Rights of Residence
Cases
Bank of Ireland v Smyth
[1993] 2 IR 102; [1993] ILRM 790 Geoghegan J
This is a claim for possession by the plaintiff of the house and lands comprised in numbers 1, 2 and 3 of Folio 9173F of the Register of Freeholders, County Tipperary, pursuant to s. 62(7) of the Registration of Title Act 1964. The plaintiff is registered as owner of a charge purported to have been created by instrument of charge. The first named defendant is the registered owner of the property and the second named defendant is his wife.
The defendants between them have defended this action on a number of quite separate grounds of defence. Three of these grounds were rejected by this Court when they were raised on an application for a non-suit at the end of the plaintiff’s case. The first was that there was non-compliance with O. 9, r. 9 of the Rules of the Superior Courts in that at the time the proceedings were instituted the first named defendant’s mother was allegedly in possession or in receipt of rents and profits within the meaning of the rule because she enjoyed a right of residence and a right of support charged on the property. I ruled against the first named defendant on the grounds that:
(a) Having regard to s. 81 of the Registration of Title Act 1964, the mother’s right of residence was a lien for money’s worth. The entitlement to that right or to the right of support did not constitute her a person in possession or in receipt of rents and profits within the meaning of the rule. As to whether a county registrar executing an order for possession could require the mother, if she were still alive, to vacate is quite another matter and did not fall to be determined in this action.
(b) The mother is, at any rate, now dead. I took the view that even if the mother ought to have been served with the summons under the rules, I should not dismiss the action for failure to do so, but on the contrary should dispense with the requirement having regard to the fact that she is now deceased. If and insofar as service on the mother was required therefore I dispensed with that requirement.
The second ground of application for non-suit was a related ground. It was submitted that the action ought to be dismissed or struck out for failure to comply with O. 9, r. 14 of the Rules of the Superior Courts. I considered that having regard to paragraph 10 of the first affidavit of Mr David Dowley, manager of the relevant branch of the plaintiff bank, there was sufficient compliance with the rule. I also took the view that even if there was not strict compliance nobody was prejudiced and that it would be wrong to non-suit the plaintiff on this account.
The third ground of application for non-suit was that the evidence seemed to indicate that the consent of the second named defendant to the charge under the Family Home Protection Act 1976 was signed after the instrument of charge had been signed by the first named defendant. However, when on my request Mr Dowley, the manager at the time of the transaction was recalled, he stated that he could not really remember which document was signed first but that he was satisfied he would have complied with the guidelines which had come from headquarters and which had been put in evidence. I refused the non-suit on the grounds that this defence had not been pleaded. Before doing so, I indicated that I would favourably entertain an application for an adjournment by the second named defendant to amend her defence, provided that her counsel could assure me that her client would be testifying that she signed the consent after the *793 husband signed the charge. The invitation was not taken up. Even if the absence of prior consent had been pleaded, I would take the view that, as a matter of reasonable inference from the evidence, the instrument of charge could not have been treated as having been unconditionally signed, sealed and delivered by the first named defendant prior to the signature of his wife on the form of consent under the Family Home Protection Act 1976. Pending the wife’s signature, the deed of charge would have been considered as signed and sealed but not yet delivered or alternatively delivered as an escrow. This view is in line with the judgment of O’Hanlon J in Bank of Ireland v Hanrahan (High Court, 1985 No. 1000Sp, 10 February 1987) where in the analogous situation of an equitable mortgage by deposit of title deeds, the learned judge decided that even though the document had been handed to the bank prior to the signing of the spouse’s consent, the mortgage was valid as not having been intended to take effect until the consent was signed.
Following on the refusal of the non-suit the only witness who gave evidence was the second named defendant. At the close of the defendants’ case two substantive grounds of defence were argued. The first was that the consent of the second named defendant was not a true consent in that she was not advised to obtain independent legal advice and that she did not have a proper understanding of what she was signing. It was submitted that the charge was void, both because on the evidence the plea of non est factum in relation to the consent had been sustained and because in signing the consent, the second named defendant was allegedly entering into an improvident transaction without the benefit of independent legal advice and without a proper understanding of the transaction involved.
The second substantive ground of defence was based on the judgment of Denham J in First National Building Society v Ring [1992] 1 IR 375, a case involving the exercise of discretion under s. 4 of the Partition Act 1868. By analogy with Denham J’s interpretation of the section in the Partition Act, it has been argued that upon the wording of s. 62(7) of the Registration of Title Act 1964, I have a discretion as to whether I order possession in this case or not. I will now discuss each of these substantive defences separately.
To determine the consent issue it is necessary to analyse carefully the provisions of s. 3 of the Family Home Protection Act 1976. S. 3, subject to four statutory exceptions, renders void a purported conveyance by a spouse of any interest in the family home, unless either there is a prior consent in writing by the other spouse or a court order dispensing with such consent. Of the four statutory exceptions, the only one which would be relevant to this case is the exception under subs. (3)(a) of a conveyance to a purchaser for full value. ‘Conveyance’ is defined in s. 1 of the Act as including (inter alia) a ‘mortgage’. ‘Mortgage’ is in turn defined as including (inter alia) ‘a charge on registered land’. Accordingly the charge in this case is a ‘conveyance’ within the meaning *794 of the 1976 Act.
The expression ‘full value’ is defined in subs. (5) as meaning ‘such value as amounts or approximates to the value of that for which it is given’. In the context of a mortgage or a charge there has always been some doubt as to the meaning of ‘full value’. But this question does not arise for decision in this case in that the plaintiff is relying on the existence of a valid consent and not on any suggestion that it is a purchaser for value. This was a proper approach for the plaintiff to take because on the particular facts of the case, if the consent is invalid on any of the grounds contended for by counsel for the respective defendants, the plaintiff had or ought to have had knowledge of the vitiating elements and therefore could not be a ‘purchaser’ within the artificial definition of that expression in the 1976 Act. In order to be a ‘purchaser’ within the meaning of the Act, the plaintiff would have had to be a chargeant acquiring ‘in good faith’ the interest in the property (see s. 3(6) of the Act). The Supreme Court in Somers v W. [1979] IR 94 has held that the words ‘in good faith’ import the equitable doctrine of notice. Since the bank in this case had full notice of all the factors alleged by the defendants to vitiate the consent, it follows that if the consent is invalid by reason of any of those factors, the bank is not a ‘purchaser’. Accordingly the escape route of the statutory exception in favour of a ‘purchaser for value’ is not available to the bank. It is only necessary to consider therefore was the consent invalid?
Counsel for the second named defendant, Ms Kennedy, submits that a consent by a wife under the Family Home Protection Act 1976, to a mortgage or charge in favour of the bank is not valid unless the wife understands the nature and consequences of the transaction. She cannot normally be said to have such understanding unless:
(1) She is told of the amount of the loan involved, and if the security is to cover future advances that she is informed of that.
(2) She is explained the repayment terms.
(3) She is explained the consequences of non-payment and in particular that possession of her family home may be recovered by the bank and may be sold.
(4) She is recommended to obtain independent legal advice.
In making this submission Ms Kennedy relies heavily on Barclay’s Bank v O’Brien [1992] 4 All ER 983. That was a case before the Court of Appeal in England in which a wife joined in a charge over the matrimonial home jointly owned by her and her husband as security for a personal guarantee by her husband in favour of the bank. Scott LJ delivered the principal judgment and I believe that the views expressed by him represent Irish law particularly having regard to the line of Irish cases dealing with voluntary deeds. I do not find it necessary to quote at length from the judgment because the head-note accurately sets out what the court held. The relevant part of the head-note reads as follows:
Held — as a matter of policy married women who provided security for their husbands’ debts and others in an analogous position such as elderly parents on whom pressure might be brought to bear by adult children, were to be treated as a specially protected class of sureties so that where the relationship between the surety and the debtor was one in which influence by the debtor over the surety and reliance by the surety on the debtor were natural and probable features of the relationship, the security given by the surety would in certain circumstances be unenforcable notwithstanding that the creditor might have had no knowledge of and not have been responsible for the vitiating feature of the transaction. The circumstances in which equity would hold that the security given by a surety in that protected class was unenforceable were:
(i) if the relationship between the debtor and the surety and the consequent likelihood of influence and reliance was known to the creditor,
(ii) if the surety’s consent to the transaction was procured by undue influence or material misrepresentation on the part of the debtor or the surety lacked an adequate understanding of the nature and effect of the transaction,
(iii) if the creditor, whether by leaving it to the debtor to deal with the surety or otherwise, failed to take reasonable steps to try and ensure that the surety entered into the transaction with an adequate understanding of its nature and effect and that the surety’s consent to the transaction was a true and informed consent. Accordingly although each case within the protected class depended on its own facts, as a general rule a creditor who took security from a married woman for her husband’s debts ought to take reasonable steps, such as advising her to take independent advice or, if she declined to do so, offering a fair explanation of the security document before she signed it, to see that she understood the transaction she was entering into….
In my opinion Ms Kennedy’s reliance on this case is fully justified. I do not think that any valid distinction can be drawn between that case and the present case on the grounds either that the second named defendant is not a co-owner of the family home or on the grounds that the liability of the husband being secured was a primary liability and not a guarantor liability. The rights of a spouse conferred by the 1976 Act are very important quasi proprietary rights even if they are not ownership rights.
Applying Scott LJ’s criteria, it is obvious that Mr Dowley was well aware of the husband and wife relationship with the consequent inherent likelihood of influence and reliance. He was equally well aware that the wife’s understanding of the transaction depended essentially on what he told her. He should have realised that what he told her and what he advised her were inadequate. He did not take adequate steps to ensure that the second named defendant fully understood the transaction. In particular he did not advise her to take independent advice.
It is only fair to say at this juncture, that I reject the second named defendant’s evidence that Mr Dowley did not use the expression ‘family home’ but merely *796 referred to the property generally. Mr Dowley is certain that he did refer to the family home and I believe him. Having regard to the fact that this was the first legal charge with which Mr Dowley was involved after the 1976 Act was enacted, I think it highly unlikely that he would not have explained in a general way the purpose of the consent as referred to in the guidelines. However I do not think that the second named defendant was deliberately giving false evidence. I suspect that she was engaging in some wishful thinking and she had no clear memory as to what exactly was said at the discussion with Mr Dowley. It may well be that in Mrs Smyth’s mind she thought that as there was a first charge on her home in favour of ACC because of a loan of £8,000 from ACC to build the house, the bank would be unable to sell or take possession of the home. At one point in her evidence Mrs Smyth spoke of the house as being owned by the ACC. But if these matters were in her mind Mr Dowley could not reasonably have been expected to be aware of them. But the bank via Mr Dowley did not adequately explain to Mrs Smyth the potential liabilities secured by the charge and above all did not explain to her that in the event of default the property including the matrimonial home could be sold by or at the instance of the bank or that an order for possession could be sought by the bank. These are vital matters of which Mrs Smyth should have been made aware before she signed the consent. Furthermore she was not recommended to obtain independent advice. I am reasonably satisfied that Mr Dowley did tell Mrs Smyth that she would be signing a consent to a mortgage of the family home but having regard to Barclay’s Bank v O’Brien, I do not consider that that was sufficient. Accordingly, in my view, while there was a document purporting to be a consent in writing there was in fact no consent within the meaning of the 1976 Act. In coming to that conclusion I prefer to rely on the equitable principles referred to by Scott LJ rather than the doctrine of non est factum which would not apply in this case in my view. The charge is therefore void and for the reasons indicated the bank is not a ‘purchaser’ within the meaning of the Act. That is sufficient to dispose of this action but in case the matter goes further I think I should indicate my views on the other substantive of ground of defence.
It is submitted on behalf of the defendants that as a matter of discretion I ought to refuse the application for possession. It is suggested that the wording of s. 62(7) of the Registration of Title Act 1964 gives the court this discretion and that the judgment of Denham J in First National Building Society v Ring supports the view that I should exercise it against the plaintiff. I disagree. I do not think that First National Building Society v Ring has any relevance to this case. The decision of Denham J turned on an interpretation of s. 4 of the Partition Act 1868. But the wording of that section is totally different from the wording of s. 62(7) of the Registration of Title Act 1964. The words ‘may, if it so thinks proper’ in s. 62(7) mean no more in my view than that the court is to apply equitable principles in considering the application for possession. This means *797 that the court must be satisfied that the application is made bona fide with a view to realising the security. But Mr Dowley establishes this essential proof in paragraph 11 of his first affidavit and it is not disputed in either a replying affidavit or the pleadings or at the hearing. It had been held in Northern Banking Co. Ltd v Devlin [1924] 1 IR 90 that even though the Registration of Title Act 1891 conferred on a registered owner of a charge the rights of a legal mortgagee under the Conveyancing Act 1881 nevertheless a registered owner of a charge unlike a legal mortgagee could not obtain an order for possession for the purposes of a sale out of court because the legal mortgagee’s right to possession arose by virtue of his estate in the land at common law and not by virtue of the Conveyancing Act 1881. This yawning gap in the rights of a legal chargeant was heavily criticised by Glover in his Registration of Land in Ireland which was published in 1933.
The position was corrected by s. 13 of the Registration of Title Act 1942 which is in identical terms to s. 62(7) of the Registration of Title Act 1964. The historical background to the subsection therefore re-enforces me in the interpretation which I give to it. I do not believe that the Oireachtas intended a wide discretion which could take sympathetic factors into account. If, therefore, I had been of the view that the consent of the second named defendant was a valid consent for the purposes of the 1976 Act I would have made the order for possession. But as I have held that there was in fact no valid consent I must refuse the application.
Johnston v Horace
[1993] ILRM 594.Lavan J
The second named plaintiff was by consent struck out of the action at the commencement of the trial.
The plaintiff, Therese Johnston, was born into the home, the subject matter of these proceedings, situate at Crumlin, Dublin. She lived therein with her parents and family until 1986 when unhappy differences arose between her and her nephew, David Horace, the defendant herein.
The plaintiff’s sister, Bridget Kinsella, now deceased, married a Mr Horace. By the invitation of the plaintiff’s family the Horaces also set up house in the home. It is agreed that the home was at all material times modest. Yet it was a home to all who resided therein. Its situation was in a long established part of the city, convenient to the city centre and I am happy that the Kinsella’s were an established and well known family in the surrounding area.
By a will dated 27 September 1961, Patrick Kinsella (the deceased) appointed his married daughter, Bridget Horace, to be his sole executrix and beneficiary of all his estate and interest that he should die possessed of subject to a right of residence in favour of his son Edward (now deceased), the plaintiff and the second named plaintiff, who was a daughter of the first named plaintiff.
The deceased died on 2 January 1956 and probate of his said will duly issued on 27 September 1961 to his executrix.
The plaintiff’s right of residence has been registered as a burden on Folio DN 008827 County Dublin.
From that time the plaintiff resided in the home caring for her family. Mr and Mrs Horace died thereafter and the defendant took the property absolutely subject to the aforesaid rights of residence.
Edward Kinsella, the son, suffered from a physical disability. However, he lived happily at home and was content with his lot. The plaintiff fed and cared for him. Following the death of Mrs Horace, the plaintiff also looked after her brother-in-law and the defendant. Edward died on 31 January 1986. He was predeceased by Mr Horace senior.
On 24 January 1991 the plaintiff instituted these proceedings seeking:
1. An injunction to restrain the defendant by himself his servants, agents or otherwise howsoever from preventing the plaintiffs from exercising their rights of residence in the home, 10A Sommerville Avenue, Crumlin in the City of Dublin.
2. An order that the defendant do forthwith deliver up to the plaintiffs a key to the said premises.
3 Further and other relief.
4. Damages.
The statement of claim issued on 5 February 1991. Following an exchange of letters seeking particulars, a defence was filed on 7 May 1991 including a counterclaim against both plaintiffs. The counterclaim sought was as follows, as against this plaintiff.
1. A declaration that the first named plaintiff has abandoned her right of residence in the premises aforesaid.
2. A declaration that the aforementioned first named plaintiff’s right of residence stand determined.
On 3 July 1991 the plaintiffs delivered a reply to the defendant’s counterclaim.
The matter first came before me on 23 October 1992. The plaintiff gave evidence of how the defendant, following Edward’s death, commenced a campaign of oppressive and bullying behaviour towards her which was of such a nature as to cause her to leave the premises against her will. At that stage all of the other members of the family were dead.
The defendant also gave evidence to me and denied all of the allegations contained in the pleadings and the evidence adduced before me.
Having heard submissions from both counsel on the first day, I adjourned this case on a number of occasions. Finally, on 19 February 1993, I heard further evidence on behalf of both parties. This evidence was directed towards determining the measure of assessing a loss of residence and as to the value of the home and as to appropriate rental levels of equivalent accommodation for the plaintiff. I heard evidence from valuers for both parties in relation to the market value of the premises as of 1986. This was put at the sum of £30,000 by the defendant’s valuer. I note however that the defendant valued these premises as of March 1990 at £40,000. Taking everything into account I would assess the value as of 1986 as at £35,000.
In relation to rental value in 1986, I would accept the figure of £25 per week as being a minimum figure to provide the plaintiff with a similar form of accommodation. The actuarial figure I accepted as being a sum of £555 for the loss of each £1 by the plaintiff. Therefore the future loss I accept to be £13,875 for the plaintiff not to be restored to her rightful right of residence as provided by her father as far back as 27 September 1961.
Following upon the conduct complained of by the plaintiff, she moved to live *597 with her married daughter in Tallaght, Co. Dublin.
Between 1986 and 1990 the defendant carried out alterations to the home, including the installation of a toilet. He later became engaged to be married. On 19 March 1990 the defendant wrote to his aunt in the following terms:
Dear Teasie,
In reply to your letter, yes I am interested in selling 10A but only because you won’t surrender your right of residency as I said this is not negotiable.
As you know I am getting married and as you have in practice already given [sic] up your right, I just wanted it in writing. I feel it is not fair to bring a wife into the home with this hanging over us, as we would like to have a family, we would like to know we have the room to do so, as you have said before that you would not come back to 10A I felt it was not too much to ask of you.
But if you want to buy the house it would have to be valued by a party unknown by either one of us, you may have gathered that I don’t really want to give up the family home, I just want to feel I can have my own family in it, without the threat of a right of residency.
David.
A second undated letter was tendered in evidence also from the defendant to the plaintiff as follows:
Dear Teasie,
So you are open to offers. Well as I am not in a position to offer, would you like to buy 10A from me for £40,000 and I will await your answer?
Dave.
PS Just £40,000 and it’s yours.
I accepted the plaintiff’s evidence. I considered her to have been a mature and truthful witness. I am satisfied that the defendant engaged in a careful and sustained campaign to rid himself of his aunt. He made life unpleasant for the plaintiff and purported to interfere with her proper enjoyment of her home and to interfere with her entitlement to use the home as such. He sought to restrict her access, to control her access and to limit her use effectively to that of her bedroom and nowhere else. I accept the plaintiff’s evidence that the conduct of the defendant was such as to make living in the home intolerable for her. I must say that I utterly reject the defendant’s case. There is no cogent evidence that the plaintiff ever abandoned willingly her right to live in her own home. I accept she was forced to leave because of the defendant’s behaviour which was, in my view, behaviour of a conscious and concerted manner seeking to force her out. In my view there is no other phrase sufficiently accurate to describe his conduct.
I reject the grounds relied upon by the defendant in his defence. I reject his allegation that she has no bona fide desire to return to the premises; that she *598 failed to exercise her alleged rights of residence; that she abandoned her right.
In particular, I reject that at no stage during the lengthy course of re-decoration, repair and reconstruction of the home that the plaintiff knew of what was going on, permitted what was going on to take place without making it clear that she was abandoning her right of residence.
In my view, no assessment of the defendant’s evidence could constitute a rebuttal of the duress alleged against him, nor indeed could it establish that he at any time behaved in a manner, other than in a deliberate manner, to force the unfortunate woman out of her house.
In addition, I accept that the plaintiff was unaware of what steps or remedies might be available to her to vindicate her rights until 1990 when, as a result of the foregoing correspondence, she retained a solicitor who caused these proceedings to be issued.
Turning to the question of what is the appropriate remedy in this case, counsel for the defendant says that damages are an adequate remedy. Alternatively, he says that the defendant’s situation has altered by marriage and the alterations he has made to the house. Or, alternatively, that the defendant has no money.
In support of his submissions that damages were an adequate remedy, counsel for the defendant submitted that the appropriate law was as follows.
The law
S. 81 of the Registration of Title Act 1964 provides:
A right of residence in or on registered land, whether a general right of residence on the land or an exclusive right of residence in or on part of the land, shall be deemed to be personal to the person beneficially entitled thereto and to be a right in the nature of a lien for money’s worth in or over land and shall not operate to create any equitable estate in the land.
The first named plaintiff comes within the first category namely enjoying a general right of residence and has accordingly a lien for money’s worth in or over the land. The discussion contained in Irish Land Law (2nd ed.), Wylie, 20.13–20.24 on rights of residence concludes that s. 81 of the Act of 1964 excludes the plaintiff from having the statutory powers of a tenant for life. Her right being in the nature of a lien is the right to bind the property for payment of the money’s worth of the residential use.
Neither the case law nor the statute clarifies whether or not the beneficiary of the right or the owner of the property can insist on the right being converted into money’s worth.
In the case to hand the plaintiff asserts that she has been deprived of the right, the defendant denies this. The plaintiff wishes her right to be valued.
I have no doubt but that there are circumstances in which a court could enter *599 by agreement of the parties into a valuation of their respective interests. There are also circumstances where a court might compel such a valuation in the general interest of the administration of justice or under its equitable jurisdiction. The court in valuing the right should carry out an objective valuation independent of the alleged circumstances in which the valuation is sought.
There are no authorities as to how such a valuation should be carried out. Such case law as does exist predates the statute and provides only a general guide as in National Bank Ltd v Keegan [1931] IR 344 at 354 where Kennedy CJ states ‘the general right of residence charged on a holding is capable of being valued in moneys numbered at an annual sum, and of being represented by an annuity or money charge’.
The reference above to an annual sum reflects the fact that the right is of an ongoing nature and as such it should be measured by reference to some reasonable periodic period depending on the circumstances of the parties. In that context the period could be monthly, quarterly or yearly.
Before considering the money’s worth the characteristics of the right as granted have to be established. In this case the first named plaintiff enjoyed:
(a) A right to share with others the use and occupation of the premises
(b) While not granted any exclusive rights she enjoyed the personal use of one bedroom in a three bedroom cottage.
In the circumstances it would be reasonable to say that her proportionate interest in the use and occupation of the premises was one-third.
In so far as the plaintiff did not contribute to the substantial improvement of the premises it would be reasonable to apply the principle applied in use and occupation cases as set out in McGregor on Damages (15th ed.) at paragraph 1420 namely that the value of the right should be assessed on the assumption that the premises were unimproved.
In the absence of any market in rights of residence the court must look to such comparables as can be found for guidance on valuations. One such method is the rental value of similar premises. In this case the question to be asked is what would represent a third of the rental value of the cottage in its unimproved condition or of such similar property of similar character in a similar area.
Other alternative though less precise valuations would be the sum one would reasonably expect a residing relative to contribute to a household in respect of the right to reside excluding contributions in respect of other household expenses.
To value the right in terms of the cost of acquiring other alternative accommodation suitable to the individual concerned is to stray away from measuring the money’s worth of the right of residence and to enter into the area of compensatory assessment. In that regard there are a whole range of options available with significant variations in rent levels depending on whether the private, public or social housing markets are assessed and it raises further *600 questions as to the application thereto of taxation provisions such as s. 142A of the Income Tax Act 1967 as inserted by s. 5 of the Finance Act 1982 and presently providing for a tax allowance in respect of the first £1,500 of rent paid by a widowed person over 55 years of age.
In many respects the objective valuation of the right of residence is the method signposted by statute. There are dangers in any formula that the actual values may throw up an unrealistically high valuation of the right, given the limited nature and extent of the right granted and the implied intention of the legislature to be read into s. 81 of the 1964 Act that the valuation should not unduly force a sale of the property so as to destroy the other interests therein. To that extent any valuation needs to be tempered with caution.
In so far as the court has to arrive at a valuation, that valuation should be measured as a periodic sum. The periodic sum should not be capitalised. It is only in circumstances where such periodic sums are not being paid or that the property is being disposed of that the lien becomes a lien secured or enforceable by way of additional security in the form of a capitalised sum if necessary. To capitalise the money’s worth of the right is akin to giving the beneficiary the equivalent of the statutory rights of a tenant for life. To capitalise assumes the ability of the owner of the property to pay or raise a capital sum or in the alternative becomes punitive on the owner in that the cost of sale of the premises has to be borne and the additional cost of repurchasing another property at some later date.
As I understand the defendant’s submissions, they are, in part, to be summarised as follows. The court ought to ignore the defendant’s conduct. It ought to ignore the testator’s intention. It ought to enable the defendant benefit by excluding the plaintiff and thereby place the burden of providing for the plaintiff’s residence either on the appropriate statutory authority or on the plaintiff herself.
Counsel for the plaintiff submits that the proper approach is to value the actual loss to date and into the future to capitalise the sum that it will cost the plaintiff to provide for alternative accommodation.
I have had ample time to consider this case. I view any conduct which, in this era of homelessness, puts a person out of their home as being reprehensible. In this case, the plaintiff’s father made provision for her — as indeed, he did for all the members of his family, including his son-in-law, the defendant’s father. The provision by the deceased might appear modest. It was not. It made provision for one of the most basic requirements that any human being yearns to attain. That is a roof over their heads for life, and a security that same would be available until the end of their days — that is a right of residence for life.
In my view the right granted is an unrestricted right. The right is not abandoned by an absence of a day, or a week, or indeed a number of years. The right cannot be varied to suit the whim of the owner. Its nature and content must *601 be viewed by the court from the right granted in the ensuing conduct of all concerned, including the common recognition of the right and the common use that right has conferred upon the plaintiff and other members of the family since the death of the deceased testator.
The right may voluntarily be abandoned expressly and freely, or indeed by effluxion of time. However, a court would have to require strong cogent evidence from a party seeking to defeat such a right, whilst the right remains a burden on a folio and in the absence of express agreement parol or written to disclose an intention to abandon.
In this case, I am satisfied that there was duress on the part of the defendant; that there was no abandonment by the plaintiff and that it would be unjust to permit the defendant to profit by his conduct.
I do not consider that this is a proper case to permit the abandonment of the right of residence. Both parties are of modest means. To suggest that the plaintiff ought to be a burden on the local authority or, indeed, that she might avail of taxation relief is to ignore the reality of the circumstances of the case.
I consider the suggestion of valuing the right of residence unreal. Where I have to value same, I take the view that it would have to be on an actuarial basis, having regard to the defendant’s conduct and his inability to pay. In addition, I take the view that a secured right of residence would otherwise become an unsecured right with no certainty that periodic payments would or could be made.
In my view the defendant has not the means nor the intention to make proper provision for the plaintiff’s right of residence. In addition, the defendant seeks to obtain court approval to defeat a dead man’s well considered intention to properly provide for his children, including the plaintiff in this case. He who comes to equity must come with clean hands.
In these circumstances, I propose to grant the plaintiff the injunctive reliefs she seeks. I also propose to award damages. I accept the plaintiff has suffered great distress, inconvenience and upset. Because of the limited means of the defendant, I will allow a figure of £7,500 damages for the interference with the right of residence to date. In so doing I wish to make clear that this is not to be taken as expressing my view as to the appropriate measure of damages for interference with a person’s right of residence. It is, in my view, an act which warrants substantial damages in most cases.
In the circumstances I dismiss the defendant’s counterclaim. I award the plaintiff her costs of the action.
Bracken v Byrne & Byrne
Clarke J., March 11, 2005; [2005] I.E.H.C. 80On the 24th July, 1967 William Bracken, on the basis of a then intended marriage between his daughter Catherine Mary Bracken and Timothy Byrne, executed a deed of settlement (“the deed of settlement”) whereby he transferred all of the properties described in Folio 2242 of the register County Wicklow to Catherine Mary Bracken and Timothy Byrne so that after their marriage they would become joint tenants in fee simple of the property subject to certain rights.
Insofar as material to this case the rights specified are those at item 2 in the deed of settlement which conferred the right upon “Joan Bracken and Mary Bracken (daughters of the said William Bracken and Mary Bracken) to reside and to be supported and maintained in the said dwelling house at any time they or either of them during their respective lives shall choose to reside there whilst unmarried”.
The plaintiff is the Joan Bracken mentioned in that clause in whose favour a right of residence and maintenance and support was conferred by the deed of settlement. The defendant is the Catherine Mary Bracken to whom, in conjunction with her soon to be husband Timothy Byrne, the property was vested. Mary Bracken, who is also mentioned in the clause conferring rights, has long since married and no right continues to subsist in her favour.
For much of the intervening period Joan Bracken lived and worked in different guises in Dublin but did from time to time visit the family home. That home was itself replaced by a more substantial dwelling which remains in the ownership of the first named defendant. Timothy Byrne, unfortunately, died on 21st February, 2000. In addition the second named defendant, Michael Byrne, who is a son of Timothy Byrne and the first named defendant has benefited by the transfer to him of part of the lands which were previously comprised in Folio 2242 County Wicklow subject to the rights of maintenance and support in favour of the plaintiff.
In those circumstances the house, in respect of which the right of residence exists, remains in the ownership of the first named defendant while the lands out of which the right of maintenance and support is to be met are now, in substance, owned by the second named defendant.
In order to understand fully the issues between the parties it is necessary to describe in some detail events in the latter part of the 1990s and the early years of this decade. In circumstances which are not particularly germane to these proceedings the plaintiff suffered significant financial reversals in the mid to late 1990s which culminated in her finding herself in a position where, contrary to her previous life experience, she had no significant employment, no interest of ownership in any residential property and only a relatively small sum of cash in capital (being the net proceeds that were left after the disposal of a restaurant business which had not been a success and the premises in which the business was conducted having been the subject of a fire in circumstances where it was underinsured).
In all those circumstances it was suggested to the plaintiff by the first named defendant (in conjunction with her husband) that she should come to reside in the family home. It seems clear that neither party had, at that time, got in the forefront of their minds the fact that the plaintiff might have a legal entitlement so to do. However the plaintiff did, in fact, go back to reside in the family home and appears for some reasonable period of time to have lived there as a member of the family and to have enjoyed support and maintenance in practice even if same was not consciously being provided in fulfilment of the obligations under the deed of settlement.
It is again common case between the parties that during 1999 a suggestion was made to the plaintiff by the first named defendant and her husband that the plaintiff would be provided with a site on a separate plot of ground which was also in the ownership of Timothy Byrne. In general terms it seems that such an arrangement was perceived to be advantageous to all concerned in that the site was nearer to Dublin where much of the plaintiff’s interests were still centered. She had also gained employment which by that time again required her to travel to Dublin.
What is, however, in serious controversy between the parties is the basis on which such a site was to be provided. The plaintiff gave clear evidence that the contemplated arrangement was that she would be given the site fully to the extent that it would be placed into her name. She accepted that it would have been for her to secure the building of a house on the site. She had retained the capital sum previously referred to and it was envisaged that that sum, perhaps topped up by a relatively moderate mortgage, would be sufficient to build a house.
The first named defendant has equally strongly maintained that the arrangement was to the effect that the plaintiff would be given only a limited interest in the property. I will return to this conflict of evidence later in the course of this judgment.
It is again common case that on foot of whatever arrangements may have been in place the plaintiff sought and ultimately secured planning permission from Wicklow County Council in respect of the building of a dwelling house. It is also common case that contact was made, on the recommendation of the first named defendant, with a builder who provided a quote for the construction of the dwelling house concerned.
Unfortunately just as the planning process was coming towards a close Timothy (who was more normally called Theo) Byrne died some few months after notification of intention to grant planning permission had been given and very soon after the final notification of the grant of planning permission had occurred.
Soon after that disputes arose between the plaintiff and the first named defendant as to whether she was to receive a limited interest in the site or was to obtain it entirely in her own name. There can be little doubt that those disputes led to a significant worsening of relations between the parties. As a result the plaintiff investigated her legal entitlements and ultimately received advice on the provisions of the deed of settlement.
In those circumstances these proceedings were brought which seek either the payment of a sum of money to represent the value of the rights of residence maintenance and support which necessarily involves a claim as against the first named defendant in relation to the right of residence and as against the second named defendant in respect of the right of maintenance and support. All such claims relate to a loss both to date and into the future.
In the alternative to the claim in respect of a right of residence (but not in respect of the claim in relation to a right of maintenance and support) the plaintiff contends that she is entitled to enforce the agreement which she alleges was in place in relation to the site.
Rights of residence and maintenance – the law
Section 81 of the Registration of Title Act, 1964 provides:-
“A right of residence in or on registered land, whether a general right of residence on the land or an exclusive right of residence in or on part of the land, shall be deemed to be personal to the person beneficially entitled thereto and to be right in the nature of a lien for monies worth in or over the land and shall not operate to create any equitable interest in the land”.
The only occasion when that section has the been the subject of judicial consideration arose in Johnson and Anor v. Horace [1993] ILRM 594 where Lavan J. had to consider the effect of the section in the circumstances of that case.
It should be noted that at p. 598 of the judgment Lavan J. indicated that neither the case law nor the statute clarifies whether or not the beneficiary of the right or the owner of the property can insist on the right being converted into monies worth. In dealing with that issue the court went on to state the following:-
“I have no doubt but that there are circumstances in which a court could enter by agreement with the parties into a valuation of their respective interests. There are also circumstances where a court might compel such a valuation in the general interest of the administration of justice or under its equitable jurisdiction”.
On the facts of the case before him Lavan J. was satisfied that there was duress on the part of the defendant owner and no abandonment of the right of residence on the part of the plaintiff. Much of the remainder of the case was concerned with how the rights could be valued and whether, on the facts of that case, it was appropriate to direct that the rights no longer be enforced and be, in substance, converted into money.
It is important to note that Lavan J. went on to hold that “the defendant has not the means nor the intention to make proper provision for the plaintiff’s right of residence”. In those circumstances the plaintiff was awarded injunctive relief which in substance allowed her to become able to enjoy the right of residence and also was awarded damages in respect of interference with the right up to the date of trial.
It is clear therefore, that the reason why Lavan J. was not persuaded to convert the plaintiff’s entitlement to money was that it was impractical on the facts of that case so to do. The case is therefore not authority for the proposition that a court could not covert the right of residence to money in an appropriate case.
However that begs the question as to what would be such an appropriate case. Neither counsel in the case before me argued that there was an entitlement, as of right, on the part of either the owner of the property or the beneficiary of the right to have the right converted into money.
In a case where the owner of such rights is effectively excluded from the enjoyment of those rights by the owner of the property there may be circumstances where the appropriate form of redress which the court should grant would be to value the rights and direct that the beneficiary be paid for those rights rather than to grant injunctive relief. Clearly the ability of the defendant to pay the sums thus awarded would be an important factor in the exercise of the court’s discretion as to whether the remedy should be by way of injunctive relief to restore the enjoyment of rights on the one hand or the payment of the sum of money in lieu on the other hand. However in many such cases it may well be that the breakdown in relations between the parties is not for as clear-cut a set of reasons as enabled Lavan J. in Johnson to take the view which he did on the facts of that case. The circumstances which may lead to such a breakdown can lie at any point upon a spectrum from one where the entire blame may rest upon the beneficiary of the right on the one hand to a case where the entire blame may rest upon the owner of the property on the other hand. Indeed it is, perhaps, important to note, that in the absence of very voluminous evidence indeed it might, in many cases, be difficult for the court to determine, with any precision, the precise apportionment of blame in relation to what will, often, be a breakdown in relations between parties stemming from a whole variety of reasons.
In the light of such general observations it is necessary to address the question as to the proper approach of the court in circumstances such as this.
Prima facie the starting point must be that the entitlement of the beneficiary of a right is to have that right enforced. Therefore the starting point should be that the owner should be entitled to appropriate injunctive relief to ensure that they can enjoy the right.
However there may be circumstances where that is not practical or reasonable. Obviously the parties are free to agree the terms upon which rights can be extinguished. Furthermore, as Lavan J. pointed out in Johnson the court can enter by the agreement of the parties into a valuation of their respective interests. More difficult questions arise where one party asserts that the rights should be exercised but the other suggests that the rights be converted into money. In principle the party seeking the cash conversion could be either the beneficiary of the rights or the owner of the property. In this case it is the beneficiary who seeks to have her entitlements paid off in money. The first named defendants says that there has been no prevention of the exercise of the rights concerned and that no entitlement to money therefore arises. It seems to me that one of the questions which the court needs to address is as to whether it has been demonstrated that it is not reasonable, in all the circumstances of the case, to require the beneficiary to be satisfied with the enjoyment of the rights to which she is entitled, enforced, if necessary, by appropriate injunction.
In most cases the practical enjoyment of a right of residence and a right of maintenance and support will require the owner of those rights to be involved in, at least to some extent, a quasi family situation. To require such a situation to continue in circumstances where there has been a sufficient degree of breakdown in the relationship between the parties so as to render it unreasonable to require the parties concerned to live in those circumstances must lead the court to a situation where it has to consider alternative remedies.
A further question which the court needs to consider is as to the extent to which it may be possible to apportion responsibility for the situation which has led to it being unreasonable to require the continuance of the arrangements in practice. Clearly a case where that responsibility rested wholly or substantially on the beneficiary of the right would give rise to a situation in which the owner of the property could not reasonably be expected to allow for the continuance of the exercise of the right. However in those circumstances it may well be that the beneficiary would have placed him or herself in a position where they might be said to have forfeited any entitlement either to the actual exercise of the rights to have a payment in money to the value of the rights. On the other hand where the reasons whereby it had become unreasonable to expect the continuance of the exercise of the rights stemmed wholly or substantially from the actions of the owner of the property there can be little doubt that it would be an appropriate to consider the exercise of the court’s jurisdiction to award to the beneficiary of the rights a sum measured as the value of the rights in lieu of their continued exercise together with an appropriate sum in damages to compensate for any loss to the date of hearing.
The difficulty arises in cases where it may not be possible to establish that either party is wholly or substantially at fault. That raises the question as to how far it is necessary for the beneficiary of the rights to go in establishing responsibility for the state of affairs on the part of the owner of the property in order to be able to invoke the jurisdiction of the court for the award of such money. Intermediate cases where both parties must bear some of the responsibility will, therefore, give rise to the greatest difficulty.
Having regard to the fact that the primary entitlement of the beneficiary of the right is to exercise of the right conferred upon them, it seems to me that the appropriate test must be that in addition to satisfying the court that it has become unreasonable in all the circumstances of the case to require the beneficiary to be content with the exercise of the right, it is also necessary for the beneficiary to satisfy the court that the balance of the responsibility for that situation lies upon the owner of the right. It is not, however, necessary for the beneficiary to establish that they are entirely free from responsibility.
Application to the facts of this case
Both sides gave conflicting evidence as to the circumstances which pertained in the house both before and most particularly after the death of Theo Byrne. While the plaintiff made certain minor complaints as to the situation prior to that unfortunate event it does not seem to me that any of the matters complained of could go any distance towards a meeting the test which I have identified above as being one where it is necessary to show that by virtue of circumstances which were predominately the responsibility of the owner it had become unreasonable to expect a continuance of the practical exercise of the right by the beneficiary.
That matters became considerably more fraught after the death of Theo Byrne is undoubtedly clear on either account. On the basis of all of the evidence I am satisfied that what led to a breakdown in relations between the plaintiff and the first named defendant was the dispute which emerged over the nature of the interest which the plaintiff was to be given in the site. Until that dispute arose any issues between the parties were of little significance. Thereafter relations became strained and, as is the wont in such situations, matters which might not have given rise to any great acrimony between the parties started to become major issues. The plaintiffs principal complaint is really that she was not treated, in a number of important respects, in a manner which was consistent with her having an entitlement to reside in the house rather than being there with the permission of the first named defendant. Some of the matters complained of may not have being of great importance and would not have been likely to have given rise to any serious acrimony were it not for the unhappy differences that emerged from the dispute over the site. It seems to me, therefore, that an analysis of that dispute is essential to understanding much of the acrimony that ensued.
On that issue the plaintiff’s case is simple. She was to get the site put into her name.
I have to confess that I found it considerably more difficult to understand the first named defendants case. In answer to counsel for the plaintiff in the course of cross examination she said the following at Q. 203 (day 2):-
“Of course the house would be in her name, naturally, but the site would never be in her name. Joan was getting planning permission so obviously the house was going to be in Joan’s name but the site would never be in her name.”
It should be noted that the context of the question which elicited that answer was an invitation to the first named defendant to explain why the plaintiff would be required to spend her own money on building the house if it was not to be put into her name.
I find it impossible to accept that the arrangement was as described by the first named defendant. I have taken into account that she (the first named defendant) is not someone familiar with property or business and that such matters were almost certainly exclusively dealt with by her husband. However she was involved in the making of the arrangements in relation to the site and it seems to me that her recollection as to what those arrangements could not be correct. In the circumstances, and having had the opportunity to observe both parties and consider the totality of their evidence in that regard, I have come to the view, on the balance of probabilities that the account of the plaintiff as to what those arrangements were is more likely to be correct and I therefore find as a fact that the arrangements entered into between the first named defendant and her husband on the one hand and the plaintiff on the other hand was to the effect that a site would be placed into the name of the plaintiff. While it was not specifically referred to I am satisfied that it was implicit in that agreement that, as a result, the plaintiff would no longer have to exercise her right of residence.
In the light of that finding it seems to me that much of the acrimony that followed stemmed from the legitimate concerns of the plaintiff that her sister was going back on the arrangement that had been freely entered into. While it would be wrong to absolve the plaintiff from any blame in relation to the worsening of relations and while many of the instances described in the evidence are relatively minor in themselves I have nonetheless come to the view that they need to be viewed against the background of the fact that relations had seriously deteriorated by reason of the first named defendant backing out on the agreement previously reached.
I have therefore come to the view that the situation had, within a relatively short time after the death of the late Theo Byrne and certainly by the late summer of 2000 reached a stage where it was no longer reasonable to expect the plaintiff to exercise the right of residence. For the reasons set out above I have also come to the view that while responsibility for that situation rested upon both the plaintiff and the first named defendant the preponderance of that responsibility rests on the first named defendant. I am therefore satisfied with the tests which I have identified above for establishing an entitlement to the have the rights converted into money have been met by the plaintiff.
Before leaving the liability issues under this heading I should add that I have given some consideration to the fact that s. 81 of the Registration of Title Act, 1964 relates only to rights of residence and not to rights of maintenance and support. However on the facts of this case it does not seem to me to be practical to require the exercise of a right of maintenance and support without also requiring the exercise of the right of residence. That might not always be the case. However on the facts of this case it seems to me that the same result must follow in respect of the rights of maintenance and support as apply to the right of residence.
For reasons which will be clear in the course of analysing the financial value of those rights there does not seem to me to be any basis on the facts of this case for taking the view adopted by Lavan J. in Johnson to the effect that that the conversion of the rights to money would be impractical. It seems to me, therefore, that it is necessary to assess the value of those rights and direct that the plaintiff be paid that value together with a suitable sum to compensate her for her exclusion from the enjoyment of those rights to date.
The agreement in respect of the site
The final liability issue concerns the plaintiff’s alternative claim to the effect that she is entitled to have that agreement enforced as against the first named defendant in her capacity as the personal representative of Theo Byrne the registered owner of the site in respect of which the agreement existed. While I am satisfied, for the reasons indicated above, that the arrangements between the parties did involve an agreement to transfer such a site I am not satisfied that that agreement is legally enforceable.
There is no consideration so as to give rise to a contract.
There is, in any event, no note or memorandum so as to satisfy the statute of frauds. Counsel for the plaintiff places reliance on McCarron v. McCarron (unreported Supreme Court judgment of Murphy J. 13th February, 1997). Part of the case advanced by the plaintiff in that case was based on the doctrine of proprietary estoppel. In considering that aspect of the case Murphy J. cited with approval Plimmer v. Wellington Corporation 1884 9 App Cas 699 where it was stated:-
“Where an owner of land has invited or expressly encouraged another to expend money on part of his land on the faith of an assurance or promise that that part of the land will be made over to the person so expending his money the Court of Equity will prima facie require the owner by appropriate conveyance to fulfil his obligation and when, for example, for reasons of title, no such conveyance can effectively be made, or a Court of Equity may declare that the person who has expended the money is entitled to an equitable charge or lien for the amount so expended”.
Murphy J. went on to note that he saw no reason why the doctrine should be confined to the expenditure of money or the erection of premises on the lands of another. He noted that it might well be argued that where a plaintiff suffers a severe a loss or detriment by providing his own labours or services in relation to the lands of another he might equally qualify for recognition in equity.
However the only detriment suffered here was the making of a planning application and some brief discussions with a builder. I am not satisfied that any sufficient detriment was incurred such as would require a Court of Equity in reliance on the doctrine of proprietary estoppel to require a conveyance of the lands.
The plaintiff’s relief is, therefore, confined to payment in respect of the right of residence and the right of maintenance and support.
Quantum
While expert evidence was called by both sides in respect of the valuation of the right of residence and, indeed, the evidence of the plaintiff based such valuation on two alternative approaches, by the close of the evidence the plaintiff accepted that the valuation placed upon such right of residence by the defendants’ valuer was correct. It seems to me, therefore, that there is no dispute but that the value, as of today, of the right of residence is €145,000. It should be noted in that context that the house itself is worth upwards of €340,000 while the farm (including its milk quota) appears to be worth not too far short of €1 million. There was uncontested evidence that the appropriate multiplier for a person of the plaintiff’s age and gender by reference to which the right of maintenance and support should be valued was 861 times the relevant weekly payment. The plaintiff gave evidence that she was currently sharing a house in Dublin and that her grocery and utility bills came to something between €100 and €120 per week. However it does not seem to me that in practice the weekly value of the right of maintenance comes to quite that sum. Firstly even when the plaintiff enjoyed the right of support without any hindrance or difficulty she did not exercise it at all times. Secondly some regard has to be had to the fact that a right of support and maintenance derives from the profitability of the lands out of which the right of support and maintenance is to be met. I had the uncontested evidence of the second named defendant to the effect that his earnings from the relevant farm (that is to say the farm over which the right of maintenance and support lies) permitted drawings of approximately €300 per week. In all the circumstances it seems to be appropriate to place a current value on the right of maintenance and support at €70 per week thus giving a capital value into the future of €60,270.
While the precise time at which it became unreasonable to require the plaintiff to directly exercise her rights cannot be established with absolute precision I believe it is appropriate to regard that time as having arisen in the latter part of 2000 and thus to calculate her losses to date on the basis of 225 weeks.
There was little real evidence as to the weekly value of the right of residence. While the plaintiff gave evidence that she currently had the use of two rooms with the use of a kitchen and bathroom in Dublin (being a share of a house) in respect of which she had to contribute €500 per month together with expenses, it is difficult to see that there would be any comparability between that sum and the value of a right of residence in a rural area. Doing the best I can it seems to me that I should award a sum of €15,000 for the loss of the right of residence to date. On the basis of the above period of 225 weeks and a cost of maintenance and support of €70 the loss of that right to date comes out at €15,750.
The total sum to be awarded is therefore:-
Future value of the right of residence €145,000
Future value of the right of maintenance and support €60,270
Value of right of residence to date €15,000
Value of maintenance and support to date €15,750
Total €236,020
I would therefore propose awarding the plaintiff that sum and making no order in respect of any of the other reliefs sought. The sums awarded in respect of loss of the right of residence (i.e. €160,000) are as against the first named defendant. The sums awarded in respect of loss of the right of maintenance and support (i.e. €76,020) are as against the second named defendant.
Approved: Clarke J.