 1997.
If monies were given in January 1989 by means of a gift, no claim could be made in respect of the same. If it were given by way of loan, at that time, the loan would be repayable by January 1995. If no demand was made for repayment during that period, and there was no acknowledgement of the debt within that statutory period, no claim could be made either by the late Christopher Flood while alive or by any other person on behalf of the estate, since there remained no debt after the January 1995 date. If the loan were acknowledged as being just that, namely a loan to the Defendant, then the limitation period would run from the time of acknowledgement. The claim, which is made, is that, even if the loan was given in 1989 an acknowledgement was made in 1994 and again in 1995, and therefore the debt was not extinguished after 6 years from the beginning of 1989, but a lot later.
If monies were given to the Defendant and Mary Parsons jointly or otherwise, but in circumstances where the money although held in their names nevertheless continued to belong beneficially to Christopher Flood, then the triggering date for the Statute is the date when the monies were “loaned”, or appropriated out of the full sums in favour of the Defendant. That appears to be either October 1991 when the contract was signed or March 1993 when closing occurred. It is acknowledged by the Defendant that he borrowed the monies, but says this was from Mary Parsons.
Since I cannot decide the outcome of this conflict at this time, it is certain that on one interpretation of events, the limitation period did not expire prior to the death of the late Mr Flood. In the foregoing circumstances, it is only where I hold that the monies were given as a gift in 1989, and remained as a gift, with no element of a beneficial interest remaining in Christopher Flood, that I could find the cause of action had expired.
Since I cannot do so with any degree of certainty it seems to me that the Defendant’s argument that the statute of limitation period expired and no cause of action could exist, cannot stand.
Since the Defendant has clearly stated — and this has been confirmed by the Defendant’s Solicitors — that he does not intend to return the monies to the estate, and intends to continue to claim it was a gift, it seems to me that the Defendant is, on the facts, in a complete conflict between his role as Executor, since as such Executor he has no intention of ensuring the monies are returned to the Estate, and his role as possible debtor to the estate.
In these circumstances, I have to consider finally whether, even accepting that there is a conflict, it would nevertheless not be appropriate to appoint an alternative person to administer the estate of the late Christopher Flood. The real basis for the Defendant’s argument against such an appointment is that the Plaintiff, or indeed an appointed administrator could not as a prudent administrator; expend the monies in question on an action, which, the defendant says, has little chance of success. Whereas I think it is proper to take into account the fact that a prudent administrator might not embark on such a course of action, nevertheless in the circumstances of this case, I am satisfied that the Plaintiff has set out and established sufficient facts to suggest that there is a serious matter to be considered. That serious matter arises from the following matters:-
(a) the fact that monies were transferred at a time when the late Mr Flood was being advised as to how he might avoid having directly in his hands, monies which might preclude him from securing a pension from the State;
(b) there is some “evidence” of this in a note, which appears to record the advices given by his bank manager at the time, or shortly beforehand; I do not suggest that this is “evidence” strictly so called, but it is an indicator in support of the Plaintiffs case;
(c) there is the fact that, at least until 1991 the monies remained entirely unexpended in the hands of the Defendant and Mary Parsons save for the investment of part of this in a fund, which, in turn, was not touched by either these persons:
(d) there is the fact that at a time when he was seeking monies for the purchase of a farm, the Defendant first went to his brother seeking a loan which is inconsistent with the claim made by him that he was given either a joint sum of money, or — as is alleged in the Inland Revenue Affidavit — a separate smaller, sum of money;
(e) there is the fact that, when he did not proceed with the request for the loan from his brother, he utilised monies from the funds which until then, had remained unexpended:
(f) there is the question of the acknowledgement allegedly made by him that it was at all times a loan from the late Mr Flood. It is easy to confuse the question of an acknowledgement of a debt for the purposes of the Statute of Limitations, which must comply with certain statutory requirements, with an acknowledgement that the monies were in the form of a loan as opposed to a gift. I am satisfied that, on the question as to whether the monies were advanced by way of loan or gift there is some evidence, including evidence of an independent person that the Defendant acknowledged it was a loan. That does not appear to me to be affected by the statutory requirement for acknowledgement for the purposes of the limitation period. It is simply a question of fact.
A Court should not remove an executor from his role, unless it is satisfied that it is necessary so to do. It is clear from the decision in Dunne v Heffernan, unreported November, 1997, that The Supreme Court considers this should only occur where the court is satisfied it must be done, and that court made it clear that it is a very serious step to take. It is not justified because one of the beneficiaries appears to have felt frustrated and excluded, but requires serious misconduct and/or serious special circumstances on the part of the executor to justify such a drastic step.
In a further, most unusual case, Glynn, Deceased: Ireland and The Attorney General v Kelly [1992] 1 IR 361, the circumstances were extraordinary, because the executor had murdered a sister of the deceased and would have thereby benefited prematurely from the will by reason of its terms. However, in that case it was said:
“The issue as to whether or not the gift or the remainder interest would be forfeited would have to be determined by proceedings between the estate of the testator and the person nominated to be executor personally.”
That appears to be the exact circumstances here, although of course, there is no suggestion that the seriousness of the present case is anything approaching that of the Kelly case.
Having regard to the decision of the Supreme Court in the Dunne case above, and although I am reluctant to take steps which would in any way have the effect of depleting the value of the estate, nevertheless I am also satisfied that a very serious matter arises in the administration of the estate and the only way in which that can be dealt with is to remove the Defendant as executor, pursuant to the provisions of Section 26(2) of the Act of 1965 and appoint an alternative to the Defendant, pursuant to Section 27(4) of the Act.
Since this is a matter, which could have the effect of further, alienating the parties to the present proceedings, I propose to adjourn the matter to a future date, for the purposes of hearing representations from each of the counsel, as to the name of an appropriate person to be so appointed, preferably by consent, and failing which the court will appoint a person to administer the estate of the late Christopher Flood.
M.K. v. J.B., High Court, February 26, 1999,
Judgment of Miss Justice Carroll delivered on the 26th day of February, 1999 .
1. This is an application by the Plaintiff through his father and next friend, E.S., to remove the Defendant as Trustee of the Will of L.K., the mother of the Plaintiff.
2. L.K. died on 29th April, 1996 having by her Will dated 21st October, 1998 appointed the Defendant, her sister, as sole Executrix and Trustee and she appointed her guardian of the Plaintiff. She made the following disposition:-
“I give devise and bequeath the whole of my estate to my Executor upon trust either to retain or sell it on trust to pay the capital and any income arising from it to and for the benefit of my son (M) in such manner and at such time as my Executor in her sole discretion thinks fit until my son shall attain the age of 21 years and thereafter I give devise and bequeath the whole of my estate to my said son (M) absolutely.”
3. She gave her Executor an extensive power to invest as if she were beneficially entitled and exonerated her from loss not attributable to her own dishonesty or wilful breach of trust.
4. The Plaintiff was born in New York on 14th March, 1987. L.K. with the Plaintiff returned to Ireland in May 1987 to reside with her mother in her house in Dublin. Her mother died on 31st May, 1988 and left her house to L.K. Thereafter L.K. and her son, the Plaintiff, lived in the house.
5. There were visits by E.S. to Dublin and by L.K. and the Plaintiff to the U.S. during the following years. The Defendant says that after the death of their mother, L.K. entered into a relationship with another man and both of them lived in the house with the Plaintiff. The death of L.K. at the age of 35 years was an untimely one. The Defendant believes it was caused by liver failure brought on by abuse of alcohol combined with tablets. She also says the Plaintiff had a very undisciplined life with his mother.
6. After the death of L.K., the Defendant took the Plaintiff to live with her and her family. E.S. initiated guardianship proceedings in May 1996. These came on for hearing in November 1996. E.S. was appointed joint guardian of the Plaintiff with the Defendant and given interim custody with liberty to take the Plaintiff to New York. On 30th October, 1997 custody was confirmed.
7. E.S. alleges that there is animosity between himself and the Defendant and that she threatened that she would sell the house if he initiated guardianship proceedings. He alleges the decision to sell was not made bona fide in the interests of the Plaintiff. He relies on a letter (21st November, 1997) from a psychiatric social worker in New York written to support his request not to sell the house. He also relies on an evaluation by a firm of auctioneers and advice from Allied Insurance Consultants Limited that it would not be prudent to liquidate the property and reinvest for seven years. He also exhibits a note written by the Plaintiff on 25th March, 1997 to say he did not want his house sold.
8. The Defendant also took advice about sale or letting. She was cross-examined on her Affidavit. She denied that she was motivated by animosity towards E.S. I am satisfied that she was not motivated by any such feelings and that she has made a bona fide decision to sell. She gives four reasons.
1. The property is vacant and she foresaw difficulties about insurance although she said the property is fully insured.
2. A very good price can be obtained so he will have a large capital sum when he attains his majority at 18.
3. If he has an attachment to the property it is unhealthy. He had a disturbed upbringing in the house with no discipline.
4. If he wished to acquire a property at 18 he is free to do so with the proceeds of sale.
9. Following issue of these proceedings, the Defendant took further advice from a financial adviser recommended by A.I.B. and he recommended sale rather than letting.
10. The Guardianship of Infants Act, 1964, Section 3, provides:-
“Where in any proceedings before any Court the custody guardianship or upbringing of an infant or the administration of any property belonging to or held in trust for an infant or the application of the income thereof, is in question, the Court, in deciding that question, shall regard the welfare of the infant as the first and paramount consideration.”
11. Section 11 of the Children’s Act, 1997 inserted Section 25 into the Guardianship of Infants Act, 1964. This provides:-
“In any proceedings to which Section 3 applies the Court shall as it thinks appropriate and practicable having regard to the age and understanding of the child take into account the child’s wishes in the matter.”
12. This must be contrasted with the Succession Act, 1965, Section 50, Sub-section (1), which provides:-
“The personal representatives may sell the whole or any part of the estate of a deceased person for the purpose not only of paying debts but also (whether there are or are not debts) of distributing the estate among the persons entitled thereto, and before selling for the purposes of distribution, the personal representatives shall so far as practicable, give effect to the wishes of the persons of full age entitled to the property proposed to be sold or in the case of dispute, of the majority (according to the value of their combined interest) of such persons so however that –
(a) a purchaser shall not be concerned to see that the personal representatives have complied with such wishes; and
(b) it shall not be necessary for any person so entitled to concur in any such sale.
I do not consider it appropriate or practicable to give effect to the Plaintiff’s wishes. It seems to me probable that he is influenced by his father’s wishes and also I doubt that he could appreciate the practicalities and benefits between the two options of renting or sale.
However there is still a duty on the Court to decide this matter in accordance with Section 3 of the Guardianship of Infants Act, 1964 having regard to the welfare of the infant as the first and paramount consideration.
In this case there are two conflicting advices. A decision has been taken bona fide by the person chosen by L.K., the mother of the Plaintiff, to act as his guardian and in whom she reposed confidence as a Trustee for sale. There are no grounds for removing her as Trustee unless the decision to sell would not be for the welfare of the Plaintiff. In my opinion the sale of the house and the investment of the capital sum until the Plaintiff attains his majority will enure for the benefit of the Plaintiff and is a decision which the Defendant is entitled to take as Executor and Trustee of the Plaintiff’s mother’s Will. In my opinion it is a decision to be taken on financial grounds not psychological grounds. I have no way of evaluating the opinion of the social worker which is not on Affidavit and as the Defendant says, it is not known how much information was given to her about the Plaintiff’s upbringing prior to his mother’s death.
I refuse the relief sought.
Re Estate of Hannon [2018] IEHC 482
JUDGMENT of Ms. Justice Baker delivered on the 30th day of July, 2018
1. James Patrick Hannon died on 3 March 2015 having executed a testamentary document on 28 January 2014 (the “2014 Will”), under the terms of which he appointed Susan Halpenny, solicitor to be his sole executrix, and, after making a number of specific bequests, devised and bequeathed the rest, residue and remainder of his estate to the Roman Catholic Archbishop of Dublin for his charitable purposes.
2. The deceased had executed an earlier testamentary document on 20 July 1999, (“the 1999 Will”), in which he appointed John Moran and William Hannon as executors, and after making certain pecuniary bequests, gave, devised and bequeathed the rest, residue and remainder of his estate to his sisters, Margaret Browne and Vera O’Connor in equal shares.
3. Doubt having arisen as to the testamentary capacity of the deceased to execute the 2014 Will, an application was made to me in the High Court sitting in the Monday non-contentious probate list for an order admitting the 2014 Will to proof in common form of law.
4. In anex temporeruling on 23 January 2017, I declined to make an order admitting the 2014 Will to proof in common form of law, as I considered did not have sufficient evidence of the capacity of the deceased. In the hope of avoiding a contentious testamentary suit, the matter was adjourned generally and liberty was given to re-enter the application in the Monday list.
5. With a view to avoiding the necessity of further litigation in relation to the testamentary capacity of the deceased, and in the light of the likely costs of such litigation, the persons entitled to the estate of the deceased under and by virtue of the provisions of both the 2014 Will and the 1999 Will have agreed terms of compromise (“the Compromise”) upon which the estate of the deceased is to be distributed.
6. This judgment is directed to the application pursuant to s. 27(4) of the Succession Act 1965 (“the Succession Act”), that Ms. Halpenny be given liberty to apply for and extract a grant of letters of administration without will annexed to the estate of the deceased, limited for the purpose of implementing the terms of the Compromise.
7. The question arising is whether such an order may be made without admitting either the 2014 or 1999 Will to probate.
The legislative provisions
8. Section 27 of the Succession Act provides as follows:
“(1) The High Court shall have power to grant administration (with or without will annexed) of the estate of a deceased person, and a grant may be limited in any way the Court thinks fit.
(2) The High Court shall have power to revoke, cancel or recall any grant of administration.
(3) Subject to subsection (4), the person or persons to whom administration is to be granted shall be determined in accordance with rules of the High Court.
(4) Where by reason of any special circumstances it appears to the High Court (or, in a case within the jurisdiction of the Circuit Court, that Court) to be necessary or expedient to do so, the Court may order that administration be granted to such person as it thinks fit.
(5) On administration being granted, no person shall be or become entitled without a grant to administer any estate to which that administration relates.
(6) Every person to whom administration is granted shall, subject to any limitations contained in the grant, have the same rights and liabilities and be accountable in like manner as if he were the executor of the deceased.
(7) Where any legal proceedings are pending touching the validity of the will of a deceased person, or for obtaining, recalling or revoking any grant, the High Court may grant administration of the estate of the deceased to an administrator, who shall have all the rights and powers of a general administrator, other than the right of distributing the estate of the deceased, and every person to whom such administration is granted shall be subject to the immediate control of the Court and act under its direction.
(8) The Court may, out of the estate of the deceased person, assign to an administrator appointed under subsection (7) such reasonable remuneration as the Court thinks fit.
(9) This section applies whether the deceased died before or after the commencement of this Act.”
9. The relief sought by the applicants is under s. 27(4) that Ms. Halpenny be permitted to extract a limited grant for all purposes to give effect to the Compromise. The difficulty that presents is that the deceased died leaving the 2014 Will and the 1999 Will, neither of which is proposed to be admitted to probate, and the last in time of which was the subject of a capacity challenge which was has not been definitively determined.
10. The estate of the deceased consists wholly of personalty in the form of bank accounts, the net value whereof is estimated to be €317,000. The Compromise provides that Ms. Halpenny shall apply for liberty to extract a grant of administration to the estate of the deceased for the purpose of giving effect to its terms. The relevant terms provide for the payment by Ms. Halpenny of the lawful debts of the estate, payment of the pecuniary bequests made in the 2014 Will and the 1999 Will, and the distribution of the estate equally between the persons entitled under the 1999 Will and the 2014 Will. The Compromise has achieved a satisfactory means of dealing with the estate in a practical way and for the avoidance of the costs of a full probate action which would have absorbed a substantial amount of the estate.
11. The question engaged in the present case is whether an order under s. 27(4) by which a person is given liberty to extract a full grant is to be made while the question as to whether the deceased died testate or intestate remains undecided.
The authorities
12. It is clear that the jurisdiction of the court under s. 27(4) permits the court to give liberty to a person other than the person who would be entitled with under a will or on death intestate to extract a grant, and that a full grant may issue under s. 27(4). The grant may be limited and a court can and often does make an order under this section notwithstanding that the court is aware that there is a will, or even that there is an executor willing and able to act. This is frequently the case when liberty of given to extract a grantad litemor a grantpendente liteunder s. 27(7), or a grantad colligenda bona.
13. The provisions of s. 27(4) which give the court a discretion to order that administration be granted to such person as it thinks fit, may be exercised only when it is satisfied that the circumstances are sufficiently “special” to justify the engagement of the statutory power.
14. The subsection was considered by the Supreme Court inIn re the Estate of Glynn, Deceased. Ireland v. Kelly[1992] IR 361. The executor named in the will of the deceased was convicted of the murder of the sister of the deceased to whom the testator had by his will devised a life estate in his farm, with reminder interest to the executor. The sole surviving next of kin renounced his right to a grant, and application was made to the High Court that liberty be given to the Chief State Solicitor to extract a grant in the estate. Gannon J. in the High Court made such order, but limited the power of the personal representative to the taking in and preservation of the assets of the deceased. On appeal the Supreme Court removed the limitation and held that the fact that the respondent accelerated his interest in reminder by murdering the tenant for life, together with the fact that his capacity to benefit under the will might not be determined unless administration of the estate was granted to the Chief State Solicitor amounted to “special circumstances” within the meaning of the subsection which made it necessary and expedient that administration be granted.
15. McCarthy J. noted at p. 365 the provisions of s. 78 of the Probates and Letters of Administration Act (Ireland) 1857, which vested a broadly similar power in the court to permit administration to be granted to the personal estate of a deceased person, but only where the court was satisfied that a person “has died or shall die wholly intestate” as to his personal estate, or “leaving a will affecting the personal estate, but without having appointed an executor thereof willing and competent to take probate”. That section was also considered by Evans P. inIn re the Estate of Crippen, Deceased[1911] P 108.
16. McCarthy J., noting the difference between s. 27(4) and these provisions of s. 78, described s. 27(4) as an “enabling section” and noted that the repealed provisions of s. 78 of the 1857 Act had postulated preconditions and was “in marked contrast to” the provisions of s. 27(4) of the Succession Act, where the discretion was not limited by any preconditions. McCarthy J. took the view that “the subsection should be given a liberal construction”.
17. Laffoy J. inIn re the Estate of Rhatigan; Deceased. Scally v. Rhatigan[2012] IEHC 140, [2012] 2 IR 286, exercised the power under s. 27(4) to pass over the person entitled to extract a grant of probate in the estate of the deceased having regard to her conclusion that the executrix had a conflict of duty and would have a conflict of interest if probate issued to her, and that the defendant who would next be entitled also had a conflict which precluded her acting.
18. Counsel for the applicant relies on my judgment in In re the Estate of O’Callaghan, Deceased[2016] IEHC 668 where I made an order giving liberty to an independent person to apply for and extract letters of administrationad colligenda bonalimited for the purpose of collecting in and preserving, but not disturbing, the estate of the deceased. At para. 28 of that judgment, having considered the jurisprudence with regard to the jurisdiction under s. 26(2) of the Succession Act to revoke, cancel or recall a grant, and the judgments of the Court of Appeal inIn re the Estate of Dunne, Deceased. Dunne v. Dunne[2016] IECA 269 and the Supreme Court inDunne v. Heffernan[1997] 3 IR 431, and having noted that the application before me was one under s. 27(4), I said the following:
“This […] is one brought under s. 27(4), and is properly characterised as an application to pass over the right of the executor to extract a grant. As a general principle in respect of both classes of application a court must respect the wishes of a testator that his or her estate be administered by the person chosen to take on that task. However, the combined effect of ss. 27(1) and (4) of the Act of 1965 is that the High Court may grant administration with or without will annexed of the estate of a deceased limited in any way that it thinks fit. The court has a power to pass over the executor named in a will and permit another person to extract a grant, but the authority of the person thus permitted may be limited in several ways. The High Court frequently gives liberty to extract anad litemgrant for the purposes of substantiating proceedings. Equally the court may permit a grant to issue limited in other ways, and I will return to deal in more detail below with these. The fact that the court may limit the power of an administrator who extracts a grant with will annexed in circumstances where an executor is passed over suggests that the Act envisages circumstances where all rights of the executor will not thereby be extinguished.
29. Specifically s. 27(4) of the Act of 1965 provides that the High Court may order that administration be granted “by reason of any special circumstances” or when it is “necessary or expedient to do so.”
19. I rejected the proposition advanced by counsel for the executor that the sole basis on which a court may permit a grant to issue to a person other than an executor named in a will was where the executor was shown to be in conflict with the estate or not be, for whatever reason, in a position to administer the estate.
20. InIn re O’Callaghanliberty was given to extract a grantad colligenda bonawith will annexed, as no question existed with regard to the validity of the will, and the order was made limited to the taking of all steps necessary to deal, by sale or otherwise of the assets in the estate, but the person who extracted the grant was not given liberty to distribute the estate.
21. The view that the power vested in the court by a provision broadly similar to s. 27(4) is not to be constructed narrowly was also taken by the English courts inIn Re Mathew, Deceased[1984] 1 WLR 1011, in which Anthony Linkin J. said that the discretion is “without fetter” and followed Eubank J. inIn Re Clore, Deceased[1982] 2 WLR 314 in taking the view that the interpretation was not to be a restrictive one.
22. Having regard to the case law, the decision of the Supreme Court in In re Glynn, the decision of Laffoy J. inIn re Rhatiganand my judgment inIn re O’Callaghan, it seems apparent to me that the limitations contained in s. 78 of the Act of 1857 are no longer a part of the law, and the court enjoys a wide enabling jurisdiction under s. 27(4) of the Succession Act to grant administration, should special circumstances be shown to exist.
23. It is to be observed that no precondition exists in the plain terms of s. 27(4) that any will or purported will be proved either in common or solemn form or that any determination be made as to whether a deceased died testate or intestate before its provisions may be invoked. A limited grant under s. 27(4) is frequently granted for the purposes of substantiating proceedings, and where a grant is made to a nominee of a creditor, and it is frequently the case in practice that the applicant for such orders is not aware whether the deceased dies testate or intestate. A grant under s. 27(4) to a creditor can in its practical effect mean that the person extracting the grant will exhaust the estate, where for example, the creditor obtains possession or sale of a property that comprises the sole asset in the estate. One of the factors that influenced me in coming to the decision inIn re O’Callaghanwas the likely costs of administering the estate, and Peart J. giving the decision of the Court of Appeal inDunne v. Dunnenoted too, that the costs of contentious proceedings were not readily to be justified.
24. Even when a full grant is made to the nominee of a creditor, the rights of the executor should the deceased have died testate would be maintained and are not abrogated, and that was an observation made by me in making the order for a grantad colligenda bonainIn re O’Callaghan.
25. But the engagement of s.27(4) requires circumstances which are “special” and I turn to examine how this is to be understood
Not a matter of mere convenience
26. The court must first ascertain whether circumstances exist which may be described as “special” and whether in those circumstances it is either necessary or expedient to give liberty to extract a grant.
27. I am of the view that for circumstances to be sufficiently “special” to engage the power under s. 27(4) the making of the order must be more than a mere convenience, such as where beneficiaries disagree as to the person who should extract a grant in an estate, or indeed as to the distribution of an estate, whether intestate or testate. The case law which considered the powers vested by s. 27(4) involved circumstances where either for moral or legal reasons the named executor, or person otherwise entitled to administer an estate, might have a conflict of interest or be otherwise unsuitable. The circumstances are different in the present case, and the reason it is sought that Ms. Halpenny be given liberty under s. 27(4) to extract letter of administration without reference to either the 2014 Will or the 1999 Will, or on the alternative basis that the deceased died intestate, are that there has been a contentious and as yet unresolved dispute between the persons entitled under the two testamentary document regarding the capacity of the testator to make the Will of 2014, and yet the claims to distribution of the estate have been compromised.
28. There does exists abona fidedispute as regard the validity of the last testamentary document of the deceased and I regard it as significant that different views regarding capacity were expressed by third party professional persons, and by persons who were not beneficiaries or potential beneficiaries on intestacy or under the 1999 will. I agree with the submission made by counsel for the applicant that the application is not made merely on account of convenience but that there exist circumstances sufficiently special, viz the desire and objectively desirable decision of those beneficially entitled to quieten the dispute which has arisen and remains unresolved concerning the validity of the 2014 Will.
29. The order sought would enable the distribution of the entirety of the estate of the deceased in accordance with the Compromise, and it remains possible that the 2014 Will or the 1999 Will could at some time in the future be the subject of proceedings, and one or other of the testamentary document may come to be admitted to proof in solemn form of law, although in practical terms it is unlikely that such eventuality would occur as the persons entitled under the 2014 Will and the 1999 Will are parties to the compromise, and all persons who would be entitled on intestacy are on notice of an application and make no objection to the order.
30. I regard it as sufficiently “special” that the court should recognise the undesirability that the parties entitled under the two testimony documents of the deceased would engage in any further acrimonious and expensive litigation regarding the capacity of the deceased to make the will in 2014.
The Probate Rules
31. In any case where an application to extract a grant is made to the Probate Office the applicant must swear an oath. In the case of an executor deriving authority from a will of a deceased person, the form of the oath in provided in Form 3 of the Rules of the Superior Courts S.I. 15 of 1996 Appendix Q, and by which the proving executor declares a belief that the documents submitted for probate “contain the true and original last will” of the testator.
32. The oath of administrator is required under r. 22 of the Non-Contentious Probate Rules, Appendix C to the Rules of the Superior Courts, S.I. 15/1986 (“RSC”), as amended by S.I. 20/1989, r. 79 and provides that the fact that the form is made pursuant to an order under s. 27 of the Act shall be stated in the oath of administrator. Order 14, r. 28 provides that the oath of administrator “shall be so worded as to clear off all persons having a prior right to the grant. Where there are prior interests the grant shall show on its face who they have been cleared off”.
33. In the case of an intestate estate the form of the oath is No. 5 and the oath declares that the deceased died intestate. In the case of an application for administration with will annexed the relevant form is Form 8.
34. In the case of an application for a limited grant for the purposes of substantiating proceedings, the application for a grantad litem, the draft oath is silent as to whether the deceased died intestate or not.
35. The form of the oath to be sworn should a full grant issue in circumstances such as those in the present case can be suitably modified and the Rules do not provide a basis on which I may determine that the order sought is not one that is permitted by the Act.
Necessary or expedient?
36. Having regard to the disjunctive language used in the subsection, it is sufficient to establish that the applicant can show that it is expedient to do make the order.
37. The circumstances of the present case are sufficient for me to take a view that there is abona fidedispute in regard to the cognitive capacity of the deceased, and an agreement has been reached following negotiations between the persons entitled under both wills by which they have compromised their respective claims and entered into an agreement that binds all relevant persons who might be entitled under the will of 2014 and that of 2009. A grant is required in order to give effect to the Compromise. It is expedient that the estate be administered in accordance with the Compromise and it is practical and desirable that Ms. Halpenny be permitted to do so.
Public policy considerations
38. Counsel for Ms. Halpenny who has no personal interest in the terms of compromise, made submissions as anamicus curiaeand identified that the biggest objection to the making of the order was the general public policy that the will of a deceased be recognised. He noted too that Kearns P., giving the judgment of the Supreme Court inElliott v. Stamp[2008] IESC 10, [2008] 3 IR 387, noted that on some cases a full probate action might be “cathartic”.
39. I do not consider it the function of the court to facilitate a cathartic response to disputes, when the cathartic response is not legally mandated. But I do consider that the public interest and the solemnity to be afforded to a testamentary document is a matter of some importance.
40. There is a public policy reason in encouraging compromise and quietening litigation concerning the distribution of property on death. I accept that there is, as counsel instructed by Ms. Halpenny argued, a public interest purpose in the proper administration of the estate of the deceased, and indeed a public policy interest that the last wishes of a deceased expressed in his or her testamentary document be recognised by the court. Equally, it seems to me that there is public policy interest in quietening what is almost always difficult, contentious and possibly even bitter litigation involving oral evidence before an estate is distributed. Indeed, in many cases where a will is challenged on the grounds of incapacity, the dignity of the deceased person, and the extent to which his or her personal activities in the last years of life are scrutinised, might give rise to a view that the dignity of the deceased may better be respected by a compromise. InPP v. HSE2014 IEHC 622 a Divisional High Court accepted the importance of the dignity of a person in death.
41. Certain statutory provisions give some support to the proposition that the estate of a deceased person may be distributed by the implementation of a compromise, and without proving a testamentary document, and s. 12 of the Capital Acquisitions Tax Consolidation Act 2003 provides that where the disclaimer of a claim under “a purported will” in respect of which a grant of representation has not issued, or in the case of “an alleged intestacy where a will exists in respect of which such a grant was issued” then the claim or right foregone shall not give rise to any tax liability and the disclaimer is not to be deemed to be a disposition for the purposes of that Act.
42. Further, legislation exits which expressly permits the distribution of the property of a deceased person without the extraction of a grant of probate. Section 61(7) of the Registration of Title Act 1964 permits a court to order on the application of any person claiming to be registered as owner of registered land in succession (but not in possession) to a deceased full owner of such land, in certain circumstances:
“Where, on the application of any person claiming to be registered as owner of registered land in succession to a deceased full owner of such land, the court is satisfied—
(a) that at least six years have elapsed since the death of the deceased full owner, and
(b) that the personal representatives of such owner are dead or out of the jurisdiction,
the court may, if it thinks fit, notwithstanding anything in the Administration of Estates Act, 1959, or this Act, dispense the applicant from the necessity of raising representation to the deceased full owner or of giving notice to his personal representatives and may order that the applicant be registered as owner of the land.”
43. Section 61(7), in my view, recognises that there may be circumstances where a court would dispense with the requirement that a grant issue in the estate of a registered owner who died either intestate or testate, andipso factothe court may permit that a will is left unproven.
44. Further, s. 27(4) is frequently used to make title to registered land where a court is satisfied that it is necessary or expedient to grant representation to an estate of a deceased registered owner and where the alternative approach might require a succession of grants or where either the persons entitled to extract such grants are deceased or cannot be found or are too numerous, or where, as is frequently the case, an applicant for such order can show an entitlement to be registered as owner.
45. The practice of executing a deed of family arrangement for the distribution of an estate other than in accordance with the wishes of a testator, or in accordance with the entitlement intestate is long established: See Laffoy,Irish Conveyancing Precedents(Bloomsbury, 2008), and the discussion in Law Society of Ireland’sConveyancing, 7th ed. (OUP, 2014) para. 16.7.2.
46. For all of these reasons it seems to me that it is not necessary that a known will be admitted to probate or that the resolution of a contentious will suit must always involve a determination as to whether a deceased died testate or intestate, or which of two testamentary documents is to prevail.
Risk of Collusive Applications
47. I am aware from counsel’s submissions that no reported case or written judgment has been found in which the issue was considered and where a court was asked to consider making an order under s. 27(4) permitting the issue of a full grant when a dispute regarding the validity of a testamentary document remained unresolved, or where the court did not make a determination regarding the question of whether a deceased died testate or intestate. Counsel also fairly said that in their experience, they have not encountered such an application in the non-contentious Probate List.
48. The fact that counsel cannot identify a similar application does not mean that the application is not one that may be made, and I consider that a number of factors must bear in my consideration. In the first place, whilst there is a public interest that the last wishes of a deceased person be respected, there is also a public benefit from the compromise of litigious claims between natural persons entitled to succeed on the death of a person, especially when most such actions can be divisive and lead to sometimes irreconcilable differences in families. There is also I consider a public interest in quietening litigation around the succession to the estate of a deceased person and in the consensual resolution of inter family disputes.
Conclusion
49. In all the circumstances, I conclude as follows:
(i) There is no reason in the plain language of the Succession Act that an order under s. 27(4) may not be made where there exists an unresolved dispute as to the validity of a testamentary document of a deceased, or as to whether he or she died testate or intestate.
(ii) The court should exercise its discretion under s. 27(4) of the Succession Act in a cautious manner having regard to the fact that the legislation requires “special circumstances” in order that it may be invoked, but such circumstances to be special do not have to be extraordinary or highly unusual and can include a determination that assists the resolution of abona fidedispute.
(iii) The circumstances must be more than the mere convenience of the parties, but the making of the order must be worthwhile or appropriate having regard to all of the circumstances.
50. I am satisfied that special circumstances do exist which make it expedient that Ms. Halpenny be permitted to extract a grant in the estate of the deceased limited for the purposes of giving effect to the Compromise. The grant to her does not amount to a determination of the court that the deceased died testate or intestate. Theoretically, there remains the possibility that the Will of 2014 or that of 2009 may come in due course to be admitted in solemn form of law by a competent court. Having regard to the fact that persons entitled to extract a grant under both Wills are parties to the Compromise the such application is unlikely. But from the point of view of probate practice a possibility, albeit remote, would continue to exist.
51. Therefore, I propose making the order sought.
In the Goods of Martin Glynn
Ireland and the Attorney General v Michael J. Kelly and Michael Concannon
Supreme Court
1 April 1992
[1992] I.L.R.M. 582
(Finlay CJ, McCarthy and Egan JJ)
1 April 1992
McCARTHY J
(Finlay CJ and Egan J concurring) delivered his judgment on 1 April 1992 saying: Part IV of the Succession Act 1965 deals with grants of representation. S. 26 enables the High Court to grant probate to an executor and replaces s. 6 of the Probates and Letters of Administration Act (Ireland) 1857. S. 27 enables the High Court to grant administration (with or without the will annexed) of the estate of a deceased person and to limit the grant. Subs. (3) provides:
subject to subs. (4), the person or persons to whom administration is to be granted shall be determined in accordance with rules of the High Court.
O. 79 r. 5(6) of the Rules of the Superior Courts provides that where the deceased died domiciled in Ireland, leaving a will appointing no executor, or appointing an executor or executors who have been cleared off by death, renunciation, citation, or otherwise, the person, or persons entitled to a grant of administration with will annexed shall be determined in accordance with a stated order of priority. It is unnecessary to state this order since it does not apply to any relevant person. O. 79 r.5(9) enables the probate officer to require notice to be given to other persons entitled in the same class. None of these rules are relevant to the special circumstances here.
S. (4) provides:
where by reason of any special circumstances it appears to the High Court (or in a case within the jurisdiction of the Circuit Court, that court) to be necessary or expedient to do so, the court may order that administration be granted to such person as it thinks fit.
S. 12 of the Administration of Estates Act 1959 (repealed by the 1965 Act) provided that where … by reason of any circumstances it appears to the High Court to be necessary or expedient to do so, the court may, notwithstanding any enactment or rule of law to the contrary, appoint such person as it thinks fit to be administrator etc.
None could doubt the apparent impropriety that will arise if Michael Kelly is permitted to act as executor. He has been convicted of the murder of the testator’s sister, who was the life tenant of some 12 acres of land, whose *584 maintenance he had to undertake if the condition set out in the will be enforced, and whose death at his hands accelerated his succession in remainder. It would appear utterly wrong that he should be permitted, even in the most formal manner, to administer the estate. The administration would appear to require the court’s assistance in determining whether or not, in the circumstances, the gift in remainder is valid. Failing its validity, there will be at least a partial intestacy.
Whilst no formal evidence was tendered in respect of it, it was accepted that Michael Kelly is now an inmate of Shelton Abbey Prison and is on daily release for employment training and spends weekends from time to time at home.
The issue is whether or not these facts establish special circumstances from which it should appear to be necessary or expedient to order that administration with the will annexed be granted to the Chief State Solicitor, in substitution for the executor named by the testator.
In In the Estate of Crippen (1911) P 108, Evans P said at 111:
By s. 73 of the Court of Probate Act 1857, this Court has a discretion (which of course must be judicially exercised) by reason of special circumstances, to appoint such person as the court shall think fit to be administrator of the personal estate of a deceased intestate, in lieu of the person who would otherwise be by law entitled to the grant of administration.
In the present case a man who has been convicted of the wilful murder of his wife has, after his conviction, made a will appointing a person his executrix and universal legatee, who claims, as such executrix, to administer the murdered wife’s estate, and as legatee to be entitled to the murdered wife’s property.
These are, surely, ‘special circumstances’.
I therefore pass over and decline to appoint the executrix; and I appoint the applicant as attorney of the deceased woman’s sister to be administrator of the deceased woman’s estate on the sister’s behalf.
If I am right in this exercise of the discretion of the court, there remains nothing which it is necessary for me to decide upon this motion.
In general, on grounds of public policy (Cleaver v Mutual Reserve Fund Life Association [1892] 1 QB 147) a person who is proved to be guilty of the murder or manslaughter of the testator cannot claim to take under the testator’s will. This was given statutory force by s. 120 of the Succession Act 1965 which excluded from succession a sane person who has been guilty of the murder etc of another, in respect of taking any share in the estate of that other, except a share arising under a will made after the act constituting the offence.
S. 27 is an enabling section, effectively replacing s. 78 of the Act of 1857 which provided:
Where a person has died or shall die wholly intestate as to his personal estate, or leaving a will affecting personal estate, but without having appointed an *585 executor thereof willing and competent to take probate, or where the executor shall at the time of the death of such person be resident out of the United Kingdom of Great Britain and Ireland, and it shall appear to the court to be necessary or convenient in any such case, by reason of the insolvency of the estate of the deceased, or other special circumstances, to appoint some person to be the administrator of the personal estate of the deceased, or of any part of such personal estate, other than the person who if this Act had not been passed would by law have been entitled to a grant of administration of such personal estate, it shall not be obligatory upon the court to grant administration of the personal estate of such deceased person to the person who if this Act had not passed would by law have been entitled to a grant thereof, but it shall be lawful for the court, in its discretion, to appoint such person as the court shall think fit to be such administrator upon his giving such security (if any) as the court shall direct, and every such administration may be limited as the court shall think fit.
S. 78 postulates certain pre-conditions:
(a) death intestate;
(b) death testate but without having appointed an executor willing and competent to take probate;
(c) executor resident out of the jurisdiction;
(d) necessary or convenient in any such case , by reason of the insolvency of the estate of the deceased or other special circumstances.
This is in marked contrast to the provisions of s. 27(4) where the discretion is not made expressly subject to any pre-condition; indeed, the determination of the grantee of letters of administration is made expressly subject to subs. (4). In my view, the subsection should be given a liberal construction. Since the applicant was prepared to undertake the administration and is supported by Michael Donoghue, a pecuniary legatee and a creditor of the estate, who has renounced his right to a grant, and Michael Concannon, another pecuniary legatee, not opposing this application, in my view the appeal should be allowed and the grant of letters of administration not limited to calling in the estate but be a grant in the ordinary form.
In the Goods of Charles Lawson.
High Court—Probate.
28 July 1933
[1933] 67 I.L.T.R 180
Hanna J.
It is contrary to practice and inadvisable to release a creditor-administrator from the obligation of administering the estate, merely because his debt has been paid; but the Court, in special circumstances, where the application was bona fide, in case of the deceased’s estate and of his widow and next-of-kin, and for the purpose of better administration, allowed a creditor-administrator, *180 whose debt (the sole debt) was about to be discharged, to retire from the administration. The Court gave liberty to the widow to retract her renunciation and granted her letters of administration.
Application on behalf of James Charles Lloyd Davidson, sub-manager and nominee of the Munster and Leinster Bank, Ltd.
Two affidavits were filed in support of the motion.
Elizabeth M. Lawson, widow of the deceased, averred, inter alia:—
The deceased died on 3rd February, 1926, intestate, leaving him surviving our one and only child named Mary Elizabeth Lawson, now aged 16 years, and me.
The only property my late husband died possessed of was the premises, held under indenture of lease for the term of 900 years from 1st May, 1885, subject to £4 2s. 6d.
At the date of his death my husband was indebted to various persons for sums of money which included rates and taxes due in respect of the house, all of which debts. I have since paid. I have also paid the costs of the funeral of my late husband. My husband was indebted also to the Munster and Leinster Bank Ltd. in the sum of £204 19s. 3d., due on foot of a promissory note and deposit of the title deeds of the said house, but this sum I have been unable to pay.
At the date of the death of my husband, in 1926, my daughter was too young to be put to any business, and from the date of my husband’s death until the month of April last I supported myself and supported and educated my said daughter out of monies earned by me from time to time by sewing work and out of the rents of rooms let in the said house where my said daughter and myself reside, and out of the said balance of the said £300.
In April last my daughter, who had finished schooling, was able to go to business. Since April last she has been and is at present employed at the tailoring business. She is earning at present 15s. per week and overtime, her weekly income being in or about £1. My daughter has become very competent at her business and her wages will from time to time increase. In addition to this source of revenue I receive the dividends on certain moneys invested for my daughter, and I have let all the rooms in the house 47 Heytesbury Street with the exception of two small rooms and kitchen which my daughter and myself occupy. The dividends and the rents I receive from the rooms let, the salary and overtime of my daughter, and my earnings, and the fact that I have discharged all my husband’s liabilities (save the debt due by my husband to the Munster and Leinster Bank) have now placed me in a position to commence to pay the amount due to the Munster and Leinster Bank. The amount due to the said Munster and Leinster Bank on foot of the said deposit and promissory note, with interest and insurance premium, is now £295 5s. 3d.
My solicitor, Mr. John P. Collins, has informed me and I believe that the Irish Civil Service Building Society have agreed, subject to the approval of this honourable Court, to advance me on mortgage of the house 47 Heytesbury Street, Dublin, the sum of £350 for the purpose of paying off the amount due to the Munster and Leinster Bank. The proposed advance is to be repaid by me in twenty years by quarterly payments of £6 19s. 0d., which payments, owing to my improved financial position, I shall be able to meet.
Proceedings (which were threatened) by the Munster and Leinster Bank to sell the house would deprive my daughter and me of our chief means of living, and would also deprive not only myself but my daughter of a valuable interest in the said house.
I am desirous of saving the said house for my daughter and myself. I pray accordingly that this honourable Court will be pleased to give liberty to James Charles Lloyd Davidson, of the Munster and Leinster Bank to retire from the administration of the estate of my late husband on being paid in the manner hereinbefore mentioned the sum due to the said Bank, and that, in order to give me good title to the premises 47 Heytesbury Street, the grant of administration to the Munster and Leinster Bank be recalled, that I be at liberty to retract my renunciation, and that letters of administration to the estate of my late husband be granted to me as his widow.
James Charles Lloyd Davidson averred, inter alia:—
I am the manager of the Grafton Street Branch and formerly sub-manager of the Dame Street, Dublin, Branch of the Munster and Leinster Bank Limited, who are creditors of the late Charles Lawson, deceased.
The Bank applied through me for the grant of administration for the reason only the said Bank were creditors of Charles Lawson.
(The deponent here set out the position *181 at present in respect of the late Charles Lawson’s liability.)
It was proposed by the Bank to institute proceedings for the sale of the premises 47 Heytesbury Street, but in view of the representations by Elizabeth Lawson and her solicitor the Bank withheld proceedings so as to afford an opportunity of discharging the Bank’s debt.
The Bank is agreeable to the proposal, which is for the benefit of all parties, that its debt be discharged by means of an advance proposed to be obtained from the Irish Civil Service Building Society to the said Elizabeth Lawson, which advance the Society has promised to make in the event of this honourable Court granting this application. If the said proposition be not carried into effect the Bank must proceed to sell the premises to satisfy its debt.
To the best of my knowledge and belief there are no actions or suits at law or equity pending touching or concerning the estate and effects of the late Charles Lawson or the administration thereof. To the best of my knowledge and belief there is no debt outstanding other than the debt due to the said Bank.
I pray accordingly, in the circumstances, that this honourable Court be pleased to give me liberty to retire from the administration of the estate of Charles Lawson, deceased, on the debt to the Bank being satisfied, that the grant of letters of administration to me be revoked and declared null and void, and that letters of administration of the estate be granted to Elizabeth Lawson as widow of Charles Lawson, deceased.
Herbert Hare moved for the applicant. He referred to Miller’s Irish Probate Practice (by Maxwell, 1900), at pages 396-7. Admittedly a creditor is not ordinarily entitled to revocation but a creditor may reasonably apply for revocation in exceptional circumstances. Here the creditor-administrator wishes to retire, not in his own relief, but bona-fide in the interest of the estate and of the widow and next-of-kin. Great loss will accrue if the application be refused.
There is no modern precedent for the application. In 1819 administration granted to a creditor was revoked he having settled his own debt and gone away. An executor who had renounced was allowed to retract his renunciation and take probate (In the goods of Jenkins, 3 Phillimore 33). In 1833 a creditor-administrator who was paid applied for and was granted revocation, the Court making a new grant to one of the children interested (In the goods of Hoare, 2 Swabey and Tristam, 361 (note)). In the goods of Morris (1862), 2 Swabey and Tristam 360, is some authority for claiming that grants to creditors are, in exceptional circumstances, exceptions to the rule that a general grant of administration, properly made, will not be revoked.
In 1887 a grant of administration of the estate of an intestate was made to a creditor who, after his debt had been satisfied, absconded and could not be found. A personal representative was required and the Court revoked the creditor’s grant without citing him and made a new grant to the sole next-of-kin (In the goods of Bradshaw, 13 P. D. 18).
The motion was not opposed.
Hanna, J., who reserved his decision, said that the application was very unusual. He indicated that he was not in favour of making orders in relief of creditors who took on the responsibility of administration. His Lordship, however, pointed out that the circumstances of the case were exceptional and that he was really impressed by the fact of the financial benefit to the widow and next-of-kin by the arrangement. Notwithstanding some of the old decisions, found by the industry of Mr. Hare, it was inadvisable and contrary to practice to release a creditor-administrator merely because his debt had been paid. He would, however, in the very exceptional circumstances, grant the order in the terms of the notice of motion.
Cases Executor by Fault
NY Breweries Co Ltd v AG
House of Lords [1899] A.C. 62;
LORD HALSBURY : . . . The property-I will explain presently what I mean by the word “property “-is in England and belonged to a person who is now dead. That property could only properly be taken possession of or administered by a person who by law was qualified to deal with it. It is idle to suggest that in the Taxing Acts, where they are dealing with English finance, the words “executor” or “administrator,” which terms we use popularly as applicable to a person who fills that character, to whatever country he belongs, are used in those statutes in any other sense than as meaning an English executor or an English administrator dealing with our own financial system. Undoubtedly the persons who are concerned in this case, having the control and dominion over the property in question, did an act whereby the title to the property belonging to the deceased person became vested in somebody else, and they are not either ” executors ” or ” administrators ” in the sense in which those words are used in the Taxing Acts. Primfi facie therefore they are executors de son tort, and, primfi facie, as it appears to me, they have taken possession of and administered the property in respect of which this question arises.
My Lords, I do not suppose that if the case had arisen in this way, that it had been something which was capable of a physical handling, and that the company had handed over that thing to persons who claimed to be possessed of it by reason of the will of some one in New York, any doubt could have arisen that they, in so handing over those subjects of property capable of a manual treatment, were executors de son tort and liable probably under each one of those sections which have been brought before us.
Then, my Lords, that brings us to the. question whether the point, which I have reserved for consideration, when I use the word ” property ” makes any difference here. In one sense it is true that you get into a difficulty by treating the word ” property ” as meaning something necessarily connected with physical possession, and capable therefore of being treated by manual delivery; but if one comes to analyse its meaning, it is manifest that a great many things, choses in action, with which we are dealing are, in the ordinary sense of the word, “property,” and capable of being treated, not indeed by physical handling, but by documents of title and instruments recognised by the law as transferring the title, the incorporeal right to sue (that is what is strictly comprehended in such phrases), documents which are capable of being enforced and treated as subjects of property.
My Lords, the condition of things here is this: Here is an incorporated company, and the deceased person is entitled to his aliquot share of the profits earned by that company. He dies, and according to the constitution of the company when a shareholder is dead the only person who is to be recognised as having a right to deal with his share is-I will put in the word which by implication is manifestly there-an English executor, or an English administrator. The company, therefore, being now in possession of the share of the profits which belonged to the deceased person, are bound to see that they do not hand it over, or hand over anything that represents it, to any person who is not entitled to deal with it. That is their duty according to their constitution and according to law, because they are in possession of something which is available as assets of the testator’s estate, bona notabilia, in this country. Then what do they do? They think proper to create a title in a person who has no authority to receive it on behalf of the dead person even according to the constitution of their own company. I cannot doubt that if we were dealing-that is the reason why I quoted the case of Hiort v. Bott ( (1874) L.R. 9 Ex. 86) to Mr. Asquith at the conclusion of his argument-if we were dealing with an action of trover and you had improperly indorsed the document of title to goods, although you had done it innocently, and thereby enabled one person to obtain property which in
truth belonged to another, you would be liable for damages in trover by reason of that erroneous indorsement. It was so held in the case I have mentioned, in the Court of Exchequer, and also in another case in this House (see Hollins v. Fowler (1875) L.R. 7 H.L. 757). That is the state of the law. Well then, suppose this same transaction to have so taken place that innocently the appel lants had been induced to do this, notwithstanding the innocence of intention, it might well have been that they would have erroneously and improperly created a title in somebody else, the result-the natural and intentional result-of which was to enable a stranger to take possession of property which did not belong to him but belonged to somebody else, then the question might have arisen whether, even in that event, the company would not have been liable.
But your Lordships are not called upon to decide that extreme case, because here it is manifest, from the record before us, that the company have acted with their eyes open-I do not mean to make any reflection upon them, for they appear to have taken a very natural and sensible course in order to have the question of law tried; but in order to have the question tried it is to be assumed against them that they have acted with full knowledge of the facts, and that full knowledge of the facts imported this: that they knew that by the entry in their register which they made they enabled property to be diverted from one person who, in this country, was by law entitled to it, to another person who had no such title at all.
Under these circumstances, my Lords, I feel very great difficulty in under
standing what is meant by some of the expressions used in the Court below. “All I can say,” says Wills J., “is, that it appears to me that the defendants have not really intermeddled with the administration of this estate.” In what
way could a person, dealing with this particular class of property, otherwise intermeddle with the estate? The appellants have done that which, as I say, has created a new title in somebody else. The peculiar character of the property is such that it does not admit of its being manually and physically handed over; but they have done a legal act, and by virtue of that legal act they have enabled it to be dealt with by somebody else, and made available by him for any purpose he desires. It seems to me, therefore, that the words of the learned judge are a little difficult to understand. Then, my Lords, the learned judge goes on: “They have simply done that which the common law of England gives them the right to do, namely, to pay an executor.” They have done nothing of the sort. The learned judge must forgive me for saying, when he says they have paid the executor, they have done no such thing. They have paid a person whom the learned judge calls. an executor, but who is not an executor within the meaning of this Act; and when the learned judge says that they “have simply done that which the common law of England gives them the right to do, namely, to pay an executor without asking him for proof of his title by the production of the probate,” I am afraid he forgets for a moment that what was done here was done with the full knowledge that the person whom they paid, not only was not an executor, but had given distinct notice that he never intended to become an executor within the meaning of the English law. Therefore I have considerable difficulty in following the learned judge’s argument….
Ihave already, for another purpose called attention to the fact that the mere indorsement of a warrant for delivery of goods has been treated as a conversion, and it really would be frittering away the meaning and substance of language to suppose that where the person happens to be actually in possession of the document, the title which enables the estate to be dealt with, he does not take it because it is already in his possession. If he alters the character in which he holds it and gives the property in it to one person rather than another, it appears to me that the moment he has done that he has ” taken possession of and administered ” it in the sense which this Act of Parliament is intended to involve.
It appears to me, therefore, my Lords, that the appellants are clearly within those words, and are liable to the duties and the penalties indicated by this section. I do not think that the matter admits of elaborate exposition. We have had a long argument upon the subject, but it all comes to this: that because this particular form of property is conveyed in a particular way, so that under particular circumstances you have not, what I may call, a physical act of handing over the property, but you have merely a signature in a book, if you alter in the register the name of the person entitled to the goods, then, although that has the effect of creating a new title and giving the complete command over the property with which you are dealing, that (it is said) is not ” taking posses sion of and administering” within the meaning of the law. It appears to me, my Lords, that so to treat it would be entirely to alter the ordinary use of language, and to suppose it to be fenced round with technicality from which I think it is happily free. In my opinion there was here a “taking possession,” and there was an ” administering” within the meaning of the law, and therefore the persons who have done that are liable to these penalties and liable to the payment of this duty. Accordingly I move your Lordships that the judgment be affirmed and the appeal dismissed with costs.
Hill v Curtis
Court of Chancery (1865) L.R. 1 Eq. 90
Wood V.-C. . . . Upon that state of facts I should have felt no difficulty, but for the case of Carmichael v. Carmichael ( (1846) 2 Ph. 101), which has been referred to. I have recently examined all the cases upon this old branch of the law, and there are one or two points which I think may be treated as clear. It seems to me quite clear at law, that a person who becomes executor de son tort cannot possibly deliver himself from the consequences of that fact cannot free himself from.an action, unless he has previously handed or paid over the property. If he have done that previously to the action being brought, he is free from all liability. Consistent with that was the decision in the case of Paull v. Simpson ( (1846) 9 Q.B. 365), for the citation of which I am indebted to Mr. Casson. That case, as may be expected, is only in conformity with the old law as stated in Godolphin, and in Mr. Justice Williams’ book. It has been settled, by that decision in the Queen’s Bench, that if one person possesses himself of the property of a testator and hands over that property to a second person, the latter is not an executor de son tort. I mention that with reference to the handing over of the property to Mr. Curtis the elder. In this court such a person might be followed as holding trust moneys with knowledge of the trust, but an executor de son tort he is not.
Then is there any difference with respect to an account being settled? Prima facie and in the absence of authority, I cannot anticipate that there would be any difference. In Padget v. Priest ( (1787) 3 T.R. 97), which was a very hard case, and in Curtis v. Vernon ((1790) 3 T.R. 597), the only point decided was, “You cannot get your discharge from the right executor, unless you get it before action brought.” Looking at the reason of the thing, that decision appears reasonable and just. How is a man, who has improperly got the property of a testator into his hands, to purge himself, except by putting it into the hands of the person who has a right to it? And if that be so, on what principle can it be said that, because there are matters of account, a suit must be brought in order to settle them? I confess I cannot see why. Then it is said, that Lord Cottenham has decided otherwise in the case of Carmichael v. Carmichael. But the remarks of Lord Cottenham were not requisite for the decision of the case; it was a dictum, and is in these terms (p. 103) : -” How can you distinguish this case from one in which there are two executors, and one dies, and his representative accounts for his receipts with the survivor? That does not discharge him from the liability to account in a suit for the administration of the estate; and the authori ties shew that an executor de son tort cannot say he is so as against those who charge him as executor. He has all the liabilities, but none of the privileges that I belong to that character.” Now I have considered that dictum with the respect that is due to so high an authority, and I confess I cannot follow the reasoning by which his Lordship arrived at that conclusion. It is plain that an executor cannot discharge himself by accounting to his co-executor, because he is himself authorized, and it is his duty, to see how the assets are applied. When he has paid over the assets he is not discharged, he must see to their application. If he is so foolish as to part with possession of the assets to his co-executor, though he is not answerable for his co-executor’s receipts, he is responsible for what he so pays over. But it may well be asked, what right have you to proceed against a man who has had wrongful possession of property, if he have discharged his duty by making it over to the executor? What claim have you to say, “You shall not be discharged by the rightful owner, but we will unrip all you have done, and bring a suit against you in respect of this property “? That is not the rule at law, it is clear, for an executor de son tort who pays over what he has received to the rightful owner before action brought, is at once discharged. And, I apprehend, the rule here must be same. If you treat Curtis only as an agent of the administratrix, there is no reason why that property which he receives should not be dealt with as property received on account. Mr. Giffard pointed out that the Defendant Curtis was charged with never having accounted, and the charge was not denied, but it would be impossible for me on such pleadings as these, where the bill makes no charges of assets remaining in his hands, to treat him as not having accounted. I may further observe, that in the case of Carmichael v. Carmichael, the appeal was from a decree made in the year 1834, which contained no reference to the Master with respect to the settled account, and did not attempt to disturb it in any way. The Master gave effect to the settled account; excep tions were taken to the report, and the Vice-Chancellor of England allowed the exceptions on the ground that the Master had no authority to treat the account as settled; and then twelve years after the decree, the appeal was brought on the ground that the decree ought to have contained a direction to the Master, not to disturb the account, but to allow the Plaintiff to surcharge and falsify. Lord Cottenham said naturally enough, ” If your argument is good for anything it goes to this—;-that there never ought to have been a decree against you at all, you ought to have been dismissed at the hearing. A direction not to disturb settled accounts may be applicable enough to the case of Plaintiff and Defendant, but not to an account between co-Defendants.”
In Sharland v. Mildon ( (1846) 5 Hare 469), Vice-Chancellor Wigram appears to have given a very clear exposition of what the law really is. He says, “The widow of a deceased person-the testator in the cause-intending to obtain representation to her husband, began to collect his assets before she had obtained such representation, and in the course of doing so she employed the Defendant Hewish to collect the debts owing to the testator. Hewish accordingly received several of the debts, knowing them to belong to the testator’s estate and paid them over to the widow. The widow did not afterwards become the legal representative of the testator, and another party has obtained such representation. The consequence is that the widow might, without question, be sued as executrix de son tort. The question is as to Hewish. The case in the present instance is one of great hardship on him, and I desired to look into the cases to see if I could avoid treating him as executor de son tort. The fact that he would be liable if he had received the money, and had not paid it over, is admitted or well established; and if that be so, it seems to follow, logically, that the Defendant cannot discharge himself, except by paying over to the legal personal representa tive of the testator the money which he has so received. Hewish might have acted in this case purely in a ministerial character, as, for example, a servant might have acted in bringing or removing furniture under the direction of his employer; but the authorities clearly shew that the doctrine-that the possession of an agent is the possession of a principal-has no application to the case of a wrong-doer.”
That brings us to the very case I suggested to Mr. Giffard, arising in this way. Suppose a widow, intending to take out administration, employs an assistant to sell goods across the counter, and he does so, and she dies before taking out administration, then they are both executors de son tort. It is not a case of agency, but both parties are liable….
Then what have we here? The case of Sharland v. Mildon shews that if, before administration is taken out, an agent is employed, the agency is not lawful so long as the employer is wrong-doer. But if the employer becomes administratrix, then all she has done is made right, and all that her agent has done is made right also….
Thoenly manner in which relief could be had against the elder Curtis would probably be to file a bill charging him with having taken possession of trust property, with knowledge of the trust, and seeking to follow that property in his hands. But that is not the case made by this bill, which is one of an executor de son tort. George Curtis the elder might be held to be a construc tive trustee if he was found in possession of the property with knowledge of the trust; but the case of acting as executor de son tort, when brought against him is met by the case of Paull v. Simpson, in the Queen’s Bench which determines that he is not chargeable as executor de son tort for goods which are handed over to him by another person acting in that character.
With respect to the costs, I should have felt disposed to dismiss the bill without costs, as against the two Messrs. Curtis, if the case had stood as it appeared upon the bill and answers, and for this reason, that they acted with great indiscretion in permitting the fund to be mixed with their own, and then in drawing upon the common fund. At the same time I believe that the estate has been considerably benefited by their interference-that there has been a saving of debts-and that the family were maintained whilst they acted. Every thing, indeed, that could be done, appears to have been done for the benefit of the family; and there would have been no probability of these children getting a sixpence out of the suit if it had continued, for it is quite clear that the Curtises could have claimed the whole of their debt, which would have exhausted the fund. As it is, one member of the family is in possession of one of the farms, and another of the other. But when I consider the absolutely monstrous charges that have been brought against these gentlemen, who have been guilty only of the single indiscretion of placing the trust-moneys and their own into one common fund, and who have acted throughout with uniform kindness to the family, I cannot, in common justice, dismiss the bill otherwise than with costs against the two Messrs. Curtis.
Note
An executor de son tort is liable to an action for account and may be made liable in tort for damages for conversion. If the former remedy is brought against him, he is not automatically liable to a general account, that is, liability for the whole estate, unless he has received everything in the estate. He is liable only for what he has received (Coote v. Whittington (1873) L.R. 16 Eq. 534, 546). This case, however, throws doubt on the statement in Hill v. Curtis that the executor de son tort can plead to such an action that he has settled his accounts with the real executors. A true executor cannot make such a plea. In the later case Malins V.-C. said: “If Vice-Chancellor Wood was at liberty to dissent from [ the dictum of Lord Cottenham in Carmichael v. Carmichael], I am at liberty to express my assent to it; for it is one which is founded, in my opinion, on common sense.” The executor de son tort may, however, be sued for conversion. He may set off expenses properly incurred as is shown by the judgment of Abinger C.B. in Fyson v. Chambers (1842)
9 M. & W. 460, 468: ” … it appears that the first act of conversion done, after the death of the deceased, was the very sale of the goods, in which the supposed executor and the defendant were actually concerned togethe.r, and that all parties were therefore liable in an action of trover. Now, it is very true, if an action had been brought in trover by the administrator against the executor de son tort, the cases have decided that an executor de son tort may recoup himself in damages for all money he has paid bona fide on account of the testator and so might the defendant in this case, if he had given any evidence that the executor de son tort had paid the debts of the testator out of the proceeds of the sale. No such evidence was given, and it therefore remains a conversion without any thing to excuse it, or to diminish the amount to be recovered.”