Administration Actions
Cases
Kelly v O’Connor and others
Chancery Division.
16 January 1917
[1917] 51 I.L.T.R 60
Barton J.
J
Barton, J.
This is an application on the part of the executors of Michael Darcie, whose personal estate is being administered in the present action, for an order that the defendant, Richard Maher, pay the applicants their costs of an action brought by them to establish an alleged will of Michael Darcie, or for an order directing that the said sum be paid out of the money represented by a deposit receipt for £923 deposited in the name of the deceased in the Fethard Branch of the Munster and Leinster Bank. Two questions arise—(1) Whether the costs of the probate action are testamentary expenses; and, if they are, then (2) whether they are payable out of the money so deposited in the bank, which moneys have been declared by this court and by the Court of Appeal to have been the subject of a good donatio mortis causa by Michael Darcie to Richard Maher. As regards the question whether these costs are testamentary expenses, in my opinion they are testamentary expenses. The facts are peculiar, but the executors are entitled to rely on three facts as showing that they were justified in incurring these costs—namely, that a case had been submitted to senior counsel, who had advised that the proceedings should be brought; that the judge at the trial of the *60 probate action had declared the executors entitled to their costs out of the assets; and that no serious claim had been made that the deceased man had disposed of these moneys by way of donatio mortis causa until all, or nearly all, the costs of the probate action had been incurred. The other question is whether, there being a deficiency of assets in this case, the applicants are entitled to resort to the moneys deposited in the bank for the payment of testamentary expenses due to them. The order of the judge who tried the probate action declares that they are entitled to these costs out of the assets; but the moneys on deposit are not assets; they never vested in the personal representatives of Michael Darcie, and do not form part of his estate. At the death of the donor the donee became absolutely entitled to them—claiming not under the representatives, but against them. It is said that property given by way of donatio mortis causa is liable for the debts of the donor, but that is because the gift would be a fraud on the creditors if the assets are insufficient for payment of debts. Legislation was necessary to make the subject-matter of a donatio mortis causa liable to Legacy Duty and Estate Duty Act. I accordingly hold that the moneys on deposit receipt in this case are not liable for the testamentary expenses of the donor.
Scott v. Scott.
M. R. [1924] IR 141
(I. F. S.)
O’CONNOR M.R. :
This action was brought for the administration of the personal estate of Thomas Scott, deceased, who died intestate. The plaintiffs are three of his children. The defendants are Ellen Scott (his widow), James B. Scott (another child), and the Provincial Bank of Ireland. The last-named was made a party on account of certain stocks and shares held by the bank as equitable mortgagees, and claimed by the plaintiffs as personal estate of the deceased.
Thomas Scott died on the 16th December, 1910. He carried on two businessesone in Upper Liffey Street, Dublin, under the name of Thomas Scott & Co., and the other at Seapoint, under the name of Scott & Co. Ellen Scott, his widow, obtained a grant of administration to his estate on the 8th May, 1911, and, instead of realizing her husband’s estate and administering it in the ordinary course, she, no doubt with the best intentions, assumed her deceased husband’s position, and carried on both businesses and supported her family thereout. The defendant, James B. Scott, is her eldest child, and when he had had some business training she employed him as the manager of the business carried on under the name of Thomas Scott & Co. She retained the management of the business of Scott & Co. in her own hands. She seems to have had unbounded confidence in her son’s capacity and integrity, because she adopted the very foolish system of signing blank cheques in the name of Thomas Scott & Co., to be filled up by him for payment of the necessary outgoings. For about eight years from the death of her husband Ellen Scott kept her banking account with a bank at Blackrock. On the 15th February, 1918, she transferred her banking business in connexion with the business of Thomas Scott & Co. to the office of the Provincial Bank in St. Stephen’s Green, Dublin, and there opened an account in the name of Thomas Scott & Co. It was alleged that when that account was opened the manager of the bank knew that the business had been formerly carried on by Thomas Scott, deceased, and that it was continued by Ellen Scott as his administratrix; but I am satisfied by the evidence which was given by the bank manager that he had no such knowledge, and knew nothing more than that the business of Thomas Scott & Co. was being carried on by Ellen Scott, and presumably as the owner thereof. The bank manager also knew that James B. Scott was the manager of the business.
For a time all went well. The account was in credit; but at the end of the year 1920 there was a debit balance of £546 5s. 9d., and at the end of the year 1921 that had been increased to £1,103 5s. 4d. This is to be accounted for by the fact that cheques signed by Ellen Scott in the name of Thomas Scott & Co., with blanks for the amounts and the names of the payees, were used by James B. Scott for paying stockbrokers the prices of stocks and shares of a speculative character, which he had purchased in his own name. When the banking account of Thomas Scott & Co. got into debit the bank asked for security, and James B. Scott deposited with the bank the scrip of certain shares in rubber companies which stood in his name. James B. Scott also opened an account in his own name with the bank. He did so for the purpose of getting an advance for the purchase of a house, for which he was to pay £1,240, which was to be secured to the bank by a deposit of the lease thereof. He further secured this account by a deposit of the scrip of certain other shares which stood in his own name. There is a sum of about £1,150 due to the bank on that account. It is clear that all the several shares which were pledged with the bank represented moneys drawn from the account of Thomas Scott & Co. In the end, further credit was refused by the bank, and Ellen Scott found herself unable to pay the liabilities of the business of Thomas Scott & Co. This, no doubt, came as a surprise to her. She thought that her cheques were honestly applied for the payment of the current liabilities of the business. Instead of that, they went to brokers on the London and Dublin Stock Exchanges. The creditors threatened to sue her, and she apprehended that on getting judgment against her they would seize the stock-in-trade of both businesses. In these circumstances the children were advised that the businesses and all the stock-in-trade belonging thereto were assets of their father, and that they should have the estate administered by the Court, and so protected against their mother’s creditors. They were also advised that the several stocks and shares which were pledged to the bank were assets of their father, and that the claim of the bank thereto could not prevail against their prior equitable title. It was for the purpose of trying this latter question that the bank was made a defendant; and as at this stage this is the only question which has to be determined, I will deal exclusively with it. I conceive that during the progress of the action other questions will arise as between Ellen Scott and the plaintiffs, and between all the next-of-kin and the unsecured creditors of Ellen Scott.
The case which is made by the plaintiffs is that, as the shares were purchased by moneys which in equity were assets of Thomas Scott, the shares themselves became assets, and may be claimed as such by the next-of-kin; that James B. Scott had no right to pledge them to the bank; and that, as the bank’s title is only an equitable title, it is subject to the prior title of the next-of-kin. This claim is supported by the old principle that every equitable conveyance is an innocent conveyance, and that, as between equities which in all other respects are equal, the first in time must prevail. The defence of the bank is that the equities are not equal, that the bank has the better equity, and, further, that the contest is not between two equitable estates, but between an equitable estate properly so called vested in the bank and a mere equity, which only gave the plaintiff a right of action.
I will first go into the question whether the equities are equal. It is not alleged against the plaintiffs that they were guilty of any negligence, laches, or acquiescence which facilitated the breach of trust which was committed. On the other hand, it was alleged, and truly alleged, by the bank, that they had no notice of the breach of trust, and that for valuable consideration they dealt in the ordinary course of business with Thomas Scott & Co., Ellen Scott, and James B. Scott. I must say that in such a case, treating it in this simple way, it is very difficult to say who has the better equity. But the bank say that there is a further element to be considered, and it is this: Ellen Scott was the plaintiffs’ trustee, and it was owing to her negligence and course of dealing that James B. Scott was enabled to deal with the moneys of the business of Thomas Scott & Co. in the way he did, and that the next-of-kin are bound by his acts. The law on this part of the case stands in a very peculiar way. Mr. Meredith, for the plaintiffs, relied on Shropshire Union Railways and Canal Company v. The Queen (1), a case of the very highest authority, being a decision of the House of Lords, presided over by Lord Cairns. The facts of that case are simple. The railway company’s banker, Holyoake, held in his own name certain shares in the company upon trust for the company, and he was allowed to be the custodian of the scrip. In breach of his trust, he borrowed money from one, Robson, on the security of a deposit of the scrip, undertaking, on request, to execute a legal mortgage. Robson died. His widow became his executrix. She gave notice to the company of her claim, which the company disputed. She afterwards procured a legal transfer of the shares from Holyoake, which the company refused to register. The executrix applied for a mandamus to compel the company to register the transfer. This raised the question whether the equity of the company, which was first in time, should prevail over the subsequent equity of Robson. On this Lord Cairns says (at p. 505): “It was perfectly legitimate that these defendants should own the stock. It is perfectly in accordance with law that they should have had that stock, which they could not hold in their own names, standing for them in the name of a trustee or in the names of trustees, and in that state of things undoubtedly the position of matters was that the defendants had the whole beneficial interest in the stock belonging to and forming part of the property of the company. Theirs was the equitable title. Holyoake was a person who held merely the legal title and the right to transfer the stock. He was able, if not interfered with, to transfer the stock to any other person, and to give a valid receipt for the purchase-money to any person who had not notice of the beneficial interest of the defendants. On the other hand, any person with whom Holyoake might deal by virtue of his title upon the register, had, or ought to have had, these considerations present to his mind. He ought to have known that although Holyoake’s name appeared upon the register as the owner of these shares, and although Holyoake could present to him the certificates of this ownership, still it was perfectly possible either that these shares were the beneficial property of Holyoake himself, or that they were the property of some other person. If he dealt merely by equitable transfer, or equitable assignment with Holyoake, and if it turned out that the beneficial ownership of Holyoake was co-incident and co-extensive with his legal title, well and good; his right would be accordingly, so far as Holyoake was concerned, complete. But if, on the other hand, it should turn out that Holyoake’s beneficial interest was either nil, or was not co-extensive with the whole of his apparent legal title, then I say any person dealing with Holyoake, by way of equitable bargain or contract, should have known that he could only obtain a title which was imperfect, and would not bind the real beneficial owner. And, my Lords, he also might have known, and should have known, this, that if he desired to perfect his title, and make it entirely secure, he had the most simple means open to himhe had only to take Holyoake at his word. If Holyoake represented that he was the real owner of these shares, the proposed transferee had only to go with Holyoake, or to go with the authority of Holyoake in his possession, to the company, and to require a transfer of those shares from the name of Holyoake into his own name. If he had obtained that transfer, and the company had made it, no question could have arisen, and no litigation could subsequently have taken place.
“That being the state of things, your Lordships have, on the one hand, the directors, clearly the equitable owners of the stock in question. You have, on the other hand, Mr. Robson, the person dealing with Mr. Holyoake for an equitable charge, having in his power, if he was so minded, to obtain a perfectly valid legal charge, which would have made his title complete. Your Lordships have to deal with a case of a pre-existing and undoubtedly equitable title, and circumstances which are alleged to have defeated and to have taken away that pre-existing equitable title. My Lords, that pre-existing equitable title may be defeated by a supervening legal title obtained by transfer. And I agree with what has been contended, that it may also be defeated by conduct, by representations, by misstatements of a character which would operate and enure to forfeit and to take away the pre-existing equitable title. But I conceive it to be clear and undoubted law, and law the enforcement of which is required for the safety of mankind, that, in order to take away any pre-existing admitted equitable title, that which is relied upon for such a purpose must be shown and proved by those upon whom the burden to show and prove it lies, and that it must amount to something tangible and distinct, something which can have the grave and strong effect to accomplish the purpose for which it is said to have been produced.
I have anxiously striven to understand what were the circumstances or what was the line of conduct which is said in this case to operate to defeat the admitted equitable title, and I have been able to discover only four matters which are stated either separately or all together to have produced that effect.
My lords, in the first place, the arguments at your Lordships’ Bar on behalf of the respondent appeared to me to go almost to this, that whenever you have an equitable owner who is the absolute owner, that is to say, entitled to the whole equitable interest, such a person ought not to have a trustee at all holding the indicia of legal ownership; or, if he chooses, for his own purpose, to have such a trustee, he must be in danger of suffering for every act of improper conduct by that trustee; and that, therefore, if the person entitled absolutely to the equitable interest in a share in a railway company, chooses for his own purpose to have that share standing in the name of a trustee for him, he will be bound not merely by a valid legal transfer of that share by the trustee, but by any equitable dealing or contract which the trustee may choose to enter into. My Lords, that is a very serious proposition. It goes not merely to shares, but it goes to land, and to every other species of property; and it goes to say that, whereas there is a large, well-known, recognised, and admitted system of trusts in this country, that system of trusts is to be cut down and moulded and reduced to this, that it is to be a system applicable only to infants, married women, or persons with limited interests; and that wherever the limited interest has ceased, and the equitable interest has become entire and complete without any limit, there the equitable owner is under some measure of obligation with regard to his duty of watching his trustee, an obligation which does not lie upon a limited owner. I find no authority for such a proposition, and I feel satisfied that your Lordships will not be disposed to introduce, for the first time, that as a rule of law.”
It appears to me that as between two claimants, each having only an equitable interest, this is a clear authority that the first in point of time cannot be prejudiced by the fact that it was a breach of trust by his trustee which occasioned the dealing with the second in point of time.
But, as I said, the law stands in a peculiar way. The judgments of the Court of Appeal in Ireland are directly at variance with the judgment of the House of Lords.
In In re Ffrench’s Estate (1), where there was a contest between cestuis que trustent, who asserted their prior equity against a subsequent equity which arose out of a breach of trust committed by the trustees, FitzGibbon L.J. said (2): “I think that where cestuis que trustent are represented by trustees, and are acting, or must claim, through trustees in whom the legal estate is or ought to be vested, and where innocent and independent third parties have been misled or defrauded by the conduct, or through the laches, of those trustees, such cestuis que trustent cannot be better off, in equity, than if they had been sui juris, and had themselves acted as their trustees did.”
In the same case Barry L.J. said (3): “It is the duty of such persons to select careful and honest trustees, and if they fail in that duty, and select those who are careless or dishonest, and either the children or innocent strangers must be defrauded by the acts of such trustees, the loss should fall on those whose agents chose the faulty trustees rather than on the strangers, assuming, of course, the latter to be guilty of no negligence or default.”
These statements of the law were reaffirmed by Porter M.R. in the Bank of Ireland v. Cogry Flax Spinning Co. (4).
I cannot reconcile these judgments with Lord Cairns’s judgment in the Shropshire Union Railways and Canal Co. v.The Queen (5) because, there the equitable mortgage was made by the company’s trustee in breach of his trust and, notwithstanding that, it was held that the company, the cestui que trust, had priority. In other words, the loss fell on the stranger and not on the party who actually appointed the delinquent trustee.
Cases of the same character with the same result were Moore v. North-Western Bank (1) and Ireland v. Harte (2).In each of these cases the stranger was allowed to suffer by the fraudulent conduct of a trustee. It is strange that the Shropshire Union Case (3) was not referred to in either In re Ffrench’s Estate (4) or in Bank of Ireland v. Cogry Flax Spinning Co. (5). Mr. Meredith would possibly explain this by saying that equities against choses in action and equities against real estate must be dealt with quite apart, and that the same principles do not apply. I cannot accept this because the principles enunciated in both the English and Irish cases are broad equitable principles which must affect every class of property. It is obvious that in the conflict of authorities I must accept the law as laid down by the Irish Court of Appeal, although I have a suspicion that it conflicts with the fundamental principle that every equitable conveyance must be an innocent conveyance.
It is, however, to be remarked that in In re Ffrench’s Estate (4) the party Tyrrell, whose later equity was held to be the superior equity, had done everything he could have done to perfect his title; whereas in the present case the Provincial Bank could have, without any difficulty, acquired the legal ownership of the shares whose scrip was deposited. One of the elements in In re Ffrench’s Estate (4) was that the claimants, who were prior in point of time, had not an equitable estate, but only what is called a mere equity, while the claimants, in respect of the later equity, had a definite equitable estatethat is, a mortgage upon an equity of redemption. Let us see how this bears upon the present case. It was the duty of the defendant, Ellen Scott, as soon as she had obtained a grant of administration to her husband, or at least within a reasonable time afterwards, to realize his assets. She had no right to continue to trade with them. She did continue to trade, and was, therefore, guilty of a continuing breach of trust. Now what were the rights in these circumstances of the next-of-kin? Any one of them could have commenced an action against her and could have made her liable for the full value of the assets which she had illegally dealt with, together with interest at the rate of 5 per cent. thereon, or, at his election, he could have adopted the trading and made her account for all her trade dealings. These were the alternative equities, either of which could have been asserted. The latter alternative has been adopted which, no doubt, means following the assets of the intestate into property which has come to represent them. But this is a mere equityit is not an equitable estate, which involves a definite lien, charge, or claim on a definite item of property. It is not like a vendor’s lien for unpaid purchase-money, or an equitable mortgage of specific property, or a claim by a cestui que trust arising out of a trust of specific property. It is rather a right of action, the assertion of which may result in the capture of property for a particular trust. It is well settled that in a contest of priorities such a claim cannot prevail against an equitable estate, such as the bank has in the present casethat is, an equitable mortgage on specific items of property. There is another element in this case which must be taken into account in weighing the equity of the next-of-kin against that of the bank. The overdraft of Thos. Scott & Co. on the bank account was brought about to a very great extent, if not entirely, by overdrafts which went in payment for the several securities which were pledged to the bank. I think that the securities in the main represent advances by the bank to Ellen Scott, and the proceeds of the sale of these securities will go in reduction of the overdraft and in relief of the estate. The overdraft must for the purposes of the plaintiffs’ claim be regarded as a liability of Thomas Scott, deceased. If it is to be regarded as the personal liability of Ellen Scott, the stocks and shares so far as purchased with advances are not assets at all, because they would then have been purchased by Ellen Scott by moneys borrowed on her own personal security. It is not necessary, however, to go particularly into this, because on the other ground mentioned I am of opinion that the title of the bank to the securities is good.
I must now see what exactly should be the terms of the judgment. In the first place, there must be the usual order for administration, with the usual inquiries. Then there must be an inquiry into the trade dealings of the defendant, Ellen Scott, with the assets of the defendant. This will be a trading account. There will be no account against her under the heading of wilful defaultwilful default has not been alleged. True, the defendant has been charged with breach of trust in trading, but the trading has been adopted. There must also be a declaration that the defendant, James B. Scott, is bound to account for all moneys belonging to the business of Thos. Scott & Co. which he invested in the purchase of stocks and shares in his own name, and there must be an account taken of such moneys and of the loss occasioned to the business by such purchases as aforesaid. There must also be a declaration that his share, as one of the next-of-kin, is bound to indemnify the estate against all such losses.
There will be a declaration that the Provincial Bank, by virtue of the deposit of the certificate of shares mentioned in the letter of deposit dated 6th May, 1920, became entitled to a good equitable mortgage on such shares and securities in respect of the balance due to the bank on foot of the account of Thomas Scott & Co. There will be a further declaration that the Provincial Bank, by virtue of the deposit of the certificate of shares mentioned in the letter of Robert Nicol to Hume Robertson, dated 7th December, 1920, became entitled to a good equitable mortgage on such shares and securities in respect of the balance due to the bank on foot of the account of James B. Scott; and a further declaration that all moneys due to the bank on such account are, as between the defendant, Ellen Scott, as administratrix of Thomas Scott, and the said James B. Scott primarily chargeable on the estate and interest of James B. Scott in the premises No. 28 Sandymount Avenue, Sandymount, the lease of which was deposited with the bank as further security for the balance due on the account of the said James B. Scott. There will be a further declaration that, subject to the said equitable mortgage, the several stocks and shares are assets of Thomas Scott, deceased.
I can decide nothing at present about the incidence of the trade debts contracted by the defendant, Ellen Scott. Questions as to this must arise in the course of the action. No doubt the creditors will furnish their claims, and when they do further questions will arise. I will declare the bank entitled to their costs of this action up to and including this hearing with their demand, and that, in so far as the securities held by the bank are insufficient to meet the said demand, such costs are payable out of the assets of the deceased. I will order the defendant, James B. Scott, to pay the plaintiffs’ costs up to and including this hearing. I will reserve all other costs, and adjourn for further consideration.
McGuiness, Deceased;
Nugent v McGuiness
Chancery Division.
11 February 1918
[1918] 52 I.L.T.R 64
Dodd J.
This was an application by way of originating summons for an order for administration of the estate of James McGuiness, deceased. The application was made on behalf of Kate Nugent of Ballintogher, Dromore, Co. Meath, one of the next of kin of James McGuiness, deceased. James McGuiness died intestate and a bachelor, on May 30, 1917, leaving personal property. Administration was granted to Hugh McGuiness, brother of deceased, on July 30, 1917. The farming stock and implements were valued for purposes of administration at £565, but applicant alleges they are worth considerably more. The next of kin of deceased, according to the Statutes of *64 Distribution, are Hugh McGuiness, the administrator, who is defendant in the present suit; Joseph McGuiness and Peter McGuiness, brothers, and Kate Nugent, otherwise McGuiness, the present applicant, and Anne McGuiness, otherwise Fegan, sisters. The chief means of support of applicant and her husband is the old age pension. She declares that since the death of James McGuiness an attempt has been made to induce her to accept £100 in full settlement of her claim on the estate. But applicant refused to settle her claim on the estate for less than £200. She now alleges that it is the intention of the defendant to take advantage of her age and poverty in order to force her to settle her claims for less than their full value, and she therefore prays for an order for administration under the Court.
E. S. Murphy made the application.
James Geoghegan, for the defendant, submitted that this was not an exceptional case within the meaning of Dowzer v. Dowzer, 48 Ir. L. T. R. 236; that the policy of this Court, as laid down in that case, and in Ryan v. Tobin, 29 Ir. L. T. & S. J. 252, cited and approved in Dowzer v. Dowzer, was always to refuse to grant an order for administration till after the lapse of one year from the death. Barton, J., in Dowzer v. Dowzer said:—“… 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 twelve months. If that were not so there would be a very large number of 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 ( vide supra ) has not been approved of.”
E. S. Murphy, in reply, submitted that this was an exceptional case, such as was considered in Dowzer v. Dowzer, and Ryan v. Tobin. He cited Wallis v. Wallis, [1882] 9 L. R. I. 511—a case where the Master of the Rolls granted administration within a year of intestate’s death.
Dodd, J.
The plaintiff is entitled to a primary decree. Defendant is administrator, and is in possession of the assets, and I think this is a sufficient reason for administering under the Court. The practice of allowing the personal representative a year to administer is, so far as the next of kin are concerned, founded on convenience. When means of communication and means of transit were less developed than at present, before the invention of the steam engine and the telegraph, a year might have been a reasonable time to allow the representative to discharge his duties. At the present day, a great deal less than a year ought, in an ordinary case, to be sufficient. I will follow the decision of Sir Edward Sullivan, M.R., in Wallis v. Wallis, and grant the order. Of course, I will reserve the question of costs, and, if it afterwards is found that the plaintiff brought these proceedings prematurely, I will not merely disallow her costs, but I shall make her pay them.
Dolan -v- Culloo & Loughrey
, Loughrey -v- Dolan, Dolan -v- Culloo & anor, Loughrey -v- McCloughan Gunn & Co., [2016] IESC 29 (02 June 2016)
URL: http://www.bailii.org/ie/cases/IESC/2016/S29.html
Cite as: [2016] IESC 29
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Dolan -v- Culloo & Loughrey, Loughrey -v- Dolan, Dolan -v- Culloo & anor, Loughrey -v- McCloughan Gunn & Co.,
Neutral Citation:
[2016] IESC 29
Supreme Court Record Number:
309 & 315/08, 125 & 599/12, 358/13
High Court Record Number:
2005 218 SP, 2012 362 SP, 2012 363 SP
Date of Delivery:
02/06/2016
Court:
Supreme Court
Composition of Court:
Clarke J., MacMenamin J., Dunne J.
Judgment by:
Dunne J.
Status:
Approved
Result:
Appeal dismissed
J
Judgment of Ms. Justice Dunne delivered the 2nd day of June, 2016
This judgment involves some five appeals from various orders of the High Court made in a number of sets of proceedings which broadly speaking concern the administration of the estate of the late Michael Campbell Deceased (hereinafter referred to as “the Intestate”) otherwise known as Michael MacCollion. In order to understand the issues in the various appeals which were all heard at the same time it would be of assistance to describe the various proceedings, the orders made in the High Court and the appeals therefrom. The first appeal is in proceedings bearing High Court Record No. 2005/218SP –
IN THE MATTER OF MICHAEL CAMPBELL DECEASED AND IN THE MATTER OF THE SUCCESSION ACT 1965
BETWEEN
CATHLEEN DOLAN
PLAINTIFF
AND
MARY CULLOO AND BRENDAN LOUGHREY
DEFENDANTS
(hereinafter described as the “administration proceedings”). The order under appeal was an order made on the 14th July, 2008 (Laffoy J.) on foot of a motion on behalf of the Plaintiff, (hereinafter described as “Ms. Dolan”), setting aside a citation to lodge in court the letters of administration granted to Ms. Dolan in respect of the said estate, issued and served upon Ms. Dolan as the administrator appointed by the High Court in the estate of the Intestate. That order was appealed by the second named Defendant in those proceedings (hereinafter referred to as “Mr. Loughrey”) by notice of appeal dated the 25th August, 2008. The appeal number in respect of those proceedings is Supreme Court Appeal No. 309/2008.
Appeal No. 315/2008 is a cross-appeal in respect of the order of the High Court of the 14th July, 2008. The cross-appeal concerns the issue of costs in circumstances where counsel for Ms. Dolan had applied for the costs of the application to be paid out of Mr. Loughrey’s share of the estate. In the event, having heard submissions on that issue no order for costs was made.
The third appeal also relates to the administration proceedings and is appeal No. 125/2012. This is an appeal by Mr. Loughrey from an order of the High Court (Murphy J.) dated the 27th February, 2012 in which Mr. Loughrey sought an order by way of appeal from an order of the Master of the High Court made on the 29th March, 2012 refusing him leave to issue a citation and also sought an order extending the time in which to make that application. In essence, Mr. Loughrey was again seeking an order for the removal of Ms. Dolan as the administrator of the estate of the Intestate.
The fourth appeal arises in proceedings bearing the title –
THE HIGH COURT
IN THE MATTER OF THE SUCCESSION ACT 1965
[Record No. 2012/362SP]
BETWEEN
BRENDAN LOUGHREY
PLAINTIFF
AND
CATHLEEN DOLAN
DEFENDANT
In these proceedings, an application was brought by way of notice of motion dated the 19th October, 2012 on behalf of the Ms. Dolan, the defendant in the proceedings, seeking, inter alia, an order pursuant to Order 19, rule 28 of the Rules of the Superior Courts striking out the plaintiff’s proceedings on the grounds that they disclose no reasonable cause of action. An order was made on the 30th November, 2012 by the High Court (Laffoy J.) declaring that Mr. Loughrey’s proceedings were vexatious and should be dismissed. Further orders were made restraining the said Mr. Loughrey from bringing any further proceedings in relation to the estate of the Intestate without leave of the court and other related orders. Mr. Loughrey has appealed from that order. The appeal number is Appeal No. 599/2012.
The final appeal is in respect of a third set of proceedings in a matter entitled –
THE HIGH COURT
[Record No. 2012/363SP]
IN THE MATTER OF THE SUCCESSION ACT 1965
BETWEEN
BRENDAN LOUGHREY
PLAINTIFF
AND
McCLOUGHAN GUNN & CO.
DEFENDANT
In these proceedings a notice of motion was issued on behalf of the defendant (hereinafter referred to as “the Solicitors” or “Mr. Gunn”, as appropriate). An order was made restraining Mr. Loughrey from instituting any proceedings against Mr Gunn or in relation to the estate of the Intestate without the leave of the Court and from instituting any motion, application or procedure in the High Court in the administration proceedings or in any proceedings currently in being in relation to the estate of the Intestate except with the prior leave of the High Court. That appeal is Appeal No. 358/2013.
Background and Details of the Appeals
The history of the matter is somewhat complicated and is best described in the judgment of Laffoy J. of the 30th November, 2012. The proceedings in which she delivered that judgment were the proceedings, the subject of the fourth appeal, brought by Mr. Loughrey against Ms. Dolan claiming damages or more accurately “monetary retribution” against Ms. Dolan. The Intestate in these proceedings died on the 19th December, 2000, without making a will. Following the death of the Intestate an application was made by Ms. Dolan, who had been the solicitor of the Intestate, to the High Court on the 30th April, 2001 when it was ordered that Ms. Dolan should be at liberty to apply for a grant of letters of administration of the estate of the Intestate limited to the collection of all his property, giving discharges for all the debts which might have been due to his estate on payment of same and doing what further might be necessary for the preservation of the property and it was further limited to taking appropriate steps to ascertain the next of kin.
On the 29th April, 2004, a grant of administration intestate to the estate of the Intestate limited as aforesaid was granted to Ms. Dolan. By further order of the High Court made on the 26th July, 2004, it was ordered that the powers of Ms. Dolan under the order of 30th April, 2001 be extended to include the right to sell the lands of the Intestate and related matters. She then sold the lands of the Intestate and lodged the proceeds of the sales in a controlled trust account at AIB, Donegal, in the name of the Intestate. At that time the then current balance on the account was approximately €435,000. Ms. Dolan initiated the administration proceedings by way of special summons on the 3rd May, 2005 between Ms. Dolan, plaintiff, and Mary Culloo and Brendan Loughrey. The purpose of the proceedings was to ascertain the next of kin of the Intestate. This resulted in a long drawn-out process, the outcome of which was recorded in a perfected order made on the 11th June, 2007. Laffoy J., in her judgment of the 30th November, 2012, noted that there was a typographical error in the perfected order. The outcome of the order made on the 11th June, 2007 was that the Court declared that Ms. Dolan was entitled to distribute the estate of the Intestate to Brendan Loughrey, Leo Campbell and the estate of one Michael Campbell, all being first cousins of the Intestate. There has been no appeal against that order. Brendan Loughrey became entitled to a one-third share of the net estate of the Intestate by virtue of that order.
Further steps were taken by Mr. Loughrey in the course of the administration proceedings. On the 21st May, 2008, the Master made an order on foot of an ex parte application by Mr. Loughrey that Mr. Loughrey be at liberty to issue a citation for service upon Ms. Dolan to lodge in court the letters of administration to the estate of the Intestate. She then brought a motion seeking an order to set aside the citation which had issued. By order of the Court (Laffoy J.) made on the 14th July, 2008, it was ordered that the citation be set aside. Mr. Loughrey appealed that order to the Supreme Court (Appeal No. 309/2008), and this is one of the appeals which came on for hearing before this Court. As mentioned previously, to put it simply, Mr. Loughrey wanted to have Ms. Dolan replaced as the administrator of the estate.
Subsequently on the 29th March, 2011, Mr. Loughrey applied again to the Master ex parte seeking liberty to issue a citation. The Master refused the application. Mr. Loughrey then brought a motion to the Court to set aside the order of the Master. By order of the High Court (Murphy J.) made on 27th February, 2012, Mr. Loughrey’s application to the High Court was refused and the order of the Master was affirmed. That is the order under appeal to this Court as Appeal No. 125/2012.
The next appeal relates to the special summons issued by Mr. Loughrey against Ms. Dolan bearing the Record No. 2012/362 SP. The proceedings resulted in the judgment of Laffoy J. on the 30th November, 2012. Those proceedings mirror earlier proceedings issued by him by way of a separate special summons in 2010. The only difference between the two sets of proceedings was that in the 2012 proceedings, the “monetary retribution” sought by Mr. Loughrey against Ms. Dolan was €8m as opposed to €5m . The 2010 proceedings were struck out by the Master. The 2012 proceedings were issued on the 9th July, 2012 and a motion was brought by Ms. Dolan seeking orders striking out the proceedings pursuant to Order 19, rule 28 on the grounds that no reasonable cause of action was disclosed; pursuant to the inherent jurisdiction of the Court striking out the proceedings on the grounds that they were frivolous and/or vexatious and/or an abuse of the process of the Court; restraining Mr. Loughrey from instituting further proceedings against Ms. Dolan without leave of the Court and restraining Mr. Loughrey from instituting further motions in the administration suit (2005/218SP) without leave of the Court and restraining Mr. Loughrey from instituting any motions in any proceedings currently in being in relation to the estate of the Intestate without the leave of the Court. The High Court made orders on foot of the application of Ms. Dolan declaring that the proceedings brought by Mr. Loughrey were vexatious and should be dismissed. In addition, orders were made restraining Mr. Loughrey from instituting various proceedings and motions without prior leave of the Court. Mr. Loughrey has appealed from the judgment and order of the High Court made by Laffoy J. and that appeal is the subject of Appeal No. 599/2012.
The next appeal relates to proceedings commenced by Mr. Loughrey against the solicitors, McCloughan Gunn & Co. Those solicitors acted for Mr. Loughrey in the administration proceedings for some time. The form of relief sought by Mr. Loughrey in those proceedings against his former solicitors was similar to the relief sought against Ms. Dolan. In other words his claim was for “monetary retribution” in the sum of €8m. Although that special summons was issued on the 9th July, 2012, it does not appear to have been served until after judgment had been delivered by Laffoy J. in the proceedings against Ms. Dolan in November 2012. An appearance was entered by McCloughan Gunn & Co. on the 8th May, 2013 and a motion was then issued by the solicitors seeking an order striking out the proceedings on a number of grounds including the fact that no leave was obtained from the High Court to proceed with those proceedings in circumstances where it was contended that the proceedings against McCloughan Gunn & Co. were proceedings in relation to the estate of Mr. Campbell and had been issued without leave of the Court. Interestingly, the affidavit grounding the motion on behalf of McCloughan Gunn & Co. which was sworn by Seamus Gunn, pointed out that Mr. Loughrey had previously brought proceedings against Mr. Gunn personally in 2010 in which Mr. Loughrey had then sought “monetary retribution” of €4m. Those proceedings had been struck out by the Master of the High Court on the 2nd December, 2010. The notice of motion brought by the solicitors McCloughan Gunn & Co. came on for hearing in the High Court before Laffoy J. on the 8th July, 2013. An order was made on that date by Laffoy J. striking out the proceedings. That order is the subject of Appeal No. 358/2013. The order of the High Court records that the proceedings were dismissed on the basis that the claim as pleaded was bound to fail and was an abuse of process. A report of the judgment in that matter delivered on the 8th July, 2013 was provided by Laffoy J. She made it clear that she informed Mr. Loughrey that she was making a similar order in these proceedings for the same reasons as those set out in the proceedings against Ms. Dolan. Accordingly she made an order dismissing the plaintiff’s claim on the grounds that the claim as pleaded was bound to fail and also on the grounds that it was an abuse of process. She also made an Isaac Wunder order against Mr. Loughrey restraining him from instituting any proceedings against Seamus Gunn or McCloughan Gunn & Co. without the leave of the Court.
Finally, as mentioned previously, there is a cross-appeal by Ms. Dolan in relation to the citation proceedings where Laffoy J. did not make any order for costs in favour of Ms. Dolan. There are in total five appeals before this Court. There is a significant degree of overlap between the appeals in respect of the proceedings brought by Mr. Loughrey against Ms. Dolan and against McCloughan Gunn & Co. in which Mr. Loughrey commenced proceedings by way of special summons seeking “monetary retribution” against both parties which proceedings have been struck out on the basis that the proceedings were broadly speaking an abuse of process and/or vexatious and frivolous and also in relation to the citations sought in the administration proceedings.
One might wonder how Ms. Dolan became caught up in this matter. It appears that the whole saga commenced by virtue of the fact that she had been the solicitor for the Intestate. When he died in December 2000, he left livestock, land and some money in a bank account. Apparently, the Gardaí were contacted about the welfare of the animals and, in turn, they contacted Ms. Dolan who had acted for the Intestate since approximately 1984. It was in that context that she first made an application to the High Court in April 2001 and everything that has occurred by way of proceedings followed from that application.
It is relevant to note that Mr. Loughrey suffered a stroke in February 2009 and, as a result of his stroke, is suffering from dysphasia. This is referred to by Dr. Mullan, his general practitioner, in a letter of the 14th May, 2012 which formed part of the papers in Appeal No. 599/2012. Dr. Mullan, in the letter referred to, commented that Mr. Loughrey “has made an excellent recovery from this. He is independent in all activities of daily living with only occasional speech hesitancy. There is no evidence of any impaired cognitive function”. While it is clear that Mr. Loughrey has difficulties by virtue of his stroke and is very difficult to understand, Mr. Loughrey has furnished to the Court comprehensive written submissions. In addition he has set out his complaints in various documents, sometimes in the form of affidavits. His case was put comprehensively before the Court in documentary form. In addition, he made some oral submissions to the Court. There was obviously some difficulty in that regard for Mr. Loughrey but he had the assistance, and very able assistance it was, of his niece, Ms. McNally. It should be noted that Ms. McNally was allowed to address the Court solely for the purposes of enabling the Court to understand what Mr. Loughrey was saying rather than for the purposes of permitting her to make anything that could reasonably be considered to be submissions in the case. There is no doubt from observing what occurred in Court that Ms. McNally was in a position to assist and interpret and put forward the representations sought to be made by Mr. Loughrey in the course of the hearing.
Discussion
Leaving aside for the moment the cross-appeal in respect of the costs order made by Laffoy J. which is the subject of Appeal No. 315/2008, the appeals concern firstly the decisions in relation to the citations being that of Laffoy J. made on the 14th July, 2008 and that of Murphy J. made on the 27th February, 2012 and then the appeals in respect of the striking out of special summons proceedings against Ms. Dolan and against McCloughan Gunn & Co. Solicitors made on the 30th November, 2012 and the 8th July, 2013 respectively.
I propose to deal first of all with the decisions in relation to the citations. The first citation was issued pursuant to an order of the Master dated the 21st May, 2008. Ms. Dolan then made an application to the High Court to set aside the citation. In her report of judgment of the 14th July, 2008, Laffoy J. set out the history of the administration proceedings to date. She noted that by order of the 26th July, 2004, Kearns J. extended the power of the plaintiff (Ms. Dolan) to include the power to sell lands registered on certain Land Registry folios in County Donegal. The Intestate was registered as owner on some of the folios, but in the case of other folios his ancestors were still registered as owners. The title to the lands on those folios needed to be updated. The administration proceedings had been issued with a view to identifying the next of kin of the Intestate. Mrs. Mary Culloo and Mr. Loughrey were joined as representatives of the classes who might constitute the next of kin of the Intestate. Mr. Loughrey established that he was a first cousin of the Intestate whereas the first named defendant, Mrs. Culloo was a more remote relative of the Intestate. At that time it appeared that Mr. Loughrey was the sole next of kin of the Intestate. Clarke J. made an order in which he directed advertisements in various newspapers for persons claiming to be the next of kin of the Intestate. Mrs. Culloo ceased to be involved in the proceedings at that stage.
Advertisements were published following that order but there was no response to the advertisements. The matter was brought back to Court for orders as to the distribution of the estate of the Intestate. On the basis of the evidence then available, the Court made an order on the 31st July, 2006 that Mr. Loughrey was entitled to the entire estate of the Intestate.
It subsequently transpired that the advertisements were not in the form directed and that the name of a relation of the Intestate which should have been included was omitted from the advertisements. By order dated the 11th October, 2006 the Court directed that the advertisements be re-published as previously directed. As a result of the re-advertising, Michael Campbell and Leo Campbell both of whom resided in Northern Ireland claimed to be first cousins of the Intestate. The matter came back to Court and by order of the 11th June, 2007 the Court (Laffoy J.) discharged the order of 31st July, 2006 and ordered that the estate of the Intestate be divided equally between Mr. Loughrey, Michael Campbell and Leo Campbell. Provision was made for costs and there was an order in respect of the costs of Mrs. Culloo, and Mr. Loughrey. There was also an order made providing for Ms. Dolan’s costs of the proceedings. It was provided that costs be taxed in default of agreement. By the time the matter was before the Court on the 14th July, 2008, none of the costs had been taxed. Ms. Dolan’s file had been with her cost accountants for almost a year and had not been reached “because of pressure of work”. By that stage, Mr. Loughrey had parted company with his Solicitors who had acted for him since late 2001 in relation to the administration of the estate. At the hearing on the 14th July, 2008, counsel for Ms. Dolan informed the Court that she had been under “relentless bombardment” from Mr. Loughrey looking for affidavits which his former solicitor, Mr. Gunn, could have given him. He had also made complaints about her to the Gardaí and to the Law Society and his conduct was distressing Ms. Dolan. It was submitted that there was no basis for the issue of the citation. Following the submissions on behalf of Ms. Dolan, the learned trial judge asked Mr. Loughrey whether he wished to say anything. He produced a lengthy affidavit sworn on the 9th July, 2008 which was then read by the learned trial judge at lunchtime. The notice parties before the Court were also heard. They pointed out that since the final order of the Court made in 2007 there had been no progress. It was contended that Mr. Loughrey was delaying taxation of his former solicitors’ costs. There had been no appeal against the final order. The only remaining asset in the estate of the Intestate, which consisted of farmland, had been sold at that point in time.
Laffoy J. then stated:
“Having read the affidavit of the second defendant and the documents exhibited in it at lunchtime, I gave judgment at 2pm. I made an order setting aside the citation. However, I made it clear that it was not being set aside on the grounds that it was vexatious or an abuse of process, but on the grounds that it was not going to advance matters. I stated that the order made on 11th June, 2007 was a final order directing the distribution of the estate. I stated that it was desirable that the taxation of costs be completed as quickly as possible. I pointed out that the second defendant was partly responsible for the delay in not co-operating with the taxation of his former solicitor’s costs. It was in his interest to co-operate.”
Orders for costs were then made and that matter is now under appeal.
The notice of appeal filed by Mr. Loughrey in relation to this matter sets forth the following reasons for appeal:
(1) “Because Judge Laffoy made her decision before I had made my defence and by doing so I was denied by right to defend myself or challenge statements by prosecuting counsel for Cathleen Dolan that were untrue also (sic) my right to question was refused by Judge Laffoy’s premature decision and Judge Laffoy even refused my request to read my replying affidavit to the Court that she controlled. And awarding costs against me to the Campbells to be paid by myself was against all logic where I did not involve the Campbells in the appeal, See my exhibit N. It was Ms Dolan who brought them in for her own reasons and Ms Dolan should be made to pay the Campbells as they were there on her behalf and they also did not have a chance to read my affidavit and exhibits.
(2) My affidavit and exhibits filed on 10 July 2008.
(3) Ms Dolan ignored the rules of the 1965 Succession Act and the superior Court 1986 orders 15, 79 and 80 and the Criminal Justice Act (Theft and Fraud) 2001 section 6, 11, 24-28 and 31.
(4) Ms Dolan’s affidavit and exhibits used on 14 July 2008.
(5) This is only some of the queries I would like answered by Cathleen Dolan that I did not get to ask because Judge Laffory’s (sic) premature decision on 14 July 2008.
(6) Hope this will clarify my position regarding this citation and after 7½ years of mismanagement of Ms Dolan’s administration it is time to call a halt.”
Mr. Loughrey filed a further document with the notice of appeal in which many complaints were made about the dealings of Ms. Dolan in relation to the administration of the estate and complaining about the manner in which the hearing on the 14th July, 2008 was conducted. In particular he complained that he was not permitted to read out his affidavit and that he was entitled to question Ms. Dolan and he concluded that document by stating that the Court failed him by concluding:
“. . that the case could be dealt with without oral evidence and cross-examination of Ms Dolan and others”.
In essence, Mr. Loughrey in that document of the 20th July, 2008 accused Ms. Dolan of various kinds of mala fides and non-compliance with Succession Act requirements. He complained that he was precluded from dealing with these matters because of “Judge Laffory’s (sic) premature decision”. It should be borne in mind that Mr. Loughrey, if he had wished, could have served a notice of intention to cross-examine on foot of the affidavit of Ms. Dolan but did not do so.
In addition to the document of the 20th July, 2008, Mr. Loughrey furnished lengthy submissions in relation to Appeal Nos. 309/2008, 125/2012 and 599/2012 on the 27th September, 2013. In those submissions he complained that Ms. Dolan as a stranger to Mr. Campbell had not been entitled to take out letters of administration. He complained that:
“[S]he has no proper standing in relation to the estate of Michael Campbell, he did not instruct her to make a will and any solicitor client relationship would have ended with his death on 19/12/2000.”
It seems at this point that a major part of Mr. Loughrey’s complaint and the reason for seeking the citation in the first instance was Mr. Loughrey’s view that he, as a first cousin of the Testator, or as he describes himself “as the only surviving lawful first cousin” of the Intestate, was entitled to take out letters of administration to the estate and that he was deprived of his inheritance rights to the land and property of the Intestate.
It should be recalled that Ms. Dolan became involved in the matter originally as she had been the solicitor for the Intestate and had been contacted by the Gardaí following his death because of concerns as to the welfare of livestock on the land. Thereafter she took out a limited grant. Subsequently, every step taken by Ms. Dolan has been pursuant to various Court orders. Thus she obtained an order of the Court in April 2004 extending her powers to administer the estate and to take steps to ascertain the next of kin. Since November 2001, Mr. Loughrey had been aware of her role as is evidenced by the letter of the 1st November, 2001 from his then solicitor, Mr. Gunn, to Ms. Dolan notifying her:
“As we have been instructed to protect our clients (sic) interests, we would be obliged if you would let us have full details of the assets and liabilities of the deceased to include copy of the relevant Inland Revenue affidavit.”
A response was furnished by letter dated the 6th November, 2001. Matters proceeded thereafter and as pointed out by Laffoy J. in her report of judgment of the 14th July, 2008:
“. . . by order dated the 11th day of June, 2007, the Court (Laffoy J.) discharged the order of 31st July, 2006 and ordered that the estate of the Intestate be divided equally between the second defendant, Michael Campbell and Leo Campbell.”
Various costs orders had been made previously and those costs orders remained to be taxed in default of agreement, in particular, the costs of the second defendant up to the 31st July, 2006 were to be taxed in default of agreement. By the time the matter came back to the Court on the 14th July, 2008, those costs remained to be taxed. Laffoy J. said that having considered the matter, she made an order setting aside the citation. She pointed out that the order made on the 11th June, 2007 was a final order directing the distribution of the estate and stated that it was desirable that the taxation of costs be completed as quickly as possible. She pointed out that the second defendant, i.e. Mr. Loughrey was partly responsible for the delay in not co-operating with the taxation of his former solicitors’ costs and that it was in his interest to co-operate.
Accordingly, that was the final order in relation to the administration of the estate. All that remained thereafter was for the costs orders made in the course of the administration proceedings to be taxed in default of agreement.
The basis of the application for the citation was that Ms. Dolan had:
“. . . failed to provide an inventory as requested and has not completed the business of the estate even though seven years had passed and many pieces of communication from myself since Mr. Gunn withdrew from the case in 2007.”
It is clear from reading the papers herein together with the various documents provided by Mr. Loughrey that there were undoubtedly delays in dealing with the estate. Those delays were, in part, caused by the difficulty in ascertaining the next of kin. However, it is also clear that by 2007 a final order had been made directing the distribution of the estate in accordance with the order made by the High Court on the 11th June, 2007 and that the only matter at that stage holding up the distribution of the estate was the need to tax the costs arising from previous orders made in the course of the administration and that the delay in taxing the costs was due to Mr. Loughrey’s lack of co-operation in that regard.
One further point may be made in relation to that citation and it is this, that when the matter was before the Court for the purpose of considering the entitlement of Leo Campbell and Michael Campbell to a share in the distribution of the estate, Mr. Loughrey swore an affidavit of the 22nd March, 2007 in the course of which he referred to an issue in regard to the distribution of a share in the estate to Leo Campbell, another first cousin of the Intestate. He stated in that affidavit:
“I say however that, as outlined by the plaintiff in her affidavit, an issue remains with regard to whether Mr. Campbell’s application should be considered by the Court at all at this stage. I say that the order of Ms. Justice Laffoy in October 2006 was clearly directed at correcting an error in the wording of the original advertisement i.e., the omission of Maggie Burke only . . .
In the circumstances, it seems to me that no claimant having come forward who is connected with Maggie Burke that the final orders made in my favour in July 2006 stand and that same should now be perfected. Further or in the alternative, I would echo the plaintiff’s request for the Court’s direction on this issue.”
It is helpful to observe that bearing in mind that it was some six years since Ms. Dolan first became involved in acting on behalf of the estate and bearing in mind that he first made contact through his solicitors with Ms. Dolan in November 2001, clearly Mr. Loughrey had no issue with her conduct of the administration of the estate at that stage. It was only subsequently that he appeared to become dissatisfied with her and, indeed, with his own solicitors who were still on record for him at that point in time. Presumably, if he had been dissatisfied with her conduct of the matter prior to that date he could and would have made an application at an earlier stage to have her replaced as administrator. That, of course, presumes that there was a reason for doing so. In addition, there was nothing to stop him making such an application after the initial application for liberty to apply for a grant had been made by Ms. Dolan. He never did so. If there was any genuine complaint to be made against Ms. Dolan the only complaint that could have any basis would have related to delay in dealing with the matter. Having said that, it seems to me that Ms. Dolan was faced with a difficult situation that she was obliged in the first instance to deal with complicated title matters in circumstances where some of the property owned by the Intestate was not held in his name and it was necessary to get the title to the property in order before it could be sold. Also of relevance was the fact that she did not have any family member to assist her or to give her instructions in relation to the matter which might have shortened the process and may have made it unnecessary to carry out investigations or inquiries as to the identity of the next of kin. I can see no other possible complaint that could have been levelled at Ms. Dolan in relation to her conduct of the matter.
As a result of the orders made in 2007 directing how the estate should be distributed the only outstanding matter then would have been the taxation of costs. There then followed the series of proceedings initiated by Mr. Loughrey together with various applications and citations sought by him. Those matters have prevented the estate from being dealt with for what is now an excessive period of time. During the course of the hearing Mr. Loughrey furnished a further letter to the Court and one of the complaints he made at that stage was that Ms. Dolan knew of the existence of the other first cousins of Mr. Loughrey and the late Intestate. However he did not produce any evidence to support that contention and it is clear as I have already indicated that up to the time when they were identified, no suggestion of that kind had been made by Mr. Loughrey. Even if Ms. Dolan had some information as to possible beneficiaries, she still had to make sure that she could identify the appropriate beneficiaries and that was the purpose of the administration proceedings. Ms. Dolan at all times acted in accordance with the directions of the Court. He also complained that Judge Laffoy was aware of the fact that he was entitled to the grant of administration. It is difficult to understand how such an assertion can be made.
In the circumstances, I can see no reason why there was any error on the part of Laffoy J. in making the order setting aside the citation as she did in July 2008.
The second citation application
This is the appeal comprised in Appeal No. 125/2012. This is an appeal from the whole of the order of the High Court (Murphy J.) of the 27th February, 2012. Mr. Loughrey had sought a further order from the Master of the High Court for the issue of a citation. The Master refused leave to issue the citation and Mr. Loughrey appealed that order to the High Court. The matter came before Murphy J. on the 27th February, 2012 and the appeal was dismissed. A number of certificates of taxation were included in the documents relied on by Mr. Loughrey. By a letter of the 24th May, 2010 Mr. Loughrey wrote to Ms. Dolan querying why monies had not been paid out from the estate. A reply was furnished by letter of the 13th July, 2010 setting out a number of reasons why Ms. Dolan had not been in a position to distribute the remaining funds from the estate. They were as follows:
“Firstly all costs have to be taxed before a final sum can be ascertained for the estate.
Secondly all the beneficiaries must then deal with their liability for inheritance tax. As you know Ms. Dolan has already made a payment on account to each of the beneficiaries of their tax threshold on the basis that they received no prior gifts of inheritances. We have already written to you about you making arrangements in due course to file a return. Are you instructing someone to deal with that on your behalf?”
It appears from the certificates of taxation enclosed in Book B furnished by Mr. Loughrey in relation to this Appeal that the taxation process was completed on the 9th December, 2010 with the taxation of the costs of Ms. Dolan.
Mr. Loughrey also furnished an affidavit which was sworn on the 27th February, 2012 in relation to the matter. In that affidavit Mr. Loughrey complained in the starkest of terms as to Ms. Dolan’s conduct of the administration of the estate going back to 2001. He added that from the date of the final order made by the High Court (Laffoy J.) on the 11th June, 2007 that Ms. Dolan:
“Bluntly refused to adhere to the clear instructions of the [H]igh [C]ourt and failed to distribute as directed funds from the sales of land and property to the entitled parties. I therefore vehemently object to any and all further fees, costs and expenses incurred from the 31st July 2006 forward, as plainly ordered on that date from the [H]igh [C]ourt.”
A report was provided by Mr. Justice Murphy in relation to the hearing of the matter dated 23rd May, 2012 for the purpose of the appeal to this Court. Murphy J. in the course of the report indicated that he agreed with the note of Mr. O’Donnell, B.L. for Ms. Dolan:
“That I had difficulty understanding what the application was and that I agreed to read the papers over lunch.”
He agreed with Counsel’s submission that some of the issues in the matter had been dealt with previously in the High Court by Clarke J. and Laffoy J. He concluded in the circumstances that it was inappropriate for him to deal with the matte which had been dealt with already by the High Court and was subject to an appeal to the Supreme Court. Mr. O’Donnell’s note was appended to the report and is available to this Court and sets out in more detail what occurred during the course of the hearing. It is clear that the report of judgment of the 14th July, 2008 prepared by Laffoy J. for the Supreme Court in connection with the appeal from her order in respect of the citation she was dealing with was opened to the Court. Having heard from counsel for Ms. Dolan, Mr. O’Donnell, B.L. and having heard from Mr. Loughrey who was assisted at the hearing by his nephew, the judge indicated that he would read Mr. Loughrey’s papers over lunch and re-convene at 2 p.m. At two o’clock Mr. Justice Murphy indicated that the Court could not deal with the matter as it had already been dealt with by Judge Laffoy and was now under appeal. After some discussion Mr. Justice Murphy confirmed that he was refusing the appeal from the Master’s order of the refusal to give leave to Mr. Loughrey to issue a citation. It was confirmed that some monies had been paid out of the estate to Mr. Loughrey, namely “his tax free threshold”. Following an application in that regard an order for costs was made against Mr. Loughrey out of his share of the estate.
In the course of the submissions furnished by Mr. Loughrey in respect of this appeal, he again complains that he has been deprived of his inheritance.
It appears that by the time the application was made to the Master of the High Court in 2011 very little had changed with regard to the situation. The decision of Laffoy J. was still under appeal to the Supreme Court in relation to the first citation and the Master quite properly refused to give leave to issue a second citation. It is clear from the report of Murphy J. and from the note of the hearing provided by Mr. O’Donnell, B.L. that Murphy J. was provided with all the papers relied on by Mr. Loughrey, read them and concluded that it was not appropriate to issue a citation in circumstances where a citation had previously issued to Mr. Loughrey but had been set aside by order of the High Court (Laffoy J.) and that that order was subject to an appeal to the Supreme Court which, of course, is one of the appeals under consideration in this judgment. It does appear that some progress had been made in that the taxation of costs had concluded by the time the matter reached Murphy J. but given that there was still an outstanding appeal from the order of Laffoy J. in relation to the first citation, it is difficult to see what further steps could be taken by Ms. Dolan to finalise matters. In those circumstances I fail to see any basis upon which it would have been appropriate for Murphy J. to have allowed the appeal from the refusal of the Master of the High Court to issue a further citation and in those circumstances I would dismiss the appeal from the order of the High Court (Murphy J.) made on the 27th February, 2012.
I should refer at this point to Appeal No. 315/2008 which is Ms. Dolan’s appeal against the order of Laffoy J. made on the 14th July, 2008 setting aside the citation and refusing the costs of Ms. Dolan in respect of that application. The question of costs is always a matter for the discretion of the trial judge. While it is the case that costs, in general, follow the event, it is nonetheless a matter for the discretion of the Court. It is of note that the only order for costs made in the course of that application was an order made in favour of the notice parties to be paid out of the share of the estate of Mr. Loughrey. No other order as to costs was made. That is clearly a matter within the discretion of the trial court and in those circumstances I would not be inclined to interfere with the order of the Court in respect of costs and accordingly I would refuse to vary the order of the High Court.
The special summons proceedings
Mr. Loughrey then issued two special summonses, the first being a special summons bearing the Record No. 2012/362SP. The special summons was between Brendan Loughrey, plaintiff, and Cathleen Dolan, defendant. The special endorsement of claim on the special summons was in the following terms:
“The plaintiff’s claim in monetary retribution in the sum of €8,000,000 (Eight Million Euro).
IN THE MATTER OF ORDER 3(1), (2), (3), (4), (5), (6), (7), (8), (11), (18), (19), (20), (21), (22). Additionally, negligence, concealment and suppression of bank statements, concurrent wrongdoing over a period of 11 years and still ongoing.”
There was also an affidavit sworn in those proceedings by Mr. Loughrey on the 28th September, 2012. In the course of that affidavit, Mr. Loughrey accuses Ms. Dolan of deceit, fraud and perjury in connection with the application for the grant administration limited as it was in 2001 and in the conduct of the administration of the estate of the Intestate. Without setting out the allegations in the affidavit in detail, the complaints of Mr. Loughrey relate to the period between the time when Ms. Dolan first became involved in the matter of the estate of the Intestate and her conduct of the administration of the estate up to May 2006.
The second special summons proceedings were brought by Mr. Loughrey against his former solicitors, McCloughan, Gunn & Co. Solicitors. The special summons in that case was also issued in July 2012 with the Record No. 2012/363SP and was between Brendan Loughrey, plaintiff and McCloughan, Gunn & Co., defendant. The special endorsement of claim was in identical terms to that against Ms. Dolan with one exception, namely that the period over which the alleged wrongdoing was occurring was a period of ten years as opposed to eleven years. In that case there was also an affidavit sworn on the 17th April, 2013 and one of the matters stated at the outset of the affidavit related to a desire to have a trial by jury in relation to the proceedings. Many of his complaints in that letter concern the fact that:
“Mr. Gunn failed to inform Brendan Loughrey that he was entitled to extract a grant of administration in [the Intestate’s] estate in May 2002.”
Other complaints were made which concern to a large extent the conduct of the administration of the estate by Ms. Dolan. Reference was made to a number of items of correspondence between Mr. Gunn, and Ms. Dolan.
Ms. Dolan issued a notice of motion on the 19th October, 2012 which came on for hearing before the High Court (Laffoy J.) on the 23rd November, 2012. At the hearing of the motion Mr. Loughrey appeared in person and Ms. Dolan was represented by counsel. Orders were sought pursuant to Order 19, rule 28 of the RSC striking out Mr. Loughrey’s proceedings on the grounds;
(a) that no reasonable cause of action is disclosed;
(b) pursuant to the inherent jurisdiction of the Court striking out the proceedings on the grounds that they are frivolous and/or vexatious and/or an abuse of the process of the Court;
(c) restraining the plaintiff from instituting any further proceedings against the defendant without leave of the Court;
(d) restraining the plaintiff from instituting any further motions in proceedings bearing Record No. 2005/218SP without leave of the Court and restraining the plaintiff from instituting any motions in any proceedings currently in being in relation to the estate of Michael Campbell deceased without the leave of the Court.
As mentioned earlier in the course of this judgment, the High Court granted a declaration to the effect that the proceedings were vexatious and should be dismissed and then made a number of other orders restraining Mr. Loughrey from instituting any proceedings against Ms. Dolan or in relation to the estate of the Intestate without the leave of the Court and from instituting any motion, application or procedure in the High Court in the 2005/218SP proceedings or in any proceedings currently in being in relation to the estate of the Intestate (save in relation to the furthering of the Supreme Court appeal) except with the prior of the High Court such leave to be sought by application in writing addressed to the Principal Registrar of the High Court.
It should also be noted that the special summons in each case contained one unusual addendum and that was a paragraph which stated:
“This summons is required to be served not less than four days before the return day mentioned therein (exclusive of the day of service), and be served under the Succession Act, 1965 [No. 27] section 44 (jury trial).”
The notice of appeal in the case against Ms. Dolan is not very clear in that it simply states that Mr. Loughrey will apply by way of an appeal from the whole/part of the judgment and/or order of the High Court. It goes on to add that he requires “a jury trial”. Insofar as the grounds of appeal are referred to, Mr. Loughrey refers to his affidavit of the 28th September, 2012, the affidavit of Ms. Dolan of the 18th October, 2012 and two books which are described as being from 1 to 65 and from 1 to 62. He also refers to the special summons and submissions. The two books submitted by Mr. Loughrey contain a series of documents but do not of themselves provide grounds of appeal as such. Thus it is somewhat difficult to ascertain precisely the grounds upon which Mr. Loughrey states that the learned trial judge was in error. Nevertheless the Court has considered and read all of the documentation submitted by Mr. Loughrey together with the document which is headed “Submissions” and includes a number of other documents.
In her judgment, Laffoy J. stated that she was focusing primarily on whether the proceedings should be struck out on the ground that the proceedings were vexatious and an abuse of process either under Order 19, rule 28 of the RSC or the Court’s inherent jurisdiction. She quoted from the judgment of the High Court in Behan v. McGinley [2011] 1 IR 47 (at p. 66) in which Irvine J. explained the jurisdiction and how it should be exercised. Irvine J., in the passage quoted, referred to a number of indicators of proceedings which were potentially vexatious to be found in a helpful Canadian decision Re Lang, Michener and Fabian (1987) 37 D.L.R. (4th) 685 at p. 691, namely:
“(a) the bringing up on one or more actions to determine an issue which has already been determined by a court of competent jurisdiction;
(b) where it is obvious that an action cannot succeed, or if the action would lead to no possible good, or if no reasonable person can reasonably expect to obtain relief;
(c) where the action is brought for an improper purpose, including the harassment and oppression of other parties by multifarious proceedings brought for purposes other than the assertion of legitimate rights;
(d) where issues tend to be rolled forward into subsequent actions and repeated and supplemented, often with actions brought against the lawyers who have acted for or against the litigant in earlier proceedings;
(e) where the person instituting the proceedings has failed to pay the costs of unsuccessful proceedings;
(f) where the respondent persistently takes unsuccessful appeals from judicial decisions.”
Laffoy J. identified a number of those indicators as being present in this matter, namely indicators (a), (b) and (c). She also observed that the proceedings were procedurally flawed in that an action for “monetary retribution” or “damages for negligence” cannot be brought by way of special summons. Further she pointed out that very serious allegations made against Ms. Dolan were not particularised. Finally she concluded that the request for a jury trial was “wholly misconceived”. As she said:
“No undecided question of fact remains in relation to the identification of the beneficiaries of the estate of the Intestate.”
Decision in respect of the Dolan Special Summons proceedings
It is very difficult to discern from the written submissions provided by Mr. Loughrey any basis for argument as to why the decision of Laffoy J. to dismiss the proceedings on the grounds that they were vexatious was in error. Mr. Loughrey reiterated his complaints about Ms. Dolan. Mr. Loughrey appears in his submissions to have focused on his right to have a jury trial. In that regard I should refer briefly to s. 44 of the Succession Act 1965. It provides for jury trials in certain circumstances and it as follows:
“(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.”
Clearly where there is no agreement between the parties to have a question of fact determined by a jury, it is a matter for the discretion of a court to decide whether or not to provide for a trial by jury in proceedings under the Succession Act 1965. Accordingly, it is impossible to disagree with the conclusion of Laffoy J. to the effect that the request for a trial by jury herein is wholly misconceived. The proceedings at issue are special summons proceedings in respect of which Mr. Loughrey has claimed “monetary retribution” in the sum of €8m. The basis of the claim appears to be an allegation that there has been “negligence, concealment and suppression of bank statements, concurrent wrongdoing” over a period of years. It is undoubtedly the case that the matters complained of by Mr. Loughrey arise out of the administration of the estate of the Intestate by Ms. Dolan but I cannot see how those proceedings could in any shape or form be described as proceedings under the Succession Act 1965. As formulated, the proceedings appear to be a claim for damages for negligence. Quite frankly, there is nothing in the special summons that could be described as giving rise to proceedings under the Succession Act 1965. Given that that is the position, the request for a jury trial is one that cannot succeed.
In addition, Laffoy J. was correct to point out that an action for “monetary retribution” or for “damages for negligence” or some form of related wrongdoing simply cannot be brought by way of special summons.
Finally, Laffoy J. considered the relevant law in relation to applications to dismiss proceedings on the grounds that they are vexatious and an abuse of process either under Order 19, Rule 28 or the Court’s inherent jurisdiction. I have quoted the passage cited by Laffoy J. from judgment of the High Court in Behan v McGinley [2011] 1 IR 47 which set out the principles to be applied. In my view, the identification of those principles and the application of those principles to the facts of this case by Laffoy J. was entirely correct.
In the circumstances, I would dismiss Mr. Loughrey’s appeal against the judgment and order of Ms. Justice Laffoy of the 30th November, 2012 as I can see no basis for deciding that she was in error in concluding that the proceedings should be dismissed on the grounds that they were vexatious or in making the other orders on the 30th November 2012.
I should add that I deprecate the manner in which serious allegations have been made by Mr. Loughrey against Ms. Dolan in circumstances where those allegations are not particularised or shown to have any basis. Ms. Dolan became involved in the administration proceedings in circumstances which have already been described. For a period of approximately six years until Mr. Loughrey parted company with his former solicitors, McCloughan Gunn & Co., no complaint or allegation of any kind of wrongdoing was made against Ms. Dolan. It is the case that there was difficulty for Ms. Dolan in dealing with the administration of the estate both in terms of ascertaining and perfecting the title to some of the land held by the Intestate and in identifying the next of kin of the Intestate. Within a relatively short period of time after she obtained a limited grant of administration, Ms. Dolan had been contacted by Mr. Loughrey’s then solicitors. It took considerably longer to ascertain the identity of the remaining next of kin and unfortunately they are now deceased. Thus the administration of the estate was not a straightforward one for her to deal with. Mr. Loughrey has complained at length in the course of the documentation as to the fact that he has been “deprived” of his rights to take out letters of administration to the estate and to have his share of the estate distributed. As is set out previously in the course of this judgment some of the delay in this matter can be directly attributed to his own conduct in relation to this matter. At various times in the course of the administration proceedings when difficulties arose or steps required to be taken, Ms. Dolan correctly and properly brought proceedings to court for the purpose of obtaining directions. It is difficult to see what else could have been done by her throughout the course of the proceedings. Ironically, one might observe, that by his conduct to date, Mr. Loughrey has prevented the completion of the distribution of the estate and his own entitlement to receive his share of the estate, (over and above the sum of his tax free threshold which he has received), has been delayed for a considerable number of years in circumstances which appear to me to be unjustifiable. In that regard he could only be described as his own worst enemy.
The final special summons proceedings
Mr. Loughrey also issued proceedings against his former solicitors, McCloughan Gunn & Co. as set out previously. Those proceedings were issued on the 9th July, 2012 but were returnable before the Master of the High Court on the 30th April, 2013 some months after Ms. Justice Laffoy had given her decision in the other special summons proceedings. These were not the first proceedings brought by Mr. Loughrey against his former solicitors. The claim in these proceedings mirrors, as I have already said, those brought against Ms. Dolan in that they claim monetary retribution in the sum of €8m. Mr. Loughrey also made reference in the proceedings to s. 44 of the Succession Act 1965. Mr. Loughrey swore an affidavit in those proceedings on the 17th April, 2013. His main complaint appears to be that Mr. Gunn, of McCloughan Gunn & Co., did not inform Mr. Loughrey that he was entitled to extract a grant of administration to the estate of the Intestate. He also made reference to some of the history of the issues that arose in the administration proceedings, for example, in relation to the claim made by Mrs. Culloo. An application was made to dismiss these proceedings and that application came before the High Court (Laffoy J.) and she dismissed the proceedings relying on the reasons given in respect of the proceedings related to Ms. Dolan. Laffoy J. provided a report of the judgment in these proceedings in which judgment was delivered on the 8th July, 2013. In the course of that report she noted that she had pointed out that the proceedings that he had initiated and revitalised against McCloughan Gunn & Co. were in exactly the same situation as the proceedings against Ms. Dolan. For the reasons set out in the Dolan judgment she was making a similar order in these proceedings. She noted that Mr. Loughrey handed in a bundle of documents in to Court and that she had seen those documents previously in the Dolan case. She then indicated to him in response to his statement to the Court that he wanted a jury trial that he was not entitled to a jury trial. She made an order pursuant to the inherent jurisdiction dismissing the plaintiff’s claim on the grounds that the claim as pleaded was bound to fail and also on the grounds that it was an abuse of process. She indicated that she also made an Isaac Wunder order against him restraining him from instituting any proceedings against Seamus M.A. Gunn or McCloughan Gunn & Co. without the leave of the Court.
The notice of appeal in this case was similar to that in relation to Ms. Dolan save that it did not make specific reference to a jury trial. He referred to an affidavit of the 17th April, 2013, the affidavit of Mr. Gunn, the ruling of Ms. Justice Laffoy of the 8th July, 2013 and the Books 1 and 2 which were furnished to the Court in relation to this matter.
I can see no reason for coming to any different view in relation to the appeal in respect of this matter than has been reached in relation to the Dolan proceedings. Despite the volume of documentation presented to the Court in this matter, Mr. Loughrey has not demonstrated any error on the part of Laffoy J. in dismissing the proceedings. The proceedings are vexatious, are bound to fail and are misconceived. Insofar as Mr. Loughrey has sought a jury trial, that is a misunderstanding on his part of the provisions of s. 44 of the Succession Act 1965 for the reasons previously explained. I can see no alternative but to dismiss this appeal and I would do so.
Conclusion
Mr. Loughrey was one of a number of beneficiaries under the estate of the late Michael Campbell. Ms. Dolan became involved originally at the request of the Gardaí given that Mr. Campbell was a former client of hers. It emerged that, unfortunately, following the death of the Intestate he was “waked” by his neighbours. Apparently, no members of his family were aware of his demise. Mr. Loughrey became aware sometime later in that year of the Intestate’s death and as has previously been indicated his solicitors were in touch with Ms. Dolan towards the end of 2001. No complaint was made at all by Mr. Loughrey as to the conduct of the matter by Ms. Dolan until long after she had taken out the grant of administration. It appears that while there was an issue in relation to the entitlement of a second cousin to an interest in the estate, Mrs. Culloo, Mr. Loughrey does not appear to have advised Ms. Dolan as to the existence of Michael and Leo Campbell who were also first cousins of the Intestate. Had this information been provided at an earlier stage by Mr. Loughrey, who clearly was aware of their existence, it would have saved a great deal of time. One wonders what might have happened if in fact Mr. Loughrey had obtained letters of administration to the estate of his late cousin and whether or not he would have had regard to the rights or interests of other potential beneficiaries to the estate. As it is, he has embarked on very expensive litigation which has effectively deprived those cousins of their entitlement to a share in the estate of the Intestate. They are now both deceased. Their families may stand to benefit at the end of the day but it is noteworthy that one of the personal representatives of the cousins died on the Friday before the case was due to be heard in this Court. The appeals continued notwithstanding that on the basis that if required by the personal representative of that notice party, the matter could be re-listed for hearing before the Court to hear any argument from that party. That necessitated that representation to the estate of that party had to be taken out in order to deal with the matter. That was subsequently done and it was indicated to the Court that no further issue required to be argued on behalf of that person’s estate. Unfortunately, the requirement to ascertain the position of the personal representative of the parties entitled to share in the estate led to a further delay in bringing this matter to a conclusion.
I have referred earlier to the fact that Mr. Loughrey suffers from some limitations in the form of dysphasia by virtue of his stroke. This has not inhibited him in any way in putting documents before the Court and in bringing proceedings before the Court and in making applications of various kinds. He has had the assistance of his niece before this Court and it has to be said that she was very helpful and courteous to the Court and the Court wishes to acknowledge its gratitude to her for her assistance. The same cannot be said of Mr. Loughrey.
For the reasons outlined above I would dismiss all of the appeals brought by Mr. Loughrey. I would express the hope that this will now bring the matter to a conclusion and that the fact that these proceedings are now at an end should enable Ms. Dolan to complete the administration of the estate and to distribute what remains of the estate to those who are entitled to receive it including Mr. Loughrey. This should be done as a matter of urgency given that the matter has been delayed for so long.
Muckian v Hoey
[2017] IEHC 47
JUDGMENT of Mr. Justice David Keane delivered on the 3rd February 2017
Introduction
1. The first respondent seeks an order directing that her costs of the present action be paid out of the estate of her late husband. The applicants oppose the making of any such order.
2. The action was brought to remove the first respondent as administratrix of her late husband’s estate. In a judgment delivered on the 25th November 2016, the Court granted that relief; see Muckian v Hoey [2016] IEHC 688.
3. The applicants and the other respondents in the action are the children of the marriage between the first respondent and the deceased. The other respondents did not participate in the proceedings.
4. The applicants seek an order directing that the costs of their successful action be paid out of the estate. The first respondent does not oppose that application. In truth, it is difficult to see how she could. The only plausible alternative to that order would be one granting the applicants their costs against the first respondent.
The first respondent’s arguments
5. In seeking her costs of the action out of the estate, the first respondent submits that the successful application to remove her as adminstratrix is one properly characterised as an administration suit. The proceedings were brought by special summons and the first respondent points to Order 3 of the Rules of the Superior Courts (‘RSC’, as amended, whereby the classes of claims in which that procedure may be adopted include ‘(1) The administration of the real or personal estate of a deceased person,… save where there is a charge of wilful default….’
6. The respondent ultimately relies on the following passage from Scanlon, Administration and Mortgage Suits (Dublin, 1963) at p. 65:
‘Executors, administrators and trustees are entitled to their costs out of the estate as a matter of course unless a charge of misconduct is established and then, and only then, do such costs become discretionary and the solicitor for a party in default is in no better position as regards costs than his client.’
7. Two authorities are relied upon by Scanlon for the proposition that an administratrix is entitled to her costs out of the estate as a matter of course unless a charge of misconduct is established against her. The first is O. LXV (65), r. 1(1) of the Rules of the Supreme Court (Ireland) 1905 (‘the 1905 Rules’). That Order of the 1905 Rules deals with the issue of costs. It is cast in substantially different terms to those of Order 99 of the RSC, the rule that now addresses that issue. The second is the following passage from Daniell’s Chancery Practice, 8th edn. (London, 1914) (Vol. II, p. 1055): ‘Trustees, agents and receivers, accounting fairly, are entitled to their costs out of the estate, as a matter of course; and the same rule extends to personal representatives, to whom, as they can only obtain complete exoneration by having their accounts passed in the Court, the Court will give every opportunity of exonerating themselves by passing their accounts at the expense of the estate.’
8. In an accompanying footnote, Daniell cites, as authority for that proposition, O. LXV. 1 of the Rules of the Supreme Court, 1883 (for England and Wales ), which the Chancery Division of the High Court in that jurisdiction then acted upon in dealing with the costs of executors, administrators, trustees or mortgagees ‘who had not acted unreasonably or carried on or resisted any proceedings.’ That rule is significantly different in material part than O. LXV, r. 1(1) of the 1905 Rules. It need hardly be said that the former rule was never in force in this jurisdiction and the latter rule was long ago supplanted by a quite different one made under s. 22 of the Courts of Justice Act 1924, itself long since repealed and replaced by s. 14 of the Courts (Supplemental Provisions) Act 1961. I do not accept that the present rules under O. 99 of the RSC, as amended, contain no provision capable of addressing the costs of an administration suit, such that, by operation of s. 14 of the 1961 Act, the jurisdiction of the Court in that regard requires to be exercised as nearly as possible in the same manner as it would have been under O. LXV, r. 1(1) of the 1905 Rules.
9. Indeed, as Scanlon acknowledges (at p. 65), even in 1963, the modern position was that ‘[s]ubject to any limitation by statute or rule of Court the rights to costs and the scales thereof are in the discretion of the Court.’ That was the case then under O. 99, r. 1 of the RSC 1962 and it remains the case now under O. 99. r.1 of the current RSC, as amended.
10. The applicants submit that they brought their application by way of the special summons procedure under O. 3 of the RSC, as amended, to avoid the greater costs of a plenary action and point out that the first respondent did not object to that course, although she was undoubtedly entitled to do so, as her wilful default or misconduct in the administration of the estate was plainly in issue from the outset.
11. For my part, I do not accept that the first respondent could foreclose any possibility of a finding of wilful default on her part as administratrix by the simple expedient of not objecting to the use of the special summons procedure as the appropriate vehicle for seeking her removal from that position.
12. Nor do I accept that there is any absolute or inflexible modern rule whereby an administratrix is entitled to her costs of an administration out of the estate unless a finding of misconduct, expressed as such, is made against her. I do accept that there is an obvious public interest in the application of a general principle whereby, once there is a reasonable ground for litigation by an administrator, executor or trustee, and once that litigation is conducted bona fide, that party should have an order for his or her costs out of the estate or trust though unsuccessful in the action. The public interest concerned is a broader manifestation of that identified by Budd J. in the narrower context of the circumstances surrounding the execution of wills in In bonis Morelli: Vela v Morelli [1968] I.R. 11 (at 34). That is to say, it is the wider public or community interest in the proper administration of estates and trusts generally. Administrators, executors or trustees should not be unduly deterred from seeking to have genuine problems or issues in the administration of any estate or trust judicially resolved because of the risk of a personal liability for the costs of the appropriate litigation.
13. There is another relevant principle. It is that an application which bears all of the hallmarks of a hostile lis inter partes – whether between beneficiaries under a will, under a trust or on an intestacy – may, depending on all of the circumstances, attract the unvarnished application of the usual rule that costs follow the event. That is the principle that I understand Herbert J. to have identified in O’Connor v Markey [2007] 2 IR 194 and Laffoy J. to have applied in Rennick v Rennick [2012] IEHC 589.
14. In considering the correct principle to apply to the present application, it is necessary to recall the material findings in the underlying judgment and the conclusion based upon them. The material findings are that there has been what is, by any measure, an extraordinary delay in the administration of the deceased’s estate by the first respondent that has not been adequately explained (para. 19), and that the first respondent has failed in her fundamental duties as administratrix properly to gather in the property of the estate and properly to account to the beneficiaries of the estate for its assets and liabilities (para. 27). The conclusion based upon those findings is that each on its own demonstrates a want of proper capacity on the part of the first respondent to execute the duties of administratrix, amounting to a special circumstance warranting her removal from that position, which special circumstance is more evident still when they are considered in combination (para. 37).
15. On that basis, it seems to me that the second of the two principles I have just identified is the more pertinent to the determination of the application at hand. That is to say, the underlying action more clearly bears the hallmarks of a lis inter partes than it does the indicia of an action defended on reasonable grounds, and conducted bona fide, by the first respondent as administratrix.
16. I am buttressed in that conclusion by a consideration of the authority relied upon by Scanlon for the proposition contained in the second part of the passage already quoted, i.e. the position of a solicitor for a client in default as an administrator is no better than that of the client . The authority is Re O’Kean [1907] 1 I.R. 223, a decision of Barton J. in the Chancery Division of the High Court, later affirmed by the Court of Appeal. In a curious echo of the present action, the case concerned a creditor’s suit for the administration of the estate of a deceased publican and trader who had carried on business in Newry, County Down. A brother of the deceased had taken out letters of administration but the creditors were dissatisfied with the manner in which the administration was conducted, hence the suit. In the course of the action, the administrator was ordered to bring in a balance of £200 due by him as administrator to the estate, but failed to do so. The administrator’s solicitor afterwards moved to vary the certificate issued by the Chief Clerk (the predecessor of the Examiner of the High Court) concerning the account that the solicitor himself had been ordered to provide of the monies that he had been instrumental in gathering in from debtors on behalf of the estate. The variation sought was to allow the solicitor to retain out of those monies a sum representing his costs of the carriage of the administration suit on behalf of the defendant administrator. Barton J. observed (at 225) that a personal representative is not entitled to his costs in an administration suit while he or she is in default to the estate and that his or her solicitor cannot be in a better position.
17. For the purpose of the present ruling, the first of those two propositions is the relevant one; no issue arises here concerning any independent claim to retain monies on the part of the first respondent’s solicitors. In that portion of the judgment in this case dealing with the failure of the first respondent as administratrix to collect and get in the estate (at paras. 20 – 27) , I concluded that the long overdue draft distribution account produced on behalf of the first respondent in January of last year raises as many question as it answers, and that it does not address, much less cure, 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. In light of that default, it follows that the first respondent is not entitled to her costs of the present action out of the estate on that quite separate basis also.
18. Turning from an analysis of the applicable legal principles to a consideration of the factors relevant to the exercise of the Court’s discretion under O. 99, r. 1 (1) of the RSC in this case, I cannot ignore the following matters. In the face of the application to remove her as administrator, the first respondent chose to oppose it, as was her perfect entitlement. After a contested application, the first respondent was found to have demonstrated a want of proper capacity to execute the duties of administratrix, amounting to a special circumstance warranting her removal from that position, and her removal was duly ordered. One of the findings that led to that conclusion was that, over the passage of many years and without any proper excuse, the first respondent has failed to produce a satisfactory distribution account, and has completely failed to account to each of the beneficiaries (including the applicants) for the relevant income, expenditure and interest associated with the property that comprises the estate. In those circumstances, to exercise the Court’s discretion to order that the first respondent’s costs of the unsuccessful defence of that application should be borne by the estate (and, thus, ultimately by the beneficiaries), rather than by the first respondent, would fly in the face, not only of fundamental reason and common sense, but also of justice. Indeed, the provisions of O. 99, r. 1(4), whereby costs should follow the event, provide strong support for an award of the applicants’ costs of the action against the first respondent. Happily for the first respondent, the applicants’ have made no such application, perhaps in the interests of conciliation, which is, of course, very much to be desired.
19. I must therefore refuse the first respondent’s application for an order that her costs of the action be paid out of the estate.
Rennick v Rennick
[2012] IEHC 559
udgment of Ms. Justice Laffoy delivered on 21st day of December, 2012.
The issue
1. The issue which the Court has to address in this judgment is who shall bear the cost of these proceedings in which the Court made an order on 30th April, 2012 by consent of the parties.
The background to the proceedings
2. The proceedings relate to the administration of the estate of Thomas Henry Reburn (the Deceased) who died on 11th March, 2005 intestate. Letters of administration intestate to the estate of the Deceased issued from the Principal Probate Registry to the plaintiffs on 20th November, 2009. The plaintiffs were lawful first cousins of the Deceased, as was the first named defendant (Mr. Rennick). The second defendant (Mrs. Rennick) is the wife of Mr. Rennick, and she was not related to the Deceased.
3. Prior to the plaintiffs extracting the grant of letters of administration there had been correspondence passing between the solicitors acting for Mr. Rennick and solicitors acting for Mrs. Rennick, on the one hand, and solicitors acting for the plaintiffs on the other hand for approximately two and a half years. Initially, Mr. Rennick, for whom G. Jones & Co., Solicitors, acted at the time, intended extracting a grant of letters of administration to the estate of the Deceased and the first named plaintiff was informed of this by letter dated 17th May, 2007 from G. Jones & Co. Mackey & Sullivan, Solicitors, who act for the plaintiffs in the proceedings, who originally acted for the first named plaintiff, commenced correspondence with G. Jones & Co. in May 2007. Ten months later, in response to a request for information as to the then current position in relation to the application for the grant of letters of administration from Mackey & O’Sullivan, G. Jones & Co. informed Mackey & O’Sullivan that the matter was complicated, in that they were in receipt of a claim from Mrs. Rennick, who alleged that she was owed money for work done and services rendered to the Deceased. Immediately, Mackey & O’Sullivan raised the issue that Mr. Rennick would be compromised if he extracted a grant, given that Mrs. Rennick was his wife.
4. The plot thickened a month later when, by letter dated 2nd April, 2008, Pierce O’Sullivan & Associates, on behalf of Mrs. Rennick, submitted a claim for €67,560 against the estate of the Deceased to G. Jones & Co. In fact, a caveat was entered in the Probate Office on behalf of Mrs. Rennick, in her capacity as creditor, in September 2008. At that stage, G. Jones & Co. prudently decided that they should not continue to act for Mr. Rennick in extracting a grant of administration and so informed Mackey O’Sullivan. That led to the decision by the plaintiffs to apply to be appointed administrators of the estate of the Deceased. Mackey O’Sullivan who were acting for them sought the file in relation to the estate of the Deceased from G. Jones & Co., whose response was that they did not have the authority of Mr. Rennick to release the file. G. Jones & Co. then fell out of the picture and Pierce O’Sullivan & Associates informed Mackey O’Sullivan that they were acting for both Mrs. Rennick and Mr. Rennick by letter of 30th April, 2009. Thereafter the correspondence passed between Mackey O’Sullivan, on behalf of the plaintiffs, and Pierce O’Sullivan & Associates, on behalf of the defendants. By June 2009 Mrs. Rennick had dropped her claim against the estate of the Deceased, save in respect of outlays which she alleged she had incurred on his behalf.
5. By late August 2009 a new issue had arisen in relation to a joint account with Irish Nationwide Building Society in the joint names of Mrs. Rennick, Mr. Rennick and the Deceased at the date of the death of the Deceased. The position of Mrs. Rennick was that the balance in the account passed to the surviving joint tenants on the death of the Deceased. One of the issues raised in the proceedings was the ownership of the monies in that account. The monies in question (€43,130.73) were returned as assets of the Deceased on the Inland Revenue Affidavit filed with the Revenue Commissioners by Mackey O’Sullivan. The only other asset of substance which the Deceased owned at the date of his death was a residence and farmland comprising approximately twenty four acres, which were valued at €230,000. Accordingly, the net value of the estate as shown on the Inland Revenue affidavit was only €270,733.24.
6. As I have already outlined, the grant of the letters of administration intestate issued to the plaintiffs on 20th November, 2009.
The proceedings
7. The proceedings were initiated by special summons which issued on 25th October, 2011. The proceedings were entitled “The High Court – Probate”. The word Probate should not have appeared in the title. In the special summons the plaintiffs sought the determination of two questions arising on the administration of the estate of the Deceased, namely:
(a) whether all reasonable steps had been taken to identify the next of kin of the Deceased and, if not, what steps should be taken to identify the next of kin; and
(b) whether the defendants held the funds in the Irish Nationwide Building Society account in trust for the estate of the Deceased, or, alternatively, whether they were beneficially entitled to the funds by right of survivorship.
Further, the plaintiffs sought an order directing the defendants to provide an account of their dealings with, including rents, profits and income derived from, the property comprised in the estate of the Deceased.
8. The proceedings were grounded on the affidavit of the first named plaintiff, which was sworn on 25th October, 2011. As regards the question as to the identity of the next of kin of the Deceased, there was exhibited in that affidavit a genealogical report furnished by Massey & King Ltd. with their letter of 23rd February, 2010 and a revised report furnished with their letter of 26th May, 2010. It was also disclosed in the affidavit that the plaintiffs had caused notices for the purposes of tracing the next of kin of the Deceased to be published in the Belfast Telegraph, the Irish Independent and the Northern Standard in July 2011. The result of the steps taken by the plaintiffs to ascertain the next of kin was their conclusion that the Deceased was survived by four first cousins on the maternal side, namely, the plaintiffs and Mr. Rennick and Gordon Rennick, who resides in the USA, and one first cousin on the paternal side, William Reburn, who resides in County Dublin.
9. The first named plaintiff also dealt with the status of the joint account in Irish Nationwide Building Society in the grounding affidavit, noting that the information furnished by G. Jones & Co. in their letter of 31st July, 2007 was that the account had existed for the previous eight years and that “the origin of the funds belonged to . . . [the] Deceased” and the instructions they had received from Mr. Rennick and Mrs. Rennick were that it was at all times the intention of the Deceased that the funds should go to the surviving account holders, namely, Mrs. Rennick and Mr. Rennick. The thrust of the plaintiffs’ position was that the monies in the account belonged to the estate of the Deceased and not to Mrs. Rennick and Mr. Rennick and correspondence was exhibited in which, in effect, Mrs. Rennick and Mr. Rennick were asked to confirm that they had dropped their claim to those monies, but there had been no response.
10. There was also implicit in the plaintiffs’ claim for an account from the defendants of their dealings with the property of the Deceased the contention of the plaintiffs that the defendants had taken the rents and profits of the agricultural land from 2005 to 2008. There was also a complaint about the failure of the defendants’ then solicitors to hand over the file in March 2009, which, it was contended, made the plaintiffs’ solicitors’ task of identifying the assets of the Deceased significantly more difficult than it might otherwise have been.
11. In response to the grounding affidavit, Mrs. Rennick swore an affidavit on 6th December, 2011, which was expressed to be sworn on her own behalf and on behalf of Mr. Rennick. The most significant averment in that affidavit is to be found in the last paragraph, in which Mrs. Rennick made it clear that at no time had she waived her entitlement to the monies in the joint account in Irish Nationwide Building Society by right of survivorship.
12. The following further affidavits were filed in the proceedings:
(a) an affidavit sworn by the first plaintiff on 13th January, 2012, which addressed both the plaintiffs’ claim for an account and the question in relation to the joint deposit;
(b) an affidavit sworn by Mrs. Rennick on 21st March, 2012, which set out the dealings of Mr. Rennick and Mrs. Rennick with the Deceased’s property; and
(c) an affidavit sworn by the first plaintiff on 27th April, 2012, which disputed that Mrs. Rennick and Mr. Rennick did not have to account to the estate of the Deceased in respect of the assets of the Deceased, by, for instance, raising an issue in relation to a lease of the Deceased’s land coupled with the milk quota attached to the lands.
13. The proceedings were transferred from the Master’s Court and first appeared in the Chancery List on 26th March, 2012, on which date, by consent of the parties, the proceedings were adjourned to 30th April, 2012. On 30th April, 2012, by consent of the parties, the Court made an order in which the two questions raised on the special summons were answered as follows:
(a) as to whether all reasonable steps had been taken to identify the next of kin of the Deceased, the answer was yes; and
(b) as to whether the defendants held the funds the subject of the Irish Nationwide Building Society account in trust for the estate of the Deceased, the answer was yes also.
In addition, it was ordered that the defendants do provide an account of their dealings with, including the rents, profits and income derived from, the property comprising the estate of the Deceased. The proceedings were then adjourned so that the Court could hear arguments in relation to costs.
14. By the time the Court heard the arguments in relation to liability for costs, Mrs. Rennick had filed two further affidavits, one sworn on 26th June, 2012, in which she set out to demonstrate that the defendants do not have to account for any sum to the estate of the Deceased and a further affidavit sworn on 12th July, 2012. Nonetheless, the Court was told by counsel for the plaintiffs that the plaintiffs do not accept that the defendants have not yet provided an adequate account. The issue whether they have or have not is not before the Court. In relation to affidavits which Mrs. Rennick swore after the order of 30th April, 2012, the only comment I have to make is that I do not consider that the question of the state of Mr. Rennick’s health goes to the issue of costs.
The law
15. It was submitted on behalf of the defendants that, in determining where liability for costs should lie, the Court should have regard to the decision of the Supreme Court in Elliott v. Stamp [2008] 3 IR 387. In that case, the Supreme Court applied the principle which had been reiterated forty years earlier by the Supreme Court in In bonis Morelli: Vella v. Morelli [1968] I.R. 11. In my view, neither decision is relevant to the circumstances of this case. The underlying rationale of an unsuccessful party in a probate action having his or her costs paid out of the estate of the testator where two questions (was there reasonable ground for litigation?; was it conducted bona fide?) are answered in the affirmative was explained by Budd J. in In Bonis Morelli as follows (at p. 34):
“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 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 modern 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.”
These proceedings did not concern the testamentary disposition of property nor did they concern execution of testamentary documents. The Deceased died intestate. Therefore, neither the decision in In bonis Morelli nor the decision in Elliott v Stamp has any relevance to these proceedings.
16. Counsel for the plaintiffs, on the other hand, submitted that two decisions of the High Court are relevant: the decision of this Court in Young v. Cadell [2006] IEHC 49 and the decision of Herbert J. in O’Connor v. Markey [2007] 2 IR 194. In my view, the latter decision is of particular relevance. In that case, a dispute arose in the course of the administration of the estate of a testator between the first and second defendants, both beneficiaries under the will. The first defendant, the principal beneficiary under the will, claimed that the payment of several outstanding debts was solely the liability of the testamentary estate and that he was not obliged personally to discharge the debts. The claim was adverse to the second defendant, whose residuary request would be substantially or entirely consumed by the payment of those debts. The outcome of the substantive action was that the first defendant was obliged personally to indemnify the estate in respect of the whole amount of those debts. In other words, the first defendant lost. Having rejected a submission that In bonis Morelli was of relevance, Herbert J. went on to make the following observations (at para. 7), which I think are of particular relevance to this case:
“By contrast, the instant application bore all the hallmarks of contentious litigation between beneficiaries which did not in any way touch upon the capacity of the testator or the state in which he had left his testamentary papers. The present application arose in the course of the administration of the estate, was not a probate action, but neither was it an ordinary administration suit. To all intents and purposes it was a hostile lis inter partes between two beneficiaries under the will. It related to the conduct of the testator’s business by the first defendant while the testator was still alive and to the issue of whether the first defendant was or was not obliged to pay the particular debts as they arose, so that they would not become a burden upon and payable out of the estate on the death of the testator. The special administrator was in reality only a nominal plaintiff to enable the opinion of the court to be obtained by way of a special summons for directions in the course of the administration. The many issues of fact and of law were litigated as a proceeding inter partes between the first defendant and the second defendant on their own evidence, and the evidence of witnesses called by each of them.”
While I have stated that the forgoing passage is relevant to these proceedings, it would be more accurate to state that it is relevant to two aspects of the proceedings.
17. Order 3 of the Rules of the Superior Courts lists the circumstances in which proceedings may be initiated by special summons, one being the determination of any question arising in the administration of any estate or trust or the ascertainment of any class of creditors, legatees, devisees, next of kin or others. The question in relation to the identity of the next of kin was undoubtedly properly brought by way of special summons and, in my view, it was prudent of the plaintiffs, as personal representatives of the Deceased, to bring it before the Court.
18. However, the question in relation to the joint deposit account, if Mrs. Rennick had not made the concession she had made, would, in reality, have been a lis inter partes between the plaintiffs, as personal representatives of the Deceased, on the one hand, and Mrs. Rennick, on the other hand, and would have had to go to plenary hearing. That did not happen because Mrs. Rennick conceded that the estate of the Deceased should get the monies on joint deposit. It was emphasised by counsel for the defendants that Mrs. Rennick still feels that the monies on joint deposit were hers and Mr. Rennick’s but, despite her strong views, she accepted that on balance she should make the concession. In this context, counsel for the defendants relied on observations made by Kearns J. in the Supreme Court in Elliott v. Stamp, which were obiter dictum. Kearns J. stated that it was preferable, where possible, for a defendant to an action challenging the validity of a will to disclose all relevant documentation in advance upon which he intends to rely at the trial of the matter, so that claims which might no longer be made in the light of such disclosure might be reconsidered and withdrawn, if necessary. In addressing the costs implications of that approach, having stated that it would represent a valuable protection for estates of deceased persons, without in any way diluting the principles enunciated in In bonus Morelli, Kearns J. stated (at p. 396):
“Thus, while it may be reasonable to commence and bring proceedings, and to bring them bona fide, a point may arrive where, as a result of disclosure made by the defence, the further maintenance of the claim can no longer be seen as reasonable. In such circumstances, it seems to me a trial judge should not be fettered in the exercise of his discretion as to costs and should be free both to decline costs from the estate to an unsuccessful litigant or even to award costs against such a litigant from the time of disclosure.”
While I respectfully agree with those observations, I really do not see the relevance of them to what I have said would, in reality, have been a lis inter partes as regards the joint deposit, if the concession had not been made by the defendants. The concession was made and, when it was made, the proceedings were finalised. In effect, the concession is the “event” for the purposes of the application of Order 99 of the Rules, which, subject to the overriding discretion of the Court, mandates that costs should follow the event.
19. As regards the order directing that the defendants account to the estate, the defendants also made a concession on that issue to the extent that they agreed to account. However, I do not see that as being an event for the purposes of determining where costs should lie; the event must be the outcome of the proper assessment of the account, which is not before the Court and on which the Court cannot adjudicate.
Conclusion
20. Having regard to all of the foregoing factors I consider that the fair and equitable way of dealing with the costs of the proceedings to date is as follows:
(a) the costs of ascertaining the next of kin must be borne by the estate and that includes the outlay, for instance, the cost of the genealogical reports and also the costs of advertising for the next of kin;
(b) as regards the remainder of the costs of the proceedings until the order of 30th April, 2012 was made, I consider that –
(i) 25% of their taxed costs should be paid to the plaintiffs out of the estate of the Deceased; and
(ii) the remaining 75% of their taxed costs should be paid to the plaintiffs by the defendants, to reflect the event represented by the concession made by the defendants in relation to the joint deposit in Irish Nationwide Building Society; and
(iii) there should be no order for costs in favour of the defendants;
(c) as regards the costs of the application for costs, the plaintiffs should be paid 75% of their taxed costs out of the estate and, subject to that, the plaintiffs and the defendants should each bear their own costs, because the plaintiffs were not wholly successful in their pursuit of all of the costs against the defendants.
O Connor v Markey & Anor
[2006] IEHC 219 (14 July 2006)
judgment of Mr. Justice Herbert delivered on the 14th day of July, 2006
This was an application made by way of Special Summons to the Court, by the special administrator appointed by the court, for the purpose of resolving a dispute which had arisen in the course of the administration of the Estate of Philip Markey, between Gerard Markey and Mary Markey, both children of the deceased and beneficiaries under his will. The first named Defendant claimed that payment of the several debts the subject matter of the application, were the sole liability of the estate and should be paid, in effect, out the residuary gift bequeathed to the second named Defendant. The second named Defendant claimed that the first named Defendant was obliged to personally indemnify the estate against the total amount of these debts, which in default of payment should be paid by the special administrator out of the property specifically devised to the first named Defendant. In my judgment given on 24th January, 2006, I found that the first named Defendant was obliged to indemnify the estate in respect of the whole amount of these debts.
The first named Defendant now claims that the entire costs of all the parties to the application, together with certain linked costs, should be paid out of the assets of the estate. The second named Defendant claims that her costs and those of the special administrator should be paid out of the estate with an order over against the first named Defendant, or in the alternative, claims an order for costs against the first named Defendant personally. The special administrator claims that he is entitled to his costs of the application out of the estate. Counsel for the first named Defendant relied upon the decision in the case of In The Goods of Morelli, deceased: Vella v. Morelli [1968] I.R. 11. Counsel for the second named Defendant relied upon the decisions in In Re Buckton: (1906 B. 1879), Buckton v. Buckton [1907] 2 Ch. 406 and In Re Knapman: (1879 K. 14) Knapman v. Wreford, 18 Ch.D. 300.
Order 99, rule 1(1) of the Rules of the Superior Courts, 1986, provides that the costs of and incidental to every proceeding in the Superior Courts shall be in the discretion of those Courts. Order 99, rule 1(4) of those Rules provides that the costs of every issue of fact or law raised upon a claim or a counterclaim shall, unless otherwise ordered, follow the event.
In the case of In The Goods of Morelli, deceased, (above cited) Budd, J.
(Ó Dalaigh C.J., Haugh and Walsh J.J., concurring, FitzGerald J., dissentiente), adopting the decision in O’Reilly v. Forde 5 I.L.T.R. 54, and referring to Fairtlough v. Fairtlough 1 Milw. 36 at 39 per Dr. Radcliffe, (a decision of the Prerogative Court), O’Kelly v. Browne Ir. 9 Eq 353, Young v. Dendy Lr., P. and D. 344, Burke v. Moore Ir. 9 EQ 609, Gillic v. Smyth 49 I.L.T.R. 36, Regan, deceased: Murphy v. Finlen [1939] L.J.Ir. 50 and Kavanagh v. Fegan and Others [1932] I.R. 566, held, that it was the general practice in Ireland that if:
(a) The case was a proper one to have been litigated and
(b) The litigation was properly conducted, the general costs should be paid out of the personal estate of the deceased as the Court had no jurisdiction to order them to be paid out of real estate.
The learned judge declined to accept the argument of Counsel for the Defendant in that case, that a more recent practice had developed in Ireland of only exonerating the unsuccessful party from paying the costs of the successful party. It was held as follows by Budd, J.:-
“A question, however, arises about the proper order to make and, if there is a doubt about the matter, it is obviously desirable that there should be some general principles laid down as a guide to a trial judge so as to secure some uniformity of practice and, in particular, so that litigants can be advised and may know how they stand when they wish to contest or support a will in an action. Speaking for myself, I am by no means satisfied that some new practice has found general acceptance in recent times; nor do I think that any good reason has been shown for departing from the old Irish practice. 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 person, 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 modern 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. I now turn to the facts.”
In my judgment, In The Goods of Morelli, deceased, is distinguishable on its facts from the instant application and, the principles of law restated and followed by the then Supreme Court in that case have no application to the circumstances which fall to be addressed in the present application. In The Goods of Morelli, deceased, was a case which turned on a question of due execution, as did Kavanagh v. Fegan and Others, Gillic v. Smyth and, Burke v. Moore. Keogh v. Wall was a revocation suit. In Regan, Deceased: Murphy v. Finlen, the three statutory pleas were raised and, O’Kelly v. Browne was a probate suit. All these cases were concerned either with, “The state in which the deceased himself or herself has left his or her testamentary papers”, or with the testamentary capacity of the deceased. This explains what Budd J., meant in the passage which I have cited and, why he considered, “The old Irish practice was a very fair and reasonable one.”
By contrast, the instant application bore all the hallmarks of contentious litigation between beneficiaries which did not in any way touch upon the capacity of the testator or the state in which he had left his testamentary papers. The present application arose in the course of administration of the estate, was not a probate action, but neither was it an ordinary administration suit. To all intents and purposes it was a hostile lis inter partes between two beneficiaries under the will. It related to the conduct of the testator’s business by the first named Defendant while the testator was still alive and to the issue of whether the first named Defendant was or was not obliged to pay the particular debts as they arose, so that they would not become a burden upon and payable out of the estate on the death of the testator. The special administrator was in reality only a nominal Plaintiff to enable the opinion of the Court to be obtained by way of a Special Summons for directions in the course of the administration. The many issues of fact and of law were litigated as a proceeding inter partes between the first named Defendant and the second named Defendant on their own evidence, and the evidence of witnesses called by each of them.
In my judgment the instant case falls within the “Third class of cases”, identified by Kekewich, J. in the case of In Re Buckton (above cited) where the learned judge held as follows at pages 414 and 415:-
“In a large proportion of the summonses adjourned in the Court for argument the applicants are trustees of a will or settlement who asked the Court to construe the instrument of trust for their guidance, and in order to ascertain the interests of the beneficiaries, or else ask to have some question determined which has arisen in the administration of the trusts. In cases of this character I regard the costs of all parties as necessarily incurred for the benefit of the estate, and direct them to be taxed as between solicitor and client and paid out of the estate. It is, of course, possible that trustees may come to the Court without due cause. The question of construction or of administration may be too clear for argument or it may be the duty of trustees to inform a claimant that they must administer their trust on the footing that his claim is unfounded, and leave him to take whatever course he thinks fit. But, although I have thought it necessary sometimes to caution timid trustees against making applications which might with propriety be avoided, I act on the principle that trustees are entitled to the fullest possible protection which the Court can give them, and that I must give them credit for not applying to the Court except under advice which, though it may appear to me unsound, must not be readily treated as unwise. I cannot remember any case in which I have refused to deal with the costs of an application by trustees in the manner above mentioned.
There is a second class of case differing in form, but not in substance, from the first. In these case it is admitted on all hands, or it is apparent from the proceedings, that although the application is made not by trustees (who are Respondents), but by some of the beneficiaries, yet it is made by reason of some difficulty of construction, or administration, which would have justified an application by the trustees, and it is not made by them only because, for some reason or other, a different course has been deemed more convenient. To cases of this class I extend the operation of the same rule as is observed in cases of the first class. The application is necessary for the administration of the trust, and the costs of all parties are necessarily incurred for the benefit of the estate regarded as a whole.
There is yet a third class of cases differing in form and substance from the first, and in substance though not in form, from the second. In this class the application is made by a beneficiary who makes a claim adverse to other beneficiaries, and usually takes advantage of the convenient procedure by originating summons to get a question determined which, but for this procedure, would be the subject of an action commenced by writ and would strictly fall within the description of litigation. It is often difficult to discriminate between cases of the second and third classes, but when once convinced that I am determining rights between adverse litigants I apply the rule which ought, I think, to be rigidly enforced in adverse litigation, and order the unsuccessful party to pay the costs. Whether he ought to be ordered to pay the cost of the trustees, who are, of course, Respondents, or not, is sometimes open to question, but with this possible exception the unsuccessful party bears the costs of all whom he has brought before the court.”
In the instant case the special administrator made the application, but, I am satisfied that this was essentially in a nominal capacity only and does not in any material way alter the situation. The claim made by the first named Defendant, who is the principal beneficiary under the will, that he was not obliged to discharge the debts in issue in the application, was totally adverse to the second named Defendant who is also, but to a much lesser extent, a beneficiary under the will and, whose residuary bequest would be substantially or entirely consumed by the payment of these debts should they fall to be paid out of the testamentary estate. If there was any issue of community importance in this case, it was, that persons in the position of the first named Defendant should not be permitted to resile from their contractual and fiduciary obligations, particularly when this inures to their own betterment and to the detriment of others, including other beneficiaries under the same will. In my judgment, it would be neither fair nor reasonable that the first named Defendant, having failed in his claim in this application, should be awarded costs out of the estate or exempted from paying the costs of the special administrator and of the successful second named Defendant, both of whom he caused to be involved in this litigation.
In my judgment, the costs of the special administrator, including the costs of Stephenson, Solicitors, who were appointed by the Order of this Court (Carroll J.), made 2nd February, 2004, to advise and to act on behalf of the special administrator in the administration of the estate of Philip Markey, deceased, must be paid out of the estate, even though this was not an ordinary administration suit. I direct that the provisions of Order 99, rule 1(5) of the Rules of Superior Courts, 1986, shall apply, so that in addition to party and party costs, all and any other costs, charges and expenses, reasonably incurred for the purpose of the application, shall be allowed.
In the case of In Re Knapman (above cited) legatees who are also next of kin to the testator brought an action against the sole executrix to whom the residuary estate, both real and personal had been devised and bequeathed, seeking a revocation of the probate. They were unsuccessful in the action and were ordered to pay the costs of the executrix. The Court of Appeal held that the executrix was entitled to
set- off these costs against the legacies. The Court held that the executrix was entitled to her expenses out of every part of the assets but as between the different persons, residuary legatee and the unsuccessful plaintiff legatees, the latter should not receive their legacies until the assets of the testator were put in the position of not being diminished by the expenses incurred by the executrix as a consequence of their proceedings.
In my judgment, though the special administrator should have his costs out of the estate, this could well result in the sort of unjust and anomalous situation which the Court of Appeal had sought to avoid in the case of In Re Knapman (above cited). If these costs fell to be paid out of the real and personal assets of the testator in the order provided by s. 46(3) and the first schedule part II of the Succession Act, 1965, the burden would fall on the residuary bequest to the successful second named Defendant thereby depriving her of all or a material part of the benefit preserved to her by the judgment of this court in exoneration of the devise to the unsuccessful first named Defendant. In the case of In Re Knapman, justice was achieved by allowing a set-off of the costs of the executrix against the legacies bequeathed to the unsuccessful plaintiffs. It was a rule of the Courts of Equity that where assets were otherwise insufficient, costs in an administration action, could be charged on specifically devised real estate, (see Jackson v. Pease L.R. 19 Eq. 96). In my judgment following the approach adopted by the Court of Appeal in the case of In Re Knapman (above cited), the costs of the special administrator in the instant case should be a charge on the real estate specifically devised to the first named Defendant. This property was valued by Neylon and Company Limited, Property Consultants and Valuation Surveyors, on 10th July, 2002, at approximately €685,000 to €700,000. The first named Defendant should not be entitled to require that the property be vested in him by the assent of the special administrator otherwise than subject to this charge for the purpose of making good this loss to the assets of the testator.
In my judgment, as no appeal was taken against the order of Kearns, J. (then of the High Court), made 10th March, 2003, the costs awarded by that order fall to be paid out of the assets of the testator in accordance with the order of application of assets in a solvent estate provided by s. 46(3) and first schedule part II of the Succession Act, 1965.
I find, adopting the principles formulated by Kekewich, J. in the case of In Re Buckton, (above cited), that the second named Defendant is entitled to an order for costs against the first named Defendant personally, such costs to include, all costs arising on foot the Special Summons No. 500 of 2003, to encompass the Application for Directions of 2nd February, 2004, (on which costs were reserved by Carroll, J.); the second named Defendant’s costs of complying with the Order for Discovery made by Carroll, J., on 2nd February, 2004; the costs of the application to the Master of the High Court on 13th July, 2004; the costs of the Appeal by the first named Defendant from the decision of the Master to this Court (O’Donovan, J.), on 1st November, 2004 and, the costs of the hearing before me, to include all proper and reasonable fees due to Mr. John Eddison of Buckton Ryan, Chartered Accountants and, any stenographer’s expenses. It will be apparent from a consideration of my judgment of 24th January, 2006, that full discovery by the first named Defendant was essential to the proper conduct of this application. I will not allow the costs of the legal submissions filed on behalf of the second named Defendant as a separate item of costs.
The costs awarded to the special administrator and to the second named Defendant will include the costs of this application for costs.
Young v Cadell & Ors
[2006] IEHC 49 (13 February 2006)
udgment of Miss Justice Laffoy delivered on 13th February, 2006.
The special summons in this matter was issued on 7th July, 2004.
Samuel Young and Josephine Young mentioned in the title were the parents of the plaintiff and of William Young, first mentioned in the title, whom I will call “the Testator”, and also of the second, third, fourth and fifth defendants. They both died in 1970.
The Testator, who was the son of Samuel and Josephine Young, and the brother of the plaintiff and the second, third, fourth and fifth defendants, died on 28th October, 2000, having made his last will and testament on 8th August, 2000. Probate of his will was granted to the first defendant, who is a solicitor and one of the executors named in the will, on 8th November, 2001.
Apparently, the plaintiff’s parents, Samuel Young and Josephine Young, died intestate. Representation has not been raised to the estate of either of them.
The only provisions of the will of the Testator which are relevant to the issues raised in the special summons are the provisions contained in clauses 4 and 5 in the following terms:
“4. I leave my dwelling house together with a garden field (which are currently used by my brother Donal) to my brother Sam for his own absolute use and benefit.
5. I leave all the out-offices, yard, hayshed etc. and the remainder of my land situate at Barnane, formerly owned by my parents, to my brother Pat Young, his wife Mary Young and to each of their four children in equal shares.”
The lands referred to in clauses 4 and 5 were the lands registered on Folio 25344, County Tipperary. Clause 5 is relevant only insofar as the lands to which it relates were registered in Folio 25344.
The allegations made by the plaintiff in the special endorsement of claim in the special summons were:
· that the defendants had failed, refused or neglected to communicate with the plaintiff and attempted to deny him his share under the will of the testator.
· that the first defendant had failed, refused or neglected to execute a deed of assent transferring to the plaintiff the dwelling house together with a garden field comprising an area of 0.5 hectares at Barnane as contained in Folio 25344 to and for his own absolute use and benefit, and
· that the first defendant had failed to distribute the assets of the estate of Samuel Young and the estate of Josephine Young pursuant to the rules of intestacy.
When the matter came into the Chancery List on 17th October, 2005, counsel for all of the defendants other than the fourth defendant, applied that the proceedings against his clients should be struck out. The basis of the application was that in his replying affidavit sworn on 8th November, 2004, with regard to the dwelling house and the garden field comprising approximately 0.5 hectares, the first defendant averred as follows:
“Neither I nor the second named defendant have any difficulty with regard to executing an Assent in favour of the Plaintiff with regard to the said property. However, in doing so, I say that I have been advised that I cannot vest in the Plaintiff any better title to the dwelling house and garden than the Estate of William Young deceased has in the said property. If Donal Young is entitled to the entirety of that property by virtue of survivorship upon the death of William Young, the execution of the Assent is a meaningless exercise. Clearly, this is an issue which will have to be determined as between the Plaintiff and Donal Young the fourth named defendant who is separately represented in these proceedings by Messrs. Nash, McDermott & Company, Solicitors. I say that there is no basis for continuing or maintaining these proceedings against any of the defendants other than the fourth defendant and it would be the intention of the remaining defendants to seek their costs from the Plaintiff if he persists with this action against them.”
There was no appearance on behalf of the fourth defendant, Donal Young, on 17th October, 2005.
The implicit offer of the first defendant to execute an assent in favour of the plaintiff of the interest of the Testator in the dwelling house and land specifically devised to the plaintiff should have been taken up in November, 2004 and that should have been the end of the matter. The offer was not pursued by the plaintiff. On the other hand, an assent was not executed by the first defendant. On 17th October, 2005 I adjourned the proceedings, indicating that I intended to strike out the proceedings against all of the defendants except the fourth defendant, if an assent was executed by the first defendant. I also indicated that I would deal with the question of costs on the adjournment but that the plaintiff and the defendants, other than the fourth defendant, should put their respective cases in relation to costs on affidavit. On 17th October, 2005 I explained the basis on which I was adopting that course, stating:
· That as the personal representative of the Testator was prepared to assent to the specific devise to the plaintiff of the dwelling house together with 0.5 hectares, the plaintiff had no other standing in relation to the estate of the testator and no basis for maintaining the action further.
· That the estates of Samuel Young and Josephine Young were not before the court and no order could be made in relation thereto.
· That the plaintiff was not entitled to any relief except the assent proffered.
I went through each item of relief claimed on the special summons and explained why it was not appropriate to grant it.
The matter came back into the list on 12th December, 2005.
I will deal first with the issues which arose between the plaintiff and all of the defendants other than the fourth defendant on that occasion first. The first defendant had filed an affidavit sworn on 2nd November, 2005 in which he exhibited an assent sworn by him on 2nd November, 2005 in which he assented to the registration of the plaintiff as full owner of the lands specifically devised to him for all the right, title, estate and interest held by the Testator therein. The execution of that assent, in my view, renders these proceedings redundant, the only issue remaining being the issue of costs. On the issue of costs, counsel for the first defendant, who also appeared for the other defendants except the fourth defendant, submitted that, as between the plaintiff and the defendants other than the fourth defendant, there should be no order for costs up to November, 2004 when the first defendant proffered the assent and that thereafter there should be an order for costs against the plaintiff. Counsel for the plaintiff submitted that the plaintiff had made a bona fide request for information and the first defendant had refused to furnish the information and, accordingly, that there should be an award for costs in favour of the plaintiff against the defendants other than the fourth defendant. Counsel for the plaintiff referred to the decision of the Supreme Court in In Bonis Morelli; Vella v. Morelli [1968] I.R. 11.
I will deal first with the relevance of the decision of the Supreme Court in Vella v. Morelli to the costs issues in these proceedings. That was a probate suit, in which the plaintiff sought an order recalling the grant of letters of administration with the will of the deceased annexed, which had been granted in common form, and condemning the will, ultimately, on the ground that it was not duly executed in accordance with law. Budd J., delivering the judgment of the Supreme Court referred to the “well-established Irish practice formulated in the last century” and he quoted the statement of the practice set out in Miller’s Probate Practice (Maxwell: 1900 Ed.) at p. 438, which was in the following terms:
“Two questions are to be considered with reference to an application for costs of the unsuccessful party:- (1) Was there reasonable ground for litigation? (2) Was it conducted bona fide? Where both these questions can be answered in the affirmative it is the usual practice of the court, without having regard to the amount or the ownership of the property, to order the general costs to be paid out of the personal estate.”
Later, Budd J. stated that he did not think that any good reason had been shown for departing from the old practice and he then set out the rationale of the practice as follows:
“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 modern 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.”
As Budd J. made clear at the end of his judgment, when answering the two questions posed on the facts of the case before him, the principle applies when the court is “considering whether an unsuccessful party in a probate suit should be allowed costs out of the estate”.
The factors which arise in a probate suit which justify the special rule in relation to costs which was reiterated in Vella v. Morelli, the importance of ensuring that what are presented as testamentary documents are above suspicion and that legal costs are not a deterrent to pursuing bona fide beliefs or suspicions as to the validity of such documents, do not arise in administration suits, which, in the case of a death testate, proceed on the assumption that the testamentary document is valid, as was the case here. Therefore, in my view, the rule in Vella v. Morelli has no application to the resolution of the costs issues in these proceedings.
It seems to me that the only possible basis which the plaintiff has for complaint against the first defendant arises from a letter of 11th April, 2001 from the first defendant’s solicitors to the plaintiff which, in reality, was the opening sally in these proceedings. The solicitors for the first defendant told the plaintiff in that letter that the Testator had made an application to the Land Registry to be registered as sole owner of, inter alia, the land specifically devised to the plaintiff prior to his death. Difficulties were being encountered with that application. It was proposed to extract letters of administration intestate to the estate of the parents of the plaintiff and the testator, Samuel Young and Josephine Young. The solicitors for the first defendant requested that the plaintiff execute renunciations so that his sister, the third defendant, who had no conflict of interest with her siblings, could extract letters of administration to the estate of Samuel Young and Josephine Young. In that letter, the solicitors for the first defendant stated as follows:
“The other beneficiaries are your brothers, Patrick (lands) and Donal
(1 hectare site and right to reside in dwelling house). Therefore Donal will have a right to reside in the dwelling house you are inheriting. This was an arrangement which your late brother reached with Donal before he died. Because Donal had been living in the house in excess of twelve years he has certain entitlements. However, he is willing to forego these entitlements provided that the arrangement he worked out with William (1 hectare site and right to reside in dwelling house are fulfilled).”
As it transpired, the plaintiff never executed the renunciation forms and, as I have stated, representation has not been raised on the estates of Samuel Young and Josephine Young. Further, as I have already stated, neither estate was before the court and the plaintiff should not have sought any relief in these proceedings in respect of either estate.
However, the paragraph which I have quoted did put the plaintiff on notice that his brother, Donal, the fourth defendant, had some claim in respect of the dwelling house specifically devised to the plaintiff. In fact, in a letter of 28th June, 2000 from the fourth defendant’s solicitors to the solicitors for the first defendant, a settlement between the fourth defendant and the Testator was recorded as follows:
“Therefore, the settlement agreed between the parties is as follows:-
(A) My client is getting the plot of ground referred to in paragraph 4 hereof outright.
(B) He will have a right of residence in the residence on Folio 25344 together with the right to use and cultivate the plot at the rear right of the house, beside the river.
(C) My client will be paid £5,000. If this payment is not made within two months from the date hereof it will carry interest hereon at the rate calculated under the Courts Act.”
The reality of this case is that the plaintiff could not get any better title to the dwelling house and garden specifically devised to him than the Testator had. However, I do think the personal representative of the Testator, the first defendant, should have told him what title the Testator had and, in particular, should have furnished him with a copy of the letter of 28th June, 2000. As against that, it seems to me that the plaintiff’s solicitors never asked the right question. The plaintiff’s complaint is that he did not get a copy of the letter of 28th June, 2000 until he eventually got discovery in these proceedings.
The conclusion I have come to in relation to the issue of costs between the plaintiff and the defendants, other than the fourth defendant, is that to a very large extent the plaintiff’s claim was misconceived. I am certainly of the view that it was unnecessary for the plaintiff to join the second, third, fifth, sixth, seventh, eighth and ninth defendants in these proceedings. On the other hand, the first defendant should have told the plaintiff or the plaintiff’s solicitors in plain and simple terms what the perceived problems with the Testator’s title were and he should have simply assented to the vesting of the property specifically devised in the plaintiff for all the estate, right, title and interest of the Testator therein, as has eventually been done.
As between the plaintiff and the defendants other than the fourth defendant, I propose to make no order as to costs.
There is a genuine dispute between the plaintiff and the fourth defendant, but it is a dispute the genesis of which is anterior to the death of the Testator. Therefore, it is not a dispute which can be resolved by proceedings brought by way of special summons for the administration of the estate of the Testator.
On 12th December, 2005 counsel for the fourth defendant sought either –
· an order that the issue as between the plaintiff and the fourth defendant should be remitted for plenary hearing, or, alternatively,
· an order dismissing the plaintiff’s claim against the fourth defendant with costs.
The dispute between the plaintiff and the first defendant is a title dispute. In my view, procedurally, it is not a matter which can be resolved by proceedings initiated by special summons in the High Court. Therefore, I dismiss the plaintiff’s claim against the fourth defendant. As between the plaintiff and the fourth defendant, there will be no order as to costs.
In the Matter of the Estate of Oliver Sherry
Late of 3 Laurel, Hazeldene, Anglesea Road, Dublin 4, Deceased and In the Matter of the Succession Act, 1965; Kieran Crowley v Daire Murphy
[2019/335 SP]
High Court [Approved]
12 October 2021
unreported
[2021] IEHC 645
Mr. Justice Mark Sanfey
October 12, 2021
JUDGMENT
Introduction
1. Mr. Oliver Sherry (‘the deceased’) of 3, Laurel, Hazeldene, Anglesea Road, Dublin 4, passed away on 12th December, 2015. He had made and executed his last will on 14th October, 2009. In that will, he appointed the defendant, an experienced solicitor who was then a partner in the firm Lyons Kenny of 57 Fitzwilliam Square, Dublin 2, as his executor and trustee under the will. It is of some relevance to note that the will stated that, if the defendant were “unwilling or unable” to act as executor and trustee, the firm of Lyons Kenny, or any firm with which Lyons Kenny was amalgamated or into which it was incorporated, was to act as his executor and trustee.
2. After payment of debts and expenses, and some small charitable bequests, the residue of the estate was to be left to the plaintiff, who is described in the will as the deceased’s “assistant”. While the plaintiff in his grounding affidavit describes himself as a “homemaker”, the defendant in his affidavit of 20th January, 2020 at para. 5 describes the plaintiff as the “sole carer of the deceased for many years”, a description with which the plaintiff does not take issue. The deceased’s estate is a valuable one; the grant of probate which issued on 23rd February, 2018 recorded the gross value and the net value of the estate as €1,831,420 and €1,819,424 respectively.
3. The plaintiff became dissatisfied with the way in which the defendant was discharging his role as executor, and issued the present proceedings seeking various orders against the defendant as regards the administration of the deceased’s estate, or in the alternative, an order removing the defendant as the legal personal representative of the estate. Ultimately, after a number of hearings before this Court, the parties on June 4th, 2021 indicated their acceptance that, subject to some minor administrative matters, the administration of the estate was complete and that the only issue to be decided was that of the costs of the proceedings.
4. While this judgment therefore deals solely with the issue of costs, it is necessary to set out in some detail the background to the proceedings, and the manner in which they developed.
The pleadings and the reliefs sought
5. The plaintiff initiated the present proceedings by way of special summons on 26th July, 2019. The special indorsement of claim referred to the principal asset of the estate as being a property (‘the property’) situate at 3 Laurel, Hazeldene, Anglesea Road, Dublin 4, which the plaintiff contended had a value of €625,000. It was stated that there had been “three failed sales of the property”, and that various shareholdings had “not yet been transferred to the plaintiff despite the plaintiff’s requests to do so”. It was pleaded that the plaintiff was “desirous of administering the estate of the deceased properly and in accordance with law and to that end among the reliefs sought seeks the removal of the Defendant as the legal personal representative of the estate” [para. 10].
6. The substantive reliefs sought in the special indorsement of claim are as follows:
(1) An order vesting the property situate at 3 Laurel, Hazeldene, Anglesea Road, Ballsbridge, Dublin 4 in the plaintiff pursuant to s.52(4) of the Succession Act 1965;
(2) an order commanding the defendant to lodge in the probate office on oath, a true, full, and perfect inventory and account of the estate of Oliver Sherry deceased, and a true account of the administration thereof pursuant to s.64 of the Succession Act 1965;
(3) an order requiring the defendant to file a Corrective Inland Revenue Affidavit in the Probate Office;
(4) an order for all necessary accounts and inquiries;
(5) an order directing the defendant to complete the administration of the estate within three months;
(6) in the alternative, an order removing the defendant as the legal personal representative of the estate of Oliver Sherry deceased;
(7) if the defendant is removed as the legal personal representative, an order giving the plaintiff liberty to apply for a grant of administration with will annexed pursuant to s.27(4) of the Succession Act 1965…”.
Events prior to the proceedings
7. It appears that the plaintiff became frustrated when, three years after Mr. Sherry’s death, the estate had not been fully administered. He consulted a firm of solicitors, which raised queries with the defendant as to a number of matters pertaining to the estate, and requesting that all funds held by the defendant for the benefit of the plaintiff be transferred to that firm. An amount of €380,000 was transferred by the defendant on 7th February, 2019 to the plaintiff’s solicitors, who continued to press for answers to their various queries regarding the administration of the estate. Due to what those solicitors regarded as a persistent failure to answer the queries, the plaintiff’s solicitors wrote to the defendant on 1st March, 2019, copying the letter by way of complaint to the Law Society of Ireland (“the Law Society”). On being contacted by the Law Society, the defendant, after an initial holding response, wrote by letter of 25th April, 2019, enclosing a number of documents by way of reply to the plaintiff’s queries.
8. These documents included what was referred to as a “Matter Summary”. This comprised a detailed statement setting out the manner in which the defendant had conducted the administration to date. It appeared that there had been issues regarding the will on the part of some members of the deceased’s family. These included the intimation on behalf of a sister of the deceased of a possible challenge to the will on the grounds of undue influence on the part of the plaintiff, which required the defendant to obtain the opinion of counsel. Ultimately, agreement was reached that the family would be satisfied if certain family heirlooms, to which members of the family had laid claim as their property, were returned to them. The plaintiff agreed to this, and this course of action appears to have resolved the family’s issues regarding the will.
9. The “Matter Summary” set out other tasks undertaken by the defendant on which it is not necessary to dwell in any detail. The property had to be secured and some repairs were carried out. The deceased’s affairs were apparently in some disarray, and required various searches, inquiries and valuations to be conducted. Issues arose in relation to the plaintiff’s employment status, and in particular the tax liabilities which might accrue to the estate, as it appeared that no deductions had been made by the deceased for tax, nor had the plaintiff paid any tax in respect of his employment. A firm of accountants was engaged to deal with the situation, and ultimately income tax liabilities and penalties relating to the plaintiff were discharged from partial distributions of the estate to him.
10. The summary refers to various standard tasks performed by the defendant in the administration of the estate. After the extent of the estate had been established, an application for a grant of probate was prepared and made. The grant issued on 23rd February, 2018. It was stated in the summary that the assets of the estate had been gathered in, and the property prepared for sale, although the first sale agreed had fallen through. Various distributions had been made to the plaintiff or on his behalf, which as of the date of the summary, amount to €865,025.58. This included a sum of €380,000 paid to the plaintiff’s solicitors on 7th February, 2019.
11. The plaintiff did not regard the letter of 25th April, 2019 or the attached documentation as satisfactory. By letter of 31st May, 2019, the plaintiff’s solicitor raised further queries in relation to the matters set out in the summary, and “in light of the delay in administering the estate to date”, called upon the defendant to “hand carriage of the Estate to Kent Carty Solicitors [the plaintiff’s solicitors] while you remain as executor in name, available to sign relevant documentation”. The possibility of “a High Court application to remove you as executor” was intimated, as was the possibility that “this may have significant costs consequences for you personally”. The request to “hand carriage of the estate to Kent Carty Solicitors” was reiterated in a letter from that firm of 3rd July, 2019. It does not appear that any response to this request was received, and the present proceedings issued later that month.
12. It is clear from the grounding affidavit that the main complaint of the plaintiff as regards realisation of assets was in relation to the property. It appears that, by January 2019, three sales of the property had been agreed, but none had proceeded. The plaintiff at para. 32 of his grounding affidavit attributes the difficulties to “certain difficulties… in relation to the title of the property… the Defendant has failed to cure the defect in the title and/or reconstruct the title…”, and maintained that this was “frustrating any opportunity for the property to be sold and is causing the estate loss…”. However, in his replying affidavit of 28th November, 2019, the defendant avers as follows: –
“13. -The Applicant entirely omits the complex efforts undertaken by me to ensure that the title was reconstructed and I was in a position to issue contracts to potential purchasers. While the impression is given that virtually nothing transpired during my tenure as executor such a completely distorted narrative ignores the fact that several sales of the property were actually attempted. I say that the real difficulty for potential purchasers transpired to be that certain fire protection defects had been identified by the management company relating to all apartments in the Hazeldene development. At the times of the attempted sales the fact that such defects were in existence was known but the extent of and, in particular, the costs of any necessary remedial work was still unknown. These works have now been completed and I have no doubt that this will enable the property to be sold when it returns to the market. Obviously I am not in control of the market nor the sales process and such a sale is entirely down to Lisneys Auctioneers who were appointed to sell the property”.
The course of the proceedings
13. The plaintiff’s grounding affidavit was sworn on 17th September, 2019, and concluded by alleging that the defendant should be removed from his role on the alleged grounds of delay, a failure to manage and protect the assets of the estate, a failure to provide the necessary accounts and inquiries, what the plaintiff alleged was a breach of trust and fiduciary duty on the part of the defendant in causing the beneficiaries loss, and a failure to respond to inquiries adequately or at all. It was suggested that, due to the defendant’s alleged “…dilatory attitude and the continued failure by him to administer the estate…this matter can now only be resolved with the assistance of this Honourable Court” [para. 41]. The plaintiff alleged that “serious misconduct” [on the part of the defendant] and “serious special circumstances” justified and necessitated the plaintiff’s removal.
14. The defendant replied by an affidavit of 28th November, 2019, and robustly rejected the criticisms made of him. He characterised the application as “grossly premature”, given that the grant of probate had issued less than two years previously, and denied that there had been either delay or prejudice to the plaintiff. In the course of this affidavit, the defendant canvassed in more detail the various issues set out in the “Matter Summary” furnished with his letter of 25th April, 2019 to the plaintiff’s solicitors. The defendant lays some emphasis on the fact that the applicant’s position was now that he requested the property to be transferred to him by a deed of assent. He asserts that the reason this had not been done previously was that the plaintiff had instructed that he wished to have the property sold and the cash value realised. According to the defendant, the transfer of the property to the plaintiff would crystallise a capital acquisitions tax liability; the defendant says that this was pointed out to the plaintiff’s solicitors by a partner in his firm. The solicitors for the plaintiff then confirmed that they required in any event the property to be transferred to their client: as the defendant puts it —
“…it appears that while the Applicant’s solicitors are entirely happy for me to remain as Executor and complete the estate including giving instructions for the sale of various shares, their position is that only their law firm could handle the conveyance of the largest asset in the estate. This is a most unusual position given that their client had instructed us not to vest the property in his name due to the tax consequences of such an action, but now appears to suggest that the most suitable course of action would be to ensure that his newly appointed solicitors have carriage of sale of the asset”. [Para. 15].
15. In the view of the defendant, the purpose of the transfer of the property to the plaintiff – which by this stage has been effected by the defendant – is “to facilitate the Applicant solicitors having carriage of sale of the primary asset within the estate” [para. 25]. The plaintiff on the other hand clearly wished at this stage to take the realisation of the estate’s main asset under his control due to what he considered to be the dilatory approach and failure to deal with queries by the defendant.
16. The parties continued over the course of the proceedings to exchange affidavits setting out their respective criticisms of each other’s positions. Further affidavits in this regard were sworn by the plaintiff on 20th December, 2019 and 7th February, 2020, and by the defendant on 20th January, 2020 and 17th February, 2020. Each side served a notice to cross examine on foot of the other side’s affidavits.
The hearings
17. Due in part to the delays caused by the Covid-19 Pandemic, the matter did not come on for trial until 4th November, 2020. The assent to the transfer of the property was sent by the defendant’s solicitors to the plaintiff’s solicitors on 16th January, 2020. By the end of March 2020, the plaintiff’s solicitors stated the outstanding items in the estate to be a sale of some Bank of Ireland shares, a transfer of Cement Roadstone Holdings plc shares for which the share certificate had been lost, and a “schedule of all dividends received”.
18. When the matter came before this Court on 4th November, 2020, it was accepted that the administration of the estate was almost complete. The defendant proffered an undertaking to complete the administration of the estate within three months, with liberty to apply in the event of a difficulty. This was acceptable to the plaintiff; however, the plaintiff applied for an order for the costs of the proceedings to be made against the defendant personally, i.e. that the defendant would not have the right to an indemnity from the estate in respect of such costs. This application was strenuously contested by the defendant. Both sides proffered detailed written submissions in relation to the issue, which is the subject of the present judgment.
19. The matter came again before the court on 30th April, 2021. Two minor issues remained outstanding, and a number of purely administrative issues. Although the defendant was in breach of his undertaking to complete the administration within three months, the plaintiff did not press the issue, and the parties agreed to put the matter back to 4th June, 2021 in the hope that all outstanding items might be completed. On that date, the parties accepted that the administration was complete, subject to a precautionary liberty to apply for the plaintiff, and asked the court to proceed with its determination of the costs issue.
Legal principles as to costs in probate and administration actions
20. The plaintiff submits that, notwithstanding that these proceedings relate to the administration of an estate, “…and ordinarily would be characterised as an administration suit…” in which costs are usually awarded to the respective parties from the estate of the deceased, the established authorities relating to the issue of costs in probate and testamentary suits – in In bonis Morelli: Vella v Morelli[1968] IR 11 and Elliot v. Stamp[2008] 3 IR 387 – are not applicable to the present matter. Those authorities establish that, for an unsuccessful party in such an action to have his or her costs paid out of the estate, two matters must be established: that there were reasonable grounds for the litigation, and that the litigation was conducted bona fide.
21. The plaintiff’s position is that the present matter is a hostile lis inter partes, rather than involving the usual disputes involved in an administration suit, such as in relation to a testamentary disposition or document. The case was focussed on the defendant’s alleged “failure to administer the estate with due expedience and inter alia an application for his removal, a claim the defendant continues to deny” [plaintiff’s written submissions, 28th October, 2020]. The plaintiff relies on the decision of Herbert J in O’Connor v. Markey[2007] 2 IR 194, and in particular upon the following passage at para. 7 of the court’s judgment:
“By contrast, the instant application bore all the hallmarks of contentious litigation between beneficiaries which did not in any way touch upon the capacity of the testator or the state in which he had left his testamentary papers. The present applicant arose in the course of the administration of the estate, was not a probate action, but neither was it an ordinary administration suit. To all intents and purposes it was a hostile lis inter partes between two beneficiaries under the will. It related to the conduct of the testator’s business by the first defendant while the testator was still alive and to the issue of whether the first defendant was or was not obliged to pay the particular debts as they arose, so that they would not become a burden upon and payable out of the estate on the death of the testator. The special administrator was in reality only a nominal plaintiff to enable the opinion of the court to be obtained by way of a special summons for directions in the course of the administration. The many issues of fact and of law were litigated as a proceeding inter partes between the first defendant and the second defendant on their own evidence, and the evidence of witnesses called by each of them”.
22. The foregoing paragraph is quoted with approval by Laffoy J in Rennick v. Rennick[2012] IEHC 559. The court held in that case that the dispute which was the subject of the litigation was in reality a lis inter partes which warranted “the application of Order 99 of the Rules [of the Superior Courts], which, subject to the overriding discretion of the court, mandates that costs should follow the event” [page 11 of judgment].
23. The plaintiff also relies on the decision of Keane J in Muckian v. Hoey[2017] IEHC 47. This ruling as to costs followed a judgment in the substantive proceedings reported at [2016] IEHC 688, as a result of which the first named respondent was removed as legal personal representative of the estate. It was submitted by the first named respondent that she should be entitled to her costs out of the estate on the basis that no misconduct had been established against her. Keane J did not accept that there was “any absolute or inflexible rule” to this effect; he accepted the principle identified by Herbert J in O’Connor v. Markey and applied by Laffoy J in Rennick that a hostile lis inter partes “…may, depending on all of the circumstances, attract the unvarnished application of the usual rule that costs follow the event” [para. 13]. The court had regard to the findings in the judgment dealing with the substantive matter that there had been “…what is, by any measure, an extraordinary delay in the administration of the deceased’s estate by the first respondent that has not been adequately explained (para. 19), and that the first respondent has failed in her fundamental duties as administratix properly to gather in the property of the estate and properly to account to the beneficiaries of the estate for its assets and liabilities… (para. 27)”. The court held at para. 14 of the judgment that these factors demonstrated “a want of proper capacity on the part of the first respondent to execute the duties of administratix, amounting to a special circumstance warranting her removal from that position, which special circumstance is more evident still when [the factors] are considered in combination (para. 37)”.
24. The court concluded that, in the circumstances, “…to exercise the Court’s discretion to order that the first respondent’s costs of the unsuccessful defence of that application should be borne by the estate (and, thus ultimately by the beneficiaries), rather than by the first respondent, would fly in the face, not only of fundamental reason and common sense, but also of justice” [para. 18]. It seems clear from the judgment of the court that, pursuant to O.99 of the Rules of the Superior Courts, costs would have been awarded against the first named respondent as following the event, although the plaintiff, “…perhaps in the interests of conciliation…”, did not make such an application.
25. The plaintiff also referred to the decision of MacGrath J in Shannon v. Shannon[2019] IEHC 604, a construction suit in which an executor contended unsuccessfully for a certain interpretation of a will against the defendant, a beneficiary of that will. The court in the course of its judgment cited with approval the dicta of Kekewich J in Buckton v. Buckton[1907] 2 Ch 406, in which the court addressed a situation where an application is made by a beneficiary who makes a claim adverse to other beneficiaries, that “…once convinced that I am determining rights between adverse litigants I apply the rule which ought, I think, to be rigidly enforced in adverse litigation, and order the unsuccessful party to pay the costs”. The court emphasised that the “rules in relation to costs, both in O.99 and as discussed and developed in Elliott and O’Connor are designed to achieve a just result”…, and came to the conclusion that “the fairest and most just result” was that there be no order as to costs.
26. While both sides in the present case proffered detailed written submissions to support their respective positions, I did not understand the defendant, in either the oral or written submissions on his behalf, to take serious issue in any substantive respect with the legal position as outlined on behalf of the plaintiff or the principles set out above. It was suggested in the written submissions of the defendant that the contention of the plaintiff “that the matter is a hostile lis inter partes is mistaken and this is a purely administrative action in the estate”. However, no authorities were cited to support this argument, which was not pressed in oral submissions. The submissions on behalf of the defendant were directed more to the facts of the matter than the legal principles; it was not seriously contested that, if the court were satisfied that the present action was what Herbert J termed a “hostile lis inter partes” rather than an administration suit as normally understood, the costs of the matter should be determined under the costs provisions applicable in ss. 168 and 169 of the Legal Services Regulation Act 2015 and the recast O.99 of the Rules of the Superior Courts, rather than pursuant to the principles in Morelli and Elliot. It was of course strongly argued on behalf of the defendant that he had not been deficient in any respect in his administration of the deceased’s estate, much less that his actions constituted “serious misconduct and/or special circumstances” as was suggested by Lynch J in Dunne v. Heffernan[1997] 3 IR 431 would be required for the court to order his removal as executor.
The “event” which costs should follow
27. In Dunne v. Heffernan[1997] 3 IR 431, the Supreme Court (Lynch J) remarked that an order removing an executrix or appointing some other person as administrator with the will annexed
“…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.” [Pages 442 to 443]
28. In the substantive decision in Muckian, Keane J considered it necessary to make an order revoking the grant of administration of the deceased’s estate to the first named respondent, and replacing her with an alternative administrator. He did so on the basis of the following conclusions:
“(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 administratix) 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 administratix, amounting to a special circumstance.”
29. In that case, the deceased died intestate on 13th October, 2003. The first named respondent was granted letters of administration on 22nd May, 2009, some five and a half years after his death. Two daughters initiated the proceedings against the first named respondent, the widow of the deceased. The grounding affidavit of the first named plaintiff was sworn on 17th July, 2015, and it was alleged that the first named respondent had been guilty of excessive delay in the administration of the estate, and had misunderstood her obligations as administratix by, inter alia, transferring lands without gathering in the consideration for those lands to the estate, sending a letter on 14th December, 2004 to the Department of Agriculture claiming payments under a scheme operated by that department which misrepresented the extent of the deceased’s interest in his late father’s estate, and certain other serious administrative errors.
30. The plaintiff in the present case submitted that the defendant had been responsible for the following matters, which it was contended amounted cumulatively to “serious misconduct and special circumstances” which warranted the defendant’s removal:
(1) Delay: The plaintiff submitted that, the deceased having died in 2015, the administration of the estate was “ongoing and incomplete at the time the proceedings issued in July 2019”…. Reference was made to the” executor’s year” a reference to s.62 of the Succession Act 1965, which provides that:
“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 before his death.”
(2) Failure to manage and protect the assets of the estate: in this regard, the plaintiff relies particularly on what he contends is the failure of the plaintiff to correct the title of the property, or to sell and/or arrange the appropriate registration of shares which, it is alleged, caused the estate loss as a result of the devaluation of the shares.
(3) Failure to provide the necessary accounts and inquiries: the plaintiff concedes that ‘some indication or type of accounts’ were furnished, but that these could not be interpreted by the plaintiff, and that an explanation for certain of the figures was ‘not forthcoming’.
(4) Breach of trust and breach of fiduciary duty: In this regard, the plaintiff’s written submissions state as follows:
‘the Defendant is a trustee of the estate (s.10 of the Succession Act 1965) and has a fiduciary duty as an executor, and particularly as a professional solicitor executor, not to cause the beneficiary loss. The administration costs incurred to date are of great concern, notwithstanding the losses that might accrue due to the Defendant’s failure to manage and protect the assets of the estate.’
(5) Failure to respond to inquiries: the plaintiff complains of a general failure of the defendant to respond to queries for information, and what is alleged to be a dilatory attitude in responding to the Law Society when contacted.
31. It is fair to say that the defendant, over the course of his three affidavits and both oral and written submissions on his behalf, disputes utterly that his administration of the estate has been in any respect deficient, although as written submissions were not delivered in sequence, no direct response to the matters set out above in the plaintiff’s submissions were furnished.
The circumstances of the appointment
32. The plaintiff’s position is, then, that the court should award costs on the basis that they should follow the event, and that, despite the fact that the plaintiff did not ultimately proceed with the matter and seek substantive relief, the proceedings have been instrumental in forcing the defendant to complete the administration of the estate, and that therefore the costs of the proceedings should be awarded against the defendant. In his affidavit of 20th December, 2019, the plaintiff summarised his position as follows: –
“25. Even if all of the outstanding issues were to be addressed presently, these proceedings were necessary in order to motivate the Defendant and his firm Kenny Solicitors to address their minds to the issues raised and engage with my legal advisers in a meaningful way. Furthermore, if the outstanding issues were to be resolved before this matter is determined by this Honourable Court, the final issue of the costs of these proceedings would fall to be considered. I say that the costs of these proceedings should not be borne by the estate and should not be classed as administration costs, as to do so would unfairly and unjustly burden the residuary beneficiary, that is your deponent. The delay in administering the estate is fully attributable to the Defendant and your deponent as a residuary beneficiary should not be unfairly penalised if the costs in resolving this matter are to be awarded from the estate of the Deceased. The Defendant was afforded ample time and an opportunity to resolve this matter without the necessity of issuing proceedings, yet he chose not to. The proceedings herein were wholly necessary in all of the circumstances, and in particular to get the administration of the estate of the Deceased almost to completion.”
33. The defendant on the other hand characterises the proceedings and the reliefs sought as “ill-advised and premature”, and on affidavit refutes each of the contentions of the plaintiff. The defendant’s position is that his costs of defending these proceedings should be “costs in the estate”; if the matter is indeed a “hostile lis inter partes” governed by the usual costs provisions and litigation, and the costs issue were resolved in favour of the defendant, it might be that the appropriate order would simply be an order for costs against the plaintiff, rather than an order that the costs of the action be regarded in the same way as administration expenses which the defendant, in the usual way, would be entitled to recover from the estate. The distinction makes little practical difference in the present case, as the plaintiff is the only beneficiary of the residue of the estate.
34. In considering whether costs should be awarded against the defendant, it is necessary to consider the terms of his appointment as executor. In addition to the appointment referred at at para. 1 of this judgment, the will – which is a straightforward and uncomplicated document – contains inter alia, the following provisions:
“2. My trustee [i.e. executor] shall be entitled to charge professional fees for work done by him or it or its members in connection with my estate whether or not the work is of a professional nature on the same basis as if he or the said firm were not my executors and Trustees but employed to carry out work on their behalf…
6. ANY of my Trustees who are engaged in a profession shall be entitled to be paid fees for work done by him or his firm on the same basis as if he were not one of my Trustees but employed to act on behalf of my Trustees.
7. I DECLARE that no Trustee of this my will shall be liable for any loss not attributable to the Trustee’s own dishonesty or to the wilful commission of the Trustees of any act known to be a breach of trust.”
35. The defendant was the solicitor who represented the deceased for a number of years. He was the choice of the deceased to act as executor, and in the six years between the execution of the will and the death of the deceased, that choice remained unchanged. The deceased was aware that the defendant was a practising solicitor, and appears to have been of the view that such a person, rather than a relative or friend, would be suitable for the task of administering his estate, particularly given that he stipulated that, should the defendant be unable or unwilling to act, the partners of the defendant’s present or future firm should act in his stead.
36. In the circumstances, it is reasonable to infer that the plaintiff would have been of the view that the defendant is a solicitor whose knowledge, experience and acumen made him suitable as an executor, notwithstanding that such an appointment would inevitably be more costly than if the work were done by a relative or friend. He would also have known that a busy solicitor with many clients would not be in a position to devote exclusive attention to administering his estate, and that the task of administration would be one which would be carried out over a prolonged period, the length of which would depend on the complexity of the issues which arose in the estate. As against that, it is also fair to presume that the deceased appointed the defendant on the basis that there would be no undue delay in administering the estate, and that appropriate expedition would be exercised to ensure that the deceased’s wishes were carried out in a timely manner.
The approach of the plaintiff and his solicitors
37. The grant of probate was issued on 23rd February, 2018. In his grounding affidavit, the plaintiff avers that he “became frustrated with the delay in the administration of the estate of the Deceased. To that end, I met and engaged with Kent Carty Solicitors in or about December 2018” [para. 13]. The first letter from the plaintiff’s solicitors intimating dissatisfaction was on 17th December, 2018, and the complaint to the Law Society was made on 1st March, 2019.
38. According to his own account, the defendant had, after the grant of probate, commenced gathering in funds from bank accounts and various life policies. The first substantial funds were received by him on 23rd March, 2018 and 3rd April, 2018. On 10th April, 2018, at the plaintiff’s request he paid a sum of €50,000 to the plaintiff’s partner, Ms. Tanya McConnon, who received a further €17,000 in the course of 2018. The defendant also arranged for the discharge in June 2018 of historic tax liabilities of the plaintiff, calculated by a firm of accountants engaged by the defendant, in the sum of €81,305, together with interest of approximately €6,590. A sum of €320,130 appears to have been paid out to the plaintiff on 19th November, 2018, and a further sum of €380,000 paid to the plaintiff’s solicitors on 7th February, 2019. A distribution account compiled by the defendant on 14th October, 2019 shows that a total of €870,007.08 had by that stage been discharged by the defendant either to the plaintiff or in discharge of his liabilities.
39. The defendant’s position as regards the reference of the matter by the plaintiff’s solicitors to the Law Society is that this complaint was simply not pursued, the defendant having given considerable detail and documentation in relation to his conduct of the executorship with his letter of 25th April, 2019 to the plaintiff’s solicitors. This characterisation is hotly disputed by the plaintiff, who contends that the Law Society indicated by letter of 9th July, 2019 – which letter is not exhibited to the plaintiff’s affidavits – that its file must be closed if litigation was forthcoming, and that it could not continue to investigate a complaint where to do so would interfere with court proceedings.
40. While the plaintiff has averred as to his frustration with the pace of the administration, which caused him to consult his present solicitors, there is little or no evidence of any written or formal complaint by him until the involvement by him of solicitors on his behalf in December 2018. He clearly had contact with the defendant up to that point and issued instructions to him subsequent to the grant of probate in February 2018 in relation to a number of matters, including preparation of the property for sale and marketing, and the establishment and discharge of his historical tax liabilities. He received very substantial disbursements from the defendant, and received a further sum of €380,000 in early February 2019.
41. The approach taken by the plaintiff’s solicitors after their engagement in December 2018 was decidedly aggressive. The letters of 17th December, 2018 and 1st March, 2019 – the latter of which referred the matter to the “Law Society Complaints and Client Relations Committee” – in particular set out queries and complaints that the plaintiff had not yet received the full benefit of the estate. The letter of 25th April, 2019 from the defendant to the plaintiff’s solicitors, which gave a considerable amount of documentation and information in relation to the realisation of the estate, did not assuage the concerns of the plaintiff’s solicitors, who wrote a lengthy letter on 31st May, 2019 addressing matters arising out of the “Matter Summary”, and calling on the defendant to “hand carriage of the Estate to Kent Carty Solicitors, while you remain as executor in name, available to sign relevant documentation…”, and intimating, in the event that this proposal was not acceptable, the possibility of an application to remove the defendant as executor. When no response deemed satisfactory was received from the defendant, the plaintiff after a further letter from his solicitors on 3rd July, 2019 initiated the present proceedings on 26th July, 2019.
The approach of the court
42. The test for removal of an executor is as set out by the Supreme Court in Dunne v. Heffernan, i.e. that there must be serious misconduct and/or special serious special circumstances to justify such a “drastic step”. The plaintiff accepts that this is the appropriate test by specifically averring at para. 41 of his grounding affidavit that the issues referred to by him in the affidavit satisfied this test and “justify and necessitate the Defendant’s removal”.
43. It seems to me that there are two issues which the court must resolve: firstly, whether the proceedings were justified, having regard to the reliefs which the plaintiffs sought; and secondly, whether the proceedings were instrumental in causing matters to be resolved to the satisfaction of the plaintiff, at least to the extent where it was deemed unnecessary to press ahead with the proceedings.
44. In relation to the first issue, the conduct of the defendant of which the plaintiff complains must be examined. However, the context must be borne in mind. The deceased had selected as executor a busy solicitor who would deal with the matter alone along with all the other matters demanding his professional attention. The defendant has set out in detail the matters which held up progress in administering the estate. Most notably, these included putting order on the somewhat disorganised affairs of the deceased, and in particular identifying and obtaining valuations of the various assets of the deceased; arranging for the tax liabilities arising out of the plaintiff’s employment to be quantified and discharged, in circumstances where the plaintiff appears to have been unable to supply much in the way of relevant documentation; the preparation of the property for sale; and dealing with the rather delicate situation whereby relatives of the deceased were intimating a possible challenge to the will.
45. It does appear that, once the grant of probate issued, the defendant was in a position to make disbursements from the estate to the plaintiff and in discharge of his tax liabilities, and did so. By February 2019, very substantial payments had been made to or on behalf of the plaintiff. Notwithstanding this, a complaint was made to the Law Society on 1st March, 2019, with the defendant responding with detailed information and documentation on 25th April, 2019.
46. Section 62 of the Succession Act 1965, quoted above, states that proceedings against the personal representatives may not be brought without leave of the court before the expiration of one year from the death of the deceased. It is very clear that this subsection does not impose an obligation on a personal representative to complete the realisation of the estate within a year. He must however distribute the estate as soon after the death of the deceased “as is reasonably practicable”. Whether or not a personal representative has done that in a given case is a question of fact, determined by the context and the particular circumstances of the case.
47. In the present case, it is clear that the defendant consulted with the plaintiff as to the realisation of the estate, and has carried out duties as executor from the time of the deceased’s death until the present day. The issue between the parties is whether he has been assiduous enough in the discharge of his duties. The defendant’s evidence is that he has done everything that could have been expected of him. Although the plaintiff is not a solicitor, it is clear that he, and the solicitors who advise him, are of the view that the defendant has been dilatory in exercising his role as executor.
48. What is missing from this case, in circumstances where the court is called upon to decide whether or not costs should be awarded to a plaintiff whose case was that the removal by this Court of the defendant was justified, is any independent expert evidence which could establish that the amount of time taken by the defendant, or the manner in which he conducted the executorship, were such as to justify the reliefs sought in the special endorsement of claim. There may be circumstances in which such evidence is hardly necessary: the delays and lack of adherence to proper procedures in Muckian were such that the court had no difficulty in finding that the first named respondent, who was not a solicitor, should be removed.
49. However, the circumstances of the present case are very different. There does not appear to have been much or any complaint by the plaintiff up the point in February 2018 when the grant of probate issued, after which numerous disbursements were made to him; serious pressure was however exerted on the defendant after December 2018. The Law Society seems to have backed away from the matter after the defendant accounted for his executorship on 25th April, 2019. The proceedings issued at the end of July 2019, and the grounding affidavit of 17th September, 2019 continued to contend that “the cumulative effect of the issues raised in this affidavit amount to serious misconduct and serious special circumstances which would justify and necessitate the defendant’s removal” [para. 41]. This was a very serious allegation, and an imputation on the defendant’s professional reputation which he was entitled to – and did – take very seriously.
50. In this regard, it was suggested by the plaintiff, almost in passing, that he had suffered loss as a result of the way in which the estate was administered. No evidence was presented to back up this allegation. While the three abortive sales of the property did involve successive decreases in price, this alone does not establish a loss, much less that it was a loss for which the defendant was culpable.
Conclusion
51. In the absence of any expert evidence, the court can only examine the facts and circumstances in the round to decide whether the proceedings, and the manner in which they were prosecuted, were the “event” which caused the defendant to perform his duties and complete his role as executor, thus precluding the need to press on with the matter.
52. Shortly after the proceedings had commenced, the plaintiff, on the advice of his new solicitors, instructed that the property be transferred to him by means of an Assent, thereby withdrawing his instruction that the property be sold. An agreement to this effect was concluded in November 2019. After an administrative hiccup which caused brief delay, the defendant complied with this wish. There remained some minor realisations of prize bonds and shares, which were in train in January 2020 when the defendant swore his second affidavit, and which have now been completed.
53. It is clear that the administration of the estate has not taken place as quickly as the plaintiff would have liked, and it may be that the defendant could on occasion have responded to queries more quickly, or acted more expeditiously. However, no doubt that could be said of almost any administration of an estate, the beneficiary of which is waiting impatiently for his distribution. In the present case, the defendant carried out the office to which he was appointed by the deceased’s will. There is no independent evidence that he did so at a pace that was at odds with his duty under s.62 of the Succession Act 1965 to distribute the estate “as soon…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…”. Likewise, there is no evidence that he caused loss to the estate in the course of his duties, or that he is responsible for the failure of successive sales of the property. Even if a court were to presume culpability on his part in this regard, there is no evidence as to the quantum of any alleged loss.
54. The plaintiff made a complaint to the Law Society, and raised various queries. The defendant supplied various items of documentation and a narrative justifying his position. The plaintiff’s response was to issue further queries, and ultimately to go ahead with proceedings due to a perceived failure on the part of the defendant to answer these latter queries. Given that there was an existing complaint to the Law Society – which would normally cause a practising solicitor to take very seriously the issue of whether or not he was proceeding appropriately and with due expedition – one wonders why the plaintiff did not try to advance the matter by these means. Effectively, the complaint process was abandoned by the plaintiff in favour of proceedings.
55. In all the circumstances, it does not seem to me that the proceedings were the appropriate means of expediting an administration which, subject to an agreement regarding the transfer of the property which was concluded shortly after the proceedings were initiated, had been largely completed. I do not think, in all the circumstances, that the proceedings or the way in which they were prosecuted can be regarded as “the event” which costs must follow. Neither do I consider that there is sufficient evidence before me to justify disallowing portion of the defendant’s costs. I am mindful that para. 7 of the will itself provides that the executor was not to be liable “for any loss not attributable to the [executor’s] own dishonesty or to the wilful commission by the [executors] of any act known to be a breach of trust”. There is no suggestion by the plaintiff that the defendant has been in any way dishonest. Neither do I think that the plaintiff has established any breach of trust on the part of the defendant.
56. I can see no reason why the defendant should not be entitled to his costs of the proceedings, whether in the proceedings themselves – which the plaintiff has effectively withdrawn – or as his necessary fees and costs to which he would normally be entitled in the course of the administration. The parties should liaise to agree appropriate orders; if this is not possible, each party should make brief written submissions – no more than 500 words – as to the appropriate orders within fourteen days after delivery of this judgment, after which I will make orders without further reference to the parties.
Kathleen Bernadette Smith v Philip Smith and Niamh Smith
2016 270 SP
High Court
27 July 2018
unreported
[2018] IEHC 525
Ms. Justice Costello
July 27, 2018
In the Matter of the Estate of Turlough Smith Deceased Late of Seeorum, Beglieve, Bailieborough in the County of Cavan
JUDGMENT
1. Turlough Smith of Seeorum, Bailieboro, County Cavan executed his last will and testament on the 22nd of April, 2014. He appointed the respondent, his nephew and niece, to be his executor.
2. By his last will and testament he devised and bequeathed:
“1. My farm of land in Tunnyduff known as the “home farm” together with the buildings thereon and my farm in Seeorum known as “Rooneys Farm” to said executor Philip Smith, son of my brother Felim Smith for his own use absolutely.
2. My dwelling house at Seeorum aforesaid to my wife Bernadette Smith for the term of her natural lifetime and after her death to my nephew Michael Smith, son of my said brother Felim Smith for his own use absolutely.
3. The remainder of my lands at Seeorum which adjoin my dwelling house to my said nephew Michael Smith for his own use absolutely.”
After certain pecuniary requests to family members and for masses for the repose of his soul and the souls of his deceased parents, relatives and friends, the residue of the estate was left to the second named defendant.
3. The deceased died on the 9th October, 2014 and a grant of probate issues to the respondents on the 28th September, 2016. They each, as is required of all persons taking out a grant of probate, swore faithfully to administer the estate in accordance with law.
4. The applicant is the widow of the deceased. On the 5th February, 2015 her solicitors wrote to the solicitors for the respondents notifying them that she was invoking her right pursuant to s. 111 and 56 of the Succession Act, 1960 (“the Act”) to claim her legal right share of one half of the estate of the deceased and to claim the deceased’s share in the family home in part satisfaction of her claim.
5. She issued a special summons on the 1st July, 2016 seeking a declaration that she is entitled to a legal right share of one half of the estate of the deceased and to the appropriation of the family home at Seeorum, Beglieve, Bailieboro in the County of Cavan and the household chattels contained therein and if necessary an order directing the respondents and one or other of them to extract a grant of probate of the estate of the deceased. It should be noted that there were no children of the marriage and the deceased died without issue.
6. The respondents resist her claim to the legal right share and to appropriate the family home on the grounds of her actual and/or constructive desertion of the deceased within the meaning of s. 120 of the Act. The second named respondent swore three affidavits in opposition to the applicant’s claim on the 14th December, 2016, 4th April, 2017 and 12th July, 2017.
7. One of the issues raised by the applicant in her affidavits was the status of payments made by the deceased during his lifetime to members of his family. She refers to a withdrawal of €70,000 by the deceased in November, 2013 where he was brought to his bank by his three brothers, Dessie, Brian and Michael Smith. This sum appears as a debt due by Brian Smith, to the estate of the deceased in the Inland Revenue affidavit submitted by the respondents.
8. In February, 2012 the deceased paid €20,000 to the first named respondent. She says this was a loan and that it should be repaid to the benefit of the estate. The first named respondent says that this was a gift for the benefit of his mother, the deceased’s sister. She had suffered a stroke and the deceased wished to pay for the works necessary to adapt her house to facilitate her continued residence at home. The applicant also alleges that the deceased came under the “the increasing dominance and influence of the respondents and in particular the second named respondent” at a time when the deceased was in his late seventies and in deteriorating health.
9. The second named respondent made no mention of any gift by the deceased to her in any of her three affidavits. She swore a fourth affidavit on the 2nd November, 2017 to ground her motion seeking an order pursuant to s. 26 (2) of the Act revoking, cancelling or recalling the grant of probate issued inter alia to her on the 28th September, 2016 and an order deleting her from the title of the proceedings.
10. In her affidavit of the 2nd November,2017 she avers that approximately three months prior to the death of the deceased in or about July, 2014 the deceased gave her a cheque in the sum of €66,000 in respect of his natural love and affection and to cover her out of pocket expenses in caring for him over the years 2008 to 2014.
11. Her affidavit continues:
8. I say that my solicitor and counsel have advised that the said payments might be regarded, and be so portrayed erroneously and falsely by the applicant as aforesaid, as being made with the purpose of substantially diminishing her legal right share in the deceased’s estate pursuant to s. 121 of the Act of 1965.
9. I say that the same is not and could not be a true interpretation of the payment whose purposes (as deposed to herein) was to express the deceased’s natural love and affection for your deponent and to thank and reimburse her for her care of him in his later years….
11. I say that, notwithstanding the foregoing averments in particular concerning the reasons for the payment as aforesaid to her and that the fact that she is not guilty of any wrongdoing, your deponent feels conflicted in the matter and does not consider that she can execute her office of executrix fully and properly.
13. I say that the within application is made with the knowledge and consent of the respondent estate herein. Same is deposed to in an affidavit sworn on the 31st October, 2017 by the other co-executor, the first named respondent. The first named respondent also deposes herein that he is willing and able to continue with the administration of the respondent estate as a sole executor.”
12. The first named respondent swore an affidavit in support of the application of the second named respondent. He said that he only became aware of the inter vivos gift from the deceased to the second named respondent in the total amount of €66,000 “recently and a considerable time after your deponent took up the office of the deceased’s estate.” He confirmed that he was ready, willing and able to act as sole executor of the estate and that if the court made the order sought, as sole remaining executor;
“I shall carry out my duties as executor to the best of my abilities and, in that connection, shall seek vigorously to use all lawful means to gather in all monies properly due and owing to the deceased’s estate as same become known to me.”
13. In reply to these affidavits the applicant said that the deceased came under the control and day to day management of the second named respondent “and in particular was under the control, management and supervision of [second named respondent] at a time of the purported gift or transfer of the sum of €66,000 and at a time when my late husband was very ill”. She is critical of the fact that there was no attempt to indicate how the sum of €66,000 was arrived at and no attempt was made to measure or vouch the alleged expenditure. She said that the second named respondent “has taken an active and forceful participation and involvement in and about the administration of the estate of my late husband”. She complains that there was a failure by the second named respondent to make full and accurate disclosure of relevant facts and information in relation to the estate. At par. 13 of the affidavit she stated:-
“…..the said Niamh Smith knew or ought reasonably to have known that there was an actual/and/or potential conflict of interest in her capacity as a named executor and one who had taken out a grant of probate to the estate of my late husband.”
She alleges that the second named respondent wrongfully collected her pension as well as the deceased’s state pension during his last illness and did not reimburse the applicant in respect of the portion of the pension that was due to her and she alleges that the second named respondent collected the deceased’s pension for six weeks following his death.
14. The second named respondent replied to the affidavit of the applicant and disputed the fact that she had in any way acted incorrectly. She exhibited a note of the expenses making up the €66,000 and she said that as soon as she notified her solicitors of the payment she was Immediately advised that disclosure of the payment should be made to the applicant and that an application should be made to the court to relinquish her role as executrix. She accepted that advice and that was why she was bringing the motion before the court. She pointed to instructions given by the deceased to his solicitor in the months before his death to execute a new will giving the second named respondent a substantial bequest. The deceased did not execute a later will based on these instructions.
Discussion
15. An executor has a duty to administer the estate of the deceased in accordance with law. He or she has a duty to ascertain and gather in the assets of the estate including any choses in action. If the deceased during his lifetime disposed of property or made payments which were liable to be set aside on equitable grounds these are choses in action and assets of the estate. It is the duty of an executor to investigate dispositions which appear out of the ordinary and to call for an explanation. Frequently a satisfactory explanation will be forthcoming and the former asset of the deceased clearly is not an asset of the estate. In those circumstances, the executor is not required to take any further steps in relation to the disposition or payment. If the executor has insufficient information or is not satisfied with the explanation furnished to him, the executor may apply to court on notice for directions in relation to the investigation or further pursuit of potential assets of the estate.
16. The court has power to revoke a grant of probate in appropriate circumstances. Section 26 of the Act provides:-
“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.”
17. In Flood v. Flood [1992] 2. I.R. 234 Macken J. had to consider whether it was appropriate to remove the defendant as executor of the estate of his late father. There was a dispute as to the nature of a significant transaction between the defendant and the deceased. The defendant said the payment was a gift, not a loan and it was not money recoverable by the estate at ll. Macken J. was of the view that there was 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 deceased. The defendant clearly stated that he did not intend to return the monies to the estate and continued to claim that the payment was a gift. She said that on the facts there was a complete conflict between his role as an executor, since as such executor he had no intention of ensuring the sums were returned to the estate, and his role as possible debtor to the estate. She went on to consider whether, even accepted that there was a conflict, it would nevertheless not be appropriate to appoint an alternative person to administer the estate. At pp. 24 -25 of the report she held:
“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 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 s. 26 (2) of the Succession Act 1965, and appoint an alternative to the defendant, pursuant to s. 27(4) of that Act.
18. In Dunne v. Dunne [2016] IECA 269 the plaintiff’s applied for an order revoking the grant of administration de bonis non by which the defendant became the legal personal representative of the un-administered estate of their late father and a declaration that the defendant was in conflict in his role as legal personal representative of the estate of the deceased. The plaintiffs claimed that they were each entitled to a 1/42nd share in land comprised in their father’s estate. The defendant pleaded in his defence that their claim was statute barred under s. 45 of The Statute of Limitations, 1957 (as substituted by s. 126 of the Succession Act, 1965) and/or that since both the defendant and his mother, Eileen Dunne, until her death in 2010 farmed the lands in question without interruption since the death of their father, the defendant and his mother acquired a possessory title as against the plaintiffs under s. 125 of the Succession Act, 1965 and accordingly that any claim they would have to a share in the lands arising from the intestacy of their father had been lost. Peart J. pointed out that there was a legal issue which would have to be determined in the administration of the estate whether or not the plaintiffs’ title to the land had been extinguished by operation of law. At para 44 of the judgment he held:
“There are many and various ways in which a legal issue may arise for determination during the course of an administration, as indeed the various cases to which the court has been referred during submissions demonstrate. There is no hard and fast rule as to how each must be dealt with. But even where the legal personal representative stands to gain depending on how the issue is determined, and this will occur quite frequently where the administrator will often be a family member, it is not in every case where such an issue arises that it will be necessary that he/she be replaced, even though it is easy to characterise that situation as one giving rise to a conflict of interest or even a potential conflict of interest. In my view, absent some serious misconduct (not alleged in the present case) the conflict must be one which has the capacity to hinder or prevent the proper and fair determination of the issue that has arisen. One could describe this as an operative conflict — in other words it is a conflict which operates unfairly against the interests of another party who is therefore at a meaningful or significant disadvantage or prejudice in the resolution of the issue, and where the appointment of another representative would remove that disadvantage or prejudice.
19. Given the particular issue in Dunne, a court hearing would be required in order to ascertain whether or not the defendant had barred the title of his brothers and sisters to the lands. At para. 49 Peart J. said “In reality nothing will have been gained by the replacement of the defendant as far as the determination of these issues is concerned” as the same evidence will have to be heard and the issue will have to be determined by a court. He emphasised that it would be a matter for the court to ensure that a fair hearing takes places for all concerned. He also emphasised the fact that one reason why a legal personal representative should not be replaced unless it is necessary, is that replacing a personal representative usually imposes an extra level of expense upon the estate. For these reasons the Court of Appeal refused to revoke the grant to the defendant.
Application of the law to the facts in this case
20. In this case there was a substantial payment by the deceased to the second named respondent shortly before his death. He was in poor health and had been discharged from hospital to her home, and not his family home. The payment, on her evidence, was to discharge expenses she had incurred on his behalf during the preceding six years and in respect of natural love and affection. In the circumstances, the payment warranted an investigation. She should at least have been called upon by the first named respondent to explain the payment. She says the payment was made by cheque therefor the payment should have been apparent from the bank statements of the deceased. It is not clear why the first named respondent was unaware of the payment until October, 2017. Had the second named respondent been the sole executrix appointed by the will, she would have been aware to investigate the payment to herself as part of the due administration of the estate.
21. However, the first named respondent was named as executor. He will continue in that role and has said that he will investigate and, if necessary, recover monies paid by the deceased to the second named respondent for the benefit of the estate. Thus, the removal of the second named respondent as executrix will not involve the estate in an extra layer of expense. Further, the estate will still be administered by the executor chosen by the deceased in his will.
22. There is a conflict between the second named defendant’s role as executrix and her role as a possible debtor of the estate similar to that in Flood’s case. Further, it is clear that she will not take any steps to investigate herself or return the monies to the estate.
23. Contrary to the situation in Dunne’s case, where the matter would have to be determined by a court whoever acted on behalf of the estate, it is possible in this case that there may be no claim by the estate to the return of the €66,000 or any part of it by the second named respondent. However, if she remains as executrix she would be obliged to bring an application for directions to the court in the circumstances. On the other hand, if the first named respondent duly investigates the circumstances of the payment and concludes that there is no basis for the recovery of the monies for the benefit of the estate, then he is in a position independently to make the decision, and thus save the estate the expense of an application to court. On the other hand, if he is not so satisfied, then he will be in a position to bring an application to court for directions.
24. In my opinion it is not necessary to remove the second named respondent in order to resolve the issue for determination in these proceedings whether the applicant is entitled to exercise rights under ss. 111 and 56 of the Act. The issue of the payments by the deceased to the second named respondent is not relevant to the determination of this issue. If the point had been raised by the appellant in these proceedings I would have refused the relief.
25. However, it seems to me that it is necessary to remove the second named respondent in order properly to administer the estate for the reasons I have set out above. She says that she has not been guilty of any serious misconduct. Certainly it has not established or even seriously alleged that the second named respondent has been guilty of serious misconduct in relation to the administration of the estate despite the complaints raised by the applicant in her affidavits. The issue of the conduct of the second named respondent has not been fully presented to this court and, in view of the potential future application in relation to this matter, I refrain from making any conclusion one way or the other in relation to her conduct.
26. However, the court cannot ignore her averment at para. 11 of her affidavit of the 2nd November, 2017 that, notwithstanding the fact that she has not been guilty of any wrongdoing, she herself feels conflicted in the matter and does not consider that she can execute her office of executrix fully and properly. This averment was made once she had obtained advices from solicitors and counsel and she herself brought the application to court.
27. The test for the court in an application of this nature is whether there was serious special circumstances such that it is necessary to remove an executrix to when a grant of probate has issued in order to enable the estate to be administered appropriately. At the end of the day the public interest is to ensure that estates are properly administered in accordance with law. In this case this requires that there be an appropriate enquiry into the potential claims to recover monies for the benefit of the estate. It is preferable that the donee of the monies should not conduct the investigation.
28. For these reasons I revoke the grant of probate issued to the first and second named respondents on the 28th September, 2016 pursuant to s. 26 (2) of the Succession Act, 1965 and I direct that a grant of probate should issue to the first named respondent pursuant to s. 27 (4) of the Succession Act, 1965. The special summons proceedings will require to be reconstituted accordingly. I will hear the parties further on the form of order to issue.