Succession to Assets
Cases Gifts ContemplationDeath
Moore v Ulster Banking Company
Court of Queen’s Bench.
10 November 1877
[1878] 12 I.L.T.R 5
May C.J., O’Brien, Fitzgerald, Barry JJ.
Nov. 9, 10, 1877
May, C.J.
This action was brought against the Ulster Bank by the personal representatives of David Moore. The defence is grounded, substantially, upon two averments—first, that in the lifetime of Moore he equitably assigned the deposit receipt to a person named M’Sweeny; and, secondly, that, after his death, the bank paid M’Sweeny the amount without notice of the death of Moore. As to the first averment, what appears to have taken place is, according to M’Sweeny’s evidence, as follows:—Moore endorsed the receipt with his own name, and handed it to M’Sweeny, directing him to take it to the branch office of the Ulster Bank. He told him it was for his niece, Miss Kerr, and said it was as little as Miss Kerr could get, for her long and anxious attendance upon him. That appears to have been all that took place in reference to the matter in Moore’s lifetime. The question is whether the fact of writing his name on the back of the receipt, and handing it over, amounted to an equitable assignment? The general principle has always been understood to be that the voluntary assignment of a chose in action, the property in which cannot pass in law so as to enable the assignee to maintain an action upon it in his own name, is inoperative both at law and in equity. The cases on this subject will be found collected in Ellison v. Ellison, 1 White and Tudor’s L. C., Eq. In Edwards v. Jones, 1 My. & Cr. 226, the obligee of a bond, five days before his death, signed a memorandum, not under his seal, which was endorsed upon the bond, and which purported to be an assignment of the bond, without consideration, to a person to whom the bond was at the time delivered. The circumstances of the case did not constitute, in the opinion of the Court, a donatio mortis causa. Lord Cottenham held that the gift was incomplete, and that as it was without consideration, the Court could not give effect to it. The latest case on the subject is *5 Richards v. Delbridge, L. R. 18 Eq. 11. There D., who was possessed of leasehold business premises and stock in trade, shortly before his death purported to make a voluntary gift in favour of his grandson, E., who was an infant, by the following memorandum, signed by D., and endorsed on the lease —“This deed, and all thereto belonging, I give to E., from this time forth, with all the stock in trade.” The lease was then delivered to E.’s mother, on his behalf. It was held that there was no valid declaration of trust of the property in favour of E., in which view it was attempted to sustain the gift. The Master of the Rolls (Sir G. Jessel) thus, at page 142, states the doctrine of the Court:—“A man may transfer his property without valuable consideration, in one of two ways—he may either do such acts as amount in law to a conveyance or assignment of the property, and thus completely divest himself of the legal ownership, in which case the person who, by those acts acquires the property, takes it beneficially, or on trust, as the case may be; or, the legal owner of the property may by one or other of the modes recognised as amounting to a valid declaration of trust, constitute himself a trustee, and, without any actual transfer of the legal title, may so deal with the property as to deprive himself of its beneficial ownership, and declare that he will hold it from that time forward on trust for the other person.” In other words, in order to effectuate a voluntary gift, there must be a transfer in law, or the owner must constitute himself a trustee for the donee. A deposit receipt is not a negotiable instrument such as a promissory note or a bill of exchange, capable of being transferred by endorsement. It is merely an acknowledgment of the bank that it holds a certain sum to the use of the depositor. The holder, by merely writing his name on the document, and delivering it to another, confers no legal right on the person to whom he gives it. The peculiarity in this case is, that there was no written memorandum stating that the testator assigned and made over the deposit receipt to M’Sweeny, but he simply endorsed the document and handed it over to him. In the case of Edwards v. Jones, there was an endorsement on the bond, a memorandum of assignment which was signed by the obligee. The present is therefore an a fortiori case. The endorsement of the deposit receipt, and the delivery of it to M’Sweeny, may have been sufficient to constitute that gentleman the agent of the testator to receive the amount from the bank, but any authority, so conferred on him, was determined by the death of the testator, which occurred before M’Sweeny took the document to the bank. I think the first portion of the defence, which avers an equitable assignment of the deposit receipt, has not been sustained. Then the defence avers that the amount was paid to M’Sweeny by the bank, without notice of the death of Moore. In fact, it appears that M’Sweeny after the death of the testator took the deposit receipt to the bank; and they paid him a small sum due for interest upon it, and gave him a new deposit receipt in his own name, for the principal. It was contended that this did not amount to payment, so far as regarded the principal. It is not necessary to consider what the effect of this transaction would have been had it occurred in the lifetime of Moore—but, in fact it did not take place till after his death; it was then the duty of M’Sweeny to have informed the bank of the death of Moore, and in fact his presentation of the deposit receipt amounted verbally to a representation that he was living. Any acknowledgment of indebtedness obtained under these circumstances by M’Sweeny from the bank was, I think, invalid. Whether this transaction could be regarded as a constructive payment of the amount of the receipt by the bank to M’Sweeny, it is unnecessary to determine, as M’Sweeny was neither equitable assignee nor agent of the testator. Payment to him, therefore, even if it had taken place, would not have discharged the bank. On the whole, I think the defence is not sustained.
O’Brien, Fitzgerald, and Barry, JJ., concurred.
Casssidy v The Belfast Banking Company
Exchequer Division.
15 December 1887
[1888] 22 I.L.T.R 46
Palles C.B., Andrews J.
Nov. 8, Dec. 15, 1887
Palles, C.B.
The sole question which has been argued is, whether the deposit receipt issued by the defendants at their Coleraine branch to Samuel Gilmore, since deceased, can be the subject-matter of a valid disposition by way of donatio mortis causa. The receipt bears date the 18th of August, 1886; it is headed “Not transferable;” and by it the defendants acknowledge to have received from Mr. Gilmore £200 to his credit on deposit account. After the signatures of the bank manager and accountant there are the words: “This receipt must be produced at the above-named branch when payment of either principal or interest is desired.” The following statements, inter alia, are printed on the back of the receipt: “The rate of interest to be allowed from time to time will be posted up in the public offices of the company and no other notice will be given. No interest will be allowed on sums lodged for a shorter period than one month.” The receipt was endorsed by the deceased in the following words: “I endorse this receipt to Catherine Cassidy of Bovedy. Dated this 2nd Decr., 1886. Samuel Gilmore.” It was handed over, so endorsed, to the plaintiff. Upon the findings of the jury we must assume that it was so endorsed and handed over in contemplation of the donor’s death, and with the intention that it should take effect upon his death from his then existing illness, and upon that event only, and should then pass to the plaintiff the property in the money mentioned in it.
In Moore v. Darton (4 De Gex & Sm. 517) a similar question arose as to a receipt which had previously been given by the alleged donee to the deceased donor. This receipt was in these terme: “Received, the 22nd October, 1843, of Miss Darton £500, to bear interest at 4 per cent., but not to be withdrawn at less than six mouths’ notice. William Moore.” Knight Bruce, L.J., then Vice-Chancellor, in giving judgment, contrasts the receipt with a bond, the delivery of which would unquestionably constitute a good donatio. “It is true,” he says, “the delivery of a bond is not the delivery of that without which the debt would not have been a specialty. The delivery of an instrument creating a specialty debt, and without which it would not be a specialty, as in the case of a bond, would be sufficient for the purpose of a donatio mortis causa, and so Lord Eldon decides as to a mortgage. That, however, I agree does not go the length of deciding that delivery of the mere evidence of a debt would be sufficient. In this case there is something more. The document here has been called a ‘receipt’ and it is a ‘receipt’ in a sense; but it is not a ‘receipt’ in the ordinary acceptation of that term.” He then proceeds in language very applicable to the document before us: “It was a document contemporaneous, I take it, with the creation of the debt … a document which was delivered to the agent of the debtor himself. The debt was a debt carrying interest. A mere debt would have arisen from a loan without any writing; but it would not have been a debt carrying interest, without a contract to that effect. That particular contract, I agree, might have been entered into without writing, but, as it was created by writing, proof of the writing was essential to recover upon the contract. This writing was therefore, in a sense, essential to the proof of the contract, and it is this writing which was in substance delivered mortis causa to the person owing the money.” Every word used by the Lord Justice in reference to the receipt there applies to the document in the present case. It was a document contemporaneous with the debt, which was delivered to the creditor, and which was essential to the proof of the contract, although the contract was one which might have been entered into without writing; and further it was a document the production of which, under another of the endorsed terms, was essential before the money could be re-demanded. Mr. M’Laughlin endeavoured to distinguish that case from the present upon the ground that the donee there was the debtor himself, and that the transaction might be supported as a release of the debt. But, as there was no consideration, the release to work an extinguishment should have been under seal, and the decision can be supported only upon the ground, put by the Lord Justice, of its being a valid donatio. The distinction attempted to be drawn can, I think, fairly be pushed to this: that as the donee there could not, as donee, sue himself as debtor, the gift might be effectual without a legal transfer of the right to sue; but as a note payable to order can, although unendorsed by the payee, be the subject of a valid donatio, this distinction does not appear to me to be material. Witt v. Amis (1 Best & Smith, 109) was an action of trover for a policy of insurance and a deposit receipt signed by the manager of the Provincial Bank of England at Southampton, whereby the bank acknowledged to hold the sum of £400 as the money of Priscilla Floyd. The defendant claimed these documents under an alleged donatio mortis causa, and the jury having found that there was a gift in fact, the verdict was entered for her, subject to leave to move. In moving to enter the verdict, Parry, Serjeant, for the plaintiff, confined his application for a rule to the policy of insurance, not seeking to disturb the verdict as to the deposit note. A bill having been subsequently filed by Amos, the defendant (Amis v. Witt, 33 Beav. 619), against Witt the administrator, to whom the legal interest had passed, it was contended for Witt (and I think rightly) that the verdict at law had only determined the right to the papers. It was also contended that the right to the money secured by such instrument as was not transferable could not pass as a donatio. Lord Romilly overruled this contention, and held the plaintiff entitled to the deposit note and the money paid in respect of it, as a valid donatio mortis causa. In Moore v. Moore (L. R. 18 Eq. 474) an attempt was made to induce Hall, V.-C., to decline to follow Amis v. Witt. One of the subject-matters of the donatio there was a deposit receipt for £470 in the Derbyshire Bank. The exact form of the receipt, and whether it was itself the contract or only evidence of the contract of loan, does not appear. The present Lord Justice Lindley, who was counsel for the defendant, suggested that the note could not be the subject-matter of a donatio mortis causa, and that although Amis v. Witt had decided that it could be, such a decision was not warranted by the earlier authorities. Hall, V.C., said: “I said in the course of the argument, and to that I adhere, that it having been actually decided by the late Master of the Rolls in Amis v. Witt, I shall not disturb that decision. If that decision is to be disturbed it must be disturbed by a higher authority than mine;” and he ultimately supported the gift of the deposit note as a valid donatio mortis causa. Dunne v. Boyd (I. Rep. 8 Eq. 609) can hardly be relied upon as a decision, because in that case the Vice-Chancellor held upon the evidence that there was not a sufficient handing over of the document to constitute a valid donatio. During the argument before us I had a vague recollection of the very point having been decided in this country by Lord Chancellor Brady in an unreported case. Through the kindness of my friend, the Chairman of the West Riding of Cork (Mr. Ferguson, Q.C.), I have been referred to the case, and have procured copies of some of the proceedings from the Public Record Office. The case was Sutcliffe v. Sutcliffe, which was heard before Brady, L.C., on the 21st of January, 1863. The subject-matter of the donatio there was a sum of £400 which had been deposited by one Edward Sutcliffe in the Kilkenny branch of the Provincial Bank of Ireland on the 26th September, *47 1861. The cause petition stated the conditions upon which the deposit was received, and which do not appear to differ materially from those in the present case. By his decree the Lord Chancellor declared that the petitioner was entitled to the sum of £400 as a donatio mortis causa.
These cases are identical with the present, save in one respect; the receipt here contains the words “not transferable,” which do not appear to have been upon the documents in any of the cases I have referred to. The words are not, in my opinion, material. The receipt of course was not (and even if those words were absent could not have been) negotiable, in the sense of conferring upon a transferee by endorsement a better title than that of his transferor. If this was what was intended to be effected by the words they were useless. If, on the other hand, the words were an attempt on the part of the bank to render the money secured by the receipt inalienable, they were void; the bank could not, upon such a contract, prevent the money of the deceased in their hands being assignable by him; or in the absence of assignment, passing to his personal representative. Again, the money secured by the receipts in the various cases I have mentioned being choses in action, were, as the law then stood, incapable of assignment at law, and the words here express no more than was implied in the receipts in those cases.
For these reasons, we are of opinion that the verdict should stand.
We desire to guard ourselves against allowing this case to be regarded as a precedent for entertaining such an action in a Common Law Division. The transfer of the debt effected by the donatio mortis causa was not an assignment in writing, and therefore could not, even since the Judicature Act, have passed to the plaintiff the legal interest in the sum of money comprised therein. We think that its true operation was to pass the equitable interest only, and that such a transfer raised a trust by operation of law in the personal representative for the donee. It may be contended that the suit involves the execution of a trust, and as such should have been brought in the Chancery Division. Section 38 of the Judicature Act, however, clearly shows that the 36th section is directory only. We, therefore, have jurisdiction to determine the case, and after the expense of a trial has been incurred we are not inclined to put the parties to the cost of a transfer and hearing in the Chancery Division.
The personal representative of the deceased ought to have been a party to the suit, but this objection was not taken, and under any circumstances would be now too late. The verdict must consequently stand.
Andrews, J., concurred.
In re Thompson’s Estate; Goff v. Duffield.
[1928] IR 607
Meredith J.
MEREDITH J. :
24 June
Hard cases, as has often been said, make bad law. This is an extremely hard case, and it is with the most sincere regret that I feel coerced to hold that the intended donatio mortis causacannot be sustained.
The deceased, Miss Anna Thompson, had a fair amount of property, but, for reasons which she stated to a friend, she felt under a moral obligation to dispose of the greater part of it in a particular way. She had, however, as she stated, a sum of £78 of her own in the post office for a certain purpose. It is her dealing in respect of this small sum that has, most regrettably, been questioned.
The deceased was on terms of intimate friendship with Miss Duffield, and, when on her death-bed, sent for her. When Miss Duffield called, someone else was with the deceased, and Miss Duffield said she would call again. But that evening she received news of the serious illness of a nephew in England, and, in consequence, left for England on the following morning. When she returned some days later, she at once called to see Miss Thompson, and then learned that she had just died. What happened in the meantime in respect of the £78 is told in the affidavit of Kate Leavy, the servant-maid of the deceased, as follows:”She gave me the box, which was locked, and told me to keep it for Miss Annie Duffield until she came back from England, and then to give it to her. She told me to tell Miss Duffield that the box and everything in it was to be hers (Miss Duffield’s), except one sovereign, which was to be given to Miss Duffield’s sister. She told me to be particular, and see that I gave it to no one save Miss Annie Duffield herself. She also gave me the key of the box. She told me to get the picture of the Norsemen in the sitting-room and give it to Miss Duffield. I took the box away, and papered it up, and I left it downstairs in my room. I also got the picture, and papered it up. Several times afterwards Miss Thompson asked had I the box safe, and repeated her instructions that I was to keep it for Miss Annie Duffield, and give it to her the moment she came back from England, and then I was to give it into her own hands. She seemed especially anxious that her instructions should be carried out. Before Miss Thompson gave it to me, as stated above, the box was kept in a press, from which I took it, and brought it to her. I saw Miss Thompson wrap up two sovereigns in the tissue-paper that I brought to her, and I also saw her lock the box.”
It appears from the affidavit of Miss Duffield that, when the box was handed over to Miss Duffield on her return from England, and opened by her, it was found that on the top of the tray there was a post office savings bank book in a post office envelope, which showed a sum of £78 standing to the credit of the deceased, who was the depositor marked therein. Several affidavits were filed, but the facts just stated are all that bear on the one question that has been raised, namely, whether or not the handing of the mahogany box and key to Kate Leavy, who then took them in charge according to her instructions, was a constructive delivery of the £78 to Miss Duffield. That there was an intention to make a donatio mortis causa was not disputed; but that is not sufficient. In the case of In re M’Wey; Ryan v. Cashin (1), which I decided last term, I referred to authorities on that point.
The difficulty in the case arises from the fact that Kate Leavy was the servant of the deceased, and that she did not do anything more than take the mahogany box in charge, according to the instructions of her mistress, with a view to performing a future act, which would constitute an actual delivery of the box and a constructive delivery of the £78, and which future act, as events turned out, could only, as a matter of fact, have been performed on the return of Miss Duffield after the death of Miss Thompson. Even if Kate Leavy had wired to Miss Duffield that she had the box in charge for her on her return, and if Miss Duffield had wired a direction to leave the box at her (Miss Duffield’s) house, then, although I do not think Miss Thompson meant to specify the return from England otherwise than casually, and at the earliest practicable opportunity, yet I think the proper thing for Kate Leavy to do in such circumstances would be to seek Miss Thompson’s further instructions, and I think she would be entitled to say: “No; you must only deliver the box into Miss Duffield’s own hands on her return.”If that is so, it is inconsistent with the box having been received by Kate Leavy in the first instance as agent for Miss Duffield. Or, to take other hypothetical circumstances, suppose that, when Miss Duffield first called, Kate Leavy had known the intentions of her mistress, and had communicated them to Miss Duffield, and had undertaken to take charge of the box for her if received, and if the deceased had simply given the box to Kate Leavy for Miss Duffield, and Kate Leavy had then taken it to her room and parcelled it up for Miss Duffield, then, in that case, there could not, I think, be any doubt but that there would have been a delivery.
I consider, therefore, that Mr. Dickie, in his able argument, went too far in contending that the fact that Kate Leavy was the servant of the deceased precluded her from acting as agent for Miss Duffield. But, without going that length, I think it clear that mere instructions by a mistress to a servant, and mere obedience to these instructions on the part of the servant, are not sufficient to make the servant an agent of a third person, just because what is directed to be done is for the benefit of such third person. Delivery, actual or constructive, is necessary to constitute a valid donatio mortis causa; and “a mere delivery to an agent, in the character of agent for the giver, would amount to nothing”: Farquharson v. Cave (1). I should be glad to seize on any point in the evidence which would enable me to hold that when the box was delivered to Kate Leavy she was divested, in respect of the transaction in question, of her character as agent for the donor and invested with the character of agent for the donee, but I can find absolutely none.
The case of Moore v. Darton (2) was strongly relied on by Mr. Barry for the plaintiff; and, on the facts of that case as reported, I fail to distinguish it from the present. That case, unlike the present, was tried on oral evidence, andparticularly having regard to the fact that the question as to agency was not the main point arguedit is not unlikely that some material fact beyond what appears in the report was put in evidence. Anyway, the learned Vice-Chancellor held on the evidence that the document in question was placed in the hands of the donor’s maid as agent for the donee. No doubt, he goes on to say,”with an intention, which appears to me sufficient, to constitute its delivery a donatio mortis causa.” I do not think this can mean with an intention sufficient to make the handing of the document to the donor’s maid a constructive delivery to the donee, for that would be contrary to the authorities. I think it only means with an intention sufficient to make what, on the evidence, appears to be a delivery to the donee a donatio mortis causa. The emphasis is on the latter words; the point as to delivery having been already dealt with.
The caseas to the class of instruments which are subjects of a donatio mortis causaof In re Dillon (3) is a valuable authority, but, as reported, it does not seem of assistance on the question of the agency of a person who was prima facie only agent for the donor.
The question as to agency in dispute in this case cannot be dealt with in one way when it arises in respect of a donatio mortis causa and in a different way when it arises in any other case; and in no other case could the mere handing of a box by a person to his or her own servant with instructions in a certain event, or at a future date, to hand it over to a third party, and the mere taking of the box in charge by the servant in accordance with the instructions, be a delivery of the box, or a constructive delivery of something to which any of the contents of the box refers, to the servant as agent for the third party. In Farina v. Home (1), which was a case of delivery of goods within the meaning of the 17th section of the Statute of Frauds, Parke B. said: “This warrant is no more than an engagement by the wharfinger to deliver to the consignee, or anyone he may appoint; and the wharfinger holds the goods as the agent of the consignor (who is the vendor’s agent), and his possession is that of the consignee, until an assignment has taken place, and the wharfinger has attorned, so to speak, to the assignee, and agreed with him to hold for him. Then, and not till then, the wharfinger is the agent or bailee of the assignee, and his possession that of the assignee, and then only is there a constructive delivery to him.” A similar question arises sometimes in the case of goods alleged to be delivered under circumstances constituting a valid pledge at common law. In Dublin City Distillery, Ltd., v. Doherty (2), Lord Parker of Waddington said: “When the goods are not in the actual possession of the pledger, but of a third party as bailee for him, possession is usually given by a direction of the pledger to the third party requiring him to deliver them to, or hold them on account of, the pledgee, followed either by actual delivery to the pledgee or by some acknowledgment on the part of the third party that he holds for the pledgee.” It is the last words that are material in the present case. Here, after Kate Leavy took the box in charge, nothing followed to show that she retained the box otherwise than as agent of the deceased, to carry out the instructions to hand them to Miss Duffield on her return.
Fayne v Martin
Supreme Court of Justice.
19 December 1924
[1925] 59 I.L.T.R 14
Kennedy C.J., O’Connor, FitzGibbon JJ.
Kennedy, C.J.
Peter Donlon was an old man of about eighty years of age, a childless widower, living alone on a small 24 acre farm. Charles Martin, the defendant in this action, lived, with his wife Margaret Martin, a short distance away from Peter Donlon. The defendant was a farmer and shopkeeper. They were both on very friendly terms with Peter Donlon, who appears to have confided in them as to his business affairs, and to have trusted them implicitly. Mrs. Martin rendered many services for him, such as cooking and washing, and he breakfasted with the Martins, and often brought his labourers with him. The defendant also helped the old man on his farm and cutting his meadow. For over twenty years Peter Donlon had been in the habit of entrusting the care of his money to Mrs. Martin, and seemed to recognise their entire disinterested friendship. He kept his money on deposit receipt in his own name in different banks, and gave the receipts to Mrs. Martin to mind for him. Shortly before his death she had cash or deposit receipts for over £700. Towards the end of July, 1923, Peter Donlon, realising that his health was breaking down, sent for the plaintiff, Michael Fayne, who is his nephew, and asked him to stay with him, which he did. on 29th July, 1923; Peter Donlon died on 17th August, 1923. On 1st August, Peter Donlon sent for Mr. Hannan, solicitor, of Longford, and gave him instructions for a will, which was prepared and executed the same day. The old man was then, as shown by Mr. Hannan’s evidence, quite clear in his mind and memory and certain as to his intentions. He informed Mr. Hannan fully and correctly of the particulars of his property, of his farm of land and his cattle, and of his moneys on deposit receipt in various banks—£100 in the National Bank, £323 in the Bank of Ireland, £280 in the Northern Bank. He appointed the plaintiff as sole executor of his will, gave him his farm and the residue of his property, after several pecuniary legacies should have been paid. These legacies amounted to £410—that is, a little less than the amount of the first mentioned two deposit receipts, and so capable of being paid without calling upon the money on deposit receipt in the Northern Bank. On 8th August Mr. Hannan received a telegram purporting to come from the testator, asking him to come and make a fresh will, but when he arrived Peter Donlon said he had not sent the wire, and was quite satisfied with the will he had already made, and did not wish to make any change in the will. The facts as to the deposit receipt for £280 in the Lanesboro’ Branch of the Northern Bank, with which this action is concerned, are to be collected from the evidence of three persons, who have personal knowledge of them—the defendant, Mr. Revell, the bank manager at Lanesboro’, and Father Cox, all witnesses examined for the defendant. The defendant states that he visited Peter Donlon every day while he was ill. On 9th August Peter Donlon told him to bring the Northern Bank receipt to the bank manager in Lanesboro’, and tell him to come and see him as he (Peter Donlon) wanted money. The receipt was at that time in charge of Mrs. Martin with the other receipts belonging to the deceased. The defendant brought the receipt to Mr. Revell, the bank manager at Lanesboro’ and gave him Peter Donlon’s message. He says that the manager came out that day and saw Peter Donlon, but that he was not present at the interview. Father Cox, curate of the parish in which Donlon lived, says that he visited Donlon during his last illness, and that he told him about the will he had made, and how he had disposed of his farm and of the money he had in the bank at Lanesboro’, and that it was not included in his will, and that that was why he wished to see Father Cox. Father Cox told him it was a mistake not to include it in his will, and advised him to send for a solicitor to make a codicil dealing with it in order to avoid a dispute after his death. Peter Donlon replied: “I think I will do that.” He told Father Cox that he wished Charles Martin to have the money, and referred to his indebtedness to the Martins for their kindness to him. On one of Father Cox’s visits Peter Donlon asked him to tell Mr. Revell, the bank manager at Lanesboro’, to come out and see him, but did not mention for what reason. Father Cox gave the manager the message a couple of days later. Mr. Revell, the bank manager, says that on 9th August, when he got Peter Donlon’s message, he went out to him, bringing the deposit receipt, which Martin had left with him shortly before that, and also the requisites for making a new lodgment, as he knew from his common experience of such cases and from the circumstances that Donlon wanted money. Peter Donlon told him that he wanted £100 to give a few legacies or donations to nephews and nieces. Mr. Revell said he did not carry so much with him, but would give it to him in *15 a few days. Donlon then arranged to send Charles Martin for the money the next day, and asked the manager to put Martin’s name on the receipt for the rest of the money, as he wished Martin to get the money if anything happened to him. The manager advised him to put it in a joint receipt in his (Donlon’s) and Martin’s own names, so that if he got well he could have control of the money. He agreed to do this, and Peter Donlon then endorsed the deposit receipt and signed a requisition form for a new deposit receipt in his own and Martin’s name jointly, and directed the manager to hand the new deposit receipt along with the cash to Charles Martin. Charles Martin says that Peter Donlon sent him to the bank the next day for the money. He went and saw the manager, who gave him £101 12s. 3d. in cash and a bank receipt for £180 in the names of Peter Donlon and Charles Martin. He brought the cash and the receipt back to Peter Donlon, counted £101 12s. 3d. out to him in bed; the old man made him fold it up and leave it beside him, and he never saw it again. When he handed Donlon the receipt, he gave it back to him and told him that all that was in the receipt was his, Charles Martin’s, and that he was to give £30 out of it—namely, £10 to Father Cox, £5 to Margaret Donlon, £5 to Mary Teresa Donlon, £5 to John Farrell, £5 to Tom Hunt. He told Martin to write it down when he went home. The written note by Martin is in evidence. The defendant says that he was surprised and did not expect Peter Donlon to do so much for him. For these facts we have, as regards the deposit receipt for £180, all the elements of a valid donatio mortis causâ. It is established that a deposit receipt, whether it be endorsed or not, may be the subject of a valid donatio mortis causâ : Porter v. Walsh, [1895] 1 I. R. 286. The evidence is clear that Peter Donlon was at the time in question in sure and certain contemplation of death, though his age, illness and death would of themselves lead to a presumption that such was the case. The evidence of the bank manager, that Donlon said he wished Martin to have the money should anything happen to him, his advice acted upon by the deceased as to the joint receipt, also Father Cox’s evidence, that he should deal with the money by a codicil rather than outside his will, put it beyond doubt that the testator intended to make a gift of this money to Martin, which should take complete effect on his death. The defendant’s evidence as to the testator telling him that all that was in the deposit receipt belonged to him is not inconsistent with such intention, and the circumstances are such that such intentions would be presumed, without the bank manager’s evidence: Gardner v. Parker, 3 Madd. 184. Upon the evidence of the defendant the deposit receipt which he handed to Donlon was given back to him by Donlon. It is settled that a donatio mortis causâ may be coupled with a trust: Hills v. Hills, 8 M. & W. 401. Therefore, the direction to Martin as to payments out of the money does not invalidate the donation. I can find no ground for disagreeing with the judgment of the learned Judge in the Court below, or disturbing the finding of the fact that the defendant did as he says, pay the sum of £101 12s. 3d. to the deceased, Peter Donlon, or to find contrary to the evidence of Father Cox and the bank manager as to Donlon’s sanity. In my opinion, therefore, the defendant has established a good donatio mortis causâ of the deposit receipt for £180, and the plaintiff has wholly failed in both branches of his claim. The appeal, therefore, in my opinion, should be dismissed with costs.
O’Connor, J.
I concur.
FitzGibbon, J.
I agree with the Chief Justice, but I differ from Meredith, J., in the inference which I draw from the intention of the dying man when parting with the deposit receipt from the acts found to be done and the words found to have been spoken by him, and the inference cannot depend upon anything apparent at the trial which is not equally clear to us. Before the plaintiff’s claim can be rejected, the Court must hold that the presumption of a resulting trust has been rebutted, and the onus of rebutting the presumption lies on the defendant. The Court must be satisfied that the deceased man effectually carried out the intended donation. No satisfactory evidence has been produced of the suggested declaration of trust, of the income for Peter Donlon during his life and of principal for survivor. All the essential requisites for a valid donatio mortis causâ are present. It has not been denied that there was a sufficient delivery of the subject-matter of the gift, the money invested on deposit receipt. Delivery of an unendorsed deposit receipt, even, is sufficient traditio to establish a valid donatio mortis causâ : Porter v. Walsh, [1895] 1 I. R. 286. I am, therefore, of opinion that this appeal should be dismissed with costs.
Mulroy, Deceased; McAndrew v Mulroy
Court of Appeal.
23 May 1924
[1924] 58 I.L.T.R 113
Molony L.C.J., Ronan, O’Connor L.JJ.
Molony, L.C.J.
In this case the Master of the Rolls came to the conclusion that on the evidence there was not a good donatio mortis causa, and, after a careful examination of the evidence, I am not disposed to differ from him. Three things are necessary for an effective donatio mortis causa, as was laid down in Cain v. Moon, [1896] 2 Q. B. D. 283 at p. 286: “First, the gift or donation must have been made in contemplation, though not necessarily in expectation, of death; secondly, there must have been delivery to the donee of the subject matter of the death; and thirdly, the gift must be made under such circumstances as show that the thing is to revert to the donor in case he should recover.” As regards delivery, it was established in Union of London and Smith’s Bank v. Wasserberg, [1915] 1 Ch. 195, that an inchoate or imperfect delivery of chattels may be sufficient for effectuating a donatio mortis causa. In that case the testator, when about to undergo a serious operation, expressed in the clearest way a desire to give his wife certain bonds to bearer, which he had in his locked box in the bank, and having discussed the matter with the assistant manager, he put his wife’s name on the outside of the parcel containing the bonds, and locked it up in his locked box, and having done this in presence of his wife, he left the box in the bank and gave his wife a list of the bonds, telling her to keep it safely. After they had reached home he gave his wife a bunch of keys which contained the key of the locked box, and told her to lock them up with the list of the bonds, which she accordingly did, in a drawer in her own room, of which she had always kept the key. The same day the testator went into a nursing home, where he shortly afterwards died; and it was held by Sargant, J., that the delivery of the key transferring to the wife a partial dominion over or part of the means of getting at the box, though not a sufficient delivery to support a gift inter vivos, was under the circumstances a sufficient delivery to effectuate a donatio mortis causa. Sargant, J., observed in the course of his judgment, p. 202: “With regard to the incident at the bank, the case of Cochrane v. Moore (25 Q. B. D. 57) shows that mere words of gift are not in themselves sufficient, but there must be delivery. If the testator had actually given the parcel to his wife, and she had handed it back to him for the purpose of safe custody, that would probably have been enough; but the facts are, I think, that the testator did not at any time during that incident part with the custody of the bonds.” The question of the effect of a redelivery of bank notes for the purpose of safe custody was discussed this year in the case of In re Hawkins, Watts v. Nash, [1924] W. N. 131. In that case the testator, on his death-bed, handed over to his niece bank notes for £5,000, and to her husband bank notes for £2,000, and clearly indicated that the money was to be theirs respectively after his death. The niece, after having got possession of the notes, asked the testator if she should put the envelope in his deed-box for safety against fire, and, upon the testator assenting, she took the key from a nail in the wall facing the testator’s bed, unlocked the box, placed the envelope in the box, which she replaced under his bed, and she hung the key upon its nail again. It was contended on behalf of the niece and her husband that there was such a complete delivery of the notes as was sufficient to constitute a valid donatio mortis causa to each donee, and that the redelivery of the notes to the testator for safe custody on behalf of the donees did not affect the previous gift. P. O. Lawrence, J., said, in delivering judgment: “The only difficulty lay in the question whether the placing the notes in the deed-box of the testator for safe custody destroyed the effect of the previous delivery by restoring to the donor possession of the notes.” Dealing with certain cases, including the case of In re Wasserberg, [1915] 1 Ch. 195, and Bunn v. Markham, 7 Taunton 244, he said: “In the present case the previous effectual delivery was unaffected by the subsequent part of the transaction, namely, the placing of the envelope, with the donor’s assent, in the deed-box by the donees for safe custody. The testator therefore was, until his death, merely the custodian of the notes for the donees. There was nothing in Bunn v. Markham inconsistent with the proposition that when once the gifts ( mortis causa ) were complete, the subsequent agreement by the donor to take back the notes for safe custody did not affect the prior gifts.” In the present case the deceased man, who was a confirmed invalid and died a few days afterwards, asked his brother, the defendant, with whom he lived, to bring him his cash-box; and it having been brought to him, he opened it with the key which was in the pocket of his waistcoat which he had at the end of his bed, and having opened it and taken out the three documents, he called the defendant to his side, and said: “Here, Jamesie, is all belonging to me, all my pro *114 perty; and I am sorry I haven’t more to give you; you were very good to me.” And he added: “You will do for me the same as you did for Kitty and Tom,” which was understood to mean to provide for Masses and a monument. Nothing else was said, but it does appear that the documents were put in the hands of the defendant. Had the defendant thenceforward retained possession of the documents there would have been strong evidence in favour of a donatio, but it appears that after the defendant had got possession of the documents he put them back into the box and that the deceased himself locked the box and, having locked the box, put the key back into his own waistcoat pocket, and then the defendant put away the box and restored the vest containing the key to where it had previously been at the foot of the bed. All this happened within a couple of minutes, and the effect of the transaction is that, notwithstanding the gift, the deceased man had exactly the same dominion over the property that he had before. If the defendant had asked to be allowed to put the papers back in the box for safe custody, and the deceased had assented to this, Watts v. Nash (supra) shows that this would not have destroyed the effect of the gift; but the unexplained replacing of the document in the box immediately afterwards leads to the belief that the deceased never intended to part with the actual possession of the documents in such a way as to lose dominion and control of them during his life. The case is one of some difficulty, and I hesitated in coming to a conclusion; but on the whole I cannot bring myself to differ from the Master of the Rolls in his conclusion, and consequently I think the appeal ought to be dismissed.
Ronan, L.J.
I have very great difficulty in this case. Donatio mortis causa depends on the intention with which certain acts are done, and the first matter we must try to ascertain is the intention with which the acts were done here. (He reviews the evidence.) He did not hand him the box with the documents in it. That is a very important distinction between this and other cases. He handed him the very documents themselves. Beyond all doubt, if the transaction ended there, there was on the evidence a good donatio mortis causa. But a donatio mortis causa can be revoked by the donor just as a legacy can; and the question in this case appears to me to be whether this complete donatio mortis causa was revoked. It could have been revoked by an act or statement of the donor showing that he intended to destroy the effect of what he had done and to resume the entire control of the property himself. No further statement by him was proved. Taking the evidence as a whole, I am not satisfied that there is anything proved sufficient to show that the donor said or did anything to revoke the gift he had already made. However, my view is immaterial, the majority of the Court holding the other way.
O’Connor, L.J.
I am of opinion that the appeal should be dismissed. Counsel for the appellant asks us to split the transaction into two—the one a transfer of the possession of the documents to his client, and the other a retransfer of them from his client to Michael on the terms of Michael keeping them on trust for the appellant. If this were the effect of the transaction, the case would be within the authority of the case in the Weekly Notes, to which we have been referred. That, however, is not my view of the matter. The whole business took only a couple of minutes or so; when it was all over, the position of the documents and the indicium of the control over them were precisely where they always were. The momentary tradition of the documents into the hands of James seems to me quite consistent with its being done for the purpose of showing to James the property the deceased intended to give him, and of enabling James afterwards to claim them. For, I think, there was an intention to benefit James; but that is a different thing from transferring the possession to James. The transfer of possession is the element necessary; it is, in my opinion, not alone not established by the evidence, but is negatived by the evidence, taken as a whole.
In re M’Wey; Ryan v. Cashin and Costello.
[1928] IR 491
Meredith J. 491
The defendant, Margaret Cashin, claims that she is entitled to £300 India 51/2 per cent. Stock and £400 3 per cent. Local Loans Stock, on the ground that what, in the indorsement of claim in the originating summons, are described as receipts for the said stock were delivered to her by the deceased shortly before his death as a donatio mortis causa of the said stock.
It is not unimportant to observe that the receipts are not, strictly speaking, receipts for the stock, but only receipts for the consideration paid for the stock. Thus the so-called receipt for the £400 3 per cent. Local Loans Stock is a receipt for the sum of £252 10s., which was the consideration for the purchase at 631/8 of £400 interest or share in the said stock. It appears from the receipt that the stock had been transferred on the date therein mentioned to the deceased. Consequently, quoad the property in respect of which the donatio mortis causa is claimed, the document is simply a memorandum or statement of particulars of the “interest or share” in the stock that was transferred to the deceased on the date mentioned.
The defendant, Margaret Cashin, was cross-examined on her affidavit, and I had some doubt in my own mind if, on her evidence in the box, the intention to make a donatio was quite clear. However, that point was not contested, and the only point raised on the facts was that the gift was intended to take effect immediately and unconditionally. But the point seems to me to be disposed of by the directions of the deceased not to sell until after his death. I therefore hold that the deceased gave Margaret Cashin the receipts intending to make a donatio mortis causa.
The question accordingly is whether, or not, that intention alone was sufficient notwithstanding the nature of the property in each case a share or interest in certain stock made transferable in a specified Bankand notwithstanding the nature of the actual thing delivered, which was in each case a mere memorandum. To hold that it is sufficient would, in my opinion, be to hold that the case of Ward v. Turner (1) is no longer good law. But the authority of that case was recognised by the House of Lords in Duffield v. Elwes (2), and was followed in Moore v. Moore (3), and, as was held in the last-mentioned case, so I hold in this, that the receipts in question here do not differ substantially from the receipts for the South Sea Annuities, which were the subject matter in Ward v. Turner (1). In re Andrews (4) belongs to the same line of authorities.
If the executors of the donor are to be held trustees for the donee for the purpose of giving effect to the gift simply because a document is handed to the donee giving particulars of a share or interest in stock that had been purchased, the intention being clear, much of the learning and of the subtle distinctions in the cases on donationes mortis causa must be regarded as obsolete. Where the executors have been held to be trustees, it is not because the donor himself had made himself a trustee, but because he had made an incomplete gift and because the doctrine, that equity will not assist a volunteer by completing an incomplete gift, does not apply to a donatio mortis causa. But there must in the first instance be something which merely requires to be completed in order to perfect the legal title.
I have only to add that in Duckworth v. Lee (5) all the members of the Court of Appeal in Ireland were agreed that the doctrine of donatio mortis causa was not to be extended. There has always been a distinction between the English law on this subject and the Roman law as it existed in the time of Justinian, and if Ward v. Turner (1) were not to be held to govern this case then it seems to me that the law would be extended so as to efface the distinction.
Mary J. Anderson, deceased
Anderson v Anderson
High Court.
20 January 1938
[1938] 72 I.L.T.R 47
Johnston, Gavan Duffy JJ.
Johnston, J.:
I should like first to congratulate counsel on each side on their very clear and succinct argument. Everything possible has been said by Mr. MacCarthy and by Mr Brereton Barry. Having considered the arguments carefully I think that Judge Sealy’s decision was correct and should be upheld, but not exactly upon the grounds upon which it was given. All the essential elements to sustain a donatio mortis causa exist in this case and I am quite satisfied on Mr. MacCarthy’s analysis of the evidence and the authorities cited that the gift constituted a valid donatio mortis causa. McGonnell v. Murray, I. R. 3 Eq. 460, on which Mr. Brereton Barry relies, was based on very different facts from those in this case. I can well understand the distinction that should be made between a deposit book in a private bank and a deposit book issued by a great State department such as the Post Office. In a sense such a book has statutory authority. Such a distinction has been drawn in England. The appeal must therefore be dismissed.
Gavan Duffy, J.:
I also think that Judge Sealy’s decision should be upheld. I think that there was a valid transfer of the property from the deceased and that there is no evidence to support a resulting trust for the donor. The respondent was in some difficulty owing to the non-production of the book, but it would be unfair to decide against him on that ground when the Post Office after the death of the deceased recognised his claim.
Anna Thompson, Deceased
Goff v Duffield
High Court.
24 June 1927
[1929] 63 I.L.T.R 17
Meredith J.
Meredith, J.
Hard cases, as has often been said, make bad law. This is an extremely hard case, and it is with the most sincere regret that I feel coerced to hold that the intended donatio mortis causa cannot be sustained. The deceased, Miss Anna Thompson, had a fair amount of property, but, for reasons which she stated to a friend, she felt under a moral obligation to dispose of the greater part in a particular way. She had, however, as she stated, a sum of £78 of her own in the Post Office for a certain purpose. It is her dealing in respect of this small sum that has most regrettably been questioned.
The deceased was on terms of intimate friendship with Miss Duffield, and when on her death bed sent for her. When Miss Duffield called some one else was with the deceased, and she said she would call again. But that evening she received news of the serious illness of a nephew in England, and in consequence left for England on the following morning. When she returned some days later she at once called to see Miss Thompson and then learned that she had just died. What happened in the meantime in respect of the £78 is told in the affidavit of Kate Leavy, the servant maid of the deceased, as follows:— “She gave me the box, which was locked, and told me to keep it for Miss Annie Duffield until she came back from England and then to give it to her. She told me to tell Miss Duffield that the box and everything in it was to be hers (Miss Duffield’s) except one sovereign which was to be given to Miss Duffield’s sister. She told me to be particular and see that I gave it to no one save Miss Annie Duffield herself. She also gave me the key of the box. She told me to get the picture of the Norsemen in the sitting room and give it to Miss Duffield. I took the box away and papered it up and left it downstairs in my room. I also got the *17 picture and papered it up. Several times afterwards Miss Thompson asked had I the box safe, and repeated her instructions that I was to keep it for Miss Annie Duffield and give it to her the moment she came back from England, and then I was to give it into her own hands. She seemed specially anxious that her instructions should be carried out. Before Miss Thompson gave it to me, as stated above, the box was kept in a press, from which I took it and brought it to her. I saw Miss Thompson wrap up two sovereigns in the tissue paper that I brought to her, and I also saw her lock the box.”
It appears from the affidavit of Miss Duffield that when the box was handed over to Miss Duffield on her return from England and opened by her it was found that on the top of the tray there was a Post Office Savings Bank Book in a Post Office envelope, which showed a sum of £78 standing to the credit of the deceased, who was the depositor marked therein. Several affidavits were filed, but the facts just stated are all that bear on the one question that has been raised, namely, whether or not the handing of the mahogany box and key to Kate Leavy, who then took them in charge according to her instructions, was a constructive delivery of the £78 to Miss Duffield. That there was an intention to make a donatio mortis causa was not disputed. But that is not sufficient. In the case of McWey, decd.; Ryan v. Cashin, 62 Ir. L. T. R. 161, which I decided last term, I referred to authorities on that point.
The difficulty in the case arises from the fact that Kate Leavy was the servant of the deceased, and that she did not do anything more than take the mahogany box in charge according to the instructions of her mistress with a view to performing a future act which would constitute an actual delivery of the box and a constructive delivery of the £78, and which future act, as events turned out, could only, as a matter of fact, have been performed on the return of Miss Duffield after the death of Miss Thompson. Even if Kate Leavy had wired to Miss Duffield that she had the box in charge for her on her return, and if Miss Duffield had wired a direction to leave the box at her (Miss Duffield’s) house, then, although I do not think Miss Thompson meant to specify the return from England otherwise than casually and at the earliest practicable opportunity, yet I think the proper thing for Kate Leavy to do in such circumstances would be to seek Miss Thompson’s further instructions, and I think she would be entitled to say: “No; you must only deliver the box into Miss Duffield’s own hands on her return.” If that is so it is inconsistent with the box having been received by Kate Leavy in the first instance as agent for Miss Duffield. Or, to take other hypothetical circumstances, suppose that when Miss Duffield first called Kate Leavy had known the intentions of her mistress and had communicated them to Miss Duffield and had undertaken to take charge of the box for her if received, and if the deceased had simply given the box to Kate Leavy for Miss Duffield, and Kate Leavy had then taken it to her room and parcelled it up for Miss Duffield, then, in that case, there could not, I think, be any doubt but that there would have been a delivery.
I consider, therefore, that Mr. Dickie, in his able argument, went too far in contending that the fact that Kate Leavy was the servant of the deceased precluded her from acting as agent for Miss Duffield. But, without going that length, I think it clear that mere instructions by a mistress to a servant, and mere obedience to these instructions on the part of the servant, are not sufficient to make the servant an agent of a third person, just because what is directed to be done is intended for the benefit of such third person. Delivery, actual or constructive, is necessary to constitute a valid donatio mortis causa and “a mere delivery to an agent, in the character of agent for the giver, would amount to nothing”: Farquharson v. Cave, 2 Coll. 356, at page 367. I should be glad to seize on any point in the evidence which would enable me to hold that when the box was delivered to Kate Leavy she was divested, in respect of the transaction in question, of her character as agent for the donor and invested with the character of agent for the donee, but I can find absolutely none.
The case of Moore v. Darton, 4 De G. & Sm. 517, at p. 520, was strongly relied on by Mr. Barry for the defendant, and on the facts of that case as reported I fail to distinguish it from the present. That case, unlike the present, was tried on old evidence, and particularly having regard to the fact that the question as to agency was not the main point argued—it is not unlikely that some material fact beyond what appears in the report was put in evidence. Anyway, the learned Vice-Chancellor held on the evidence that the document in question was placed in the hands of the donor’s maid as agent for *18 the donee. No doubt he goes on to say, “with an intention, which appears to me sufficient, to constitute its delivery a donatio mortis causa. ” I do not think this can mean “with an intention sufficient to make the handing of the document to the donor’s maid a constructive delivery to the donee,” for that would be contrary to the authorities. I think it only means “with an intention sufficient to make what, on the evidence, appears to be a delivery to the donee a donatio mortis causa. ” The emphasis is on the latter words; the point as to delivery having been already dealt with. The case as to the class of instruments which are subjects of a donatio mortis causa (In re Dillon, 44 Ch. D. 76, at p. 82) is a valuable authority, but, as reported, it does not seem of assistance on the question of the agency of a person who was primâ facie only agent for the donor.
The question as to agency in dispute in this case cannot be dealt with in one way when it arises in respect of a donatio mortis causa and in a different way when it arises in any other case; and in no other case could the mere handing of a box by a person to his or her own servant with instructions in a certain event, or at a future date, to hand it over to a third party, and the mere taking of the box in charge by the servant in accordance with the instructions, be a delivery of the box, or a constructive delivery of something to which any of the contents of the box refers, to the servant as agent for the third party. In Farina v. Home, 16 M. & W. 119, which was a case of delivery of goods within the meaning of s. 17 of the Statute of Frauds, Parke, B., said:—“This warrant is no more than an engagement by the wharfinger to deliver to the consignee, or anyone he may appoint; and the wharfinger holds the goods as the agent of the consignor (who is the vendor’s agent), and his possession is that of the consignee, until an assignment has taken place and the wharfinger has attorned, so to speak, to the assignee, and agreed with him to hold for him. Then, and not till then, the wharfinger is the agent or bailee of the assignee and his possession that of the assignee, and then only is there a constructive delivery to him.” A similar question arises sometimes in the case of goods alleged to be delivered under circumstances constituting a valid pledge at common law. In Dublin City Distillery, Ltd. v. Doherty, [1914] A. C. 823, at p. 852, Lord Parker of Waddington said:— “When the goods are not in the actual possession of the pledger, but of a third party as bailee for him, possession is usually given by a direction of the pledger to the third party requiring him to deliver them to, or hold them on account of, the pledgee, followed either by actual delivery to the pledgee or by some acknowledgment on the part of the third party that he holds the goods for the pledgee.” It is the last words that are material in the present case. Here, after Kate Leavy took the box in charge, nothing followed to show that she retained the box otherwise than as agent of the deceased to carry out the instruction to hand them to Miss Duffield on her return.
For these reasons I must hold that the intended donatio fails.
I allow all parties their costs out of the general estate and £5 5s. preliminary costs to Miss Duffield.
Mills v. Shields and Kelly.
Gavan Duffy P. [1948] IR 367
GAVAN DUFFY P. :
18 May
I think the plaintiff has established a valid donatio mortis causa. The late Alfred Mills handed certain valuables to Father Celestine Kelly, O.D.C., asking him to give the parcel to the donor’s brother (and there is no doubt that he meant Dr. Ernest Mills of Johannesburg) in case anything happened to the donor when he went away to be treated at a nursing home, and Father Kelly promised to give the parcel to the brother; he understood that the contemplated treatment was dangerous. Shortly afterwards the donor gave Father Kelly another package to put with the first. Alfred Mills was suffering from neurosis and about three weeks later he set out for Dublin reluctantly from Loughrea, got out of the train soon after starting in the morning and, having arranged with a friend to go with him by car to Dublin next day, because he was afraid to travel alone, went for a walk by himself and took his own life on the evening of the same day. He had told one witness that he was going to Dublin to see a specialist and another that he was going for a rest; I cannot be certain that he meant to go to a nursing home, but it is clear that, in pursuance of advice that he had received, he was making the journey in the hope of finding a cure for a very oppressive form of neurosis, most probably through some pathological treatment. The substance of the direction that accompanied his donatio was that the gift was to become effective if he should die when he went away for treatment; and on a fair view of the evidence I think that is what happened, for I think this was the journey in contemplation. I follow the decision of Lord Tomlin in Wilkes v.Allington (2), in holding that the donatio is not defeated by the fact that the donor, having set out for Dublin, did not die, as he had feared, from treatment in a nursing home, but from another cause.
It is immaterial whether or not Alfred Mills made his gift, as is now suggested, under the apprehension of being visited with an irresistible impulse to commit suicide; the surmise is easy to accept after the event, but the evidence is really quite inconclusive. This case is not one of intended suicide within the ban of Agnew v. Belfast Banking Company (3).
Mr. Micks, however, on behalf of the personal representative of the deceased man, stoutly contests the validity, for the purpose of donatio, of the donor’s delivery to his own agent. Now Father Celestine Kelly was the spiritual adviser of Alfred Mills, who placed the utmost confidence in him as a man; accordingly he chose the priest as his agent for the donatio and twice gave him valuables to transmit to Dr. Mills in South Africa, if the donor were to die under the contemplated treatment. In law Father Celestine was clearly the donor’s agent; but he was a fiduciary agent, to take charge of considerable assets and see to their safe transmission to a distant country in the event of the donor’s death while away from home for treatment. Father Celestine therefore accepted a trust and, the implied power of revocation never having been exercised, he is trustee for the beneficial owner of the property, Dr. Ernest Mills. The case, I think, is indistinguishable on the facts from In re Korvine’s Trust, Levashoff v. Block (1), cited in White and Tudor’s Leading Cases in Equity (9th ed.), vol. 1, at p. 357, as the latest of a series of authorities for the proposition that an essential of a validdonatio mortis causa is a delivery of the subject of the gift to the donee for his own use or upon trust for another person,and I am happy to follow Mr. Justice Eve in sustaining thetraditio.
There remains for further argument the question whether certain of the valuables delivered, including stock and share certificates, were capable of passing, for the purpose ofdonatio mortis causa, by the simple delivery proved here.
Mills v. Shields. (No. 2).
Gavan Duffy P. [1950] IR 21
GAVAN DUFFY P. :
26 Jan. 1949
I have already decided in favour of a gift mortis causaby the late Alfred J. Mills, but the question whether certain securities, representing his investments, effectively passed to the donee on the death of the donor by virtue of histraditio of stock and share certificates and savings certificates stood over for further evidence and argument. The securities are:1, certain savings certificates of Saorstát Éireann; 2, certificates, in Mr. Mills’s name, of shares in ten companies registered, under the Companies Acts, in Ireland; and 3, certificates, in his name, of stock or shares in fourteen companies registered, under the Companies Acts, in England. I omit securities in respect of which the plaintiff, as donee, now makes no claim.
The savings certificates were issued in 1929 and 1930, but I understand that the Savings Certificates Rules, 1926, described as “Conditions regarding the issue of Savings Certificates,” apply to them. Art. 47 (2) of the Rules requires any dispute as to the actual ownership of a certificate, arising between the Minister for Posts and Telegraphs and any person claiming to be entitled, to be referred to the Registrar of Friendly Societies for final decision. Accordingly, I think the donor’s contract with the Post Office requires the plaintiff to resort in the first instance to the Minister, and then, if the claim is rejected, to the Registrar. Useful notes on the corresponding jurisdiction and decisions in England will be found in Halsbury’s Complete Statutes of England, vol. 17, tit. “Savings Banks,” at pp. 654, 675, 761-2.
Various things in action have been held to pass under gifts mortis causa, but the nature of the particular right involved must determine the document or documents whereof delivery is requisite for a good gift mortis causa.The delivery of a negotiable instrument is capable of passing, on the donor’s death, the rights which the document carries; but, as to non-negotiable instruments, it is desirable to distinguish vouchers for money, as to which a clear principle can be extracted from case law, in their relation to giftsmortis causa, and documents embodying other things in action(such as stock and share certificates), for where these are concerned I find the law harder to ascertain from the cases: see, in this connection, Jenks’s “Digest of English Civil Law,”3rd edn., pars. 2063, 2064.
As to vouchers for money, a term in which I include mortgage deeds and other documents of title to a payment of cash, I think the accepted principle is that the delivery of a document of title, acknowledging a sum of money to be payable to the donor, can effectively pass his rights, by way of gift mortis causa, provided that the document expresses the terms on which the money is payable and shows, at least, the essentials of the contract between the donor and the party liable to pay: see the judgment of Cotton L.J., at p. 82, in In re Dillon, Duffin v. Duffin (1),as adopted in In re Weston, Bartholomew v. Menzies (2),per Byrne J.
In England that principle has been accepted in such cases as In re Richards, Jones v. Rebbeck (3), by Eve J., in favour of a traditio of Victory Bonds, and Darlow v.Sparks (4), by Bennett J., in favour of a traditio of savings certificates issued by the British Government.
In Delgoffe v. Fader (5), Luxmoore L.J. rejected, for the purpose of a gift mortis causa, the delivery of a book equivalent to a mere bank pass book; in doing so he reiterated the test prescribed by Cotton L.J. and Byrne J., but he also stressed the fact that the book was not essential to the recovery of the money to which it related; and counsel for the plaintiff suggest, as a sufficient alternative condition to that of the principle of In re Dillon, Duffin v. Duffin (1)where the document handed over is not negotiable, that the delivery, by way of gift mortis causa, of a document essential to the recovery of the donor’s claim makes a traditio effective in equity, and that, a stock or share certificate being a document of that character, the plaintiff is entitled to succeed.
The feature here relied upon by the plaintiff has undoubtedly found favour from time to time in the Courts;
obviously, where a contract is evidenced by a single paper writing, the document is often likely to answer, or fail to answer, the test, whether one asks if it sets out the whole contract or whether one asks if it is essential to recovery on the contract. Cassidy v. Belfast Banking Co. (1) is, perhaps, the best case for the plaintiff’s test. There Palles C.B. emphasised the fact that the deposit receipt in question was essential to the proof of the contract. At the same time, he expressly grounded his judgment on that of Knight Bruce V. C., in Moore v. Darton (2), which Cotton L.J., in In re Dillon, Duffin v. Duffin (3), found very instructive to illustrate the rule that a document expressing the terms of a contract was a good subject-matter when delivered by way of gift mortis causa; in fact, that was one of the two authorities upon which the Lord Justice formulated his principle: that authority upheld the donatio of a receipt for money, repayable on six months’ notice, with interest at 4%, as the document itself showed.
One other feature of Cassidy’s Case (1) deserves notice. The deposit receipt, while showing interest to be payable, stated that the rate of interest would be posted up in the bank’s offices and that no other notice would be given; yet the delivery of the document was upheld for a giftmortis causa. I observe that in In re Weston, Bartholomewv. Menzies (4), the delivery was upheld of a document which, while failing to set out the entire contract, did disclose the essentials of the contract. I shall have to consider whether I can say as much of the donor’s stock and share certificates here, if the same principle applies to a document which is not a voucher for money.
I think the most instructive case in Ireland is Duckworthv. Lee (5), in the Court of Appeal, where an attempt to sustain the delivery of an IOU as effective for a giftmortis causa was unanimously condemned. The document was a mere memorandum, and imperfect at that, for it said nothing about interest, which the debtor had agreed to pay. Ashbourne C., stating that in all the cases cited where the gift mortis causa had been upheld the document delivered was essential to the recovery of the debt, gave as instances a policy of assurance, a bond, a mortgage deed, and a deposit receipt, cases in which I notice that the document embodied the whole contract, or substantially the whole contract, of the parties; he then mentioned Moore v. Darton (2) (as also did FitzGibbon and Walker and Holmes L.JJ.), pointing out that there the receipt was evidence of the entire debt and of all the terms of the loan, it proved all the terms of the contract, and, as the contract was created by writing, proof of the writing was essential to recovery upon the contract. Walker L.J. said:”The delivery of the thing must carry with it some property, or the delivery must be of some writing which contains special terms or conditions attaching to the debt which it proves, and which must be carried out and proved in seeking its enforcement.” Holmes L.J. said that there are “simple contract debts to which the parties have by memorandum in writing attached special conditions as to bearing interest, the mode of payment, and the steps to be taken before payment can be enforced; in such cases the document may be regarded as essential evidence to establish the debt, inasmuch as it contains the terms of the contract which could not otherwise be proved; and it is possible to hold without an infringement of the principle governing this branch of the law that by the delivery of such a document in anticipation of death there may be a transfer of the debt to take effect upon death.”
Thirty years earlier in M’Gonnell v. Murray (1), Walsh M.R. at p. 471, rejecting the donatio of a savings bank book, had done so because the book did not embody the terms of the contract between the depositor and the bank.
There seems to be no reason why equity should lend its aid on any easier conditions to validate the traditio of a share certificate than those on which it validates the traditioof a voucher for money, where a gift mortis causa is asserted; I think the same underlying principle must govern, and, if so, the cases just cited do not suggest to me that equity will recognise as sufficient the handing over of a document essential to recovery of the donor’s claim, unless it shows all the material terms of the contract. But, before I examine the nature of the stock and share certificates and the company law affecting them, I wish to refer briefly to the case law for choses in action other than a right to money.
The authorities upon gifts, or attempted gifts, mortis causa of that species of choses in action during the last two centuries are strangely scanty. It is conceded that delivery by way of gift mortis causa of a mere stock receipt is ineffective; and Irish law on this topic has followed English precedent. ( Ward v. Turner (2); In re M’Wey, Ryan v.Cashin and Costello (3).) Hall V. C., in Moore v. Moore (4),held equally ineffective the delivery of scrip certificates for stock in an English railway company, stating that he thought the railway stock not substantially distinguishable from South Sea Annuities, but he did not advert to the difference between the stock receipts for South Sea Annuities and the railway scrip certificates, the first as being mere receipts for the money paid and the others, authentic documents of title. One subject-matter of the gift mortis causa asserted in In re Weston, Bartholomew v. Menzies (1) was a certificate of shares, convertible into money, of a building society, and Byrne J. said that he was unable to distinguish that certificate from “an ordinary certificate of railway stock, like that which was dealt with in Moore v. Moore (2)”;so the claim of the donee of a share certificate failed, as the donee’s claim to a provisional share certificate had in that case failed, as if each of them had got nothing better than a mere receipt for the consideration money, as in Ward v. Turner (3).
Then Kekewich J., in In re Andrews, Andrews v. Andrews (4)rejected, for a gift mortis causa, a Post Office savings bank investment certificate, which appears to have shown the essentials of the bargain. I confess that I find the learned Judge’s reasoning hard to follow; he said that he rejected the claim “on principle and authority” and because a Judge of first instance ought not to go beyond In re Dillon, Duffin v. Duffin (5) and In re Weston, Bartholomew v.Menzies (1). In In re Lee, Treasury Solicitor v. Parrott (6),Astbury J. questioned this case and, basing himself on In re Dillon, Duffin v. Duffin (5) upheld for a gift mortis causa the delivery of an exchequer bond deposit book; he said that the document was the only document of title existing. The judgment does not advert to the fact that the book did not fully set out the donor’s rights, for the holder was entitled, though the book did not say so, to get a bond on application and on surrendering the book, and until such an application and surrender the bond would not actually come into physical existence at all. However, the book did certify the donor to be the registered holder of bonds for £100.
If this brief survey of cases directly concerned with the legal position of gifts mortis causa of documents representing things in action other than a right to money gives a fair picture of the relevant case law, that position is manifestly rather obscure. One further case, In re Craven’s Estate, Lloyds Bank v. Cockburn (No. 1) (7), might from the reports of it have been of service to the plaintiff, but it proves to be of no avail. An English bank in Monaco held securities there for an English lady of English domicile, who in expectation of death caused the bank to transfer the securities into the name of her son, the donee, and upon her death the transaction was upheld by Farwell J. as a good gift mortis causa. The case might have served the plaintiff here very well, if the securities included English share certificates, and at my request, the plaintiff’s solicitors have now obtained a copy of the affidavit evidence before the Court; in fact, I have postponed this judgment in order to see that evidence. From a copy of defendant’s affidavit it now appears that the securities, worth more than £5,000, consisted, not of investments in England, but of “bearer” certificates of stock and shares from Argentina, Brazil, Sweden, China and Japan (see In re Wasserberg (1)) and one New York certificate, endorsed by the donor and transferable by endorsement.
While this case gives no help, In re Andrews, Anrews v.Andrews (2), and In re Lee, Treasury Solicitor v. Parrott (3),are inconclusive, and, as I read Moore v. Moore (4) and In re Weston, Bartholomew v. Menzies (5), the investments failed to pass to the donees because their certificates were assimilated to stock receipts per incuriam (as I venture to think).
I turn for light to the leading case of Duffield v. Elwes (6),where delivery of a judgment, a bond, and mortgage deeds, effected a good gift mortis causa. Lord Eldon’s analysis has to be read at length; here I shall note that he cited a decision by Lord Hardwicke to the effect that deliverymortis causa of a bond for £100 passed on the donor’s death the equitable, not the legal, interest in the bond (pp. 534-5), and that he examined a judgment by Lord Mansfield on a gift by will of a mortgage debt and held (pp. 541-3) that, though the particular will did not pass the mortgaged land, equity would enable the legatee of the debt to call for a conveyance. He then explained “. . . provided you lay the foundation in the intent of the gift, that the debt is well given . . . and then, as the result of that interest so given, you say that the party who has the land becomes in equity a trustee for the person entitled to the money . . .”So, in the case before him, the delivery of the material documents raised a trust, by operation of law, which a Court of equity would execute. No difference in principle emerges between the documents requisite, on a gift mortis causa, to a transmission by operation of law of an equitable interest in money or in land; the reasoning is not confined to money claims, the fate of the stock receipts, not being documents of title, in Ward v. Turner (1) is cited, and I think the principle enunciated, mutatis mutandis, fitted things in action not being money claims, when Lord Eldon, closing his speech, said:”In the one case, the bond and mortgage are delivered; in the other the judgment . . . is deliveredwith that, the evidences of the debts are all delivered.The instrument containing the covenant to pay is delivered. They are all delivered in such a way that the donor could never have got the deeds back again.” I think it is a fair paraphrase to say, with Cotton L.J. and Byrne J., that the terms on which the moneys were payable were expressed and the essentials of the contract shown, by the documents delivered.
It remains to consider what exactly the donor did hand over to the Reverend Celestine Kelly as agent for the donee. He gave him, besides coins and currency notes and some securities with which I am not concerned, a number of certificates; each of these documents, other than the savings certificates certified the donor to be the proprietor of certain stock or shares in an Irish or an English company, subject to the company’s memorandum of association and articles (or, in the cases of two Irish companies, subject to their articles), and every certificate (except that of Williams & Woods, Limited, an Irish company) purported to make its production to the company a condition precedent to the registration of a transfer of the donor’s interest. While the Irish companies are governed by the Companies (Consolidation) Act, 1908, the Companies Act, 1929, for England has to be borne in mind where the English companies are concerned; most of them, in fact, have registered their articles or amended articles under that Act.
The plaintiff relies on the position of a member (whether shareholder or stockholder) under company law, and the position under the Act of 1908 can be summarised in a few words. I shall confine myself to shareholders. A shareholder in any of the companies in question is the registered holder of an aliquot undivided part of the capital of an incorporated body, established to make profits; his share certificate isprima facie evidence of his title, so is the appropriate entry in the company’s register. The memorandum and articles bind the company and its members as if signed and sealed by all, with covenants by each member and his personal representative to observe all the provisions of the memorandum and articles; hence, they are the company’s fundamental contract with its members and also regulate the members’ reciprocal rights; they must be registered and are open to inspection and a member can get a copy from his company; members and persons dealing with a company have constructive notice of its memorandum and articles.
Shares are transferable by a member, in manner provided by the articles, and by his personal representative; the company is not to be embarrassed by the entry on the register of notice of any trust and a company’s articles often purport to exempt it from recognising any equitable claim to a share. But the deposit of a share certificate without any instrument of transfer effects an equitable charge, at least if accompanied by notice to the company, because the deposit implies an agreement to execute a transfer.
I am told that the position is, practically, the same in England under the Companies Act, 1929, except that s. 63 of that Act effectively vetoes the registration of a transfer without an instrument of transfer, for the protection of the Revenue: Re Greene (deceased), Greene v. Greene and Others (1); but s. 63 has the following proviso:”Provided that nothing in this section shall prejudice any power of the company to register as shareholder . . . any person to whom the right to any shares in . . . the company has been transmitted by operation of law.”
Transmission by operation of law is precisely the species of devolution that will carry the plaintiff here, if anything can: see the judgment of Palles C.B. in Cassidy v. Belfast Banking Co. (2). Consequently, the absence of instruments of transfer from his donor’s traditio need not defeat him; indeed, a transfer seems inappropriate to a conditional and revocable assignment, intended, though not testamentary, to bear a donor’s signature springing into life only at the moment of his death. While I have not seen the articles of association of several of the companies, most of those put in evidence, English and Irish, require a common form of transfer, to be signed by transferor and transferee, and speak of transmission by operation of law where they contemplate death or bankruptcy; but, in the single case of Boots Pure Drug Company, Limited, with articles registered under the Act of 1929, I find art. 23, after the usual provision for transfers of shares, reflecting the proviso to s. 63 of the Act by providing (not in the collocation of death and bankruptcy) that nothing in the article is to prevent the company from registering as a member any person to whom
shares have been transmitted by operation of law. In my view, however, whatever the articles say, all the companies, English and Irish, would have to recognise the transmission by operation of law, if the plaintiff can succeed in establishing it.
As I see the matter, one obstacle stands in the plaintiff’s way, but a fatal one in a Court of first instance at least: the certificates given by the donor did not constitute “all the evidences,” in Lord Eldon’s phrase, of his contracts with the several companies; they stated instead where an inquirer was to look for the major text of those contracts, that is, in the memorandum and articles of each company, and confined themselves to fragments of the contracts.
The certificates which the donor handed over were, no doubt, the only evidence at his disposal of his title to the stocks and shares. By statute they constituted prima facieevidence of his good title in law, but nothing more. They declared that the title which they certified was subject to the company’s memorandum and articles (or to its articles); that declaration was otiose, because by statute the memorandum and articles are made the vital documents, since they are the fundamental contract between a company and its members, who are deemed to have covenanted to observe the contract. It is true that a man buying the same securities on the stock exchange will assume the fasciculus of multifarious obligations on either side, involved by acquiring membership, to be the normal obligations, which in practice do not alarm him; but, in fact, a memorandum and articles may cover a very wide range of incidents and conditions, so that a new member may incur liabilities and acquire rights quite outside his ken, if he has not read and understood his contract, and those rights and liabilities he can find out only by inspecting the memorandum and articles. The certificate assured the donee of the donor’s title to so many shares of a given value or to so much stock in a particular company, but apart from that, gave him no ideaor only a vague ideaof the essential conditions attached, of the donor’s covenants with the company, of the company’s obligations towards the donor. Even to tell a man that his shares will carry a five per cent. preferential and cumulative dividend is far from divulging all the material contents of a memorandum and articles of association.
In this particular case neither the donee nor his agent, the actual recipient of the certificates, was resident in Dublin or London where the missing information was obtainable. The plaintiff himself lived in South Africa and the recipient in the West of Ireland, so that, if the intended transmission
were effective, the donee was to be bound by a number of contracts whereof, as the certificates in effect told him, he could discover the remaining stipulations, not figuring in the certificates, if he took the trouble to write to the registered offices of the companies or to have a search and a précis made at the Registry in London or Dublin. It would be very convenient to allow a share certificate to be good subject-matter for a gift mortis causa and we are nowadays impatient of formalities, but the impediment here looks to me very much more serious than it was in Cassidy’s Case (1) where the document delivered did disclose the whole contract, except the variable rate of bank interest, which the donee was told to go from time to time to the bank to ascertain; and that case was decided before Cotton L.J. had formulated his principle, though I respectfully agree with the decision.
The result is that I feel constrained on the authorities, as I understand them, to hold that the plaintiff has failed to make out his title, as donee mortis causa, to the stock and shares represented by the certificates which the donor handed to Reverend Celestine Kelly and, admittedly, he cannot sustain a gift inter vivos of those securities.
Re Bibiana Foran, Deceased:
Lenihan and Others v O’Mahony and Another
High Court.
27 January 1950
[1950] 84 I.L.T.R 187
Gavan-Duffy P.
Gavan-Duffy, P.:
In this case I hold that the deceased lady, Mrs. Foran, gave to Mr. Dee the Deposit Receipt on a contingent trust in favour of the donees. I attach no importance to the fact that it was to be brought back to be endorsed, or that she postponed details of the payment of the balance. She had parted with possession of the document, and the gift to the beneficiaries was complete as regards £1,500 of the money on Deposit. But the document must be such as to show real terms of the contract. It can effectually pass a right if it is complete. But here it is incomplete; it does not state the rate of interest. This, I think, is essential. The rate of interest may be readily ascertained; but it should appear on the contract itself, or show how it was to be ascertained. It may be at the current rate of interest, but it does not say so. I hold on all points in favour of the beneficiaries, save as regards the form of the Deposit Receipt. But this is incomplete. Therefore, I must hold that in this case the intended donation fails. I am reluctant to do so, but I think the observation of Luxmoore, L.J. in Delgoffe v. Fader at p. 928 leaves me no choice. This document does not contain all the terms of the contract. I find, therefore, in favour of the defendants, and allow all parties their costs out of the estate.
Cases Joint Account
Mary Lynch v Moira Burke and Allied Irish Banks p.l.c.
[1986 No.3013P]
High Court 16th January 1990
[1990] I.R. 1
O’Hanlon J.
16th January 1990
The plaintiff is executrix and universal legatee of Frances McFadden, deceased, who died on or about the 10th January, 1986, and the first defendant is a niece of the said deceased.
The action concerns the entitlement to monies in a deposit account at the Falcarragh, County Donegal branch of the second defendant which was opened on or about the 28th September, 1983, in the joint names of the said Frances McFadden and the first defendant. A sum of £29,401.72 was lodged to the credit of the said account by Frances McFadden when it was opened and by the addition of further lodgements made from time to time by the said Frances McFadden and accumulated interest, the amount to credit of the account had risen to £42,292.15 by the date of death of the said Frances McFadden. With the addition of further interest which has accrued since the said date, the figure has now risen to a sum of £53,364 and upwards. All lodgements to the account were made by Frances McFadden out of her own monies and no withdrawals were made from it at any time.
The deposit book was indorsed as follows (presumably in accordance with instructions given by Frances McFadden at the time of opening of the said account): “Payable to Frances McFadden only or survivor” – the word “only” being underlined, and the book was retained in her possession until she died. Mrs. Pauline McGarvey of the second defendant bank identified the handwriting on the first page of the deposit book as her own, but could not remember what was said when the account was opened. She confirmed that she must have underlined the word “only” in the indorsement on that page and concluded that she had done so because the instructions as to payment out were so unusual. She gave evidence of other deposit accounts opened by Frances McFadden and the names of other relatives, where the indorsement concerning payment read “either or survivor”.Withdrawals had been made by Frances McFadden from these earlier accounts.
All the families concerned in the case originated in the Gweedore area of County Donegal. Frances McFadden emigrated to Scotland on leaving school and worked as a cook in Glasgow for most of her life. She married, but there were no children of the marriage, and after the death of her husband she returned to live in Derrybeg, County Donegal, for a short period before she died.
Una Friel, mother of the first defendant, Moira Burke, was a sister of Frances McFadden. She married and lived on for a time in Donegal, but after the death by drowning of her first husband, Jack Gallagher, she married again, lived for about two years in Falcarragh, and then moved initially to the North of England, and later to Glasgow.
Moira Burke, the first defendant, went to Scotland in 1961 when she was 17, followed three weeks later by her sister, Nuala, and the two sisters lived for about two years with their aunt, Frances McFadden, until their mother and stepfather moved to Glasgow, when the family was re-united. Moira married in 1965, but her marriage broke up in 1976. She has no children. She worked until 1973 but not since. She has been badly off and living on social welfare payments since her marriage broke up and her husband stopped making weekly payments. She said that she had always been close friends with her aunt, Frances McFadden, and they became very close again when her marriage broke down and Frances lost her husband. They lived in adjoining streets in Glasgow. When Frances went back to live in Donegal she sent registered letters with money three or four times a year to Moira – maybe £100 or £200.
In 1983 Frances McFadden came on a visit to Glasgow and visited Moira Burke. “We had tea and a talk. She had bought me a suite. She gave me money. She said: ‘I have a card from the bank to put your name in a joint account. Next day she said to come to Ireland to Falcarragh and sign. We went across to Gweedore on Saturday, and to the A.I.B. in Falcarragh on the following Tuesday. She wanted me to sign. I don’t remember who we dealt with. She (Frances McFadden) said she brought me over from Glasgow for signature. She told me not to say to anybody that I had it. I signed a form in the bank. I was not back again in Ireland until she died. I understood if she died before me I would get the money. If I needed money she would provide it. She said I could have the same grave as her and her husband.”
I am satisfied, on the evidence in the case, that Frances McFadden intended, when opening the account in the joint names, that her niece, the first defendant, should be entitled to the beneficial interest in any monies standing to the credit of the account at the time of death of Frances McFadden, should she predecease her niece. I am further satisfied that Frances McFadden intended to retain control over the account during her lifetime, to the extent that no withdrawals could be made from it save on her own application only.
With reference to a submission made by counsel for the first defendant that the evidence supported a conclusion that Frances McFadden stood in loco parentis to her niece, I am not prepared to make any such finding on the evidence which I have heard. I accept that she was very attached to her niece, and wanted to help her in the conditions of financial hardship which she was experiencing, and from her action in bringing Moira Burke all the way over from Glasgow to Falcarragh to participate in the opening of the joint account and from what was said by Frances McFadden at the time, her intention that Moira Burke should be entitled to take by survivorship any monies in the account in the event of Frances McFadden predeceasing her, was, in my opinion, made clearly manifest. Some significance may be attached to the fact that Frances McFadden, only two months earlier, had made her last will, dated the 20th July, 1983, giving, devising and bequeathing “all the property I may die possessed of or entitled to” to her sister, Mary Lynch, the plaintiff herein, and I am of the opinion that the opening of the joint deposit account was intended to exclude any claim by the plaintiff to those monies remaining on deposit in the said account at the time of her death.
The plaintiff swore an Inland Revenue affidavit to lead to the grant of probate of the will of Frances McFadden, on the 13th February, 1986, only a matter of weeks before the initiation of the present proceedings, in which she gave the following particulars concerning the joint account:
“The amount in account was at date of death – £42,296.15.
(a) Moira Burke, Shawfields, Glasgow, Scotland – niece of deceased. [named as the other person referred to in the joint account].
(b) The deceased owned all monies in account prior to opening of account.
(c) Account opened on 28th September, 1983.
(d) We have no instruction on intention of deceased but presumably she intended that survivor should take monies on her death as account was of ‘pay survivor’ variety.
(e) Deceased provided all the monies.
(f) Deceased enjoyed benefit of account in the sense that Moira Burke was not aware it existed.” (This appears to be incorrect).
Then, in response to the query as to “the names and addresses of the persons who became beneficially entitled to the joint property on the death of the deceased” -“(g) Moira Burke – already referred to at 6a” and, in response to query as to “the title under which the persons at (g) became beneficially entitled to the joint property” – “(h) Account was opened by deceased in joint names.” These replies have, of course, no binding effect in the present proceedings, but they are of interest as showing the mind of the plaintiff and/or her legal representatives in relation to the beneficial entitlement to the monies on deposit in the immediate aftermath of the death of Frances McFadden.
It is now necessary to consider the legal principles applicable to this state of facts. Mr. McCann, for the plaintiff, relied strongly on the decision of the former Supreme Court in the well-known case of Owens v. Greene and Freeley v. Greene [1932] I.R. 225, which involved a determination of entitlement to large sums of money which Austin Freeley, during his lifetime, had transferred to deposit accounts in the joint names of himself and a nephew, Fr. Michael J. Owens, in one case, and himself and a distant relative, Patrick Freeley, in another case. The deceased, in making these arrangements, had expressed himself to the bank manager as wishing to settle his money and as wishing to “do something” for his nephew, while retaining the right to withdraw interest on the monies without recourse to either of the parties named as joint depositors. The arrangements were made without involving either of the two persons named by the deceased and they were not made aware of what was happening until some time later when they were given some information by the deceased and by the bank manager. The deposit receipts recited the obligation on the part of the bank to be “accountable to them or either of them” (referring to the joint names). There were some dealings by the deceased during his lifetime with monies on joint deposit, but none involved the other parties named by him as joint depositors.
Meredith J., in the High Court, held that the monies did not form part of the estate of the said Austin Freeley, deceased, and belonged beneficially to the plaintiffs by right of survivorship. On appeal, however, this finding was set aside by the Supreme Court. The legal principles were discussed in the judgments of Kennedy C.J., FitzGibbon J., and Murnaghan J. Kennedy C.J. said (at p. 237 et seq.):
“If, at the death of Austin Freeley, there were nothing more of information as to the several transactions than the records of the deposit accounts in the books of the Bank, a resulting trust would clearly arise by equitable presumption in favour of Austin Freeley and his legal personal representatives as to all the monies which were, on the 8th of September and the 15th of December, 1930, lodged to the deposit accounts in the names of Austin Freeley and Patrick Freeley and in the names of Austin Freeley and the Rev. M.J. Owens. There was no such relationship between Austin Freeley and Patrick Freeley or between Austin Freeley and the Rev. M.J. Owens as would raise a presumption of advancement to rebut the implication of a resulting trust. The onus of rebutting the implication of such a resulting trust by evidence rests upon the plaintiffs, Patrick Freeley and the Rev. M.J. Owens, who instituted these actions claiming to be beneficially entitled by survivorship to the monies standing to the accounts in which they were respectively named as joint creditors with Austin Freeley. They may discharge the onus which they have undertaken by proving that it was the intention of Austin Freeley, when putting the monies to the deposit accounts in the Bank, to give to the plaintiffs, respectively, then and there and by that act, a right, that is to say an immediate present right to take the monies with which he associated their respective names by survivorship (should they survive him), for their own respective use and benefit as surviving joint beneficial owners with him. It will not suffice to prove a merely testamentary intention on his part for a testamentary disposition can be made only by will. It will not suffice to show an incomplete, or a conditional, or a postponed gift, nor can such an attempted gift be made good by means of a fictitious trust. But a gift completed by immediate transfer of legal ownership or by a declaration of trust taking immediate effect will, if proved, support an intention to give a voluntary benefit and rebut the presumption of resulting trust. These principles (neatly summarised by FitzGibbon L.J., in O’Flaherty v. Browne [1907] 2 I.R. at p. 434) are well established and we have only to consider their application to the facts before us . . .
The use of the particular form . . . may be an attempt to give whatever may remain undrawn to credit of the account at the depositor’s death as Gibson J. appears to have held in the Circuit case of Diver v. McCrea , 42 I.L.T.R. 249. In such a case, however, the intention is not to make a joint deposit operating as a present gift. It is an attempt to make an ambulatory and postponed gift of such (if any) monies as shall remain undrawn from the account at the depositor’s death, which, in my opinion, is contrary to established principles inasmuch as it is really testamentary in character and intention, and for that reason I am unable to accept the decision in Diver v. McCrea which is I think erroneous . . .
But if he (Austin Freeley) had finally made up his mind, on the 8th of September, 1930, as to how he would dispose of his monies, it was, in my opinion, competent for him to have placed his monies on joint deposit accounts as he did, with the intention of making then and there immediate complete gifts in trust for himself and Patrick Freeley in the one case and in trust for himself and Father Owens in the other case, as joint tenants with right of survivorship as regards the capital sums only, the interest to be paid to him (Austin Freeley) during his life, such intention as regards the capital not to be capable of alteration. For effectuating such purpose, he might well have adopted the form of deposit receipt in question with the intention and for the purpose only of drawing the interest payable on the deposits and his use of the deposit receipts would be limited by that intention, notwithstanding their form (“accountable to them or either of them”), for it would follow from the complete gift of capital made that the other parties would have the right to intervene by proper proceedings to prevent him drawing, or at least appropriating to his own use, any part of the capital. Such, in my opinion, would be the only tenable basis upon which the plaintiffs could rest their claims in these actions . . . On the contrary, counsel for the plaintiffs, who also definitely disclaimed any question of trust in the case, took their stand rather on the line of the judgement in Diver v. McCrea 42 I.L.T.R. 249, and pressed the matter as one of a gift in each case of whatever, if anything, would remain to credit of the deposit accounts at the death of Austin Freeley, admitting that, in the meantime, by reason of the form of the deposit receipts, he might at any time withdraw all or any part of the capital monies for his own use or benefit. In my opinion, such a gift is an invalid gift as an attempt to make a testamentary disposition otherwise than by will.”
FitzGibbon J. said (at pp. 244 – 246):
“In the ordinary case of money invested or deposited in two names it cannot be withdrawn by either without the concurrence of the other. In the words of Lindley L.J., in Standing v. Bowring 31 Ch. D. 282 at p. 290, “the donor has put the thing given out of his own power, and has placed it in such a position that he can only get the thing back with the concurrence of the donee.” Even where there is such a transfer of the dominion, the law presumes, in the absence of additional evidence of intention, a resulting trust in favour of the donor, except where the joint owner is the wife or child of the donor, or a person to whom the donor stood in loco parentis. With the exception of Diver v. McCrea 42 I.L.T.R. 249 . . . I am not aware of any case in which the alleged donor retained throughout his life the complete power of disposition over the property in dispute, and it was held that there had been a complete gift by him in his life time . . . To my mind the inference is almost irresistible that when he made the other deposits in two names payable to himself and another or either of them, and kept absolute control of the receipt, without production of which the money could not be withdrawn, he had no present intention of parting with the property, but was endeavouring to make a disposition of it which would take effect upon his death on so much of the money as then remained upon deposit, but retaining all power of disposition over it during his life.”
He concluded (at pp. 251-252):
“In my opinion the plaintiffs have failed to establish any present intention on the part of Austin Freeley to part with his property in, and absolute dominion over, the deposited money during his lifetime, and a disposition to take effect only upon his death, if he should not have previously disposed of the money, cannot be effected except by a declaration of trust, which is admitted not to have been made by him.”
Murnaghan J. said (at pp. 253-254):
“If then, the money belonged beneficially to Austin Freeley during his lifetime, if he had not bound himself by any trust in reference to it, and if he retained full dominion over it, the contrivance to make the money pass on death was an attempt to make a nuncupative will which the law does not give effect to . . . The ingenious suggestion that on the death of Austin Freeley the property passed at law to the plaintiffs, and that this property, which was his up to the moment of his death, not bound by a resulting trust, has to my mind neither principle nor established authority to support it. It would be a direct method of circumventing the Wills Act. I agree with the full statement of the law made by Mr. Justice FitzGibbon on this point, and am of opinion that the attempt of the deceased to circumvent the Wills Act must fail in law.”
Similar questions of law have arisen for decision before the courts in other common law jurisdictions, and the decision of the former Supreme Court in Owens v. Greene and Freeley v. Greene [1932] I.R. 225 has been considered on a number of occasions.
It was analysed critically by the High Court of Australia in the case of Russell v. Scott (1936) 55 C.L.R. 440, and the court elected not to follow the Irish decision. In that case an elderly lady and her nephew opened a joint account in a bank by transfer of a large sum from an account in the lady’s name, and with no contribution on the part of the nephew. The account was kept in funds by payments from the aunt’s investments and was used solely for the purpose of supplying the aunt’s needs – the withdrawals being made by the nephew, using withdrawal slips signed by both the aunt and the nephew. When the account was opened the aunt told the nephew and others that any balance remaining in the account at her death would belong to the nephew and it was found as a fact that the aunt intended the nephew to take beneficially whatever balance stood to the credit of the account at her death. It was held by the High Court of Australia, overruling a decision of Nicholas J. in the Supreme Court of New South Wales, that the presumption of a resulting trust in favour of the aunt and her estate was rebutted; the nephew’s legal right by survivorship to the balance of the account prevailed and was not the subject of any resulting trust.
The following passages appear in a joint judgment delivered by Dixon and Evatt JJ. (at pp. 450 – 451):
“The contract between the bank and the customers constituted them joint creditors. They had, of course, no right of property in any of the monies deposited with the bank. The relation between the bank and its customers is that of debtor and creditor. The aunt and nephew upon opening the joint account became jointly entitled at common law to a chose in action. The chose in action consisted in the contractual right against the bank, i.e., in a debt, but a debt fluctuating in amount as moneys might be deposited and withdrawn. At common law this chose in action passed or accrued to the survivor . . .
The right at law to the balance standing at the credit of the account on the death of the aunt was thus vested in the nephew. The claim that it forms part of her estate must depend upon equity. It must depend upon the existence of an equitable obligation making him a trustee for the estate. What makes him a trustee of the legal right which survives to him? It is true a presumption that he is a trustee is raised by the fact of his aunt’s supplying the money that gave the legal right a value. As the relationship between them was not such as to raise a presumption of advancement, prima facie there is a resulting trust. But that is a mere question of onus of proof. The presumption of resulting trust does no more than call for proof of an intention to confer beneficial ownership; and in the present case satisfactory proof is forthcoming that one purpose of the transaction was to confer upon the nephew the beneficial ownership of the sum standing at the credit of the account when the aunt died. As a legal right exists in him to this sum of money, what equity is there defeating her intention that he should enjoy the legal right beneficially? Both upon principle and upon English authority we answer, none.”
Having examined a number of English decisions, the joint judgment then continues (at pp. 453 – 456):
“The fact that these cases arose between husband and wife affects only the burden of proof. In a case where there is no presumption of advancement, satisfactory affirmative proof of an intention to confer a beneficial interest supplies the place of the presumption. Once it appears, as it does in the present case, that a definite intention existed that the balance at the credit of the bank account should belong to the survivor, these cases become, in our opinion, indistinguishable.
In principle there is no reason why, when at law a chose in action accrues to the survivor of two persons in whom it was jointly vested, equity should fix the survivor with a resulting trust in favour of the personal representatives of the deceased who furnished the value it possesses, if the joint chose in action was so vested by the deceased with the purpose of imparting beneficial ownership to the survivor on his death. The reason which is assigned for such a resulting trust rests at bottom upon the notion that the deceased, by intending to reserve the right in her lifetime of applying all or any of the money in the account for her own purpose and by continuing in fact to enjoy the use of that money, retained the full beneficial ownership of the property which in law vested in herself and her nephew jointly in consequence of the account standing in the names of both of them. For it is said that the deceased’s intention that her nephew on surviving her should take the amount of the bank account is a testamentary wish to which effect could be given only by a duly executed will. This must mean that, while retaining full beneficial property in a corpus, she intended that on her death some other person should succeed to her property in that corpus or to some interest therein to which he was not before entitled either absolutely or contingently, and to which the law gave him no title to succeed. It is only in this sense that an intention to benefit can be said to be testamentary. Law and equity supply many means by which the enjoyment of property may be made to pass on death. Succession post mortemis not the same as testamentary succession. But what can be accomplished only by a will is the voluntary transmission on death of an interest which up to the moment of death belongs absolutely and indefeasibly to the deceased. This is not true of the chose in action created by opening and maintaining the joint bank account. At law, of course, it was joint property which would accrue to the survivor. In equity, the deceased was entitled in her lifetime so to deal with the contractual rights conferred by the chose in action as to destroy all its value, namely, by withdrawing all the money at credit. But the elastic or flexible conceptions of equitable proprietary rights or interests do not require that, because this is so, the joint owner of the chose in action should in respect of the legal right vested in him be treated as a trustee to the entire extent of every possible kind of beneficial interest or enjoyment. Doubtless a trustee he was during her life time, but the resulting trust upon which he held did not extend further than the donor intended; it did not exhaust the entire legal interest in every contingency. In the contingency of his surviving the donor and of the account then containing money, his legal interest was allowed to take effect unfettered by a trust. In respect of his jus accrescendi his conscience could not be bound. For the resulting trust would be inconsistent with the true intention of that person upon whose presumed purpose it must depend.
In support of the conclusion that the moneys at the credit of the bank account formed part of the deceased’s estate, reliance was placed upon Owens v. Greene [1932] I.R. 225 and upon some Canadian decisions. In Owens v. Greene the court reached the conclusion that the survivors were not entitled to the proceeds of certain deposit receipts severally taken by the deceased in their respective names and his own jointly, with power to either to draw. It appeared that, although he treated the moneys as still at his disposal while living, it was his desire that the survivors should be entitled on his death to the monies represented by the respective receipts. It is not easy to discover from the report which are the steps in the reasoning we have adopted that the learned judges would deny. Kennedy C.J. said that the survivors who claimed the deposits might “rebut the presumption of a resulting trust by proving that it was the intention of” the deceased “when putting the moneys to the deposit accounts in the bank, to give” them “respectively, then and there and by that act, a right, that is to say an immediate present right to take the moneys with which he associated their respective names by survivorship (should they survive him), for their own respective use and benefit as surviving joint beneficial owners with him” [1932] I.R. at pp. 237, 238. Consistently with the views we have expressed this statement of the position might be accepted in terms. We would say that, by placing the money in the joint names, the deceased did then and there and by that act give a present right of survivorship. At law this was so and in equity too. But in equity, and as a result of the terms of the contract with the bank, at law too, the deceased might defeat the right by withdrawing the money. Some of the matters which the judgments mention appear to us to go rather to the question of fact whether the deceased was actuated by a definite intention to confer the beneficial ownership at his death upon the survivor. But, on the assumption that such was his intention, we are unable to agree in the conclusion at which the court arrives.”
The joint judgment then refers to a number of Canadian cases supporting the view adopted in the judgment and to others which “appear to turn on the court’s refusal to find the requisite intention in the donor, but contain much reasoning directed against the conclusion which commends itself to us” (p. 456). The judges then point out that the view they have adopted accords with the weight of opinion in the United States, and refer to McEvoy v. Belfast Banking Co. , [1935] A.C. 24 where “the view taken by the House of Lords of a somewhat similar transaction to that dealt with in Owens v. Greene [1932] I.R. 225 and in some of the Canadian cases does not seem to have been affected by the idea that the donor’s purpose was testamentary.” They conclude: “For the reasons we have given we think that an erroneous application of this notion is the source of the difficulties which have been felt in the Irish case and in some of the Canadian cases.” The other members of the court, Starke J. and McTiernan J., concurred in allowing the appeal, Starke J. saying (at pp. 448 and 449):
“A testamentary disposition can only be made by will. But a disposition which does not require the death of the donor for its consummation is not testamentary . . . A person who deposits money in a bank on a joint account vests the right to the debt or the chose in action in the persons in whose names it is deposited, and it carries with it the legal right to title by survivorship . . . The vesting of the right and title of the debt or chose in action takes effect immediately, and is not dependent upon the death of either of the persons in whose names the money has been deposited. In short it is not a testamentary disposition.”
The conflicting decisions of the Irish and Australian courts were considered by Romer J. in Young v. Sealey [1949] Ch. 278, which again concerned money belonging to a deceased intestate which was paid by her into joint banking accounts in the names of herself and her nephew, payments into the accounts and withdrawals therefrom having been made only by her during her lifetime. The evidence was that she intended the beneficial as well as the legal interest to pass on her death to the defendant. Romer J. held that, notwithstanding that the beneficial interest in the dispositions made by the deceased passed only on her death, they were not invalid by reason of failure to comply with the requirements of the Wills Act, 1837. In doing so he applied the earlier English decisions of Beecher v. Major , (1865) 2 Drew. & Sm. 431 and Marshal v. Crutwell , (1875) L.R. 20 Eq. 328. In relation to the argument that the attempted disposition was ineffective by reason of lack of conformity with the Wills Act, 1837, the learned judge was referred to the Irish decision in Owens v. Greene and Freeley v. Greene [1932] I.R. 225 and to a number of Canadian cases, but was not referred (apparently) to the decision of the High Court of Australia in Russell v. Scott (1936) 55 C.L.R. 440. He expressed himself as attracted by the reasoning in Owens v. Greene and the Canadian cases which were in line with it and commented on the absence of any reported case of which he was aware in which the point raised before him was presented to the court. He concluded, however, by saying (at p. 295):
“That there were cases of this type prior to Marshall v. Crutwell , however, appears from the observations of Sir George Jessel which he made in that case; and it is impossible to say that the point was not taken in any of them or in any subsequent cases. Secondly, there is the fact that a court whose decisions are entitled to very great respect, namely the Appellate Division of the Supreme Court of Ontario, had the very point before them but did not accept it. In these circumstances, and having regard to the disturbing effect which an acceptance of the argument might well have on titles already acquired, I think it is better that the change in the current of authority which I am invited to make should be made rather by the appellate court than by a court of first instance, assuming that it is to be made at all.”
In Re Figgis Deceased [1969] 1 Ch. 123 the conflict between the Irish decision in Owens v. Greene and Freeley v. Greene [1932] I.R. 225 on the one hand, and the Australian, Canadian and English decisions on the other hand, was again considered, this time by Megarry J., in a case involving the entitlement to monies lodged to a joint current account of a husband and wife, when the husband had predeceased the wife. Megarry J., having reviewed some earlier English authorities, referred at p. 143 to the case of Re Pattinson deceased, Graham v. Pattinson (1885) 1 L.T.R. 216 “a decision of Chitty J. which seems to have been somewhat neglected by the textbooks. This case emerged because it was referred to by the High Court of Australia in Russell v. Scott (1936) 55 C.L.R. 440, which is a case that could usefully have been cited to Romer J. in Young v. Sealey [1949] Ch. 278, for it might have assisted him in his decision to follow the Court of Appeal of Ontario in Re Reid (1921) 50 Ont. L.R. 595, in preference to the Supreme Court of the Irish Free State in Owens v. Greene [1932] I.R. 225.”
It now appears to be accepted law in England that, “the fact that the transferor retains control during his lifetime over the property transferred into the joint names does not prevent the gift, even where it appears to be of a testamentary nature and not in conformity with the Wills Act, 1837, from being an effective and complete gift inter vivos from the time of making, so as to vest the legal title to the property in the donee by survivorship on the death of the transferor.” (Halsbury: Laws of England, 4th edn., Vol 20, para. 40).
The foregoing review of decisions by courts of high authority in other jurisdictions appears to indicate the existence of a strong and uniform current of authority disputing the correctness of the decision of the former Supreme Court in Owens v. Greene and Freeley v. Greene [1932] I.R. 225. I consider that in the present case I am bound to follow and apply that decision but having regard to the fact that it is a decision which appears to conflict with the interpretation of this branch of the law in so many other common law jurisdictions, it might well be a case where the Supreme Court would be disposed to review again the correctness of that decision, if a suitable opportunity arose for doing so.
In the present case, equity presumes, as against the survivor of the two joint depositors, a resulting trust in favour of the estate of the deceased in respect of the beneficial interest in the monies remaining on deposit at the time of her death, but I am satisfied that the presumption of such resulting trust is rebutted by evidence establishing an intention on the part of Frances McFadden that any such monies remaining on joint deposit at the time of her death should accrue to the first defendant, Moira Burke, by right of survivorship, as beneficial owner.
Notwithstanding this finding, however, I consider that I am bound by the decision of the former Supreme Court in Owens v. Grenne and Freeley v. Greene [1932] I.R. 225 to hold that the transaction should be regarded as an invalid gift and as an unsuccessful attempt to make a testamentary disposition otherwise than by a will. For this reason I will give judgement in favour of the plaintiff for the relief claimed at paras. (a) to (f) inclusive of the statement of claim, but I do so with reluctance as it apperas to me to defeat what I regard as the clear intention of the deceased lady, Frances McFadden, in relation to the ultimate disposal of the beneficial interest in the monies on deposit.
Mary Lynch v Moira Burke and Allied Irish Banks plc SC
1990 Nos. 81, 86
Supreme Court
7 November 1995
[1996] 1 I.L.R.M. 114
(Nem. Diss.) (Hamilton CJ, O’Flaherty, Egan, Blayney and Denham JJ)
7 November 1995
O’FLAHERTY J
(Hamilton CJ, Egan, Blayney and Denham JJ concurring) delivered his judgment on 7 November 1995 saying: This is an appeal brought by Moira Burke from the judgment and order of the High Court (O’Hanlon J) of 16 January 1990 ([1990] 1 IR 1), granting the plaintiff declarations in her favour in respect of monies held on a deposit account with AIB Bank plc in the joint names of Frances McFadden, deceased, and her niece, the first named defendant Moira Burke.
Frances McFadden, a widow, died on 10 January 1986. She had made her last will on 20 July 1983, whereby she gave all the property of which she died possessed of or entitled to to her sister, Mary Lynch, the plaintiff; as well she appointed her sole executrix.
Moira Burke had a sad life. She lost her father when young. Her mother re-married. She migrated to Glasgow in 1971 when she was 17 and stayed for about two years with her aunt, Frances McFadden. She married in 1975 but the marriage broke up in 1976. After the marriage break-up, the husband ceased to make maintenance payments after some short time and, during these hard times, it appears that Frances McFadden had been generous to her.
In September 1983 Frances McFadden (who at that time had returned to live in County Donegal) visited Moira Burke in Glasgow and told her that she wanted *117 to put her name into a joint account with a bank in Falcarragh, Co. Donegal. On 28 September 1993, a deposit account was opened with the Falcarragh branch of the AIB Bank in the joint names of Frances McFadden and Moira Burke. A sum of £29,401.72 was lodged to the credit of the account by Frances McFadden and, thereafter, there were further lodgments made from time to time by Frances McFadden. At the date of trial the amount standing to the credit of the account was £53,364. At the hearing of the appeal we were told that the amount had now risen to about £65,000, including accumulated interest.
The deposit book was endorsed by the bank official as follows: ‘Payable to Frances McFadden only or survivor’. The word ‘only’ was underlined. Moira Burke’s address in Glasgow was inserted beneath Frances McFadden’s name though, as already stated, Mrs McFadden lived in Co. Donegal at this time.
The learned trial judge said that he was satisfied that Frances McFadden, when opening the account in the joint names, intended that her niece, Moira Burke, should be entitled to the beneficial interest in any monies standing to the credit of the account on Frances McFadden’s death, should she pre-decease her niece. He was further satisfied that Frances McFadden intended to retain control over the account during her lifetime to the extent that no withdrawals could be made from it save only on her application.
The judge also attached some significance to the fact that Frances McFadden, two months before she opened the joint deposit account, had made her last will and he was of the opinion that the opening of the joint deposit account was intended to exclude any claim by the plaintiff to those monies remaining on deposit in the account at the time of her death.
Notwithstanding these findings, the judge felt constrained on the authority of the decision of the then Supreme Court in Owens v. Greene and Freeley v. Greene [1932] IR 225 to hold that Moira Burke was not entitled by survivorship to these monies.
The question for resolution on this appeal is whether that result can be upheld as one that is justified in law or equity?
The first inquiry to make is to find out the legal effect of the opening of the deposit account in the joint names. Thereby, the bank undoubtedly became a debtor to Frances McFadden in the amount lodged. The bank and Frances McFadden contracted that only Frances McFadden could make withdrawals from the account but that on her death Moira Burke would be entitled to the monies standing to the credit of the account on that date. By her presence (she had journeyed especially from Glasgow to Falcarragh for the occasion, at Mrs McFadden’s request) and signature it is manifest that Moira Burke was a party to this contract from the outset. It is agreed on all sides that if the bank had paid over the monies then in the account to Moira Burke on Frances McFadden’s death it could incur no liability to the estate of the deceased. However, it is contended for the plaintiff that in that situation Moira Burke would have to *118 account to the estate for the monies so received. The monies on deposit with the bank represent a debt or chose in action. Since Frances McFadden and Moira Burke contracted jointly with the bank it would seem right that the bank should be liable to both — in accordance with the terms of the contract. There was sufficient mutuality of interest between Frances McFadden and Moira Burke to justify this assessment of the legal situation.
Mr McCann SC’s essential submission before us is to leave aside any question of contract and instead submit that what we are concerned with is that this chose in action or debt could not be gifted to Moira Burke except by a declaration of trust, a completed gift or by will.
He says that there has been no declaration of trust and he says that what we have here is an imperfect or incomplete transaction. Equity, it has been said, will not come to the aid of a volunteer to perfect an imperfect gift.
In this regard, we do well to recall something that Barry LJ said in the case of Gason v. Rich (1887) 19 LR Ir 391 at p. 402, a case relied upon as one which, together with O’Flaherty v. Browne [1907] 2 IR 416, is said to provide a basis for the decision in Owens v. Greene:
This question as to what does, or does not, constitute a complete voluntary gift of property so as to be supported in a court of equity has been the subject of discussion over and over again almost for a century, and the decisions upon it are very numerous, and not very easy to reconcile with each other, and it is difficult to extract any principle from them. It is impossible not to feel that legal ingenuity is far oftener exercised in defeating the intention of parties than in supporting them.
Leaving aside for the moment the concept of gift, I think that it is best to consider, in the first instance, the contractual aspects of the case to find whether that provides a solution. In my judgment, it does. I have outlined what I think was agreed between the parties and it amounts to this: Moira Burke must be regarded as entitled to claim as a party to the contract under the actual terms of the contract.
In McEvoy v. Belfast Banking Co. [1935] AC 24 the House of Lords was concerned with a case which had many similarities to the instant case. The ultimate decision turned on whether the donee could claim money that he had, after the donor’s death, assisted in appropriating to a business that failed — that aspect of the case need not detain us. However, Lord Atkin had the following of interest to say in the course of his speech relating to the form of contract that emerges when a deposit account is opened in joint names. He said, at p. 43:
The suggestion is that where A. deposits a sum of money with his bank in the names of A. and B., payable to A. or B., if B. comes to the bank with the deposit receipt he has no right to demand the money from the bank or to sue them if his *119 demand is refused. The bank is entitled to demand proof that the money was in fact partly B.’s, or possibly that A. had acted with B.’s actual authority. For the contract, it is said is between the bank and A. alone. My Lords, to say this is to ignore the vital difference between a contract purporting to be made by A. with the bank to pay A. or B. and a contract purporting to be made by A. and B. with the bank to pay A. or B. In both cases of course payment to B. would discharge the bank whether the bank contracted with A. alone or with A. and B. But the question is whether in the case put B. has any rights against the bank if payment to him is refused. I have myself no doubt that in such a case B. can sue the bank. The contract on the face of it purports to be made with A. and B., and I think with them jointly and severally. A. purports to make the contract on behalf of B. as well as himself and the consideration supports such a contract. If A. has actual authority from B. to make such a contract, B. is a party to the contract ab initio. If he has not actual authority then subject to the ordinary principles of ratification B. can ratify the contract purporting to have been made on his behalf and his ratification relates back to the original formation of the contract. If no events had happened to preclude B. from ratifying, then on compliance with the contract conditions, including notice and production of the deposit receipt, B. would have the right to demand from the bank so much of the money as was due on the deposit account.
In this case, as I have pointed out, Moira Burke was a party to the contract from the outset.
In Russell v. Scott (1936) 55 CLR 440, the High Court of Australia was called upon to deal with a problem that I think is almost identical to the one presented to us. The question posed in that case was as follows:
… whether the survivor of two persons opening a joint bank account is beneficially entitled to the balance standing at credit when the other dies, if all the moneys paid in have been provided by the deceased acting with the intention of conferring a beneficial interest upon the survivor in the balance left at his or her death but not otherwise, and of retaining in the meantime the right to use in any manner the moneys deposited.
Dixon and Evatt JJ in the course of a joint judgment said the following by way of answer at pp. 450–451:
The contract between the bank and the customers constituted them joint creditors. They had, of course, no right of property in any of the moneys deposited with the bank. The relation between the bank and its customers is that of debtor and creditor. The aunt and the nephew upon opening the joint account became jointly entitled at common law to a chose in action. The chose in action consisted in the contractual right against the bank, i.e., in a debt, but a debt fluctuating in amount as moneys might be deposited and withdrawn. At common law this chose in action passed or accrued to the survivor….
*120
The right at law to the balance standing at the credit of the account on the death of the aunt was thus vested in the nephew. The claim that it forms part of her estate must depend upon equity. It must depend upon the existence of an equitable obligation making him a trustee for the estate. What makes him a trustee of the legal right which survives to him? It is true a presumption that he is a trustee is raised by the fact of his aunt’s supplying the money that gave the legal right a value. As the relationship between them was not such as to raise a presumption of advancement, prima facie there is a resulting trust. But that is a mere question of onus of proof. The presumption of resulting trust does no more than call for proof of an intention to confer beneficial ownership; and in the present case satisfactory proof is forthcoming that one purpose of the transaction was to confer upon the nephew the beneficial ownership of the sum standing at the credit of the account when the aunt died. As a legal right exists in him to this sum of money, what equity is there defeating her intention that he should enjoy the legal right beneficially?
The answer the court gave was that there was none and distinguished Owens v. Greene and certain Canadian cases in reaching this conclusion.
The case as pleaded and apparently presented in the High Court on the plaintiff’s behalf was to say that the monies on deposit were held on an implied or resulting trust by Moira Burke for the benefit of the estate of the deceased. As already pointed out, the learned trial judge felt that he was constrained by the decision in Owens v. Greene to uphold this submission.
Since historically the concept of an implied or resulting trust was an invention of equity to defeat the misappropriation of property as a consequence of potentially fraudulent or improvident transactions, it would surely be paradoxical, if the doctrine is allowed to be invoked to defeat the clear intention of the donor as found by the trial judge, an intention so clear, as the Chief Justice observed in the course of the debate before us, that he could not possibly have made any other finding as regards the donor’s intention than the one that he did make. In this regard it is apposite to recall what Lindley LJ said in Standing v. Bowring (1885) 31 Ch D 282 at p. 289:
Trusts are neither created nor implied by law to defeat the intentions of donors or settlors; they are created or implied or are held to result in favour of donors or settlors in order to carry out and give effect to their true intentions, expressed or implied. It appears to me there are no equitable as distinguished from legal grounds on which the plaintiff can obtain relief.
As to Owens v. Greene the requirement that that case seems to lay down for a donee to benefit is that the deposit receipt is a joint one and that it is payable to the parties or the survivor thus putting it out of the depositor’s power to deal with the fund without the concurrence of his co-owner during his lifetime. This certainly appears from the judgment of Fitzgibbon J at pp. 245–246 of the report. *121 This concept appears to be implicit, also, in the judgment of Kennedy CJ (the relevant passage is quoted at length by the learned trial judge); or, at the least, that the donee should be entitled equally with the donor to resort to the funds during the joint lives. The judgments were also concerned to emphasise the importance in the legal scheme of things that testamentary dispositions should be required to comply with the relevant statutory requirements. Of course, if one were dealing with a testamentary disposition there would have to be compliance with the relevant requirements of the legislation in question. But that is to beg the question; if the arrangement made was not testamentary (which in my judgment it was not) then the legislative provisions (see Part VIII of the Succession Act 1965) have no application.
Towards the end of his submissions, Mr McCann no doubt in the light of the trial judge’s finding about the donor’s intentions, came to submit that his client’s claim rested in law and to say that the case was not concerned with a trust, express or implied. He says the situation is simply that the monies on deposit belonged to the estate of the deceased. However, I believe that at law the niece had a legal interest in the monies on deposit either by reason of the contractual relationship of the parties or, in the alternative, as a gift which admittedly was not a completed gift in the conventional sense but is nonetheless one that should be upheld as being a gift subject to a contingency viz. that of the death of the donor which contingency does not disqualify it as being a proper gift.
It seems to me that Owens v. Greene gives cause for unease on a number of grounds. In the first place, the judgments contain a number of severe criticisms of witnesses in the case which sound strange to us since we are accustomed to holding that matters of primary fact are exclusively for the trial judge and even in regard to inferences of fact respect must always be afforded to the trial judge’s finding. (cf. Hay v. O’Grady [1992] 1 IR 210; [1992] ILRM 689). But since no report of the judgment of the trial judge (Meredith J) is extant we do not know what findings of fact he made. Further, criticisms are made in the course of the judgments concerning counsel’s submissions which it is difficult to square with the manner in which the case was pleaded and, indeed, the account of the argument put forward for the donees as it appears in the report. The case pleaded was that the deceased declared that the monies on deposit were to belong beneficially to the plaintiff in the event of the death of the deceased and would not in that event form any part of his estate. The argument apparently presented to the court was that the sole question was whether the trial judge was justified in finding as a fact, as he did find, that the donor intended and expressed the intention that each (donee) should be entitled beneficially to the property of which he became the legal owner on the death of the donor, so rebutting the presumption of a resulting trust.
As his last stand, Mr McCann, has urged that if it is thought that the concept of trust must be considered (and in my view because of the course that the case *122 took in the High Court it is clear that we must deal with the relevance of the trust concept) that we should not overrule Owens v. Greene since it has stood for so long and, therefore, has been relied upon over the years by practitioners in advising clients. In the circumstances, since I believe — a view shared by all members of the court — that the decision was wrongly decided it should be overruled. (cf. Ryan’s Car Hire Ltd v. Attorney General [1965] IR 642; Mogul of Ireland v. Tipperary (North Riding) County Council [1976] IR 260 and Finucane v. McMahon [1990] 1 IR 165; [1990] ILRM 505).
Further, this will introduce a measure of consistency in our jurisprudence: it restores equity to the high ground which it should properly occupy to ameliorate the harshness of common law rules on occasion rather than itself be an instrument of injustice. Further, it brings us into line with other common law jurisdictions.
I would allow the appeal.
In the Matter of an Interpleader Application pursuant to O. 57 of the Rules of the Superior Courts
AIB Finance Ltd v. Sligo County Council and Andrew Curneen
1990 No. 3 Sp
High Court
25 October 1994
[1995] 1 I.L.R.M. 81
(Morris J)
MORRIS J
delivered his judgment on 25 October 1994 saying: This matter comes before the court as an interpleader summons brought by Allied Irish Bank Finance Co. Ltd. There is on deposit with the company the sum of £51,749.57 plus accrued interest in deposit account No. 1/MC/8423/011. The original *83 deposit of these funds was made by Fr Stephen McGuinness (otherwise Patrick Stephen McGuinness) and the funds were lodged on 2 September 1986 in the joint names of Fr McGuinness and the Sligo County Council. They were originally lodged to the Sligo branch of Allied Irish Banks plc and were subsequently transferred to the account in Allied Irish Bank Finance Ltd.
Fr McGuinness died on 18 April 1987 and probate to his estate was granted to the second named claimant, Mr Andrew Curneen, on 4 February 1988.
Both Mr Curneen in his capacity as the executor of the late Fr McGuinness, and the Sligo County Council claim to be entitled to the money standing to the credit of the account and in these circumstances the bank has claimed relief by way of interpleader.
The basis upon which each of these parties claims to be entitled to the funds is as follows.
The Sligo County Council claims that the funds ‘are and always were a fully constituted gift’ and that Fr McGuinness and the Sligo County Council were joint trustees of the money in the account.
The second named claimant claims to be entitled to the money as the personal representative of the late Fr McGuinness and claims that there is a resulting trust in favour of Fr McGuinness.
The circumstances in which this action arises can be summarised as follows. The late Fr McGuinness was a native of Aclare in the County of Sligo. During his lifetime he acquired certain funds and on his retirement, in or about the year 1983, he conceived the desire to benefit the area of Aclare. His first steps in that direction took the form of acquiring a playing field for the area. With this he achieved only limited success and was dissatisfied in that he felt the persons in effective control of the playing field were not adequately answerable for the way in which it was used. He therefore believed that any future ventures should be undertaken through some statutory body which would be answerable for the proper management of any enterprise to which he might subscribe. He contacted the Sligo County Council and was referred to the Sligo County Development Team and in particular to Mr Terence Byrne who was county development officer for Sligo county. Through the co-operation of various people and bodies Fr McGuinness was able to achieve his ambition by being in part instrumental in the building of a factory in Aclare. The construction of the factory cost £83,000 and Fr McGuinness contributed £25,000 towards that objective. The county council were authorised to accept the contribution from Fr McGuinness towards that objective by virtue of the Local Authorities (Acceptance of Gifts) Act 1945 and it, the county council, passed a resolution on 23 June 1984 creating the Aclare (Fr Stephen McGuinness) Civic Improvements Scheme. The contribution made by Fr McGuinness, £25,000, was paid into that fund in November 1984.
That concluded this transaction and Fr McGuinness then turned his attention to further benefiting the community and approved of the suggestion which was *84 made to him that an urban renewal scheme for the village of Aclare should be carried out and he enthusiastically agreed to make available further funds towards such a scheme. The significance of his contribution was that with his agreement to make available these funds, the county council could seek the support of other individuals and bodies so as to finance the project. Without such a commitment by Fr McGuinness the urban renewal of Aclare, no matter how desirable, would have been low in the county council’s list of priorities.
In furtherance of the urban renewal scheme an expert was commissioned, at the expense of the county council, to prepare plans for the redevelopment of Aclare and these were approved, not only by the residents of Aclare, but also Fr McGuinness. The county council set about the implementation of these plans. This involved the acquisition of certain derelict buildings. It also involved the acquisition of a licensed premises for the purpose of conversion into a community centre. The significance of this acquisition was that such an acquisition was not immediately capable of finance from any of the recognised funds available to the county council and it made this acquisition on the assumption that Fr McGuinness’s funds would be available to meet the cost.
In the months of January/February 1986 Fr McGuinness took up residence in Nazareth House in Sligo and he then took the appropriate steps to realise funds by the sale of his shares to finance the project and in July 1986 he was in a position to lodge the money in the Sligo branch of the AIB.
On 2 September 1986 arrangements were made for Fr McGuinness and Mr Paul Byrne, the then county manager for the County of Sligo, to attend at the offices of the Allied Irish Banks plc at 26 Stephen Street, Sligo and they there met with Ms Concepta Cuddy, the manager’s secretary, where they executed a mandate to the bank and opened a joint deposit account in the names of Fr Patrick Stephen McGuinness and the Sligo County Council. The terms of that mandate are of importance and it reads:
We Reverend Fr Patrick Stephen McGuinness and Sligo County Council hereby request and authorise you:
(1) To open and keep a deposit account (‘the account’) for us in our joint names at your 26 Stephen Street, Sligo branch or such other branch or branches as may from time to time be substituted therefor, to be used by us for the receipt and dispersement of monies placed on interest bearing deposit account with you.
(2) To give effect to any request, direction or instruction relating to withdrawals and transfers from the account on the signature of Reverend Fr Patrick Stephen McGuinness.
(3) Upon the death of Reverend Fr Patrick Stephen McGuinness to pay the balance on the account to Sligo County Council as survivor.
*85
And we and each of us declare that the within mandate unless terminated by death or incapacity of either of us or by operation of law shall continue in full force and effect until notice in writing signed by either of us countermanding your authority and instructions is received by you.
This mandate was duly signed by the parties and Fr McGuinness paid into the account the sum of £56,871.20.
Thereafter there were two dealings in this account; the first took place on 8 January 1987 when at the request of Fr McGuinness the fund was transferred from the Allied Irish Banks to AIB Finance Ltd so that it would attract a more beneficial rate of interest. The Sligo County Council took no part in this transaction. The second was the making of a loan to a Mr Egan for the purpose of acquiring tools and equipment to commission the factory which had earlier been built in Aclare. While the county council was aware of this transaction, its authority and consent to it was neither sought nor given and the extent of its involvement was limited to a provision that the interest on the loan would be paid to it.
On 16 March 1987 Fr McGuinness requested that the Sligo county manager, the chairman of the Sligo County Council and the secretary of the Sligo County Council attend at his rooms in Nazareth House and there execute a document entitled ‘agreement’.
This document is of relevance. It reads:
Whereas a deposit account in the joint names of Reverend Fr Patrick Stephen McGuinness and Sligo County Council has been opened in the AIB Stephen Street, Sligo branch it is hereby agreed that such monies in said accounts as may be paid to Sligo County Council shall be used by said council only for the purposes of and/or consistent with the objectives of the Aclare (Fr Stephen McGuinness) Civic Improvement Scheme or the McGuinness Aclare Fund which is the £57,000 deposit on that occasion. To this sum may be deposited any balance left over from Fr Stephen McGuinness’s previous donation of £25,000 to the county council for the purpose as stated above, including a medical centre, renewal of derelict houses and improvement in the environments.
The previous donation was used for building a factory generously aided by the county council, the Sligo County Development Team and Finance Department per IDA.
Any previous agreements on the above donation should be cancelled.
The agreement was signed by Fr McGuinness, the county manager, the chairman of the county council and the county secretary.
Fr McGuinness was at all times enthusiastic that the project of the urban renewal of Aclare should be completed without delay and constantly enquired *86 as to progress.
I have no doubt whatever that if Fr McGuinness had survived, the funds in question would have been made available and paid over to the county council for the benefit of the project. They were still in AIB Finance Ltd at the date of his death on 18 April 1987.
The Sligo County Council claimed to be entitled to these funds on the basis that there was a completed gift by Fr McGuinness of these funds to the county council.
Fr McGuinness’s executor disputes that there was a completed gift and contends that if there was a gift it was to come into effect only upon his death and accordingly was ineffectual.
I accept as a clear and unambiguous statement of the law, that part of the judgment of Fitzgibbon J in Owens v. Greene [1932] IR 225 at p. 249 where he cites with approval the following passage:
… this transaction was, in effect, an attempt to make a nuncupative testamentary disposition. Father O’Flaherty remained the owner during his life of moneys which, on his death, he wished to pass to his successor, just as he intended, in the case of his nieces, that the money which he intended for them should go by survivorship. There are two principles applicable to the subject matter, of which one or other appears to be fatal to the respondent’s contention. The first is that a testamentary disposition can only be made by will, and that any attempt to make it by parol inter vivos must fail. The other is exemplified by Richards v. Delbridge. A voluntary trust may be created by a declaration of trust, or by a completed assignment of the legal ownership to a trustee; but it is impossible to turn an incomplete, conditional or postponed gift into a trust, where there is no intention to create the relationship of trustee and cestui que trust. It was not intended that this money should be left derelict, or that any trust should take effect upon it, during the life of Father O’Flaherty. So long as he lived he was owner and nothing less.
On any examination of Fr McGuinness’s actions and conduct in this case it is clear that he never made a complete assignment of the legal ownership of these monies to the Sligo County Council. In making that finding I rely, inter alia, on the following matters:
(1) The wording of the mandate is clear and reserves to Fr McGuinness the sole right to make requests or give directions or instructions to the bank relating to the withdrawal or transfer from the account. The Sligo County Council had no such right. Fr McGuinness did in fact exercise this right in the two instances already referred to i.e. by the transfer of the funds and by the making of a loan to Mr Egan. The Sligo County Council took no active part in either transaction.
(2) In the earlier transaction, that is to say, when the factory premises were being built when Fr McGuinness intended to benefit the civic improvement *87 scheme, he paid over the sum of £25,000 to the Sligo County Council who in turn lodged it to the benefit of the Aclare (Fr Stephen McGuinness) Civic Impovement Scheme in accordance with the resolution adopted by the county council on 23 July 1984. No such payment or lodgment was made in the case of the funds which are the subject matter of these proceedings.
(3) I consider it to be of significance and importance that the county council commenced the acquisition of the derelict property in February of 1986 which included the acquisition of a licensed premises. Fr McGuinness’s funds would have been of significant help in the payment of the deposits and the cost of acquisition and it appears to me that the county council, for the very laudable reason of not wishing to rush this elderly gentleman, withheld any request for funds but relied upon the fact, as they saw it, that they were safe by reason of their rights to the funds by surviving Fr McGuinness. I believe that it was in their contemplation at all times that the funds would pass on his death. This was in all respects a reasonable anticipation considering that at this time Fr McGuinness was 92 years of age. If Fr McGuinness intended to make an immediate gift that, in my view, was the best possible moment to do so.
(4) The fact that Fr McGuinness still considered himself to be in control and possession of the fund is, in my view, reflected in the agreement signed on 16 March 1987 which speaks of ‘such monies in said accounts as may be paid to Sligo County Council’. I consider that phraseology inconsistent with the submission that there has been a completed gift. It can only be interpreted as relating to a further gift of funds, the amount of which has not as yet been fixed.
In the consideration of the issues in this case I find myself to be in complete agreement with the judgment of O’Hanlon J in Lynch v. Burke [1991] 1 IR 1 where having reviewed the relevant authorities he says (at p. 13):
The foregoing review of decisions by the courts of high authority in other jurisdictions appears to indicate the existence of a strong and uniformed current of authority disputing the correctness of the decision of the former Supreme Court in Owens v. Greene and Freely v. Greene [1932] IR 225. I consider that in the present case I am bound to follow and apply that decision but having regard to the fact that it is a decision which appears to conflict with the interpretation of this branch of the law in so many other common law jurisdictions, it might well be a case where the Supreme Court would be disposed to review again the correctness of that decision, if a suitable opportunity arose for doing so.
Accordingly, finding, as I do, that there was at most an uncompleted gift by Fr McGuinness to the county council and finding, as I do, that it was his intention to and that he did in fact retain dominion and control over these funds up to the time of his death and finally that no relationship of trustee and cestui que trust existed between Fr McGuinness and the county council, I refuse the reliefs *88 sought by the first named claimants and make an order as sought at paragraph 18a of the second named claimant’s counterclaim.
O’Meara v Bank of Scotland PLC
[2011] IEHC 402
Judgment of Miss Justice Laffoy delivered on 28th day of October, 2011.
1. The factual background
1.1 The defendant in these proceedings was incorporated as Bank of Scotland (Ireland) Limited when the events the subject of these proceedings took place and when the proceedings were initiated. Since then, Bank of Scotland (Ireland) Limited has merged by absorption into Bank of Scotland Plc subsequent to a cross-border merger. Throughout this judgment I will refer to Bank of Scotland (Ireland) Ltd. and Bank of Scotland Plc as the defendant.
1.2 These proceedings relate to the monies in two deposit accounts in the joint names of John O’Meara (Mr. O’Meara), the plaintiff’s late husband, and the plaintiff, which were opened in November and December 2008 with the defendant, the earliest bearing account No. 929260/101, to which I will refer as joint deposit account No. 101, and the later bearing account No. 929260/102, to which I will refer as joint deposit account No. 102. The primary relief sought by the plaintiff is a declaration that all monies standing in both accounts on 28th November, 2009, the day following the death of Mr. O’Meara, are the property of the plaintiff. The defendant’s primary answer to that claim is that the set-off by the defendant of the monies standing to the credit of those accounts against the monies due by Mr. O’Meara on foot of a loan account in his sole name bearing No. 471216/128, to which I will refer as the loan account No. 128, which was effected on 5th January, 2010 by the transfer of monies aggregating €1.6m from the joint deposit accounts to loan account No. 128, was valid. The defendant seeks a declaration on its counterclaim to that effect.
1.3 Mr. O’Meara had been a respected and a valued customer of the defendant for many years prior to October 2008, when the events which have given rise to these proceedings commenced. Indeed, he had become a customer of the defendant’s predecessor, ICC Bank Plc, as far back as 1994. Mr. O’Meara was involved in farming and in the beef industry. He reared, and purchased and fattened, livestock, and exported livestock to the Middle East. From the year 2000 onwards he had become involved in property investment, in respect of which he borrowed from various lending institutions, including the defendant. By the end of 2008 he had eleven loan accounts with the defendant.
1.4 Sometime before 26th November, 2008, probably during the previous week, Mr. O’Meara got in touch by telephone with Mr. Dave Savage (Mr. Savage), who was the divisional director of lending at the defendant and asked to meet him. The meeting took place at the defendant’s office at St. Stephen’s Green, Dublin, 2. It was attended by Mr. Savage, who was accompanied by Ms. Ruth Corrigan (Ms. Corrigan), a lending executive with the defendant, and by Mr. O’Meara. Mr. O’Meara indicated that he wanted a loan facility in the sum of €1.6m for working capital for his business. Mr. Savage’s evidence was that he explained to Mr. O’Meara that the matter was not as straightforward as other loans which had been advanced in the past because the defendant’s credit committee was getting “much tighter”. Mr. Savage’s evidence was that Mr. O’Meara indicated that he could “cash back” the loan facility and that he would put in place a deposit with the defendant. The defendant’s officials understood that the monies for the deposit were monies that were coming to Mr. O’Meara from Anglo Irish Bank Corporation Plc (Anglo). The meeting was told that the purpose of the loan was to buy cattle for Mr. O’Meara’s business. The joint deposit accounts Nos. 101 and 102 and the loan account No. 128 were put in place as a consequence of that meeting in the circumstances which I will outline below.
1.5 Joint deposit account No. 101 was set up first. It was the understanding of Mr. Savage and Ms. Corrigan at their meeting with Mr. O’Meara that the funds he had available to set up the deposit account were the sole property of Mr. O’Meara. However, when Mr. O’Meara arrived at the defendant’s office on 26th November, 2008 to open the account he had a cheque drawn on Anglo in the sum of €1,534,126.60 on which the payees were named as “John and Claire O’Meara” and which was crossed “Account Payee only”. The plaintiff’s signature appeared on the back of the cheque. Although the procedures were gone through to do so and Mr. O’Meara signed an application form to open an account in his sole name and the account, which I understand to be deposit account No. 471216/126 referred to in the defence, was set up, it was decided by the officials of the defendant that the cheque could not be used to open a deposit account in the sole name of Mr. O’Meara. A decision was made to open a joint account in the joint names of Mr. O’Meara and the plaintiff.
1.6 Mr. O’Meara was given an application form to open a six month fixed deposit account to take away to be completed by both himself and the plaintiff, while the Anglo cheque was retained by the defendant. Some of the details on that form were completed by Ms. Susan Dwyer (Ms. Dwyer), an official in the deposits section of the defendant. Both Mr. O’Meara and the plaintiff signed the form at the appropriate place on the third page. Towards the end of the form on the fourth page, the mandate provisions under the heading “Withdrawal Instructions” appeared. It was stated on the form that instructions were to be given to the defendant by such persons and in such manner as was set out in the “Deposit Account Mandate” attached. As I understand it, what followed was the “Deposit Account Mandate”. A number of options were then set out as follows:
“* any one Account Holder // All Account Holders // Others (Please specify)”.
As regards the asterisk before “any one Account Holder”, the following explanation was then set out:
“The Bank is permitted to act on the instructions of either one of you without the need for the consent of the other connected with the Account. For example, either one of you may withdraw all funds in the Account without requiring the consent or signature of the other.”
The first option – any one Account Holder – was ticked and on the same line after three options the name “John O’Meara” in block capitals appears. Ms. Dwyer’s evidence was that the application form/mandate was interpreted by the defendant on the basis that Mr. O’Meara was the only person who could give the defendant withdrawal instructions.
1.7 The Account which was opened, joint deposit account No. 101, was a six month fixed deposit account on which the rate of interest payable was 5.5% per annum. The defendant’s general conditions governing that type of account contained special provisions in relation to joint accounts. Paragraph (a) of clause 3 provided:
“Where an Account is held by two or more persons, the Account shall only be operated in accordance with the written instructions received from the Account Holders from time to time. The Bank shall not be concerned about the division of ownership of the monies lodged in the Account between individuals.”
Clause 3(d) provided:
“On the death of any joint Account Holder, the balance of the Account plus accrued interest may on the production of the appropriate Revenue and testamentary documentation be withdrawn in total or retained in the name of the surviving Account Holder(s).”
1.8 On the evidence it would appear that on 26th November, 2008 no enquiries were made by the defendant’s officials as to the source of the funds represented by the Anglo cheque. Prima facie, as they were joint payees on the Anglo cheque, those funds were the property of Mr. O’Meara and the plaintiff jointly, although the beneficial ownership is an issue which will be addressed later. After joint deposit account No. 101 was opened on 28th November, 2008, value having been obtained for the Anglo cheque on the previous day, Mr. O’Meara made two withdrawals from it, one in the amount of €300,000 on 4th December, 2008 and the other in the amount of €300,000 on 15th December, 2008, which were effected by transfers to an account in the Naas branch of Bank of Ireland in the name of “John O’Meara Farms” and were obviously in connection with his business, so that the balance remaining therein when loan account No. 128 was subsequently set up was €934,126.60.
1.9 There were a number of steps in the process whereby the loan of €1.6m to Mr. O’Meara solely was sanctioned. The officials in the lending department submitted an application to the defendant’s credit committee. The credit committee sanctioned the loan, whereupon a letter of offer issued to Mr. O’Meara, which was dated 17th December, 2008. The original of the letter of offer with acceptance signed by Mr. O’Meara was not available to be put in evidence. However, I am satisfied that, despite thorough searches, the original cannot be located and that the photocopy which was put in evidence is a true copy of the original. The document comprised twelve pages, which were stapled together. The first five pages set out the terms of the offer. The next two pages related to acceptance. The next four pages comprised attachments designated (1), (3) and (4). The latter attachment contained two pages. The final page was designated “Attachment (5)” and it is of very considerable significance in the resolution of the issues which arise in these proceedings.
1.10 As regards the offer of the loan, the purpose of which was expressed to be for working capital and no other purpose, and its terms, the advance was to be in the sum of €1.6m and the term was to be three years. Interest on the loan at the rate stipulated, was to be paid by monthly direct debit and the principal was to be repaid by one repayment at the end of the three year term. The loan was to be secured. It was provided that the security for the loan, which would extend to cover Mr. O’Meara’s general liabilities to the defendant, would include five securities, two being extensions of two existing first specific charges over specified land held by the defendant, one being a continuing lien over a certain Portfolio Investment of Mr. O’Meara, and one being a continuing equitable deposit over Mr. O’Meara’s share certificates in a certain development. As I understand the evidence, Dillon Eustace, Solicitors, were retained by the defendant in relation to the foregoing elements of the security. The final element of the security, which was dealt with “in-house”, was described as follows:
“A Lien incorporating a Right of Set-off over a Deposit Account with the Bank in the name of John O’Meara and Claire O’Meara in the Bank’s standard form for an amount of €1,600,000 plus accrued interest thereon.”
The acceptance of the offer on page 7 of the letter of offer was signed by Mr. O’Meara. Underneath his signature his name appears printed and in manuscript block capitals. The date is then given as 22nd December, 2008. His signature was witnessed by Muhammad Abdullah, whose address in Dublin is given, and whose occupation is given as “Security”. I will set out the circumstances in which Mr. O’Meara executed the acceptance later.
1.11 Attachment (5), which is the twelfth page of the letter of offer, is headed “RIGHT OF SET-OFF”. It is addressed to the defendant. Its text is in the following terms:
“In consideration of your offering loan facilities as set out in your Facility Letter dated 17th December, 2008, I hereby agree that while any monies are due and owing by the Borrower John O’Meara to Bank of Scotland (Ireland) Ltd. (the “Bank”), the Bank may at any time and without notice to me debit any credit balance on any account in my name with any sums which are or may become owing to the Bank by myself. I undertake not to reduce below €1,600,000 the total credit balance of those accounts in which I have a credit balance.”
Below that text there is space for the “Borrower/Account Holder” to sign. Mr. O’Meara signed at that point. Below that, the date of 20th December, 2008 was inserted. Below the date, there is facility for a witness to sign. The plaintiff signed her name opposite the word “Witness”. At the hearing she acknowledged that the signature which appears on attachment (5) is her signature. Thereafter the address of the plaintiff and her late husband is set out and the date which appears below that is 22nd December, 2008. I think it is probable that the address and the date 22nd December, 2008 were inserted on attachment (5) by Ms. Corrigan, when Mr. O’Meara brought the completed form to the defendant’s office on 22nd December, 2008. The signature details as they appear on attachment (5) are replicated at para. 15.2 below.
1.12 When Mr. O’Meara attended at the defendant’s office on 22nd December, 2008 he had not completed the acceptance on page 7. Ms Corrigan got him to sign the acceptance and, as she felt she could not witness his signature, she asked Mr. Abdullah, who was a security man in the defendant’s premises at the time to witness Mr. O’Meara’s signature and he did so.
1.13 To recapitulate in relation to the joint deposit account No. 101, the position as at 22nd December, 2008 was that the balance on the account was €934,126.60, following the withdrawal by Mr. O’Meara of the two amounts of €300,000 each in December 2008. Accordingly, there were not sufficient funds in that account to satisfy the lien/set-off requirement in the letter of offer of 17th December, 2008. What the defendant did in order to bring the monies on deposit with it in the joint names of Mr. O’Meara and the plaintiff up to €1,600,000 was to open a second joint deposit account, that is to say, joint deposit account No. 102, in the joint names of Mr. O’Meara and the plaintiff and to transfer €665,873.40 from loan account No. 128 to that account. This was done on 23rd December, 2008. The sum of €665,873.40 represented the two withdrawals of €300,000 each which Mr. O’Meara had made in December together with the difference between the amount of the Anglo cheque and the sum of €1,600,000. The reason a new account was opened, rather than transferring those monies to joint deposit account No. 101, was that in the interim since the opening of that account the rate of interest payable by the defendant on six months fixed deposit accounts had been reduced from 5.5% to 5%. Although, on the evidence, Mr. O’Meara did not sign any documentation in connection with the opening of the new account nor have any involvement in it, it is reasonable to infer that he tacitly consented to the approach adopted by the defendant. On the expiry of the fixed terms of the two joint deposit accounts during 2009 the accounts were rolled over for further fixed terms, albeit at lower interest rates. In my view, nothing turns on this.
1.14 As regards loan account No. 128 which had been opened on 23rd December, 2008, in addition to the transfer of the sum of €665,873.40 to joint deposit account No. 102, Mr. O’Meara drew down the sum of €250,000 on 23rd December, 2008. In the first four months of 2009 Mr. O’Meara drew down further amounts aggregating €680,000. Some of the withdrawals were effected by transfer by the defendant to the account of Mr. O’Meara at the Naas branch of Bank of Ireland, that is to say, the account named “John O’Meara Farms” and others by cheques in favour of Mr. O’Meara, which were collected by him. The interest due on the loan account was paid monthly up to and including the month of September 2009. The debit balance on loan account No. 128 at that stage was €1,597,057.40, which factored in some small amounts debited for bank fees. The next direct debit for interest was due on 23rd October, 2009.
1.15 On 8th July, 2008 Mr. O’Meara had informed the plaintiff that he had been diagnosed with cancer and that he had between a year and eighteen months to live. Despite that and a serious setback in the summer of 2008, Mr. O’Meara continued to run his business. The evidence of the officials of the defendant who met him between October and December 2008 was that they were unaware that he was unwell, although, when his accounts were reviewed in July 2009, the fact that he had lost a considerable amount of weight was remarked on. In any event, on the evidence, I am satisfied that the officials of the defendant were not told by the defendant that he was terminally ill and that they were not aware of that fact during 2008 or during the first three quarters of 2009. On 16th October, 2009 Mr. O’Meara’s accountant, John P. Greely, wrote to Mr. Savage referring to the fact that Mr. O’Meara had been in hospital and would, hopefully, be released the following weekend. Mr. Greely stated that Mr. O’Meara had been advised by his doctor, in order to assist with a speedy recuperation, not to take any act or part in the business for at least six weeks. The purpose of the letter was to inform the defendant that Mr. O’Meara had no option but to cancel the direct debit payments for October and November 2009.
1.16 The response of the defendant, in a letter from Mr. Savage to Mr. Greely dated 20th October, 2009, was that in order to avoid “these facilities” falling into repayment arrears, the defendant proposed to utilise “the funds currently on liened deposit in a/c 929260 to fund these repayments”. An application form to be signed by Mr. O’Meara and the plaintiff, requesting that the defendant make transfers from the joint deposit accounts “to meet loan repayments on loan facilities attaching to reference 471216” was enclosed for signature. While it is not of any particular relevance to the issues the Court has to decide, I understand that the proposal did not relate solely to the interest payments on loan account No. 128. Mr. Greely’s response on behalf of Mr. O’Meara on 6th November, 2009 was that Mr. O’Meara was unable to accede to the request in relation to the “liened deposit account”.
1.17 Mr. O’Meara died on 27th November, 2009. His will, which was not put in evidence, has not been proved. As I understand the evidence, the plaintiff is the principal beneficiary under his will. However, that, unfortunately, is of no benefit to the plaintiff because the Court was informed that his estate is “very insolvent”.
1.18 The officials of the defendant had become aware of the death of Mr. O’Meara by 1st December, 2009. At a meeting held on 18th December, 2009 with Mr. Greely, the defendant’s officials, Mr. Savage and Michael Corcoran of the defendant’s BRU (Business Restructuring Unit), who had “taken over the file” in relation to Mr. O’Meara, Mr. Greely was informed that the defendant intended setting off the sum of €1.6m in joint deposit accounts Nos. 101 and 102 against the loan facility. Although, as the documentation discovered by the defendant illustrates, in late December 2009 internally some of the defendant’s officials had concerns as to whether the defendant was entitled to exercise a right of set-off against the funds in the joint deposit accounts, on 5th January, 2010, as I have recorded earlier, sums aggregating €1,600,000 were transferred from the two joint deposit accounts to loan account No. 128. As I understand the position, the effect of those transactions was to close joint deposit account No. 102, but a balance remained in joint deposit account No. 101, which by late March 2010 had grown to €46,209.51.
1.19 No contact was made by the defendant with the plaintiff following the death of Mr. O’Meara and prior to the transfers from joint deposit account Nos. 101 and 102 on 5th January, 2010. While no issue arose on this point in the course of the evidence, it is clear on the documentation before the Court that Mr. Greely’s client was Mr. O’Meara, not the plaintiff. The plaintiff attended at the defendant’s office at St. Stephen’s Green in Dublin on 22nd March, 2010. She met with Ms. Dwyer. The plaintiff’s evidence was that she wished to withdraw €20,000 from the joint deposit account with her late husband. Ms. Dwyer’s understanding was that she wished to withdraw all of the funds lodged to that account. In any event, Ms. Dwyer informed the plaintiff she could not withdraw the funds because there was a right of set-off on the account. The plaintiff requested that the balance on the account be transferred electronically to her personal current account at the Kilcock branch of Allied Irish Banks Plc and signed a withdrawal form on 22nd March, 2010. By letter dated 22nd March, 2010 Ms. Dwyer, on behalf of the defendant, and referring to the withdrawal request, required the plaintiff to furnish the following documentation: an original or a certified copy of the death certificate of Mr. O’Meara; an affidavit by Mrs. O’Meara confirming her marriage; and a copy of the marriage certificate. Subsequently, in April 2010 the plaintiff furnished the required documentation. However, the balance in joint deposit account No. 101 was not transferred to her personal account as she had requested.
1.20 These proceedings were initiated by a plenary summons which issued on 18th June, 2010.
2. The plaintiff’s case and the defendant’s defence and counterclaim as pleaded
2.1 There are some subtle differences between the case made on behalf of the plaintiff in the pleadings and the submissions made at the hearing. For that reason I consider it necessary to consider the pleadings in some depth.
2.2 To a large extent, the narrative contained in the statement of claim delivered on 12th July, 2010 is consistent with what I have outlined above. However, it is recited in the statement of claim that on or about 22nd December, 2008 the plaintiff and Mr. O’Meara opened joint deposit account No. 102 and authorised the transfer into the said account of monies in the sum of €600,000. The figure mentioned in incorrect, but, more importantly, it was contended on behalf of the defendant that the plaintiff had no involvement in the opening of that account. I will return to the issue to which that contention, which I am satisfied is factually correct, gives rise later.
2.3 In paragraph 6 of the statement of claim it is pleaded that the sums lodged to both deposit accounts were lodged by the plaintiff and Mr. O’Meara for the benefit and future welfare and security of the plaintiff and their sons, that the lodgement by Mr. O’Meara was intended to be “an advance” to the plaintiff and that Mr. O’Meara and the plaintiff intended that, in the event of the death of Mr. O’Meara, the plaintiff should have sole legal and beneficial ownership of the monies standing to the credit of the two joint deposit accounts. The defendant in its defence denies each of those assertions and further asserts that the purpose asserted by the plaintiff, namely, to provide for the future welfare and security of the plaintiff and her two sons was never disclosed to the defendant. On the contrary, it is contended that at the time of the creation of the deposit accounts and at all material times thereafter it was represented to the defendant that the monies would provide “cash-backing” for the loan advanced to Mr. O’Meara.
2.4 It is pleaded in the statement of claim that it was an express or an implied term of the contract between the plaintiff and Mr. O’Meara, on the one hand, and the defendant, on the other hand, that no monies would be withdrawn from the joint deposit accounts “without the express authority in writing of one of the Account Holders namely the Plaintiff and/or the said John O’Meara”. While the defendant does not admit the plea as to the express or implied contractual term, the defendant does admit that the defendant would be entitled “to set-off monies standing to the credit of” the joint deposit accounts or any of them “with the authority (express or implied) of any one of the account holders, namely, the Plaintiff and/or the late John O’Meara” (emphasis in original). Further, it is pleaded by the defendant that it was entitled “to set-off monies standing to the credit of” the joint deposit accounts or either of them on the instructions, authority or consent (in each case express or implied) of Mr. O’Meara. In other words, as I understand it, the position of the defendant, as pleaded, assuming it assimilates withdrawal instructions with “set-off” instructions, is not wholly in line with Ms. Dwyer’s interpretation of the withdrawal instructions on the mandate – that one account holder, Mr. O’Meara, was the only person who could give the defendant withdrawal instructions on the account.
2.5 The plaintiff pleads that the document entitled “Right of Set-Off” attached to the facility letter of 17th December, 2008, on its true construction, as regards the granting of a right of set-off, applied only to such accounts as were maintained in the sole name of Mr. O’Meara. In response, the defendant pleads that the plaintiff signed the “Right of Set-Off” document and that, although it appears from the face of the document that she signed as a witness to the signature of Mr. O’Meara, in signing the document –
(a) she expressly or impliedly gave her authority to the defendant setting off sums standing to the credit of the account(s) to which the right of set-off document related in reduction of the personal liabilities of Mr. O’Meara; and/or
(b) she became estopped from denying that she gave such authority.
Further, it is denied that the effect of the right of set-off document was to give the defendant a right of set-off only in relation to accounts maintained in the sole name of Mr. O’Meara.
2.6 The plaintiff pleads that the defendant acted wrongfully, unlawfully and in breach of contract and/or negligently and in breach of duty and of fiduciary duty on 5th January, 2010 in exercising a purported right of lien and set-off against the two joint deposit accounts. It is pleaded that the defendant did not have authority or the consent of the plaintiff or of Mr. O’Meara to transfer the funds as it did. The defendant denies all the allegations of wrongdoing and, additionally, denies that any duty of care was owed by the defendant to the plaintiff or that at any material time the defendant stood in a fiduciary capacity to the plaintiff.
2.7 In addition to claiming a declaration in the terms set out at para. 1.2 above, the plaintiff also seeks an order directing the defendant to pay the monies standing on 28th November, 2009 to the credit of joint deposit accounts Nos. 101 and 102 to the plaintiff together with interest thereon at the rate applicable by the defendant to six month term deposits up to the date of such payment. The plaintiff also claims various ancillary reliefs including damages for negligence, breach of duty, statutory and fiduciary duty and breach of contract and interest pursuant to the Courts Act 1981 or contractual interest. The position of the defendant is that the plaintiff is not entitled to any of those reliefs.
2.8 In its counterclaim, the defendant pleads that the common intention as between the defendant, the plaintiff and Mr. O’Meara was that the plaintiff would be a party to the right of set-off document, not only as a witness but also as a signatory to the joint deposit accounts to which the document related, but through inadvertence or mistake, the defendant, Mr. O’Meara and the plaintiff omitted to make sure that it was made clear in the text that the plaintiff signed not only as a witness but also as a party to such arrangement. Accordingly, the defendant seeks to have the document rectified so as to reflect the true intentions of the parties and seeks an order to that effect.
2.9 In its counterclaim, the defendant pleads that it has at common law a right to exercise the right of set-off in respect of the two joint deposit accounts. Finally, in its counterclaim the defendants pleads that, if the defendant has no entitlement to exercise the right of set-off in question, any sums which were unlawfully set-off enure for the benefit of the estate of Mr. O’Meara, subject to grant of probate and the taking out of letters of administration.
2.10 In general, in her reply and defence to the defendant’s counterclaim the plaintiff joins issues on the various matters which are pleaded in the defence and counterclaim, specifically denying any contract between her and the defendant other than the contract in relation to the joint deposit accounts. She denies that she agreed that the monies in the joint deposit accounts or any part thereof would provide “cash backing” or any security for the loan to Mr. O’Meara. She denies that there was a common intention that she should be a party to the right of set-off document and any intention to become bound thereby in her capacity as a co-signatory or in any contractual capacity. Finally, the plaintiff pleads that, in seeking the equitable relief of rectification, the defendant has failed to do equity and is guilty of equitable fraud and by its actions and omissions had disentitled itself to claim equitable relief. That plea is particularised by various alleged failings and actions on the part of the defendant, for example –
(i) failing to explain to or advise the plaintiff of the nature of the obligation which the defendant alleges it intended her to undertake by signing the right of set-off document,
(ii) failing to advise her that she should seek legal advice before executing that document,
(iii) attempting to exploit the weakness of the plaintiff’s position, particularly in the absence of legal advice, and
(iv) failing to inspect the signed document and draw to the plaintiff’s attention that it showed her signature as merely that of a witness rather than a party.
On the basis of the conduct particularised, which is considerably more extensive that I have recorded here, it is pleaded that the plaintiff is entitled to rescind the contract contended for by the defendant, if it came into effect.
2.11 It is noteworthy that it is not alleged by the plaintiff that either the execution of the mandate to open joint deposit account No. 101, or the execution of the right of set-off document, was procured by pressure, undue influence or any unconscionable conduct on the part of Mr. O’Meara. Moreover, there was nothing in the evidence of the plaintiff which would suggest that Mr. O’Meara exercised duress or undue influence over her. She was the only witness who could testify as to what transpired between her and Mr. O’Meara. I now propose to consider her evidence in relation to the transactions with the defendant.
3. The plaintiff’s evidence
3.1 To put the plaintiff’s evidence in relation to the transactions with the defendant into context, it is necessary to outline the personal circumstances of the plaintiff and her late husband to some extent. In 2008 the plaintiff was 45 years of age and her husband was approximately two years older than her. They had lived together since 1992 and had married in 2005. They had two children, a boy born in March 2004 and a boy born in May 2005. As I have already recorded, the plaintiff became aware of her late husband’s cancer diagnosis in July 2008 and he died less than a year and a half later. There is no doubt that testifying was very stressful for the plaintiff. It emerged during cross-examination that she herself had had breast cancer in 2001 but had recovered. It was the plaintiff’s evidence that the respective roles of herself and her husband were very well defined. Her role was to rear the children and to be the homemaker. He was the provider. The plaintiff’s evidence, which I accept, was that Mr. O’Meara was a very private person. She did not know about his business or his bank accounts. Before the opening of joint deposit account No. 101, as far as she was aware, she never had a joint bank account with Mr. O’Meara. He provided her with signed cheques on a current account in his sole name at the Naas branch of AIB and she had a current account for household related expenses in her sole name in the Kilcock branch of AIB.
3.2 The plaintiff’s evidence was that towards the end of November 2008, after he had started chemotherapy treatment, Mr. O’Meara told the plaintiff in the kitchen of their home that he was opening a joint account in both of their names and he was going to put “over a million and a half into it in cash” for the plaintiff and “the boys”, should anything happen to him. The plaintiff’s evidence was that she knew nothing about the defendant bank. As regards the documents she signed in relation to accounts with the defendant, her evidence was that she did not remember specifically any documents, although she recollected that her late husband got her to sign something. She did not remember seeing the front of the Anglo cheque but acknowledged that her signature was endorsed on it. She also acknowledged that the signatures on the application/mandate and on the right of set-off document were her signatures. She had no specific recollection of signing either document. Her evidence was that her late husband would have just asked her to sign her name and she would have done so. She received no explanation as to why she was signing the right of set-off document.
3.3 I accept the plaintiff’s evidence in relation to the matters referred to in the next preceding paragraph. I am satisfied that her late husband did not involve her in his business or financial affairs, save to procure her signature when it was necessary. Although the address of Mr. O’Meara and the plaintiff, as shown on the bank statements and other documentation in relation to joint deposit account Nos. 101 and 102, was their family home, Pitchfordstown Stud, Kilcock, County Kildare, the plaintiff’s evidence was that post was not delivered to the house but was collected by her husband from what she described as a “pigeon hole” in the Post Office. Her evidence was that she never saw post from a bank or even utility bills. I accept her evidence on that, because it is consistent with the documentation which was put in evidence. Mr. O’Meara’s address as shown on the bank statements or other documentation in relation to loan account No. 128 was his business address in the town of Naas. Many of the relevant documents were marked with a date stamp showing the date of receipt and the same type of receipt appears on the documentation in relation to joint deposit account Nos. 101 and 102.
3.4 Early in the course of her cross-examination the plaintiff stated that she knew nothing about the “Anglo money” and that she did not recall any form of joint investment in Anglo and she had no knowledge of her husband and herself making other joint investments previously. The plaintiff’s evidence was that she was unaware of the withdrawal by Mr. O’Meara of the two sums of €300,000 each from joint deposit account No. 101 in December 2008 and her explanation was that she never discussed money with her late husband. Later, she stated that in November 2008, when her husband told her he was depositing €1.5m, she was not concerned to check as to whether all the “paper work” was “legal”. She trusted him. She gave that evidence in a very distressed state and the remainder of her cross-examination was postponed until the following day.
3.5 A number of controversies arose when the cross-examination of the plaintiff was resumed on the following day. First, as was pleaded in the statement of claim, the plaintiff, in an affidavit to ground an application for an interlocutory injunction, which had been brought on behalf of the plaintiff at an early stage in the proceedings, had averred that the joint deposit account No. 102 had been opened on 22nd December, 2008 by her and Mr. O’Meara. It was put to her that that averment was not correct. Her response was that it was absolutely correct on the basis of the information she had seen in the bank statements. That, I believe, was her honest understanding of the situation. The plaintiff did not agree with the explanation put to her by counsel for the defendant as to the circumstances in which joint deposit account No. 102 was opened, which I do not find surprising. However, she did say that her understanding was that the monies which went into joint deposit account No. 102 were her and her husband’s money.
3.6 Secondly, contrary to the submission made on behalf of the defendant, I did not understand the plaintiff to make a concession in her evidence that the proceeds of the Anglo cheque were the sole property of her husband and were not joint property of herself and her husband, as the cheque prima facie indicated. The particular response of the plaintiff in cross-examination on which the defendant relies to support that submission arose in the context of counsel for the defendant putting to the plaintiff that Mr. O’Meara had effective control over the monies represented by the Anglo cheque, that the plaintiff gave him control over the monies, that she had not been induced into or tricked into so doing and that it was implausible that, given the knowledge she had at the time about Mr. O’Meara’s health, she would not have read at least the important points of the relevant documents and would not have understood their import. The plaintiff’s response was that her husband was an exceptionally wealthy man, she had no reason to be “intricately reading any small print”, she signed “millions of documents”, she did not know what she was signing, she trusted her husband emphatically, he was a wonderful provider and there was nothing they ever wanted and she knew nothing “about intricacies”. She went on to say that she believed he had a cheque for €1.5m in his hand. At that stage counsel interjected saying “With respect”. The plaintiff then stated:
“and it sounds now like he stole it, you are saying and he didn’t. It was his money.”
When that last sentence is considered in the context of all of the evidence of the plaintiff and, indeed, all of the evidence adduced by both parties, in my view, it cannot be taken as a concession by the plaintiff that she was not the beneficial owner jointly with her husband of the monies represented by the Anglo cheque.
3.7 The impression I formed of the plaintiff was that she was an intelligent and honest woman who respected her late husband and, as regards the business and financial matters, deferred to him. Her perception was that her husband was a very wealthy man and that perception may have been justified before the fateful events of mid-September 2008 and subsequently globally. I can fully appreciate why in late 2008 and throughout 2009 there were matters of greater concern to her other than the meaning and detail of business and financial documents which her husband asked her to sign.
4. Submissions/issues
4.1 The Court has had the benefit of comprehensive written submissions from both sides to which I will refer, as appropriate, when analysing the issues, the legal principles applicable and in setting out my conclusions hereafter.
4.2 Out the multiplicity of issues which arise on the pleadings, the evidence and the submissions made by the parties, I propose addressing the following, which I consider to be the key issues:
(a) Who was the beneficial owner of the monies represented by the Anglo cheque and what is the relevance of the answer?
(b) How did the monies in joint deposit account No. 101 devolve on the death of Mr. O’Meara?
(c) Were the monies in joint deposit account No. 101 impressed with a trust?
(d) What was the effect of the death of Mr. O’Meara on any valid right of set-off vested in the defendant?
(e) How was the defendant permitted to operate joint deposit account No. 101 having regard to the terms of the mandate given by the joint account holders?
(f) What was the effect of the operation of joint account No. 101 by the defendant from the time it was opened to 23rd December, 2008?
(g) Did the defendant have a right of set-off against joint deposit account No. 101 on 5th January, 2010 on any basis – at common law, in equity or contractually?
(h) If it is found that a contractual right of set-off was not created over joint deposit account No. 101, should an order rectifying the right of set-off document, that is to say, attachment (5) to the letter of offer of 17th December, 2008 be made?
(i) Is the plaintiff estopped from contending that the defendant had no right of set-off against joint deposit account No. 101?
(j) Does the beneficial ownership of joint deposit account No. 102 differ from the beneficial ownership of joint deposit account No. 101 and, if it does, what are the consequences?
5. Beneficial ownership of the monies represented by the Anglo heque/relevance
5.1 While on the pleadings and in their submissions the parties addressed the beneficial ownership of the monies in the joint deposit accounts, in my view, the starting point for the Court has to be consideration of who was the beneficial owner of the monies represented by the Anglo cheque before those monies were lodged in joint deposit account No. 101. As I have already indicated, prima facie, the cheque being payable to Mr. O’Meara and the plaintiff jointly, the monies were owned by them jointly. The provenance of those monies was not traced, although the evidence suggests that they represented the proceeds of an investment, which it must be inferred was in the joint names of Mr. O’Meara and the plaintiff, with Anglo, which had matured. This is supported by the application to the defendant’s credit committee, which is a reliable source as to what was known to the defendant’s officials, which records that Mr. O’Meara “received €1.6m cash from a matured Anglo Irish Bank investment”. Save that it establishes that Mr. O’Meara alone put up the entire money to acquire the joint investment with Anglo, because of the application of the equitable principles which I will outline, it is immaterial to the issue of the beneficial ownership thereof that the plaintiff was unaware of the existence of the joint investment.
5.2 In their written submissions, counsel for plaintiff asserted, reflecting what is pleaded in paragraph 6 of the statement of claim, that the monies deposited in joint deposit account No. 101 were contributed by both Mr. O’Meara and the plaintiff through the medium of the Anglo cheque, which was payable to them jointly. It was reiterated that the purpose of so doing was for the benefit and future welfare and security of the plaintiff and her two sons. Having referred to their relationship of husband and wife, it was asserted that Mr. O’Meara “is presumed to have advanced his “contribution” to the plaintiff”, without citing any authority. Counsel for the defendant did not, in their submissions, address the plaintiff’s reliance on the presumption of advancement. While I consider that the presumption of advancement does bear on the ownership of the funds lodged to joint deposit account No. 101, I consider that its application must be considered by reference to the acquisition of the investment with Anglo in the joint names of Mr. O’Meara and the plaintiff.
5.3 The core question which has to be considered as a prelude to determining all of the issues outlined earlier is what was the effect of Mr. O’Meara contributing the entire monies for the acquisition of the investment with Anglo but acquiring it in the joint names of himself and his wife, the plaintiff. Professor Delany in Equity and the Law of Trusts in Ireland (5th Ed.) quotes (at p. 170) the following passage from the judgment of Keane J., as he then was, in JC v JHC (High Court, unreported, 4th August, 1982), which explains the doctrine of advancement:
“Where property is taken in the joint names of two or more persons, but the purchase money is advanced by one of them alone, the law presumes a resulting trust in favour of the person who advanced the purchase money. This presumption may however be rebutted; and in particular the circumstances of the person in whose name the property is conveyed being the wife of the person advancing money may be sufficient to rebut the presumption under the doctrine of advancement.”
As Professor Delany observes, in that case, Keane J. appeared to base his decision on the fact that the evidence “overwhelmingly” reinforced the presumption of advancement, which he said would arise had there been no other evidence of the parties’ intentions. Professor Delany suggests that one could argue that Keane J. regarded the presumption of advancement as being relevant only where evidence to establish the parties’ true intentions was lacking. Moreover, Professor Delany later (at p. 172) observes that, having regard to the decision of the Supreme Court in RF v. MF [1995] 2 ILRM 572, the presumption can readily be rebutted by evidence establishing a contrary intention and in practice it is only likely to directly influence the outcome of a case where there is little or no evidence to show what the parties’ intentions in relation to the ownership of the property actually were.
5.4 The Anglo cheque was payable to Mr. O’Meara and the plaintiff jointly and, prima facie, represented monies jointly owned by Mr. O’Meara and the plaintiff. Even if, as one must assume was the case, Mr. O’Meara was the sole contributor to the matured investment, the proceeds of which were represented by the Anglo cheque, in the absence of rebutting evidence, the presumption that Mr. O’Meara intended to advance the plaintiff in acquiring the investment in joint names applies, so that it must be assumed that Mr. O’Meara and the plaintiff were the beneficial owners of the matured investment and monies represented by the Anglo cheque.
5.5 The foregoing analysis is based on the assumption that the matured investment was some type of investment, for example, a bond, purchased by Mr. O’Meara in the joint names of himself and the plaintiff. If that assumption is incorrect and the matured investment was a fixed term deposit in their joint names, which matured by expiry of the fixed term, the position as to beneficial ownership is the same. Professor Delany states (at p. 162):
“So, where money is deposited by a husband in an account in their joint names the presumption of a resulting trust in these circumstances may be rebutted by the presumption of advancement and prima facie the relationship between the parties will usually result in the wife taking the balance remaining in the account beneficially.”
However, Professor Delany issues a note of caution, in stating that such a result should not always be assumed and one question which must be addressed is whether the account was opened merely for the parties’ mutual convenience or whether it was intended as a means of making provision for the other spouse. On the evidence, there is nothing to suggest that the purpose of the joint investment in Anglo was for the mutual convenience of Mr. O’Meara and the plaintiff. In my view, the only reasonable inference which can be drawn is that Mr. O’Meara’s intention was to make provision for the plaintiff should he predecease her.
5.6 The defendant attempted to establish through cross-examination of the plaintiff, that Mr. O’Meara was the sole beneficial owner of the monies represented by the Anglo cheque, which was at variance with the position adopted by the officials of the defendant in their dealings with Mr. O’Meara. On 26th November, 2008 the officials of the defendant became aware that Mr. O’Meara and the plaintiff were the joint payees on the cheque. Aside from the fact that the cheque was crossed “Account Payee only”, the officials of the defendant obviously formed the view that Mr. O’Meara and the plaintiff were the joint owners of the proceeds of the cheque and all of the defendant’s conduct thereafter is consistent with that conclusion. In particular, the defendant required that the application to open a six month deposit account in which the proceeds of the Anglo cheque were to be lodged be made in the names of, and by, both Mr. O’Meara and the plaintiff, and this was done. In consequence, joint deposit account No. 101 was opened in the joint names of Mr. O’Meara and the plaintiff. I have come to the conclusion that the defendant has not displaced the presumption of advancement which applies to the creation of the joint investment with Anglo. Accordingly, I find that Mr. O’Meara and the plaintiff were the joint beneficial owners of the money in joint deposit account No. 101 when it was opened with the proceeds of the Anglo cheque.
5.7 If the Court was only concerned with the effect of the opening of joint deposit account No. 101 and the fact that the plaintiff was the surviving joint account holder, that conclusion would be of little relevance, having regard to the decision of the Supreme Court in Lynch v. Burke [1995] 2 IR 159. On the authority of that decision, the legal effect of the opening of that account in the joint names of Mr. O’Meara and the plaintiff on foot of the application signed by both of them was that the defendant became contractually bound to both account holders and, as a matter of contract between the plaintiff, as surviving joint account holder, and the defendant, she became entitled to the balance in the account on the death of Mr. O’Meara. The relevance of establishing the beneficial ownership of the monies on deposit in joint account No. 101 relates to the defendant’s claim to a right of set-off.
6. Devolution on death of Mr. O’Meara
6.1 Leaving aside for the moment the implications of the defendant’s claim to a right of set-off against the monies in joint deposit account No. 101, it follows from what is stated at para. 5.7 above that, in accordance with established law, on the death of the first of the joint owners to die, that is to say, on the death of Mr. O’Meara, the monies which remained in that account accrued to the surviving joint owner by right of survivorship. Indeed, counsel for the defendant accepted in their written submissions that, where a deposit account is held in joint names, upon the death of one of the parties, the proceeds devolve to the surviving account holder, as was held by the Supreme Court in Lynch v. Burke. The defendant’s subsequent contention, both as pleaded and in its written submissions, that, if the Court were to hold that the defendant has no right of set-off, the monies in both joint deposit accounts devolved to Mr. O’Meara’s estate, and that the plaintiff has no direct personal claim to the monies, in my view, is wholly contradictory and at variance with the true legal position.
6.2 It may be that that proposition is based on the contention that Mr. O’Meara was the sole beneficial owner of the monies lodged to joint deposit account No. 101. If that is the case, it is based on a false premise in the light of the conclusion I have reached as to the beneficial ownership of the monies represented by the Anglo cheque. As I have indicated–
(a) prima facie the monies represented by the Anglo cheque were owned jointly by Mr. O’Meara and the plaintiff,
(b) given the husband and wife relationship of Mr. O’Meara and the plaintiff, the presumption of advancement, rather than the presumption of a resulting trust, has arisen in relation to the beneficial ownership of the matured investment, in respect of which the cheque issued,
(c) there is no evidence, objective or otherwise, to rebut the presumption of advancement and, in the absence of any other evidence, there is no basis for inferring that the conduct of Mr. O’Meara in proffering ex post facto the Anglo cheque to “cash-back” the loan he was applying for is inconsistent with the finding of advancement, and, in any event, it is reasonable to infer that he did not anticipate that the defendant would have to resort to those monies; and
(d) the conduct of the defendant was wholly consistent with the monies being jointly owned by Mr. O’Meara and the plaintiff.
Accordingly, in my view, if the defendant has not established a right of set-off against those monies, the plaintiff is entitled to so much thereof as remained in joint deposit account No. 101 at the death of Mr. O’Meara.
6.3 Different considerations apply to the monies in deposit account No. 102, which I will address later.
6.4 It is difficult to understand the rationale of Clause 3(d) of the terms and conditions in relation to joint deposit account No. 101, which I have quoted at para. 1.7 above, in requiring production of “testamentary documentation”, whether Mr. O’Meara died testate or intestate, and whether representation has been raised to his estate or not. As a matter of law, the plaintiff, as the surviving account holder, was entitled to the monies in joint deposit account No. 101 at the date of his death, if the defendant has not established that it is entitled to a right of set-off against that account.
7. Trust?
7.1 While I consider that, as between Mr. O’Meara and the plaintiff, on the one hand, and the defendant, on the other hand, the defendant, having regard to the documentation and information it had, had to, and did, assume in November 2008 and at all material times subsequently that monies on deposit in joint deposit account No. 101 were owned jointly by Mr. O’Meara and the plaintiff and became contractually liable to them on that basis, I accept as correct the submission made on behalf of the defendant that the plaintiff has not established that the monies lodged to that account were impressed with a trust for the benefit of the plaintiff and her two sons on the basis of either the plea in the statement of claim that the monies were lodged “for the benefit and future welfare and security” of the plaintiff and her two sons, or the plaintiff’s evidence, because the defendant was not on notice of any such trust.
7.2 The following passage from Paget’s Law of Banking (13th Ed., 2007) (at para. 11.28) quoted by counsel for the defendant in their submissions represents the law in this jurisdiction:
“If a bank has notice, however received, that an account is affected with a trust, express or implied, or that the customer is in possession or has control of the money in a fiduciary capacity, it must regard the account strictly in that light. Of course, where there is no such notice, the mere fact that, unknown to the bank, monies are held by the customer in a fiduciary capacity in no way affects the bank’s right to treat them as the absolute property of the customer.”
The authority cited by the editor of Paget for the proposition in the second sentence quoted above is the decision of the House of Lords in Thomson v. Clydesdale Bank Ltd. [1893] AC 282.
7.3 As regards the application of that proposition in the case of joint deposit account No. 101, even if the account holders, Mr. O’Meara and the plaintiff, regarded themselves as holding the money in a fiduciary capacity, that was not known to the defendant, and the defendant was entitled to, as it did, treat the funds as the absolute property of both Mr. O’Meara and the plaintiff, the account holders. However, the manner in which the defendant was permitted by the account holders to operate that account is crucial to the determination of the ultimate ownership of the monies lodged to it in November 2008.
8. Effect of the death of Mr. O’Meara on any valid right of set-off
8.1 Before addressing that issue, I think it is appropriate to record that I agree with the submission of the defendant that, if a valid right of set-off against the funds in joint deposit account No. 101 was created prior to the death of Mr. O’Meara, Mr. O’Meara’s death did not eradicate or prejudice that right. I agree with the submission that, as regards the effect of a pre-existing right of set-off, the implication of the death of one of two joint account holders, in this case, Mr. O’Meara, on the respective rights of the surviving account holder, the plaintiff, and the defendant is analogous to the effect of the commencement of a liquidation on a pre-existing right of set-off. In the case of a voluntary liquidation, in Dempsey v. Bank of Ireland (the Supreme Court, Unreported, 6th December, 1985) Henchy J. stated (at p. 11):
“The intervention of the winding up did not override or pre-empt the Bank’s ability to give effect to that right, any more than it would affect an enforceable lien or charge on those accounts existing at the relevant date. It follows that the bank’s accrued right to debit took precedence over the liquidator’s title to the accounts.”
8.2 The right referred to in that passage was a right which had been given by EuroTravel Limited, the company in liquidation, to Bank of Ireland that, if Bank of Ireland was called upon to pay on foot of a guarantee given by it on behalf of the company, Bank of Ireland could debit any account in the company’s name with any sums payable by the bank under the guarantee. The underlying rationale of the decision was that the liquidator could only get such title to the assets as the company had – no more, no less. By analogy, in my view, if the defendant had a valid right of set-off against joint deposit account No. 101, that right would have been exercisable notwithstanding the death of Mr. O’Meara and the plaintiff’s entitlement by way of survivorship would have been subject to it.
8.3 In the interest of clarity, I should say that, while recognising that on the death of Mr. O’Meara the banker/customer relationship between him and the defendant terminated, the submission made on behalf of the plaintiff, in reliance on a passage in Derham on The Law of Set-Off (4th Ed. 2010) at p. 739, that the defendant was precluded after his death from combining accounts, which could have combined during the lifetime of Mr. O’Meara, although strictly an issue between the personal representative of Mr. O’Meara and the defendant, is not in line with the rationale underlying the decision of the Supreme Court in Dempsey v. Bank of Ireland.
9. Permitted operation of joint account No. 101
9.1 The manner in which the defendant was permitted to operate joint deposit account No. 101 was determined by the terms of the application form and, in particular, the “Withdrawal Instructions” segment thereof, which was signed by both account holders. I am at a loss to understand why, according to Ms. Corrigan’s evidence, the officials of the defendant could have interpreted the withdrawal instructions given by the applicants as limiting the authority to withdraw to Mr. O’Meara alone. The option which was ticked was “any one Account Holder” which, in accordance with the explanation given immediately underneath, permitted the defendant to act on the instructions of either account holder. If Mr. O’Meara alone was to be entitled to give withdrawal instructions, the “Others” option should have been ticked and his name should have been specified in relation to that option. In any event, I consider that nothing much turns on that because, as I have set out earlier, there seems to be consensus on the pleadings, at any rate on the basis of the assumption I have made in the last sentence in para. 2.4 above, that no monies could be withdrawn from joint deposit account No. 101 without the express authority of “any one” of the account holders.
9.2 However, both on the pleadings and in its counsel’s written submissions, the defendant goes further, in that it contends that the defendant was entitled to set-off monies standing to the credit of joint deposit account No. 101 with the authority (express or implied) of any one of the account holders, namely, the plaintiff or Mr. O’Meara. The submission made on behalf of the defendant, while superficially attractive, is fallacious. It is based on the well established principle that, while the normal relationship between a banker and its customer is that of debtor and creditor, quoad the drawing and payment of the customer’s cheques as against the money of the customer in the banker’s hands the relationship is that of principal and agent as stated by Lord Atkinson in Westminster Bank Ltd. v. Hilton (1926) 43 TLR 124 at p. 126. On the basis that the instructions given on the application form were that “any one Account Holder” could give written instructions, it was submitted that either Mr. O’Meara or the plaintiff could instruct the defendant to withdraw money from the account without reference to the other. That is undoubtedly correct. However, whether it is correct, as the defendant contends, that the creation of the right of set-off document was a form of withdrawal instruction, and that it was entitled to treat the execution of attachment (5) as an instruction by Mr. O’Meara only and, as such, as having been provided by any one account holder, so that the defendant was entitled to act upon it and effect the set-off without further reference to the plaintiff, is primarily a matter of construction of the withdrawal instructions in the application form.
9.3 When it was executed by the plaintiff, the application form, which included the withdrawal instructions, was a “standalone” document. It would not be correct to regard its commercial context as subsuming the terms of the letter of offer dated 17th December, 2006 which stipulated the terms on which the loan would be granted to Mr. O’Meara.
9.4 When one looks at the entirety of the application form it is clear that it was envisaged that the completed application form might be brought in person by the applicant to the defendant or might be sent in by post. It set out, for instance, identification requirements generally regarded as “anti-money laundering” requirements, although they seem not to have been a consideration in this case. Taking an overview of it, the terms of the application form were addressed to the ordinary bank customer, who might or might not attend in person at the defendant’s office. Applying “commonsense principles” advocated by Lord Hoffman in ICS v. West Bromwich B.S. [1998] 1 WLR 896, which were adopted by the Supreme Court in Analog Devices B.V. v. Zurich Insurance Company [2005] 1 IR 274, given the purpose and nature of the application form, in my view, the withdrawal instructions which I have quoted are not open to the construction that, by ticking the “any one Account Holder” option, one joint account holder was permitting the defendant to put in place what would, in effect, be a form of security over the monies in the account, such as a right of set-off, without the consent of the other joint account holder. The words used in the explanation to the customer, which I have quoted earlier, must be given their natural and ordinary meaning. The explanation points to the withdrawal of funds, even all of the funds, by one account holder without requiring the consent or signature of the other. It does not point to, or envisage, a withdrawal of the funds by the defendant pursuant to a right of set-off given by one account holder.
9.5 Moreover, the reality of the situation is that the defendant did not consider that the right of set-off could be put in place without the consent of the plaintiff. In fact, Ms. Corrigan’s evidence was that when Mr. O’Meara brought the letter of offer back to the defendant on 22nd December, 2008 she considered that the right of set-off document “looked okay” because it was signed by Mr. O’Meara and the plaintiff, she having noted that the account was in joint names.
9.6 Accordingly, I have come to the conclusion that the defendant cannot make the case, in reliance on the withdrawal instructions in the application form, that the right of set-off could be validly put in place on the written instructions of Mr. O’Meara only as one account holder.
10. Operation of joint deposit account No. 101
10.1 The next question which requires to be considered is how joint deposit account No. 101 was operated between the time it was opened and the 23rd December, 2008 when joint deposit account No. 102 was opened, and the implications of that for the plaintiff and the defendant. In acting on Mr. O’Meara’s withdrawal instructions of 4th December, 2008 and 15th December, 2008, the defendant clearly acted in accordance with the withdrawal instructions given to it by both account holders. Therefore, the plaintiff cannot advance any claim to the two sums aggregating €600,000 were transferred to Mr. O’Meara’s business account in Bank of Ireland in Naas. The reality of the situation is that by 23rd December, 2008 she could only claim a joint legal interest in and joint ownership of the balance in joint deposit account No. 101, which at the time was €934,126.60.
10.2 Counsel for the defendant, properly in my view, took issue with the plaintiff’s contention that the sum of €665,873.40 which was lodged in joint deposit account No. 102 when it was opened on 23rd December, 2008 was from monies provided by Mr. O’Meara and the plaintiff jointly. The source of that money was loan account No. 128 in the sole name of Mr. O’Meara. It is clear from the statement of account that the transfer was made out of that account on 23rd December, 2008. The purpose of the transfer was to “top-up” the monies on joint deposit in the joint names of Mr. O’Meara and the plaintiff to the level of the security by way of right of set-off specified in the letter of offer of 17th December, 2008. The practical aspects of the transaction were that the joint deposit account No. 102 was opened and there was an internal transfer from loan account No. 128. On the basis of the documentation and oral evidence before the Court, it is clear that neither Mr. O’Meara nor the plaintiff were in any way consulted in advance about the implementation of the transaction, although, as I have stated earlier, clearly Mr. O’Meara tacitly accepted what was done. The account holders were not required to fill out a new application form because joint deposit account No. 102 was considered by the defendant’s officials to be a “sub-account” of joint deposit account No. 101.
10.3 As to what the implications of the transactions were, it was submitted on behalf of the defendant that, in commercial terms, the defendant’s “own” monies were used to “top-up” the joint deposit account over which Mr. O’Meara was required to give security. From a banking law perspective, as regards the first step in the transaction, the withdrawal from loan account No. 128, Mr. O’Meara became a debtor of the defendant in the amount drawn down. As a result of the second step in the transaction, that the sum drawn down was placed by the defendant’s officials in the joint names of Mr. O’Meara and the plaintiff in joint deposit account No. 102, the question arises as to whether the ownership thereof, including any right to which the ownership was subject, was the same as affected the balance which remained in joint deposit account No. 101 or different. As a matter of principle, one must come to the conclusion that it was not the same, for the reasons I have set out later at para. 17. Indeed, one must also conclude that, notwithstanding that her name was put on joint deposit account No. 102, there was no contractual relationship between the plaintiff and the defendant in relation to the monies in that account.
10.4 Having regard to those conclusions, it is necessary to address the remaining issues in relation to both joint deposit account No. 101 and the joint deposit account No. 102 separately.
11. Right of set-off against joint deposit account No. 101 – general observations
11.1 Although the security condition in the letter of offer of 17th December, 2008, which I have quoted at para. 1.10 above, referred to a “lien” incorporating a right of set-off over a deposit account, as was held by the House of Lords in Westminster Bank v. Halesowen [1972] 1 All ER 641, no man can have a lien on his own property. As the money lodged to joint deposit account No. 101 became the defendant’s money, although the defendant was indebted to the account holders for the balance on the account, a lien could not have been created. Indeed, I did not understand the defendant to claim that it had a lien. It claimed that such security as it obtained under the right of set-off document, that is to say, attachment (5), was a right of set-off or a right to combine accounts.
11.2 The contention of the defendant in this case, however, is that it is not limited to whatever right was created by the set-off document, but that its right of set-off falls within each of the following recognised categories of set-off, namely:
(a) a bank’s common law right of set-off of accounts;
(b) equitable set-off, although that is not pleaded; and
(c) contractual set-off.
While I will consider the application of each category to the facts in turn, a preliminary observation is apposite. When the requirement of a right of set-off was conditioned into the letter of offer dated 17th December, 2008 by the defendant, the targeted deposit account, joint deposit account No. 101, was in the joint names of Mr. O’Meara and the plaintiff and the defendant’s contractual relationship in relation to that account was with both account holders. What the defendant required was a contractual right of set-off in the defendant’s “standard form” from both joint account holders. Mr. O’Meara accepted the offer on the basis of that express condition. In my view, the only issue which could properly arise in relation to the monies in that joint deposit account on 22nd December, 2008 is whether the defendant followed through on the express condition and obtained an enforceable right of set-off in the standard form from both account holders. I can see no basis on which the Court could find that there was some other implied agreement in the “ether”, which could be resorted to by the defendant if it did not ensure that the express term was effectively complied with.
12. Bank’s common law right of set-off?
12.1 As regards the application of a bank’s common law right of set-off to the facts as found, on the basis of the finding I have made that the joint deposit account No. 101 was legally (that is to say, contractually as against the defendant) and beneficially owned by Mr. O’Meara and the plaintiff, whereas the loan account No. 128 was in the sole name of Mr. O’Meara and he had sole liability for it, the defendant had no right at common law to set-off or combine the two accounts. The fundamental principle which underlies the entitlement of a bank to set off under the general law is mutuality, which requires that the debts be between the same parties in the same right. The finding that the defendant was contractually liable to Mr. O’Meara and the plaintiff jointly, who were beneficial joint owners of the monies on deposit in joint deposit account No. 101, precludes any application of the rule of set-off at common law.
12.2 Accordingly, it is unnecessary to express a definitive view on the submission made on behalf of the plaintiff, by reference to the decision of the Supreme Court in Bank of Ireland v. Martin [1937] I.R. 189, that, in the absence of a contractual arrangement, a bank may not combine a deposit account and a loan account, although I appreciate that particular emphasis was laid in the submission on the fact that the deposit account was a joint account, whereas the plaintiff was not indebted to the defendant and the plaintiff was not relying merely on the proposition that in this jurisdiction combining accounts at common law is confined to current accounts.
12.3 Nor do I consider it necessary to comment on the point made by counsel for the plaintiff in their submissions that, in any event, the defendant could not combine the loan account with any other account at any time prior to the death of Mr. O’Meara, because the loan account was for a term of three years, and the principal advanced had not become repayable prior to Mr. O’Meara’s death. Having said that, the reality of the situation is that, apart from whatever, if any, right of set-off the defendant has, it is clear on the evidence that the defendant is not going to recover the amount due on loan account No. 128.
13. Equitable set-off?
13.1 As regards the principle of equitable set-off in the context of bank accounts, the requirement of mutuality in relation to the beneficial interests in the cross-debts pervades its application. Having made the finding that Mr. O’Meara and the plaintiff were the joint beneficial owners of the monies in joint deposit account No. 101, in my view, there is no basis on which the principle of equitable set-off could avail the defendant and the argument based on the principle is misconceived. Nonetheless, I propose analysing the argument made on behalf of the defendant.
13.2 As counsel for the defendant pointed out, the most recent exposition of the principle of equitable set-off is to be found in a note on the decision of the Court of Appeal in England and Wales in Geldof Metaal Constructie NV v. Simon Carves Ltd. [2010] 4 All ER 847, which, in my view, is of little assistance in addressing the application of the principle to the facts of this case. Having considered the jurisprudence on equitable set-off, Rix L.J. set out his conclusions in para. 43 of his judgment, which is quoted in full in the note. He set out his conclusion at page 849 as follow;
“For all these reasons, I would underline Lord Denning MR’s test, freed of any reference to the concept of impeachment, as the best restatement of the test, and the one most frequently referred to and applied, namely ‘cross-claims . . . so closely connected with [the plaintiff’s] demands that it would be manifestly unjust to allow him to enforce payment without taking into account the cross-claim’. That emphasises the importance of the two elements identified in Hanak v. Green; it defines the necessity of a close connection by reference to the rationality of justice and the avoidance of injustice; and its general formulation, ‘without taking into account’, avoids any traps of quasi-statutory language which otherwise might seem to require that the cross-claim must arise out of the same dealings as the claim, as distinct from vice versa. Thus, if the Newfoundland Railway test were applied as if it were a statute, very few of the examples of two-contract equitable set-off discussed above could be fitted within its language. I note that in Chitty on Contracts (30th edn., 2008) vol. II, para. 37 – 152 the test for equitable set-off is formulated in terms of Lord Denning MR’s test.”
13.3 The test of Lord Denning MR referred to in that quotation was postulated in Federal Commerce v. Molena Alpha Inc [1978] 3 All ER 1066, sometimes referred to as “The Nanfri”, which is also of little assistance in addressing the application of the principle of equitable set-off to the facts here. Although there were three time charterparties at issue in that case, in reality it was a one-contract case. The matter came to court by way of an award of an umpire in the form of a special case, following an arbitration in which the two arbitrators disagreed. One of the questions which the Court of Appeal had to consider was whether the charterer was entitled to deduct from hire, without the consent of the owner, claims against the owner. It was held that he was by virtue of the terms of the charterparty and by reason of the fact that a rule of law in relation to a charterparty, which required payment in full without deduction, did not extend to hire payable under a time charterparty, so that the charterer was entitled to deduct claims which constituted an equitable set-off. Having alluded to the distinction made at common law between set-off and cross-claim and the strictures imposed by the courts of common law, Lord Denning MR stated (at p. 1077):
“But the courts of equity, as was their wont, came in to mitigate the technicalities of the common law. They allowed deductions, by way of equitable set-off, whenever there were good equitable grounds for directly impeaching the demand which the creditor was seeking to enforce: see Rawson v. Samuel . . . per Lord Cottenham LC.”
Later, having referred to the effect of the Judicature Act 1873, Lord Denning MR continued (at p. 1078):
“We have to ask ourselves: what should we do now so as to ensure fair dealing between the parties? . . . This question must be asked in each case as it arises for decision; and then, from case to case, we shall build up a series of precedents to guide those who come after us. But one thing is quite clear: it is not every cross-claim which can be deducted. It is only cross-claims that arise out of the same transaction or are closely connected with it. And it is only cross-claims which go directly to impeach the plaintiff’s demands, that is, so closely connected with the demands that it would be manifestly unjust to allow him to enforce payment without taking into account the cross-claim.”
On the facts of that case, Lord Denning MR and Goff LJ held that in time charterparty cases, the equitable right to deduct should be limited to instances when the ship owner wrongly deprives the charterer of the use of the vessel or prejudices him in the use of it. It should not be extended to other breaches or default of the ship owner, such as damage to cargo arising from the negligence of the crew. What is significant for present purposes is that there is nothing in the test for equitable set-off as formulated by Lord Denning MR or in the Geldof decision which dispenses with the requirement of mutuality in relation to beneficial interests.
13.4 The application of the doctrine of equitable set-off in the context of bank accounts is considered in Paget (op. cit.) at paras. 29.27 et. seq. relied on by counsel for the defendant. Reference is made by the editors of Paget to the decision of the Court of Appeal in Bhogal v. Punjab National Bank [1988] 2 All ER 296 which, like many of the authorities on the issue of equitable set-off, arose in the context of entitlement of a plaintiff to summary judgment. The appeal related to two actions, in each of which the plaintiff, who had monies on deposit in the defendant bank, had obtained summary judgment for the amount on deposit, and the defendant bank appealed, contending that it should be granted unconditional leave to defend the actions because it had a valid defence by way of equitable set-off. The basis of the claim for equitable set-off was the defendant bank’s contention that each of the plaintiffs was merely a nominee of a third party, who was indebted to the defendant bank and that it was entitled to set off the credit balance on each deposit account against the debit balance on the third party’s account. It was held by the Court of Appeal that, since the evidence did not clearly establish that the deposit account of each of the plaintiffs was a nominee account, the defendant bank could not raise a defence of equitable set-off in their actions. In the Court of Appeal the following passage from the judgment of Scott J. at first instance in one of the cases was quoted and in the judgment of Bingham L.J. there was reference to “the wisdom of the rule” which Scott J. laid down. The passage (which appears at p. 306 in the judgment of Bingham L.J.) is to the following effect:
“The commercial banking commitment that a bank enters into with a person who deposits money with it is just as needful of immediate performance as are a bank’s obligations under a letter of credit or bank guarantee. I think it would be lamentable if a bank were able to defeat a claim by a person who had deposited money on such grounds as the bank is asserting in the present case. It is possible that this action will come to trial in some two or three years’ time and that the bank will fail to make good the arguable case that it has set out before me. It would have succeeded in postponing for that considerable period its obligation to repay a customer who had made a simple deposit of money with it. That seems to me to be totally contrary to the basis on which banks invite and get money deposited with them. I hold that the bank is not entitled to refuse repayment of money deposited with it on the basis merely of an arguable case that some other debtor of the bank has an equitable interest in the money.”
13.5 Of course, on the facts here, on the basis of the finding I have made, no question remains as to the ownership in equity of the monies in joint deposit account No. 101. Apart from the contractual liability of the defendant, which in my view is the paramount consideration, as I have found that Mr. O’Meara and the plaintiff were the beneficial owners of the monies on deposit in joint deposit account No. 101, they, or, after the death of the first to die, the survivor (subject to the fixed term aspect of the particular deposit, which is not in issue) was entitled to withdraw the balance in the account on demand. Because of the lack of mutuality, the defendant had no entitlement in equity to set-off Mr. O’Meara’s sole liability for the debt on foot of loan account No. 128 against the balance in that deposit account.
13.6 The basis on which the defendant sought to demonstrate that there was an equitable right of set-off does not stand up to scrutiny. The defendant undoubtedly entered into two agreements with Mr. O’Meara which were closely connected from its perspective and probably also from Mr. O’Meara’s perspective. Under one, say Agreement A, the defendant advanced a loan of €1.6m to Mr. O’Meara. Under the other, say Agreement B, Mr. O’Meara and the plaintiff deposited the proceeds of the Anglo cheque with the defendant. The defendant contends that the two agreements are intimately connected and it would be unjust to enforce Agreement B by requiring the release of the monies on deposit on the demand of the plaintiff, because to do so would be to ignore the defendant’s claim to recover the loan advanced under Agreement A. That proposition ignores the absence of mutuality between the defendant’s liability under Agreement B and its entitlement under Agreement A. In the absence of some contractual foundation binding not only Mr. O’Meara, but also the plaintiff, the requirement of mutuality cannot be overridden by the defendant. It is not unjust that the defendant should be compelled to release the monies on deposit to the surviving joint account holder, the plaintiff, in accordance with its contractual obligation. The principle of equitable set-off does not apply.
13.7 Furthermore, it ill behoves the defendant to seek to rely on an equitable principle in support of the exercise of a right of set-off against the plaintiff, having regard to the fact that there was absolutely no communication between the defendant and the plaintiff and, in particular, the defendant did not advise the plaintiff to obtain legal advice and made no inquiry as to whether she had the benefit of legal advice in accordance with the principles referred to later in para. 15.6, when dealing with the issue of rectification. Given the plaintiff’s lack of understanding of what the defendant contends she was doing in subscribing her name to the right of set-off document, and her lack of understanding as to what was being agreed by Mr. O’Meara with the defendant, it would be unfair and inequitable to enforce the right of set-off against the plaintiff, if she is not contractually bound.
13.8 The kernel of the issue as to whether the right of set-off was validly exercised on 5th January, 2009 is whether the defendant, as it clearly had intended to do, effectively obtained from both of the account holders of joint deposit account No. 101 a contractual right to set-off Mr. O’Meara’s liability on loan account No. 128 against the monies in that account.
14. Contractual right of set-off?
14.1 That question turns on the construction of the right of set-off contained in attachment (5). I think it is worth recalling that the plaintiff endorsed her signature on the Anglo cheque on or before the 26th November, 2008 in her home. Some time later Mr. O’Meara put the application form for the six month fixed deposit account, which he had been given after the defendant’s officials decided that a joint deposit account should be opened, before the plaintiff and she signed on the third page. Just short of a month later, on 20th December, 2008, the right of set-off document was put before her. It was the twelfth page of the compendium of documents which comprised the letter of offer and attachments. The only reference to a deposit account with the defendant was on the second page of the letter of offer and it was in the provision in relation to security which I have quoted at 1.10 above, which refers to a deposit account in the names “of John O’Meara and Claire O’Meara”. The entire document was complex. Having regard to the manner in which it was completed, it is reasonable to infer that Mr. O’Meara, an experienced and astute businessman, had difficulty navigating his way through it, in that he arrived back in the defendant’s office on St. Stephen’s Green on 22nd December, 2008 without having signed the most crucial part of it, namely, the acceptance on page 7, which resulted in the involvement of Mr. Abdullah as a witness. He had signed attachment (2) in relation to insurance instructions, apparently on the 19th December, 2008. He did not sign attachment (3), dealing with authorised signatures on the loan account apparently until 22nd December, 2008. Similarly, attachment (4) containing the instruction to Bank of Ireland, Naas Branch in relation to the direct debit in respect of the interest payments was not executed until 22nd December, 2008.
14.2 Counsel for the plaintiff submitted that the right of set-off document should be construed contra proferentem. They submitted that, as a matter of interpretation of that document, neither Mr. O’Meara nor the plaintiff agreed to a right of set-off being effected against the deposit accounts. In fact there was only one deposit account in existence at the time – joint deposit account No. 101. For illustrative purposes, and not intending to preclude any argument which the personal representative of the defendant may make in the future, it can be observed that, if that account had been in the sole name of Mr. O’Meara, as a matter of construction, it would appear to have been captured by the right of set-off document in that, as borrower/account holder, he agreed that the defendant might “debit any credit balance on any account in my name”, which, prima facie, would capture the credit balance on a deposit account in his sole name. The real problem with the right of set-off document, from the defendant’s perspective, is that it was clearly drafted for execution by a sole account holder and, while it might have been, it was not adapted to bind joint account holders conferring a right of set-off on the defendant over a specific existing joint deposit account. The document did not signify that it was to be executed by a person other than a sole account holder and, ex facie, the plaintiff signed as a witness. Having regard to the finding I have made that Mr. O’Meara and the plaintiff had a joint legal interest in, and were jointly beneficially entitled to, joint deposit account No. 101, I consider that the right of set-off document was not effective to bind the plaintiff as one of the joint account holders and, in the events which happened, as the surviving account holder, so as to confer a right of set off on the defendant in relation to that account.
14.3 From the evidence of Mr. Savage, it is clear that when he reviewed the documentation following the meeting with O’Meara in July 2009, he noticed the fact that the right of set-off document was signed by the plaintiff only as a witness and had a concern about that. However, no steps were taken to rectify the situation.
14.4 It is convenient at this juncture to consider the relevance or otherwise of an authority relied on by counsel for the plaintiff – the decision of Costello J. in O’Keeffe v. O’Flynn Exhams and Partners and Allied Irish Banks (the High Court, Unreported, 31st July, 1992). The basis on which that case was decided against Allied Irish Banks in favour of the plaintiff, Mrs. O’Keeffe, is summarised in the judgment as follows (at p. 35):
“In my opinion if a request is made for a joint loan to purchase property which is accompanied by an agreement to deposit the title deeds of the property then an equitable claim over the interest of both purchasers is created once the loan is made as requested and the land conveyed to both. But if contrary to the request the loan is made to one of the purchasers only and the property is subsequently purchased jointly the interest of the customer with whom the bank contracted and to whom it lent the money is the only interest which is subject to an equitable charge. When subsequently the title deeds are lodged the equitable charge created by the agreement over the customer’s interest becomes an equitable mortgage by the deposit of the deeds. This means that in the events that happened in this case the bank obtained an equitable mortgage over Mr. O’Keeffe’s undivided moiety in the Kilpeacon lands, but it obtained no equitable interest of any sort over Mrs. O’Keeffe’s interest.”
14.5 Frankly, I do not see the relevance of that finding to the factual circumstances of this case. It concerned the severance of a joint tenancy in land by one joint owner creating an equitable charge by deposit of title deeds. Here the Court is concerned with a joint deposit account at the defendant bank, in respect of which the defendant was contractually liable to both joint account holders. More importantly, in this case, the agreement between the defendant and Mr. O’Meara was that the loan would be to Mr. O’Meara solely and that is what happened. The defendant wanted security over the monies on deposit with it, the source of which was the Anglo cheque, which, as I have held, were beneficially owned by Mr. O’Meara and the plaintiff. The mistake the defendant made is that, as it could not either at common law or in equity obtain a right of set-off of the monies due from Mr. O’Meara on loan account No. 128 against the monies in the joint deposit account because of lack of mutuality, it needed to obtain a contractual right of set-off, which bound both account holders, but it failed to do that. Accordingly, it obtained no right of set-off against the monies in joint deposit account No. 101 as of 23rd December, 2008.
15. Rectification?
15.1 Emphasising that the issue which is being addressed is whether the Court should find that the defendant is entitled to exercise the claimed right of set-off against the balance of the monies on deposit in joint deposit account No. 101, as it purported to do on 5th January, 2010, I will now consider the defendant’s counterclaim for rectification. In the circumstances which I have found prevailed, the defendant could only acquire a right of set-off by contract and the objective of the defendant clearly was to extend the general law to a tri-partite situation where the joint owners of the monies on deposit with the defendant would agree with the defendant that those monies might be set off against a debt due to the defendant by one of the joint owners, Mr. O’Meara, solely. I emphasise that, because it seems to me that the fundamental question is whether the other joint owner, the plaintiff, ever signified the intention to be bound by such agreement.
15.2 On the basis of the defendant’s claim for rectification as pleaded, it is not suggested that the text of the right of set-off document as quoted at para. 1.11 above requires rectification. What is suggested is that the details of execution require rectification. If the application were acceded to, the details of execution (the words in bold type having been added) would read:
Signed/Witness John O’Meara
Borrower/Account Holder
Date: 20/12/08
Signed/Witness: Claire O’Meara
Borrower/Account Holder
Address: Pitchfordstown Stud
Kilcock
Date: 22/12/08
In the interests of clarity, I should say that the elements which are shown in italics are the signatures of Mr. O’Meara and the plaintiff, the date of execution by Mr. O’Meara, which I think it probable was inserted by Mr. O’Meara, and the address and final date, which also appear in manuscript and I think it probable were inserted by Ms. Corrigan on 22nd December, 2008. It was submitted on behalf of the plaintiff that, given that the preceding text is not proposed to be rectified, the additions to the right of set-off document proposed would still not expressly authorise the exercise of a right of set-off of the monies due on loan account No. 128 against the balance in joint deposit account No. 101.
15.3 The legal basis on which a court can order rectification is well settled. It was recently succinctly summarised by Clarke J. in Mooreview Developments & Ors. v. First Active Plc & Ors. [2009] IEHC 214 in the following terms (at para. 9.9):
“Rectification is a discretionary remedy which allows a court to amend the wording, but not affect the making, of a contract, where the wording does not reflect the intentions of the parties to the contract. The party seeking rectification must provide evidence of a common continuing intention in relation to the provisions of the contract agreed between the parties up to the point of execution of the formal contract. In Irish Life Assurance Co. v. Dublin Land Securities Ltd [1989] I.R. 253, Griffin J., at p. 263, described this standard of proof as ‘convincing proof, reflected in some outward expression of accord, that the contract in writing did not represent the common continuing intention of the parties on which the court can act’. The court in Irish Life further held that there will be an especially onerous burden on a party seeking rectification where long negotiations have taken place between the parties, both of whom have taken legal advice during such negotiations.”
15.4 The criterion stipulated in the last sentence in that quotation has no application to the facts of this case because, not only was no legal advice taken by the plaintiff but there was no engagement by the defendant with the plaintiff at all and, in fact, there was no direct communication or contact with her by any official or agent of the defendant in relation to the condition imposed by the defendant on Mr. O’Meara in the letter of offer of 17th December, 2008 that the defendant be granted a right of set-off against the monies in joint deposit account No. 101. There is absolutely no evidence in this case of a common continuing intention to which the plaintiff was a party that the defendant would be given security by way of right of set-off against joint deposit account No. 101 in respect of the monies to be advanced to Mr. O’Meara, which were subsequently the subject of loan account No. 128. The only evidence before the Court on which the defendant could rely in support of the existence of such an intention is that the facility letter, with attachment (5) stapled to it, was probably handed by Ms. Corrigan to Mr. O’Meara when he called to the defendant’s office at St. Stephen’s Green, probably on the 17th December, 2008. Ms. Corrigan, in her evidence said that it was “more than likely” that she told Mr. O’Meara that the plaintiff had to sign the right of set-off document. She had no exact recall of doing so, although she suggested that, if she did not say it to Mr. O’Meara, then she doubted that the plaintiff’s signature would be on it. I do not think it is reasonable to infer that, because the plaintiff’s signature appears on attachment (5), the plaintiff was signing in her personal capacity, rather than as a witness, as the document suggests. The fact that Mr. O’Meara signed attachment (5), which was the last page of the twelve page document and had the “witness” portion of the execution details completed by the plaintiff, while not having completed what was arguably the most important element of the document, the acceptance on page 7, is open to the inference that Mr. O’Meara got the plaintiff to sign as a witness rather than as a party to the transaction. Accordingly, the defendant’s claim for rectification must fail because there is no evidence of a continuing common intention on the part of the plaintiff to execute a right of set-off document to comply with the security condition provided for in the letter of offer of 17th December, 2008.
15.5 Even if it were possible to conclude that it was the intention of the plaintiff to execute the right of set-off document not merely as a witness but in a manner which would bind her as one of the beneficial owners of joint deposit account No. 101, and that the document needs to be rectified to reflect that, a question would arise as to whether the Court should exercise its discretion to grant the equitable relief of rectification in circumstances in which the defendant took no steps whatsoever to ensure that the plaintiff understood the implications of executing a document which would have given the defendant the type of security it was seeking over the monies in joint deposit account No. 101. In particular, the question would arise as to whether the defendant should have advised the plaintiff to seek legal advice to avoid being disentitled to equitable relief. While, on the basis of the finding I have made in the next preceding paragraph, the question is hypothetical, I propose to comment on it generally.
15.6 Apart from reference to a text (Hodge on Rectification, 1st Ed., 2010 at para 1 – 41 et. seq.), no authority was specifically cited by counsel for the plaintiff to support their contention that the defendant did not take the steps it should have taken, including advising the plaintiff to obtain independent legal advice. I have noted earlier that the plaintiff did not allege either in the pleadings or in her evidence that Mr. O’Meara exerted undue influence over her or that he took any unfair advantage of her. Her position was that she just signed what Mr. O’Meara put in front of her without seeking or obtaining any explanation. There is authority in the United Kingdom that a bank is always on inquiry when a wife provides security for her husband’s debt and that it must take reasonable steps to satisfy itself that the practical implications of the proposed transaction have been brought home to the wife, in a meaningful way, so that she enters into the transaction with her eyes open so far as its basic elements are concerned and reliance by the bank upon confirmation from a solicitor, acting for the wife, that he advised her appropriately is sufficient to discharge the bank’s obligation (the decision of the House of Lords in Royal Bank of Scotland v. Etridge (No. 2) [2002] 2 AC 773). The manner in which the defendant went about obtaining what it considered as security for the loan it was advancing to Mr. O’Meara solely over a deposit account in the joint names of Mr. O’Meara and his wife, the plaintiff, is so egregiously at variance with the principles enunciated by the House of Lords in Etridge (No. 2), which, as academic commentators have suggested should be applied by the courts of this jurisdiction (Mee (2002) 27 Ir. Jur. 292; Delany Equity and the Law of Trusts in Ireland, 5th Ed. at p. 746), that it is unlikely that a court would afford an equitable remedy to the defendant to perfect its security, if such was necessary and it was appropriate to do so, without seeking to explore in depth the application of those principles in this jurisdiction, having regard to the conduct of the defendant and the potentially improvident nature of what the defendant was requiring the plaintiff to do.
15.7 Finally, it is pertinent at this point to make two general observations in the interests of clarity. First, in the context of the application of equitable principles, in my view, it is necessary to distinguish between the operation of a joint deposit account by the account holders, which banks, understandably, as reflected in condition 3(a) of the general conditions quoted at para. 1.7 above, leave to the account holders, on the one hand, and the creation of what, in effect is a type of security over a joint deposit account, on the other hand. Secondly, I accept the argument advanced on behalf of the defendant that the defendant did not occupy a fiduciary position vis-à-vis the plaintiff and that the plaintiff’s claim, insofar as it is based on alleged breach of fiduciary duty, is misconceived.
16. Estoppel?
16.1 The basis on which counsel for the defendant contended that the plaintiff is estopped from asserting that the monies on deposit in joint deposit account No. 101 were not to be applied in reduction of Mr. O’Meara’s liability to the defendant under loan account No. 128 was that all necessary ingredients of an estoppel are present, namely: a representation by the plaintiff; reliance on the representation by the defendant; and the defendant acting to its detriment. The defendant’s officials appear to have assumed on 23rd December, 2008 that there was an effective right of set-off against the monies in joint deposit account No. 101 in place by reason of the plaintiff’s signature on the right of set-off document. The defendant certainly acted to its detriment in advancing the loan to Mr. O’Meara when, as I have found, it had no right of set-off. The question which remains is what representation was made by the plaintiff, whether by word or conduct, to the defendant which, in the words of Griffin J. in Doran v. Thompson Ltd. [1978] I.R. 223 relied on by counsel for the defendant, amounted to “a clear and unambiguous promise or assurance” that she would participate in granting a right of set-off to the defendant against the monies on deposit in joint deposit account No. 101?
16.2 The defendant’s submission was that it is to be found in the plaintiff’s assent to the lodgement of the Anglo cheque, which was to be “cash backing” for the loan to Mr. O’Meara, and her agreement (in effect) that Mr. O’Meara could mandate withdrawals from that account without reference to her, and her knowledge (if not her explicit assent) of the set-off commitment provided by Mr. O’Meara. All the plaintiff did was that –
(a) she endorsed the Anglo cheque,
(b) she signed the application form to open joint deposit account No. 101, which included the withdrawal instructions, which resulted, in due course, in the joint deposit account being depleted to the extent of €600,000, and
(c) she subscribed her name as a witness to Mr. O’Meara’s signature to the right of set-off document.
Those actions, separately or in conjunction with each other, did not amount to “a clear and unambiguous promise or assurance” that the defendant would have a right of set-off against the monies in joint deposit account No. 101.
16.3 The fundamental problem for the defendant in this case is that it did not get the commitment it required from the plaintiff in order to obtain the security which it sought. In fact, it completely ignored the plaintiff’s interest. The result is that it must suffer the consequences of its own mistake.
17. Ownership/ rights over joint deposit account No. 102
17.1 The monies which the defendant transferred to joint deposit account No. 102 were sourced from loan account No. 128. Sole liability for the sum of €665,873.40 so transferred was assumed by Mr. O’Meara under loan account No. 128. The sole purpose of the drawdown was to meet the security requirement in relation to providing a right of set-off against a joint deposit account with a balance equivalent to the amount of the loan, €1.6m. It was the defendant’s officials, on their own initiative, who put the joint deposit account in place in the joint names of Mr. O’Meara and the plaintiff to meet that requirement. While the “sub-account”, as it was characterised, was opened in the joint names of Mr. O’Meara and the plaintiff, the plaintiff was not a party to it at any time. Therefore, the decision of the Supreme Court in Lynch v. Burke, in my view, does not assist the plaintiff. Moreover, before it was opened, she had no legal or beneficial entitlement to any part of the sum of €665,873.40 transferred by the defendant’s officials to it. Accordingly, in my view, one has to look behind the names on the account.
17.2 On the basis of the doctrine of a resulting trust, as Mr. O’Meara, through the medium of the draw down from loan account No. 128, was the sole contributor to the monies in joint deposit account No. 102, prima facie, he was the beneficial owner of those monies, unless the presumption of advancement overrides the doctrine of resulting trust.
17.3 The plaintiff implicitly relied on the evidence of Mr. Savage in support of its contention that the monies in joint deposit account No. 102 were jointly beneficially owned by Mr. O’Meara and the plaintiff and passed to the plaintiff by right of survivorship. Mr. Savage was asked in cross-examination why a deposit account in the sole name of Mr. O’Meara was not opened to bring up to the level of €1.6m the balance on deposit with the defendant, given that the right of set-off document extended to any account in his name. The response of Mr. Savage was that Mr. O’Meara wanted it that way. He wanted the money to go back into the joint deposit account, which he had set up at the particular time. What he had instructed the defendant to do was to put the money in the name of himself and his wife. That response is inconsistent with the evidence of Ms. Corrigan and Ms. Dwyer, who were the officials of the defendant who were implementing the transactions on 23rd December, 2011 and who, on their evidence, did so without reference to Mr. O’Meara.
17.4 Even if Mr. O’Meara intended that the monies in joint deposit account No. 102 would be beneficially owned by himself and his wife, effect could only have been given to that intention subject to any trust or equitable interest known to the defendant to which the monies were subject. Mr. O’Meara was facilitated by the defendant in the draw down the sum of €665,873.40 from loan account No. 128 and its transfer to joint deposit account No. 102 for a specific purpose – to top up the monies on deposit to the level of the set-off requirement conditioned into the letter of offer of 17th December, 2008. Therefore, the monies in joint deposit account No. 102 must be deemed to have been impressed with an obligation in equity to fulfil that purpose. Accordingly, the right of the defendant to have that purpose fulfilled would have had priority in equity over the beneficial ownership of the monies, whether the beneficial ownership was vested in Mr. O’Meara and the plaintiff jointly or in Mr. O’Meara solely. It follows that, wherever the beneficial ownership was vested, the plaintiff cannot rely on beneficial ownership by right of survivorship to make the case that the defendant did not have a right of set-off as against those monies for Mr. O’Meara’s sole liability on foot of loan account No. 128 on 5th January, 2010.
17.5 The question whether Mr. O’Meara and the plaintiff jointly were the beneficial owners, or Mr. O’Meara was the sole beneficial owner, of the monies on deposit in joint deposit No. 102 subject to the defendant’s right of set-off arises between the plaintiff, on the one hand, and the personal representative of Mr. O’Meara, on the other hand. Representation has not been raised to the estate of Mr. O’Meara and his personal representative was not before the Court. Accordingly, it would be inappropriate for the Court to express any definitive view on that question. Notwithstanding the absence of the personal representative of Mr. O’Meara, it has been necessary to reach a conclusion as to whether beneficial ownership of the monies, wherever it lay, was subject to the right of the defendant to set-off, and I have concluded that it was.
17.6 Consistent with the view I have expressed earlier in relation to the analogy with the liquidation situation addressed by the Supreme Court in Dempsey v. Bank of Ireland, the personal representative of Mr. O’Meara would acquire no better title to the monies in joint deposit account No. 102 than Mr. O’Meara had.
18. Summary of conclusions and orders
18.1 As regards joint deposit account No. 101, I have come to the conclusion that the monies in that account were jointly beneficially owned by Mr. O’Meara and the plaintiff and that they passed to the plaintiff by right of survivorship on the death of Mr. O’Meara. I have further concluded that the defendant was not entitled to set-off the monies due on loan account No. 128 against those monies, as it purported to do in January 2010. Accordingly, the plaintiff is entitled to a declaration that all the monies which were standing to the credit of that account on 28th November, 2009 are the property of the plaintiff. As to how the plaintiff is to be compensated for the breach of contract by the defendant in not paying those monies to the plaintiff on being requested to do so, although the plaintiff claimed interest under the Courts Act 1981, as amended, in the statement of claim, no case was made on behalf of the plaintiff for pre-judgment interest at the Court rate. I consider that the plaintiff will be properly compensated by payment by the defendant to her of interest from 28th November, 2009 to the date of judgment at the rate applicable to six month fixed term deposits with the defendant and thereafter interest at the Court rate.
18.2 There will be judgment for the appropriate sum, the quantification of which should be agreed between the parties.
18.3 Having come to the conclusion that the plaintiff did not have a beneficial interest in the monies lodged in joint deposit account No. 102, the plaintiff is not entitled to any relief in respect of those monies. While, in the absence of the personal representative of Mr. O’Meara before the Court, I think it is inappropriate to make the declaration sought by the defendant in its counterclaim that the defendant was entitled to set-off the monies in that account, I propose that a declaration be made that the plaintiff has no claim to the said monies.
18.4 Subject to that, the defendant not being entitled to rectification of the set-off document, the defendant’s counterclaim will be dismissed.
Talbot v Cody
4 November 1875
[1875] 9 I.L.T.R 187
Sullivan M.R.
Dec. 12, 1874, Jan. 15, 23, Nov. 4, 1875
Sullivan, M.R.
The arguments in this case have left no point unconsidered, and have exhausted all the cases that have the smallest bearing on any legal or equitable view of it. The question involved is, also, very important, having regard to the frequency of transactions analogous to the present, and the large sums of money which are circumstanced, from time to time, in a way similar to the manner in which the sums which are the subject-matter of this suit are circumstanced.
The facts of the case, which are all-important to keep in view, are as follow:—Richard Cody, who was the husband of Elizabeth Cody, the defendant, died on the 11th of May, 1873, and in his lifetime had dealings with two banks in the town of Mullingar, spread over a considerable number of years, and conversant with a considerable amount of money. One bank was a branch of the National Bank at Mullingar, and the other a branch of the Hibernian Bank. It appears that, in the year 1859, Richard Cody, who does not appear to have had a current account, lodged £200 upon deposit receipt, and from time to time increased that amount until it stood, on the 3rd of June, 1859, at £250. Now, the deposit receipt is a document issued by the bank to the person who gives the money in this form—“Received from Richard Cody the sum of £250, for which we will be accountable,” and on it is endorsed the statement that the rate of interest is posted at the Bank, but that ten days’ notice previous to withdrawal is required to be given by the depositors; and in that form all these deposit receipts appear to have been given. That £250 remaining in the bank on the 3rd of June, 1859, was followed by lodgment by Richard Cody, on the 30th September of the same year, of £100. But he took the deposit receipt on that occasion, not in his own name alone, but in that of himself and his wife; and on the 22nd May, 1860, he went and altered the deposit receipt he had for £250 by taking interest on it, and re-lodged on that same day £450 in the joint names of himself and his wife, which he drew out on the 16th May, 1861, and relodged on the same day in the joint names of himself and his wife. On the 27th of March next year (1862) he lodged £30 on deposit receipt in his own name, and on the 12th of June in that same year he drew out the deposit receipt for £450, and relodged that sum in the joint names of himself and his wife, together with the deposit receipt of £30, and another sum of £50 on the 6th November of the same year; and on the 27th of May, 1863, he lodged £20 in his own name on deposit receipt. On the 18th of June, 1863, having drawn out the deposit receipts of £450 and £30, which stood in the joint names of himself and his wife, he reinvested them in the joint names of himself and his wife, and lodged £50 more on the 21st January, 1864, in the names of himself and his wife. He proceeds in that manner from time to time to enter similar transactions, which had been in the name of himself alone, until his lodgment stood, on the 31st of August, 1871, at £1,200 in the two names of himself and his wife, and so that transaction stood when he died in May, 1873, leaving the last four deposit receipts outstanding. In the Hibernian Bank £490 stood on deposit receipts in the joint names of himself and wife. One deposit receipt of the National Bank for £30 stood in his own name alone, and one for £30 in the same bank in the joint names of himself and his wife. With the Hibernian Bank his dealings were as follow:—He lodged sums varying from £30 to £400 at different periods in his own name, from 15th May, 1850, up to 17th June, 1869. On the 17th of June, 1869, he had a deposit receipt for £400 in his own name, and another for £50 on the 17th November, 1870, and on the same day he reinvested in the name of himself and his wife; and on the 16th of November, 1871, he drew out those two deposits, put them together, and took out one receipt in the joint names of himself and his wife, which he drew out on the 29th September, 1872, and relodged in the joint names of himself and his wife. When he died he had three deposit receipts in the name of himself and his wife, and one in his own name for £30, a sum very insignificant as compared with those for which the deposit receipts were given.
He made his will, and by that will he bequeathes the sum remaining and bearing interest in his name in the Mullingar branches of the Hibernian and National Banks—“I will and bequeath the interest only accruing from time to time to my said wife, Betsy Cody, for and during her natural life, and at her death I will and desire that said sum become the sole and exclusive property of my said nephew, James Talbot, he undertaking, at the decease of my said wife and coming into possession of the farm of Knockatee, to give and make over to my nephew, his brother, Richard Talbot, the farm now held by the said James Talbot, in full and same way as said James Talbot held same, for the sole use of said Richard Talbot, he, the said Richard Talbot, paying yearly and every year £10 per annum towards the support and maintenance of his sister, Maria Talbot, during his natural life; I further will and wish that James Talbot should reside with his aunt during her life”—subject to a certain condition as to appointing James Talbot his residuary legatee. On his death this James Talbot proved his will as personed representative, and so far back as the 14th November, 1873, James Talbot filed his bill in this Court as the representative of Richard Cody, praying that his assets may be administered, and that *188 four deposit receipts may be declared part of the assets of the testator, and that Elizabeth Cody may be restrained from proceeding in an action of detinue that she had commenced in the Court of Queen’s Bench against him in respect of these deposit receipts. Rightly or wrongly, that bill was founded on the notion that the effect of those transactions was to give the wife the legal right to those deposit receipts, and that the money so deposited was to go to her as having survived her husband. The bill states that the testator, when he deposited the moneys, did not know that the effect of so depositing them would be to prevent him availing himself of the control of the money, and that if he had known that fact he would not have made these lodgments; and, accordingly, the bill stated, that to the action of detinue brought by the wife he had no defence at law, and that he had filed the defence solely with the view to have the equitable question tried; and prayed for an injunction to restrain the action of detinue. Acting upon the bill and the statement in it, I granted an injunction, and restrained the plaintiff from suing for those deposit receipts. The bill was brought to a hearing, and evidence having been gone into on both sides, to my surprise it was argued for the plaintiff, that Elizabeth Cody had no right whatever at law to these deposit receipts or the money mentioned in them; that the legal title of the plaintiff had never been altered directly or indirectly by what had been done by taking these receipts under the circumstances I have stated; and that they remained assets of the husband, uncontrolled by any right, legal or equitable, in the wife. It is manifest that that places this Court in a position of great difficulty and embarrassment, because the plaintiff, who had admitted the legal right of the wife, has argued at the bar that such legal right had no existence whatever, and that no such right was ever given at law. And then it was contended that, as there was no legal right in relation to those deposit receipts, there can be no equitable gift to her, and, therefore, that I should decide that these receipts still constituted the assets of the testator. Being very unwilling that the case should be disposed of upon grounds apparently defective, and being told that the advisers of the plaintiff had been altered and changed after the bill was filed, and before the argument at the hearing, when a totally different view of the law was taken from what was taken when the bill was filed, I put it to Mr. Law, whether it would not be better to allow the plaintiff to amend his bill by withdrawing those statements of the legal right being vested in the defendant, and let the plaintiff make the best case he could. He seeks to have this case decided independent of any view that was taken when the bill was filed; and Mr. Walker assenting, I accordingly gave the plaintiff liberty to amend his bill upon certain terms. The case now comes before me as an amended record, from which have disappeared all the statements in relation to the legal right of the defendant, everything in relation to the injunction, everything calling for decision as to whether those deposit receipts constituted the assets of Richard Cody or not. I think it was very much to be regretted that the case was brought to a hearing upon the record as it stood originally, and that some steps were not taken to have saved costs in bringing such case to a hearing when I was compelled to listen to the arguments as to the legal right to sue upon those deposit receipts. Now, the wife, Elizabeth Cody, the defendant, says that in this Court, no matter what may be the view of her rights at law, she is able to show that, having regard to the circumstances connected with the man’s dealings with the bank, there has been given an equitable gift to her as having survived her husband of those sums of money amounting to £1,600 odd. I need scarcely say, if there was given an equitable gift by this man in hislifetime, he could not alter it by his will; in other words, the husband that has advanced the wife cannot alter that advancement by his will, or in any other way. The plaintiff contends that there is one test of this case, and one only—viz., Could Elizabeth Cody, under the circumstances that are proved, have sued the banks at law for the amount of the deposit receipts as the survivor of her husband? and it is contended that, on the circumstances before me, she could not so sue at law, and that this fact is decisive that she could not hold him liable in the Court, there being no such transaction upon which this Court can fasten a trust in favour of the wife surviving. I must say, with all respect to the learned arguments addressed to me, that I do not appreciate them at all. My impression is that the right to sue at law does not settle the question whether a wife can maintain a gift between herself and her husband, for as between them no equitable gift made immediately ever alters the legal right to sue; and I think those cases of imperfect gifts have not the smallest application to the case before me. I put a common case in the argument :—A husband takes a sum of money, deposits it with a third party, saying that he means that money for his wife, and the third party assents to hold the money either expressly or tacitly. There is in this Court the clearest gift of that money to the wife in equity, but the legal right remains unaltered, because, if the person were so ill advised as to refuse to pay it, an action can be brought only by the husband. In the same way, where the husband makes a present of a book, a picture, or a piece of furniture, the husband alone must sue in respect of it, because the wife cannot in a Court of Law hold property separate from her husband with a legal right to sue upon it. It is impossible to conceive that her right to sue at law can be the smallest test as to whether that transaction imported a gift or not. Now, that the husband can make a gift to his wife, not merely by constituting a third person as trustee, or by formal declaration of trust under hand and seal, has been decided in case after case; and the matters of which gifts can be made are as variable as man and wife can possibly make them. I take it that any words expressed by the husband, in relation to property subject to transfer or delivery, which show the intention to divest himself of that property, and to give it to the wife, if proved in this Court, constitute a perfect gift, and that between money gifts and gifts of a statue or picture, &c., there is no difference whatever. I also state as my view of the law, that, inasmuch as the husband can give to his wife property capable of immediate delivery, so he can constitute her joint tenant with himself, because it would be a most extravagant proposition to maintain, that the husband cannot do that which any stranger in the community can do for him or his wife. But whether they are joint tenants in the strict acceptation of the term, or whether they are tenants by entireties, does not make the smallest difference. I hold that he can make an immediate gift under such circumstances, and that she can hold, if she survived him, any property capable of delivery. It is impossible to conceive that the case of Lloyd v. Puyhe, L. R. 8 Ch. App. 88, was ever intended to alter the law in this Court as to gifts between husband and wife or to fetter such gifts, and Lord Selborne, giving the judgment of the Court of Appeal, takes care to preface his judgment by these words:—“There were many cases in which a husband or a stranger had transferred property into the name of a married woman, or had placed it in the hands of a third party, upon a contract that it was to be for the benefit of the wife. His Lordship would be sorry to suggest, without necessity, any doubt as to the validity of such transactions, whether intended to create a trust or to give a legal title. Of course, no such title could be created in favour of the wife as against the true owner if he did not consent to the transaction, but if he did, his impression was that there was nothing in the law to prevent the wife, if she survived the husband, from having the property” Lord Justice James expresses himself substantially to the same effect.
Now, that being my view of the law, the question is, what is the effect of this man’s dealings with the banks, considering the evidence adduced? We have the fact that the deposit receipts stood for a considerable time in his own name; that he altered those receipts, and took them in the names of himself and his wife, that, notwithstanding, he still continued to take some receipts in his own name alone; that he was substantially, from beginning to end, increasing the money acknowledged by those deposit receipts to be held as that of husband and wife.
A very important question has been raised and argued with great ability—that is, what is the effect of the banker *189 giving the deposit receipt in the form here adopted ?—does it vest the legal right of action in the wife surviving? I do not mean to decide that question at all. There may be great difficulties about it, having regard to the fact that a deposit receipt is not a promissory note, and that the deposit receipts are in the name of the husband alone. Lord Justice Mellish, in his judgment in Lloyd v. Pughe, carefully abstains from giving any opinion as to the effect of taking a deposit receipt, as distinguished from taking money on current account, in reference to the right to sue at law. My reason for not giving any opinion is that, as I have already stated, the right to sue at law is not a test as to whether this is a gift or not. I doubted whether there are circumstances enabling me to hold that this woman, in equity as joint tenant, takes by survivorship. My opinion is, that her right to sue at law is perfectly unimportant. Is it to be supposed, that a man cannot make himself joint-tenant with his wife of property in the hands of a third person who consents to hold it? When the husband dies, never having touched the money in his lifetime, is it to be said that in this Court her right is to be annulled because the legal right to sue was only vested in him? In that case this Court would hold that this person was constituted trustee. And the question, in my opinion, is, did the husband constitute in this Court himself and his wife joint-tenants in this money? That depends, in my opinion, on what he did and what he intended to have done, so far as you can be sure of this intention from the acts which he performed, because we have no evidence as to his intention save what the wife says he told her. I am not at all certain (and I think there is authority for it) that if the transaction stood alone by itself—the husband coining deliberately to his banker, drawing the money, and altering the deposit receipts into the name of himself and his wife, and getting an acknowledgment that it was received from both—that transaction, unexplained by any collateral circumstance, does not contain within itself forcible and overwhelming evidence that he intended to constitute himself joint-tenant with her. It is settled law that, if a husband gets a transfer of stock to the joint names of himself and his wife, that is his wife’s if she survives, and the advancement is inferred from the transaction itself, there being no conceivable object in his doing so except with a view to the advancement. What is the reason that money is to be dealt with upon a different principle from stock? It is said you give a chose in action in one case, but not the money. All that this Court wants is sufficient evidence of intention, manifested by the acts and language of the husband, that he meant to constitute himself joint-tenant of the money with his wife. What other conceivable object is there in transferring the money from the name of himself to that of himself and his wife? I do not see any. It is said it was with a view to avoid the legacy duty; but that argument appears to take the ground from under itself, because, if so, that can be done only by giving it to the wife surviving. I think a single transaction would be much less strong than the facts that appear before me. We have these transactions going on for a considerable number of years. What inference can be drawn from his conduct in relation to those transactions? There must have been some difference intended to be effected, by getting the deposit receipts transferred from his own name into that of himself and his wife. It is conclusive evidence that he had some reason for putting his wife’s name to that deposit receipt, indicating a different intention from that with which he had it in his own name. It has been argued very strongly that the idea of joint-tenancy never occurred to him. I have a case before me decided by Vice-Chancellor Kindersley—a most painstaking judge—the case of Gosling v. Gosling, 3 Drew, 335. The facts of that case are short and simple, and it has been relied upon by Mr. Cleary as a precise authority for the principle that altering a deposit in the bank from a man’s own name into that of himself and his wife is evidence to show that he intended her to be a joint-tenant. There a gentleman had £600 standing in the hands of Messrs. Seager. He had a promissory note secured by them. He went to Messrs. Seager and told them to transfer the debt in his name to the joint account of himself and his wife, as he wished her to have it after his death. He cancelled the promissory note, made a new one in the name of himself and his wife, and died leaving his wife surviving him. Kindersley, V.C., says:—“I think I must take it that this was a trust created by the testator for his wife; his desire was to benefit her. He had £600 in the hands of Messrs. Seager, secured by a promissory note to him, and, having no other assignable inducement than to benefit his wife, he says:—‘I wish the £600 standing in your books to be placed to the joint account of myself and my wife.’ No motive is attempted to be assigned except that which, in fact, Seager says was stated to him. The act was done constituting the husband and wife joint-tenants of the money, so that after the death of either the survivor would be entitled.” I am not in the habit here of reversing decisions. If those decisions are wrong, they can be reversed elsewhere. Now, that learned judge lays down that the transaction was a trust, and constituted a joint-tenancy; he does not rely upon a second promissory note being given. Again, there is the case of Grant v. Grant (34 Beav. 623), before Lord Romilly, which has never been quarrelled with, so far as his judgment bears upon chattels capable of transfer. [His lordship referred to the judgment of Lord Romilly.] In this case the wife has made an affidavit, and states plainly that her husband told her that his object was “that he altered the lodgment with the object and intention, as he stated to me, that he and I should be jointly interested, so as to enable the survivor to take the principal.” Now, of course, first of all, her evidence is subject to this infirmity, that she has given evidence in her own favour; and if it stood alone, and if the transaction itself did not import what it does, I would be slow to act upon her evidence. But it is impossible, in a case of this description, to shut it out altogether, as Lord Romilly thought in Grant v. Grant. Her evidence, however, is in that position that a very little thing would destroy its efficacy if the transaction itself presented a different import to my mind. With respect to the statement to Howes that he had money in the bank, that is too loose to look upon as a statement that he regarded the money as his own. The conclusion I have come to is that, having regard to his dealings with the bank, particularly to that care with which each is followed up, and the sedulous manner he maintained his wife’s name, there is sufficient evidence to hold him a trustee for the joint use of himself and his wife. The case of Marshall v. Crutwell (L. R. 22 Eq. 328), which came before Sir George Jessel, M. R., in my mind confirms the view I take of this case. [His lordship referred to the facts and decision in that case.] Both upon authority and on the particular state of facts—having regard to the number of the transactions and the different sums increasing from year to year—I hold, in this case, that the husband constituted himself trustee that this money should belong to the wife surviving him.
Cases Transfer Contract
K v K
[2018] IEHC 615
JUDGMENT of Mr. Justice Denis McDonald delivered on the 7th day of November, 2018
Introduction
1. The plaintiff and the defendant in these proceedings are brothers. They have four other siblings, namely three sisters and one brother. The plaintiff is the second eldest in the family. He is the eldest male but he has one sister who is older than him. He was born in 1965. He is married and has two children and he currently works as a self-employed hackney driver.
2. The defendant (who is also married) is the executor and personal representative of the late mother of both parties. In this judgment I will refer to their mother as “the deceased”. In circumstances where the proceedings involve a claim under s. 117 of the Succession Act 1965 (the 1965 act) it is important that I do not reveal any detail in this judgment which would identify any of the parties. I will therefore refer to the parties themselves as “plaintiff” and “defendant” respectively and I will refer to all other persons and any relevant place names by reference to a letter of the alphabet or by some other mechanism which avoids use of their actual names. I sincerely hope that the in camera rule which applies to these proceedings will assist the parties (and the other members of the K family) in maintaining their privacy in relation to the events described in this judgment. Regrettably, it will be necessary in this judgment to consider many aspects of the life of this family which, in the absence of a court hearing, would remain entirely private.
The Will of the deceased
3. While there were earlier wills executed by her (and while a number of draft wills were prepared on her behalf during her lifetime) the last will and testament of the deceased was executed in August 2011. The deceased subsequently died in 2013. The defendant thereafter took out a grant of probate in January 2015.
4. Under her will, the deceased left her china, delph and cutlery to her three daughters. Each of the daughters are also to receive a bequest of €5,000 each. Both the defendant and the remaining son are to receive substantial gifts of land which formed part of the family farm built up by the deceased’s late husband (the father of all five children) and his brother (who I shall refer to as “the uncle”).
5. The plaintiff is also to receive a gift of lands. However, in his case, the lands extend to no more than 3.5 acres. In the Inland Revenue affidavit, the value of these lands as of the date of death of the deceased was €42,000. While the value of the gifts to each of the three daughters of the deceased is also modest, the value of the gift to the plaintiff contrasts starkly with the value of the gifts to the defendant and the remaining brother. In the Inland Revenue affidavit, the value of the gifts to the defendant (including any benefits passing by survivorship) was given as €3,006,365 while the value of the gifts, (again including any benefits passing by survivorship) to the remaining brother was €748,547.
The plaintiff’s claim
6. The plaintiff makes a number of claims which can broadly be summarised as follows: –
(a) The plaintiff makes a claim based on promissory estoppel, proprietary estoppel and/or legitimate expectation that a particular parcel comprising 90 acres of the family farm, is held by the defendant as trustee for the benefit of the plaintiff. This claim is advanced on the basis of a number of alleged representations which the plaintiff claims were made to him during their respective lifetimes by his late father, the uncle and the deceased. As explained in more detail below, the plaintiff claims that, acting on foot of these representations, he left school at an early age and thereafter devoted his life to the family farm;
(b) Alternatively, the plaintiff claims that he is entitled to the parcel of lands in question on the basis of a testamentary contract made between him and the deceased under which (so he claims) the deceased agreed to devise to the plaintiff those lands in her will and he seeks specific performance of that testamentary contract;
(c) In the alternative, the plaintiff seeks a declaration pursuant to s. 117 of the 1965 act that the deceased failed in her moral duty to make proper provision for the plaintiff in accordance with her means. In the course of the hearing, the case made by the plaintiff was that the parcel of 90 acres described above would constitute such proper provision;
(d) At one point, the plaintiff also advanced a claim based on a quantum meruit . However, in the course of the hearing, it was accepted by his counsel that he was no longer advancing such a claim.
7. In his statement of claim, the plaintiff contends that it was always envisaged by the deceased, her husband, the plaintiff and the uncle that the plaintiff would inherit one-third of the farm. It is alleged that after the plaintiff left school at fifteen years of age in 1980 to work on the farm, he worked long days and nights on the farm to generate income to repay a large indebtedness owed to a bank arising from the purchase of part of the farm. He did not receive any wage for his work as his father often stated ” You’re doing it for yourself, sure I can’t take it with me “. In contrast, it is alleged that the plaintiff’s brothers (namely the defendant and remaining brother) worked only occasionally on the home farm and did not show the same interest in farming as was shown by the plaintiff. The plaintiff also makes the following allegations in the statement of claim: –
(a) The plaintiff refers to his father’s will of 11 February 1993 under which he left his entire estate (save for some small legacies to his daughters) to the deceased. However, the plaintiff contends that the estate was left to the deceased on this basis on the understanding that it would be shared equally between the plaintiff and his two brothers after her lifetime.
(b) The plaintiff also contends that, following his father’s death in 1996, it was specifically represented to him by the deceased that he would get the 90 acres of land described above under her Will.
(c) It is also alleged that in 1997 the deceased, the plaintiff, the defendant and the remaining brother started a sand and gravel business on the family farm and that the plaintiff purchased the first lorry and trailer for that business in 1999. This subsequently developed into a concrete business which was very successful.
(d) The plaintiff contends that in 2002 the deceased had a dispute over a piece of property with a neighbour (who was also a relation). The case went to court and the plaintiff’s father in law was called as a witness by the claimant. The case resulted in the claimant getting adverse possession of the piece of property in question. It is contended that this infuriated the deceased and other members of the family who ” in time, turned against the plaintiff and his wife “. It is also alleged that the defendant gradually took over control of the businesses and the farm and the plaintiff was pushed and ” bullied out of both businesses and the farm “.
(e) It is alleged that on 1 August 2007 the deceased came into the plaintiff’s home and stated that things were not working out between the defendant and the plaintiff such that the plaintiff was ” going to have to find something else to do with his life “. At that point, the plaintiff was 42 years of age. He was paid until Christmas 2007 but then his wages stopped and he was dismissed from the businesses which he contends had been created with the assistance of his input and efforts.
(f) The plaintiff says that he was induced by the deceased, his father and the uncle to believe that by working on the farm he would ultimately become the owner of the 90 acres described above and that he shaped his life around the farm in reliance on this inducement
(g) At the time of the deceased’s death, the plaintiff said that his outgoings were approximately €20,000 per annum. He earned approximately €46,000 per annum, his family home was valued at €195,000 and he had savings in the amount of €3,000.
The defence of the defendant
8. It is not necessary, at this point, to set out every aspect of the defence advanced on behalf of the defendant. However, the following aspects of the defence should be noted: –
(a) The case is made that all of the children of the family worked on the family farm from a young age and that the plaintiff’s contribution was no greater than that of his siblings and was less than that of the defendant and the remaining brother;
(b) While it is admitted that the plaintiff left school at the age of fifteen, it is denied that he did so to work full time on the farm and it is also denied that he worked full time on the farm;
(c) All of the representations alleged by the plaintiff are denied;
(d) It is alleged that the plaintiff showed little interest in farming and that he provided only minimal assistance (which was ” comfortably surpassed by his brothers’ contribution ” with the farming activities of the family and was ” rarely (if ever) called upon to do so “. It is expressly alleged that the plaintiff commenced a haulage business at the age of nineteen and that he had little or no involvement with the farm thereafter;
(e) Attention is drawn in the defence to the fact that in 1994, on the marriage of the plaintiff, a property in the local town was transferred to the plaintiff at a small consideration by the plaintiff’s late father and by the uncle. While the plaintiff was obliged to pay the uncle for his half share, the fathers’ share in the property was transferred to the plaintiff by gift;
(f) All of the family assisted in refurbishing the property transferred to the plaintiff;
(g) The deceased contributed regularly to the plaintiffs’ loan repayments in respect of the half share transferred to him by the uncle and repaid the final balance of the loan (€10,000 approximately) in 2004;
(h) With regard to the sand and gravel business, it is alleged that this was commenced by way of joint venture with a local man and that it was commenced by the deceased together with the defendant and the remaining brother. It is alleged that the plaintiff commenced working as an employee in that business in 1999, and that he contributed to the business by the use of a lorry and trailer that he had acquired with some financial assistance from the deceased. It is alleged that the plaintiff’s contribution to that business ” although tolerated for several years, was erratic and disruptive “.
(i) It is also alleged that from the commencement of this business, the farming activities of the deceased and the rest of the family on the family farm were minimal, and the farm did not generate a profit;
(j) It is denied that the plaintiff was pushed out of the family business and it is also alleged that the farming activities of the family were insufficient to be described as a business.
(k) The defendant makes the case that the plaintiff left the ” family enterprise ” in 2007 ” of his own volition “. The defendant contends that this arose in circumstances where the plaintiff allegedly became irate with the deceased following his discovery that she had sold certain land without consulting him. It is alleged that he verbally abused the deceased and placed her in fear for her own safety. It is also alleged that the plaintiff attempted to assault the defendant. Following this alleged assault, the defence pleads that the deceased, accompanied by her second eldest daughter (who I shall refer to as M) visited the plaintiff at his home and offered to support him in another business venture of his choice but he rejected this.
(l) It is contended that subsequent to this meeting, the plaintiff’s relationship with the deceased was characterised by “o pen and demonstrative hostility on his part. When he encountered her, he shouted at her, and his demeanour toward her was generally threatening “. It is also alleged that the plaintiff has a volatile temper and a history of violence and that the deceased ” lived in fear of him and used her best endeavours to avoid him “.
(m) With regard to the plaintiffs’ contribution to the business, it is alleged that this was ” problematical ” in that he had neglected on a consistent basis to return delivery dockets (as all drivers were required to do) and that he was in the habit of retaining the phone of the business and not answering it when customers called or that he otherwise failed or refused to facilitate customers ” so that many of them turned to other suppliers “. It is alleged that these difficulties had been the subject of numerous disputes with the deceased and that during the course of one of those interactions the plaintiff had thrown a heavy wooden plank at the deceased.
(n) The testamentary contract is denied;
(o) With regard to the farm business, it is alleged that the plaintiffs’ father attended to the running of the farm during his lifetime and retained farm labourers to assist him in doing so and that following his death the farming activities of the family were significantly reduced, which included the sale of livestock and the letting of approximately 40 acres of land.
(p) With regard to the estoppel claim, not only is that claim denied but the defendant contends that he had, with assistance from the remaining brother, carried out significant and extensive improvements to the lands the subject matter of the plaintiffs’ claim. In particular, the defendant claims that: –
(i) In June 2003 he retained contractors to clear five fields (comprising 40 acres) of trees and hedges, so as to create one large field;
(ii) in 2008 the defendant and the remaining brother carried out reclamation and drainage works to approximately fifteen acres of the land;
(iii) In 2009 the defendant carried out work to two fields, comprising approximately fourteen acres – again consisting of the removal of trees and shrubs, land drainage, the laying of drains, ploughing, cultivation and seeding.
(q) It is contended that at the date of the death of the deceased, she owed no moral duty to the plaintiff. It is contended that having regard to his situation in life, the extent of his assets and income and the provision made for him by his father during his lifetime, he had no need for provision. Without prejudice to that contention, it is alleged that any such need was met by the provision for the plaintiff contained in the last will of the deceased.
(r) It is also alleged that the plaintiff is guilty of laches and delay in failing to make the case now made in these proceedings during the lifetime of the deceased. It is alleged that by proceeding in this way, the plaintiff has deprived the defendant of the evidence of ” the only person in a position to give direct evidence in contradiction of the plaintiff’s claim and is thereby severely and fundamentally prejudiced the defence of the within action “.
(s) It is also alleged that the plaintiff’s decision to await the death of the deceased before advancing his claims was ” conscious, deliberate and self-serving, and was calculated to remove the evidence of the deceased from the adjudication of his claim. The plaintiff has. . not acted fairly and has not come to equity with clean hands “.
(t) It is also alleged the conduct of the plaintiff in not commencing proceedings previously “invites the inference that he knew or believed or apprehended that the deceased’s evidence would contradict his own”.
9. It should be noted that, notwithstanding the allegations of delay on the plaintiffs’ part, there is no attempt in the defence to rely on the Statute of Limitations 1957, or insofar as the equitable relief sought by the plaintiff is concerned, to rely on it by analogy. Furthermore, there is no reliance on the Statute of Frauds (Ireland) 1695 in relation to the plaintiffs’ claim based upon a testamentary contract.
Dealings between the parties subsequent to the death of the deceased
10. Unfortunately, there are very deep divisions within the family. It was manifest during the course of the trial that, with the exception of M., the plaintiff and his siblings are not on speaking terms. Regrettably, the atmosphere between the parties was not improved by the manner in which the defendant has chosen to deal with the plaintiff’s claim. Thus, for example, following the death of the deceased, the solicitors acting on behalf of the plaintiff sought a copy of the will of the deceased (which had previously been read to all members of the family at a family meeting following the death of the deceased). By letter dated 10 May 2013 the solicitors then acting on behalf of the defendant responded to this request in the following terms: –
“We understand a reading of the Will was undertaken by the Executor to all family members last weekend. The full content of the Will was revealed at such time and the Executor is not of a mind to provide copies at this time.
Our client has suggested to your client that if he wishes to attend with our client at our offices . . . then a further reading of the Will can occur”.
11. A further request for the Will was made in September 2004. On 18 September 2004, the defendant’s solicitors informed the solicitors acting for the plaintiff that:
“Our client has instructed us not to issue a copy of the deceased’s Will yet.”
I cannot understand the basis on which the defendant thought it appropriate to give such instructions. When he came to give evidence at the trial, he had no explanation as to why such instructions had been given.
12. In January 2015, a request was made by the solicitors acting for the plaintiff for a copy of the Inland Revenue affidavit, together with a copy of the grant of probate and the entire Will including the map which was attached to the Will. On 29th January 2015, the solicitors then acting for the defendant indicated that they had requested the defendants’ instructions. The request for a copy of the Inland Revenue affidavit and associated documents was repeated in a letter dated 6 February 2015. On 12 February 2015, the solicitors previously acting on behalf of the defendant in relation to the administration of the deceased’s estate wrote the plaintiffs’ solicitors to say that a new firm of solicitors had been appointed to act in these proceedings and it was suggested that contact should be made with them. Ultimately, it appears that a version of the Inland Revenue affidavit was provided but it was incomplete. I have to say that I find it difficult to understand why documents of this kind would not be made available to a party in the position of the plaintiff. At no stage – either in the course of the correspondence or in the course of the hearing – was any plausible explanation offered as to why the defendant was reluctant to provide copies of such documents to the plaintiff. As it transpired, a full copy of the Inland Revenue affidavit was not made available until after the trial had commenced. I glean that there may have been concerns that the Inland Revenue affidavit contained personal data relating to persons who are not parties to the proceedings (namely the other siblings of the parties). However, the Inland Revenue affidavit is an essential document in any case of this kind and under the Data Protection Acts, the processing of personal data is permissible where it is required (inter alia) for the purposes of, or in connection with, legal proceedings. Thus, if there was such a concern about the provision of the full copy Inland Revenue affidavit, it does not seem to me to have been a justifiable concern.
13. It is also deeply disappointing that, in a case of this kind, the defendant expressly refused to engage in mediation. In this context, prior to the service of the notice of trial, the plaintiff’s solicitors by later dated 14 October 2016 invited the defendant to engage in mediation. Reminders were sent on 17 October and on 4 November 2016. Subsequently, on 16 November 2016, the defendant’s solicitors wrote to say that: –
“Our client has instructed us that he will not engage in Mediation in relation to this matter.”
In my view, mediation is particularly appropriate in a dispute of this kind, since it provides an opportunity for members of a family to reach an amicable resolution of a dispute which, if it airs in court, will involve discussion of deeply private matters (including the private life of the deceased) in a starkly adversarial way.
14. Thereafter, the notice of trial was served. Sadly, this was a missed opportunity to explore whether these proceedings could be resolved on an amicable basis and to avoid the inevitable trauma and unhappiness that would be engendered by airing the grievances felt by both sides to this dispute in the course of an adversarial hearing. The opportunity was also lost to achieve a significant saving in costs.
15. For completeness, it should be noted that on the evening before the fifth day of the trial – namely on 26 June 2018 – an open offer was made by the defendant to settle the proceedings on certain terms which involved the transfer of some lands to the plaintiff over and above those devised to him under the terms of the deceased’s Will. However, that offer was severely criticised by counsel for the plaintiff. In particular, he drew attention to the way in which the offer was sent late in the day, at 4:07 p.m., and yet was only to remain open until close of business on the same day. He also drew attention to the way in which the offer referred to a 2009 Will which had never been discovered by the defendant and which was provided by means of a faxed copy, so that it was impossible to understand (without reference to colour copies of maps) what precisely were the terms of the offer. Counsel also severely criticised the terms of the offer under which it was stated that if the offer was not accepted before close of business on 25 June, there could be costs consequences.
The hearing
16. The hearing of these proceedings took place over the course of six days, namely 19 – 22 June and 27 – 28 June. It is regrettable that a family dispute of this kind could not be resolved out of court. On several occasions, I urged the parties during the course of the hearing to take steps to resolve this dispute amicably. I explained to the parties that I have to base my decision solely on the evidence which I have heard in court. Save to the extent of that evidence, I have no familiarity with any of their family history or the connection which they have with the lands (or any specific part of the lands) comprised in the family farm. I sought to explain that a negotiated settlement is a significantly preferable outcome to a finding imposed by the court. Regrettably, any finding imposed by the court is likely to give rise to ongoing bitterness and a deep sense of grievance on one side or the other.
17. Notwithstanding the observations made by me during the course of the hearing, the case proceeded. Sadly, the animus between the parties was palpable during the hearing. As noted earlier, it became clear that none of the members of the family are on speaking terms with the plaintiff save for his sister M. However, even she gave evidence against the plaintiff and it was clear from her demeanour in the witness box that, to some extent at least, she shared the animus against the plaintiff.
18. During the course of the hearing, I heard evidence from the following witnesses: –
(a) the plaintiff;
(b) the aunt of the parties (who I shall refer to as “the aunt”). The aunt was a sister of the late father of the parties. She gave evidence on behalf of the plaintiff;
(c) a retired mechanic who gave evidence on behalf of the plaintiff and who has known the family for 35 years. Although he was briefly cross-examined his evidence, was not, in substance, challenged. I will refer to this witness as “Mr. M.”.
(d) a retired nurse (who I shall refer to as “Ms. W”) also gave evidence on behalf of the plaintiff. She also knew the family for many years and in particular knew the deceased, her late husband and the uncle. While she was also cross-examined, her evidence was, again, not challenged in substance;
(e) the plaintiff’s wife (who I shall refer to as “Mrs. K.”);
(f) the defendant;
(g) M, the sister of the parties, M. gave evidence on behalf of the defendant.
(h) the fourth child and third daughter of the deceased who I shall refer to as “P”. She also gave evidence on behalf of the defendant
(i) The remaining brother also gave evidence on behalf of the defendant.
(j) The solicitor who was instructed by the deceased in relation to the preparation of her last will and testament. His firm also acted for the defendant in the administration of the estate of the deceased. The solicitor was called as a witness by the defendant on Day 5 of the hearing. Just before the solicitor was called I was informed that there were a number of additional testamentary documents that had not been discovered which included the 2009 Will mentioned in para. 15 above. In circumstances where these documents had not been discovered, counsel for the plaintiff objected strongly to their admission. No adequate explanation was proffered as to why these documents had not been discovered. In the circumstances, I took the view that it would plainly be unfair to admit them at such a late stage in the hearing in circumstances where the defendant had an obligation to make discovery of these documents and where there was a very clear failure to disclose the documents as part of the defendant’s discovery;
(k) A certified public accountant who was called as a witness by the defendant. She was the accountant for both the deceased and the family company which ran the family concrete business. She had acted as the accountant since 2009. She also assisted in providing figures in respect of some of the financial information contained in the Inland Revenue affidavit.
The evidence
19. Before addressing the claim of the plaintiff in relation to the alleged representations and the alleged testamentary contract, it may be helpful in the first instance to consider the overall history. It should be noted, at this point, that significant elements of the evidence of the plaintiff were not challenged by the defendant. For example, it was not challenged that at the date of death of the deceased, the plaintiff was 48, he was a hackney driver, his earnings at the date of death were about €20,000 after expenses and €16,000 after tax. He has no pension. He is married with two sons. At the time of the death of the deceased, both boys were still in school. One of them is now an apprentice mechanic earning about €300 per week and the younger son is still at school. At the date of the deceased’s’ death, the plaintiff’s wife was living at home, having given up her previous employment. At that date, the plaintiff had two hackney cars that were between 13 – 15 years old with a value of approximately €7,000 or €8,000. No formal valuation was provided in relation to this but the figures were not challenged. The principal asset owned by him at that time was the house in the local village which he said was valued at €225,000. (For completeness, it should be noted that in the course of the hearing it was agreed that the value of this house as at June 2018 was €300,000). The plaintiff also had about €3,000 in savings.
20. Insofar as his earnings were concerned, the plaintiff gave more definite evidence by reference to his tax returns for 2013 that his total income for that year was €21,099 and his total taxable income was €19,751. In the following year, his taxable income was €18,507. At the time of his mother’s death, his sole income was derived from the hackney car business.
21. There is no dispute that the plaintiff left school at fifteen. According to the plaintiff’s evidence, his father wanted him at home:
“To give him a hand to help him out on the land because there was debt there and it was getting out of control with him. I stayed at home . . . to farm and to help him keep the land . . .”
(As recorded in the transcript on Day 1 at p. 7, lines 5 – 9.)
22. At that time, the uncle was also alive. The plaintiff described his work as including: –
“All sorts of farming, like looking after the cows, calving the cows, lambing the ewes, making hay, dipping and dosing and all, everything in general to do with the stock”.
(Day 1 at pp. 7 – 8). The plaintiff also gave extensive evidence on Day 2 (at pp. 6 – 23 of the transcript) of the work undertaken by him on the farm. In summary, the work undertaken by the plaintiff was labour intensive and largely manual, involved long hours (often from 7.30 a.m. to 8.00 or 9.00 p.m.), extended to the care of cattle, sheep and horses, the cultivation of barley, oats and fodder beet, the making of hay and silage, the milking and calving of cows, the lambing and shearing of sheep, the breaking in of horses, and the buying and sale of farm animals at local marts. It is noteworthy that no equivalent evidence was given by either the defendant or the remaining brother of any work on the farm which came near to the level of work described by the plaintiff in his evidence on Day 2.
23. As noted above, it was alleged in the defence that the plaintiff showed little interest in farming and that he provided only minimal assistance with the farming activities of the family which was surpassed by his brothers’ contribution. It was also expressly alleged in the defence that the plaintiff commenced a haulage business at the age of nineteen and that he had little or no involvement with the farm thereafter. However, none of this was substantiated at the hearing.
24. Notwithstanding what was alleged in the statement of claim, the plaintiff, in his evidence, did not go so far as to say that he was forced to leave school at fifteen. The impression I have from his evidence is that he was quite happy to leave school at that stage. Furthermore, under cross-examination, the plaintiff acknowledged that both of his brothers also left school at the same age. However, it was not put to the plaintiff on cross-examination that the plaintiff showed little interest in farming or that he provided only minimal assistance, or that his assistance was surpassed by his brothers’ contributions. Nor was it put to him that from age nineteen onwards that he had little or no involvement with the farm. What was put to the plaintiff (on Day 2 at p. 67) was that both of the plaintiffs’ brothers worked long and hard hours on the farm. The plaintiffs’ response was that this was not true. The plaintiff explained (at p. 63 of the transcript on Day 2), that when the remaining brother left school, he worked at a local mill owned by a relation in a nearby town for two years. He then went away working cutting timber for a while, and he subsequently took over a pony – riding business from his sister M. The plaintiff acknowledged that the remaining brother bought a shearing machine and that he and his remaining brother sheared the sheep between them but that the remaining brother then hired out the shearing machine and undertook work on behalf of local farmers. The plaintiff acknowledged that the remaining brother did some work on the farm but he said this was not substantial. His evidence to this effect was not challenged further on cross-examination.
25. With regard to the defendant, the plaintiff said that when he left school, he went to work with a local farmer milking cows and he stayed there for two years. He then went to work for another farmer and he was being paid for this work. He then started up a contract fencing business ” with which he was gone most days “. (Day 2 at p. 66). The plaintiff also said that the remaining brother worked in this fencing business. While it was put to the plaintiff that the defendant also milked the cows on the family farm, the plaintiffs’ evidence in relation to the defendant’s involvement in the fencing business was not seriously challenged in cross-examination save that it was suggested that the defendant and the remaining brother were not fencing all the time.
26. The fact that the plaintiff was working extensively on the family farm from age fifteen was corroborated by the aunt who gave evidence that she was surprised that the plaintiff was allowed to remain in school until age fifteen and that the purpose of his leaving school was to work on the farm. She gave evidence that if she called over to the farm, both of her brothers (namely the plaintiff’s father and the uncle) and the plaintiff would always be out working on the farm as would two of the sisters. She also emphasised that, in those days, farm work was more labour intensive than today. In the early years, there was no silage. Hay had to be made, then had to be carried and long days had to be worked. She said that her brothers did not know Sunday from Monday, ” It was just work/work “.
27. The aunt gave evidence that both the defendant and the remaining brother also worked on the farm, but that the defendant also carried on a fencing business. She did not suggest that the work carried on by them came anywhere near that of the plaintiff.
28. The extent of the work undertaken by the plaintiff on the farm was also corroborated to some extent by Mr. M. who visited the farm from time to time principally to obtain advice from the plaintiff’s father in relation to the care of his horses. His evidence was that the plaintiff was the ” person there ” (meaning the person on the farm). He did not see the defendant or the remaining brother at work on the farm but he saw the plaintiff at work – in particular breaking horses. It has to be said that his evidence on this issue was quite limited and he was not challenged on it on cross-examination. Nonetheless, it does provide some corroboration for the plaintiff’s evidence which, as noted above, has already been corroborated significantly by the evidence given by the plaintiff’s aunt.
29. The plaintiff’s evidence in relation to the work done by him on the farm was also corroborated by Mrs. W, who gave evidence that she and her husband (who farmed lands within a few kilometres of the family farm) regularly obtained assistance from the plaintiffs’ father, uncle and the plaintiff. Mrs. W. gave evidence that she accompanied her late husband to the family farm and that on visits to the farm the plaintiff was always there working on the farm. However, Mrs. W. could only give evidence in relation to the period up to 1996 when the father of the plaintiff died. Thereafter her visits to the farm more or less ceased. However, the period subsequent to 1996 is dealt with in the evidence given by the plaintiff’s wife. She married the plaintiff in September 1994. She gave very clear evidence (on Day 3 at p. 75) that the plaintiff worked extensively on the farm. She stressed that this was not a nine to five job. There were long hours. The plaintiff was required to work for however long he was needed. There were sheep, horses and cattle on the lands at that time. She explained that the father and uncle and the plaintiff all worked on the farm. She had no knowledge of the work undertaken by the defendant or the remaining brother. She also described that the plaintiff had a very close relationship with his father and the uncle. This evidence was not challenged on cross-examination.
30. When the defendant came to give evidence, he confirmed that when he left school at fifteen, he went to work for a local farmer and that subsequently in 1994, he started a fencing business which took up on average about two days a week. In relation to the work undertaken by him on the farm, his evidence was that: – ” I helped out, anything we were asked to do we done it. ” (Day 3 p. 135). When asked how many hours a week he worked on the farm, he said that it would: – ” Be hard to say . . . ” (Day 3 p. 140). In relation to the work undertaken by the plaintiff, the defendant sought to give evidence that it was not correct to say that the plaintiff had undertaken the bulk of the work on the farm in the early days and that in fact it was his father and the remaining brother who principally carried out the work. However, objection was taken to that evidence by the defendant in circumstances where this was never put to the plaintiff on cross-examination. This was against a background where previously, at the end of Day 2 of the hearing, I indicated the importance of putting to the plaintiff on cross-examination the evidence that was proposed to be given on behalf of the defendant. The cross-examination of the plaintiff continued into Day 3 and there was therefore every opportunity for the defendant and his witnesses to ensure that all relevant material was made available to the defendant’s counsel for the purposes of the continued cross-examination so that anything material could be put to the plaintiff. In light of the above objection made by counsel for the plaintiff, counsel for the defendant did not pursue this line of evidence with the defendant on Day 3.
31. When the plaintiff’s sister M. came to give evidence (on behalf of the defendant) she said that all of the members of the family ” did their bit ” but she also gave evidence (consistent with the evidence given on behalf of the plaintiff) in relation to the work done by the plaintiff. She said (Day 4 at p. 97): –
“[The plaintiff] would have been feeding the cattle, there was cows calving. He would have had to put fodder in; scrap the yard; bed down the shed; moving sheep, anything that had to be done that way, he would have done it. Brought cattle to the mart or, you know, to the factories. The same with sheep.”
32. M. did, however, make clear that, in her view, the plaintiff stopped going to school because this is what he wanted. She said that he had the option, (had he wished to do so) to remain on in school. She also said that there were farmhands employed on the farm but, importantly, she also said that once the plaintiff left school, he took over from the farmhands. This strongly reinforces the conclusion that the work undertaken by the plaintiff was substantial. She said (Day 4 at p. 100): –
“And when [the plaintiff] comes of age that he was able to handle the tractor, yes, he drove the tractor. He did the jobs, putting in bales, more efficient and stuff like that. But there were lads there to do work up until the time when they weren’t – my parents weren’t – able to afford really anybody and [the plaintiff] was there because he had left school and he was able to do work like that”.
33. On the other hand, she confirmed that both the defendant and the remaining brother also did some work on the farm. She said that the plaintiff was there: –
“but yet the boys would have done a fair bit as well. You couldn’t really say one did really over the other.”
34. M. also gave evidence that, in contrast to the plaintiff, neither the defendant nor the remaining brother were allowed to leave school until they had secured work for themselves elsewhere. This seems to me to further corroborate the evidence given on behalf of the plaintiff that the plaintiff was the person principally involved in work on the family farm. If the defendant and the remaining brother had to work elsewhere, it follows that they were not available to work on the farm to the same extent as the plaintiff.
35. Having regard to the evidence which I heard in relation to this issue, it appears to me to be clear that in the period up to the death of the plaintiff’s father in 1996, the plaintiff was working extensively on the family farm and had been doing so since leaving school at age fifteen. There is no evidence before the court to substantiate the contention made in the defence that the plaintiffs contribution was less than that of the defendant and his remaining brother or that he provided only minimal assistance at the farm which was surpassed by the contribution made by his brothers. I accept fully that both the defendant and the remaining brother did work on the farm also, but on the basis of the evidence before the court, I find as a fact that the plaintiff’s contribution in the period up to his father’s death was significantly more extensive than that of his brothers and moreover, subject to the haulage business described below, was the plaintiff’s sole source of income.
36. Insofar as the haulage business of the plaintiff is concerned, his evidence was that he had a livestock truck which he used to do a few runs every week to the local marts and that it was ” just pocket money more so than anything ” (Day 1, p. 23) His evidence was that the truck was principally used on the family farm but that he also used to do a few ” runs ” with it to local marts on behalf of other farmers and that he might get something of the order of €100 – €200 per week when carrying out such runs. Such work did not, however, arise on a consistent basis. It arose on a relatively piecemeal basis. This commenced in 1985. On Day 3, p. 19 it was put to the plaintiff on cross-examination that the defendant would say that the plaintiff was largely involved in the haulage business and not the farming business but his answer was that he never took out a haulage license and that it was: – ” just a bit of local livestock is all I was doing “. This line of cross-examination was not thereafter pursued. Moreover, when the defendant came to give evidence, he did not say that the plaintiff was more involved in his haulage business than with the farm. The plaintiff’s commitment to haulage work outside the farm was also dealt with by the remaining brother (who I shall refer to hereafter as “J”) when he came to give evidence. On Day 4 at p. 148, he said that on some days the plaintiff would be ” away on the lorry and whoever was there would have to fill in “. I understood the reference to ” whoever was there ” was a reference to himself or to the defendant. On the same page, J. also said that ” the lorry job could go on for a couple of days at a time. ” This evidence was given in the context of questions put to him by the defendant’s counsel as to whether there was any difference in workload between J., the plaintiff and the defendant. The clear impression which I am left with, as a consequence of this evidence, is that while there were days when the plaintiff’s involvement in the haulage business would mean that the plaintiff was not present on the farm (or at least not present for a full day) he was otherwise present on the farm and it is noteworthy that J. did not give evidence (in answer to the question put to him at p. 148 on Day 4) to support the contention made in the defence that the plaintiff was more concerned with the haulage business than the farming business. On the contrary, the evidence given by J. is, in fact consistent with the evidence given by the plaintiff (as summarised above) to the effect that the haulage work undertaken by him arose essentially from time to time. It was by no means a consistent or regular activity.
37. As noted above, the plaintiffs’ father died in 1996. By that time, the uncle had also died. Following her husbands’ death, the deceased was clearly very concerned about the level of bank debt which had accrued which was partly attributable to the acquisition of land during the lifetime of her husband and her brother in law. Based on the evidence which I have heard, it appears that the deceased was determined to find an additional source of income and that, as a consequence, she decided to exploit a sandpit on the family farm. According to the plaintiff, the family started the sandpit in 1997/1998. From then on, a significant part of the plaintiff’s work was concerned with delivering material from the sandpit business. In order to facilitate this new business, the flock of sheep on the farm was sold but cattle were still kept on the farm. The plaintiff gave evidence (on Day 2 at p. 24) that between his work arising from the exploitation of the sandpit and the farming, he was working seven days a week, about 70 hours a week with very little in the way of holidays. He said that there was still a lot of farm work with 87 cows – especially when they calved. The plaintiff maintained (at p. 27 on the same day) that on some part of every day, right up to the year 2007 he worked on the farm (on some days going to the mart) and that the farm work continued notwithstanding the sale of the sheep. He explained (at p. 29 on Day 2) that herding of cattle had to be undertaken at least once a day and on Sundays twice a day.
38. Insofar as the sandpit business is concerned, the plaintiffs’ evidence was that he was ” one of the founder members of all that business. . . I bought the first lorry and trailer . . . to start that sandpit. I signed for a 01 Hyno Ready Mix truck. I was the foundation of that business ” (Day 2 at p. 30). He also says that he was instrumental in dealing with the requirements under the Planning and Development Act 2000 in respect of existing sandpits and quarries. The relevant provisions of that Act in relation to this issue became operative on 28 April 2004 and the Act required that the quarry had to be registered within one year from the coming in to effect of the section. He also said that he was involved in the purchase of vehicles (including a truck and a semi-trailer) for this new business. His evidence was that the loan was taken out in his own name but that his mother, the deceased, provided a guarantee. This evidence was given against the background where, as noted above, the defendant contended in his defence that the sand and gravel business had been commenced by the deceased together with the defendant and J. and that the plaintiff merely worked as an employee in the business.
39. The plaintiff also gave evidence that he was involved in insuring the fleet of trucks used by the business. By this time, a company had been incorporated by the deceased for the running of that business. In this judgment, I will refer to this company as ” the company “.
40. The plaintiff fully accepted that each of his brothers also played a full part in the business. The plaintiff’s evidence was that when the sandpit business commenced, the fencing business previously carried on by the defendant came to an end. During this time, the plaintiff was paid out of the business €450 per week. In addition, the company paid €120 per week towards his mortgage until that was discharged (with the assistance of a final payment of €10,000 by the deceased) in 2004. From 2004 onwards, the plaintiff says that he was paid €650. That appears to have been the gross payment as the records produced to the court during the hearing would suggest that the plaintiff received €512 per week into his hand.
41. Under cross-examination, the plaintiff’s evidence was that each of the brothers were paid roughly the same. On Day 2 at p. 80 he said (and he was not challenged on this): – ” We were all on the same standing in the business “.
42. The plaintiff’s evidence was that, during this period, he was doing well financially, such that his wife (who previously had taken a five-year career break from her job with the Eastern Health Board) decided not to go back to work. The plaintiff’s explanation for this was (Day 2 at p. 90 – 91): –
“And when the two lads – when the second arrived, I was going from morning until night and I didn’t have much time, it was from bed to work, and the childminder that was minding the oldest fella, sometimes I used to be late picking him up and stuff, so when the five years – stayed at home for the five years then it was a decision time then whether she’d have to give up her job or go back to work. . . so we decided we were financially OK at the time . . . in 2004”
43. The evidence given by the plaintiff’s wife corroborated the evidence set out at paras. 37-42 above. She stressed that even after the sand and gravel business started, the plaintiff continued to carry on his work on the family farm. On Day 3 at p. 81 she explained that he still farmed. She said that there was still nearly as much work to be done as before. Both the cattle and the land required looking after. It was necessary to make silage and hay and to fertilise the ground and to assist with calving of cows.
44. The plaintiff’s wife also confirmed in her evidence that, insofar as she could see, each of the brothers had as much a role in the sand and gravel / concrete business as each other. She explained that it was very hard at home because the plaintiff was at work most of the time. It should be noted that the plaintiff’s wife also said that the first time she ever heard of any allegation that the plaintiff lacked interest in farming or that the plaintiff was involved in intimidating the deceased, or that the plaintiff was no more than an employee in the business, was when the present proceedings were brought. This is clear from her evidence on p. 107 on Day 3. None of this evidence was challenged on cross-examination.
45. The defendant, in his evidence, explained that in order to set up the sand and gravel business, the plaintiff sold the cattle lorry (previously used for haulage) and bought a truck and the plaintiff got finance for a trailer and that is how the business started. (Day 3 pp. 154 – 155) Thereafter, it appears from the defendant’s evidence at p. 155 on Day 3 that the business (and subsequently the company when it was established) purchased any further equipment. At p. 158 on the same day, the defendant confirmed that each of the brothers were paid the same. This appears to me to be inherently inconsistent with the case made by the defendant in his defence that the plaintiff was merely an employee of this business. It is clear from the defendant’s own evidence that the plaintiff played a key part in the establishment of the business. Furthermore, the fact that each of the brothers was paid the same wage strongly suggests an equality of interest in the business.
46. The defendant described that his mother was in charge of the finances for the business. The defendant confirmed that there were no management meetings of any kind. He also confirmed (Day 4 at p. 11) that the plaintiff drove a tipper truck as part of his work for the business and he would draw stone and sand and gravel and deliver it to builders and farmers. When asked who directed operations, the defendant (again at p. 11 on Day 4) answered as follows: –
“Well, the way it was with it at that particular time, [J.] was married and he was living [away from the home farm] and I was the one that was living at home. So in the morning I was there first naturally. So when the workers came in, the boys came in to drive lorries, I was dealing with them, and sure when everyone finished up whatever they were doing and they went home, I was still there. So I was dealing with them first and last”.
47. Over time, it appears that the defendant gradually acquired a greater role and say in the running of the business. It is also clear that a tension developed between the plaintiff and the defendant in relation to the way in which the sand and gravel / concrete business was operated. It appears to be clear from the evidence given by the defendant (as quoted in para. 46 above) that, although the deceased took charge of finances, it was the defendant who became de facto manager of the business. This is confirmed by the evidence given by J. on Day 4 at p. 155. However, it is clear from the evidence described in para. 45 above that the plaintiff played a key role in the establishment of the business. It is also clear from the evidence of the plaintiff and his wife that the plaintiff continued to work in the business right up to the events of 2007 (described below). As noted in para. 8 above, in the defence of the defendant, it is specifically alleged that the plaintiff’s contribution to the business ” although tolerated for several years, was erratic and disruptive “. This was strenuously denied by the plaintiff, who says that the first time he heard this allegation was when he saw the defence delivered in these proceedings. The only evidence that was given to substantiate the allegation in the defence was the following: –
(a) The defendant gave evidence on Day 4 at p. 12 that the plaintiff did not return delivery dockets to the office on the day of deliveries but did so on the following morning. The defendant also said that no-one really knew what time he started and what time he finished but he said that ” that was never a problem, no-one questioned it “;
(b) The defendant also sought to give evidence that the plaintiff had only come into the office once every three or four days ” with a ball of dockets and just fire them at the women in the office “. However, counsel for the plaintiff objected to this evidence on the basis that it had not been put to the plaintiff on cross-examination. In response to the plaintiffs’ objection, I reminded counsel for the defendant that I had drawn attention at the end of Day 2, to the necessity to put matters of this kind to the plaintiff in the course of the cross-examination. Counsel for the defendant did not demur and therefore this line of evidence was not continued. No submission was made that the plaintiff might be recalled to deal with this issue. For completeness, I should record that, in my view, it is a matter of basic fairness to a witness that if an allegation of this kind is to be made in the course of evidence on behalf of the defendant, it is essential that it should be put to the plaintiff so that the plaintiff has an opportunity to address it and respond to it in the course of his own evidence. I also reiterate that there was an adequate opportunity between the end of the hearing on Day 2 and the resumption of the cross-examination of the plaintiff on Day 3 for the defendant and his witnesses to provide the defendant’s legal team with any specific examples of alleged bad behaviour by the plaintiff so that they could be addressed in the course of the resumed cross-examination of the plaintiff on Day 3.
(c) When the parties’ sister, P., came to give evidence, she explained the difficulty that arose for her when delivery dockets were not returned by the plaintiff on the day of delivery. She said that she needed the delivery dockets before the business opened the next morning after delivery. In circumstances where customers came to pay bills, there would be a problem for her if the delivery docket was not available. She needed the docket in order to confirm the amount that was owed by the customer. I should explain that P. worked in the office of the company. She explained that, as a result, the company did not look ” professional as a business “.
(d) It is also alleged in the defence that the plaintiff retained the company phone and did not answer it with the result that customers turned to other suppliers. There was, in fact, no evidence given at the hearing by any witness that customers turned to other suppliers. The plaintiff, in his evidence, said that he only had one phone which he used for the business and his private use as well. Nothing definite was put to the plaintiff on cross-examination in relation to this issue. It was suggested that the deceased had an issue with the plaintiff in relation to a phone, but the nature of the ” issue ” was never identified in the course of the cross- examination of the plaintiff. On Day 4 at p. 11 the defendant was asked by his own counsel whether he had any role in relation to the ” issue ” with regard to the mobile phone, but he gave no evidence, in response to this question, about the plaintiff’s use of the phone. However, when P. came to give her evidence, she was cross- examined by counsel for the plaintiff in relation to the phone and she said that there were two phones. P. said that when the plaintiff went away to play music at weekends, the deceased bought another phone which the plaintiff was to use during the week for his calls, and then to leave it in the office at weekends if he was not going to be at home because the deceased wanted to ensure that the phones were always answered. However, P. did not explain what was the problem with the phones and no evidence was in fact given about any impact arising from the phone ” issue ” on the business of the company.
(e) P., under cross-examination, also referred to ” difficulties with the other members of staff ” but no evidence was given of what these difficulties were, and, in those circumstances, I am left without any real evidence as to what difficulties might have existed. Notwithstanding that the cross-examination of P. would have permitted a re-examination of P. on this issue, no attempt was made to re-examine P. by reference to the evidence which she had given under cross-examination. I therefore have no sufficient evidence about these alleged difficulties.
48. Subject to what I say below, the evidence falls far short of establishing that the plaintiff was guilty of conduct that amounted to disruption of the sand and gravel and concrete business. There was, however, evidence of an altercation (which I describe below) between the plaintiff and the defendant. There is also some evidence (which is strenuously denied by the plaintiff) that the plaintiff shouted at his mother, the deceased. In the defence it was alleged that the plaintiff became irate with the deceased following his discovery that she sold certain land without consulting him. It is alleged that he roared and verbally abused the deceased, placing her in fear for her safety and that he then departed ” in fury “. In the course of his direct examination, the plaintiff gave evidence that this never happened; that he was in fact delighted that the deceased had sold this land and he said that he ” most certainly ” never shouted at his mother. Under cross-examination, what was put to him was that in July 2006 the deceased had taken him to task about the mobile phone and the dockets, and the plaintiff lost his temper and stood over his mother and shouted at her. The plaintiff’s response was that this was not true.
49. Under cross-examination it was also put to the plaintiff that he lost his temper with the deceased over the decision to sell the lands. It was put to him that this occurred in the office in the presence of the defendant and that the plaintiff was abusive towards his mother and that he stood over her shouting at her. It was also put to him that he stormed outside into the yard and, to prevent him from coming back into the office, the defendant physically restrained him. The plaintiff responded by saying that none of this was true and he reiterated that he was in fact delighted that the field in question had been sold.
50. It was also put to the plaintiff in very general terms that from 2007 onwards the plaintiff ” on occasion sought to intimidate the deceased ” and that there was ” acrimony ” between the plaintiff and the deceased. Both of these general accusations were denied by the plaintiff in his evidence and nothing concrete was put to him in respect of either of these allegations. In the course of the cross-examination of the plaintiff, it was suggested that J. would give evidence regarding an incident relating to the use of a motorbike in a field, which it was suggested intimidated the deceased. Again, this was denied by the plaintiff. He said that his elder son had a scrambler motorbike on which his son went over the fields and the plaintiff used to open the gates to give him a spin from one field to the other. But he said there was no issue about it. Subsequently, when J. came to give evidence, there was no mention of a motorbike. I therefore do not believe that there is any evidence to support the general allegation that the plaintiff sought on occasion to intimidate the deceased. For completeness, I should mention at this point evidence heard by me on a de bene esse basis from P. in relation to an incident which she recounted between her mother and herself relating to the plaintiff’s conduct. Essentially, P. sought to give evidence as to what the deceased had said to her about the plaintiff. This was heard by me de bene esse on the express basis advanced by counsel for the defendant that submissions would subsequently be made to me as to the admissibility of this evidence. Ultimately, when it came to the closing submissions, I was informed that in fact I would not be addressed on this issue. In the circumstances, I do not propose to recount in this judgment the evidence given by P. on this issue. For the purposes of this judgment, I must proceed as though that evidence had never been given.
51. Subsequently, the defendant gave evidence in relation to what I might describe as the alleged incident of shouting by the plaintiff at the deceased over the sale of part of the farm by the deceased (as described in para. 48 above). This was dealt with by the defendant in his evidence in chief on Day 4, pp. 13 – 15. Although not all of the detail of this evidence had been put to the plaintiff, I took the view that the thrust of the evidence had been put to him. However, it is noteworthy that, contrary to what had been put to the plaintiff, namely that this altercation took place in the office, the defendant’s evidence was that the altercation had taken place in the kitchen of the house in which the deceased and the defendant resided. In fact, this is where the plaintiff said the conversation about the sale of the land had taken place. It was put to the plaintiff on Day 3, p.18 at Q 52 that the defendant’s evidence would be that all three were together in the office. The plaintiff’s was ” No, we were actually in the house “. However, notwithstanding his evidence to that effect, it was again put to him at Q 54 that the conversation took place in the office. The question put to him was: ” That this took place in the office, [the defendant] will say, not at the home. ”
52. Yet, when the defendant himself came to give evidence, notwithstanding the line of cross-examination of the plaintiff (presumably done at his instruction) as described in para. 51 above, the defendant gave evidence that the incident in fact happened in the kitchen. The defendant alleges that the plaintiff came into the kitchen in a rage, complaining that he had not been told about the land being sold. The defendant says that he went out to the yard and got the key of the lorry that the plaintiff had driven to the family home and he continued as follows: –
“And I brought it in and I left it on the table, to try and explain to him that if this hadn’t have happened, we were in serious financial trouble, we were gone, if we hadn’t have got to sell that land, but when I returned into the kitchen he was roaring and screaming at her. He was standing over her. She was sitting in an armchair in the corner of the kitchen, ‘that she had no right to sell the land. Who did she think she was?'”
53. The defendant said that he remonstrated with the plaintiff and that the plaintiff then went out into the yard where he took the key out of the pick-up that the defendant intended to drive. As the plaintiff was heading back towards the house, the defendant says that he went out after him to prevent him doing so, following which
“we had a bit of a tussle in the yard. I got the key of the pick-up back off him, and he left, he left the yard.”
54. There was certainly a tussle between the plaintiff and the defendant which occurred in July 2007. However, the plaintiff’s account of the incident has nothing to do with the conversation (if the plaintiff’s version of events is true) or the altercation (if the defendants’ version of events is true) that took place with his mother in relation to the sale of the lands. According to the plaintiff in his evidence in chief (Day 2 at. P. 42) he was assaulted by the defendant in the yard in front of the office in July 2007. He also says that he made a complaint to the local Gardai. He expanded on this under cross-examination (also on Day 2 at pp. 91 – 93). He said that on 23 July 2007 at about noon, he drove the lorry into the yard. As he was filling it with diesel, the next thing that happened was that the defendant: –
“came storming up from the house, pulled the keys out of the lorry, and he says to me, he says, ‘I have enough of you’ he says to me like that. With that, I filled the lorry, I went on down to the house and he got very erratic towards me over that he was the boss and he didn’t want – he didn’t like – he wasn’t getting on with me as such, right. . . .
But what happened then was I went into the house and I said to him, I said ‘. . . what did you take the key out of the lorry for? What’s going on, you know? Well he says ‘I have enough of you’, he says like that. And I went outside anyway and there was a red pick-up outside the door which was used for the concrete and it was used for the farm . . . so I took the keys out of the pick-up and I said ‘I am going’ says I, ‘you can’t do that on me’, I said like that ‘that’s not fair you know’. So with that anyway he jumped on me in the yard and got me down in front of the office. And my brother -in -law was there as well standing in the yard watching. And he got me down anyway and he put his knee on my face. I got up after a few minutes anyway and I went to the back door of the house and I got some tissue and my mother says, she says ‘that’s a terrible carry on’, she says like that. And with that I rang [my wife] and she came out for me and I went home.”
55. The plaintiff says that he discussed the matter with his wife and he went down to the local Garda sergeant to make a statement in relation to the incident as he was ” afraid of what was going to happen next “. He explained that on the following morning he had a spare key of the lorry and he went back out, started up the lorry and worked away as usual.
56. Unfortunately, there is a direct conflict between the evidence of the plaintiff on the one hand and the defendant on the other as to the circumstances in which the incident occurred. I therefore have to decide which version of events is correct. I have come to the conclusion that the plaintiff’s evidence in relation to the incident is more credible. He was able to provide significant detail in relation to what occurred. Furthermore, he provided this detail in answer to questions put to him while under cross-examination. He was not led in his evidence in any way. In contrast, the explanation given by the defendant for walking out of the house and taking the key out of the lorry is difficult to credit. There was no need to take the key out of the lorry to explain to the plaintiff that if the sale of the land had not gone through, the family business was in serious financial trouble. Furthermore, there is the inconsistency between the evidence given by the defendant as to where the discussion in relation to the sale of the lands occurred as between the evidence given by him on the one hand (where he said the discussion took place in the kitchen) and what he must earlier have told his counsel for the purposes of the cross- examination of the plaintiff (when it was put to the plaintiff that the defendant’s evidence would be that the interaction occurred in the office). It also has to be said that, on an overall basis, I found the plaintiff to be a more forthright witness than the defendant. For example, under cross-examination, the plaintiff was willing to make concessions and he did not prevaricate in his evidence. In contrast, the defendant was unable or unwilling to explain, for instance, why he had given instructions to his solicitors to refuse to provide a copy of the Will. When he was pursued on this issue in cross-examination his ultimate – and I have to say, unconvincing – answer was that he could not remember why the Will or the full copy of the Inland Revenue affidavit had not been furnished to the plaintiff’s solicitor, notwithstanding the requests which had been made for copies of these documents which, in my view, ought to have been provided. I do not understand how there could be any proper basis to refuse to provide copies of these documents to a person in the plaintiff’s position who had commenced proceedings of this kind. I do not accept that the defendant’s explanation that he could not recall why the copy Will was not provided. It seems to me to be probable that the refusal was in fact fuelled by the animus which the defendant harbours against the plaintiff. The defendant was also unable to answer questions as to the inquiries made by him in relation to certain assets which, according to the Inland Revenue affidavit, had passed by survivorship to some of his siblings.
57. It is clear that the incident in the yard was the event which ultimately led the deceased to exclude the plaintiff from the family farm and from the sand and gravel / concrete business. In this context, it will be recalled that in the defence delivered on behalf of the defendant it is expressly alleged that the plaintiff left voluntarily. However, no evidence to that effect was offered at the trial. It is quite clear from the evidence given at the trial that a decision was taken by the deceased that the plaintiff’s involvement in the business should cease. While there is a dispute on the evidence (which I deal with further below) as to whether any representation was made by the deceased at this time to the plaintiff that he would inherit lands, there is no dispute on the evidence that the deceased and M. called to the home of the plaintiff on the Bank Holiday Monday in early August 2007. According to the plaintiff (Day 1, p. 36) the deceased came in to his house with M. and said that she wanted to see the plaintiff and his wife. According to the plaintiff she said: –
“[the defendant] and yourself are not getting on together. You’ll have to go and do something else”.
58. The plaintiff said (Day 2 at p. 43) that he was: –
“devastated with what she said to me, I never expected that she would do that . . . She said, [the defendant] can’t get on with you and she says, he wants you out of it. . . . And I said to her . . . can I not keep the farm, and can I not do the farming and let him work away in the business? No, she says, I’m keeping all the land until after my time, which . . . we knew that all the time.”
59. In substance, that evidence is entirely consistent with the evidence both of the plaintiff’s wife and of M. Insofar as the plaintiff’s wife is concerned, she was asked under cross-examination about the visit by the deceased and M. in August 2007. She said (Day 3 at pp. 114 – 115): –
“I wasn’t there for the whole conversation because when she came in we sat down the four of us in the kitchen, the back door was open, and the children were out, it was a Bank Holiday Monday. The first sentence she said was P. and yourself are not getting on and I think you need to go and do something else. So when she said that I was in shock, P. was in shock. . .. I said this conversation should be in [the deceased’s home] not in my kitchen, and I walked out the back door and they were still talking and M. will verify that.”
60. The plaintiff’s wife also confirmed that the plaintiff said to his mother that he wanted to farm the land, and her response was that she was keeping the land ” until after her time “.
61. When M. came to give evidence, the essential facts as described by her are the same. She explained that she received a telephone call from her mother who said: – ” I’m having a problem with the lads . . . I want to talk to [the plaintiff] ” (Day 4, p.108). M. described going into the kitchen where the plaintiff’s wife put on the kettle and then the deceased said to the plaintiff that she could not have them fighting; that she needed to do something; that she wanted him to leave the business. At that point, M. said that the plaintiff’s wife turned around to the deceased and said: – ” how dare you bring your business into my house “, following which she left the kitchen. M. then continued as follows: –
“My mother continued on to say to [the plaintiff] that she couldn’t have: ‘you fighting among the other employees’, and she couldn’t deal with it. So she asked [the plaintiff] to leave and go and get something else. To try and do something else. [The plaintiff] said that he knew nothing else, that he had farming. My mother said: ‘. . . there’s no money in farming. You may go and find something else to do'”.
62. M. said that the deceased then said that she would offer to think about it and see was there anything else that he could do – or have an interest in – that would help him make a living. She said that she would help him and back him financially in anything he wanted to do. M. also confirmed that the plaintiff said that all he knew was farming, and that farming was what he wanted to do. She also expressed the view that she thought this decision of the deceased was ” pounced ” on the plaintiff.
63. It is therefore very clear that the departure of the plaintiff from the family business was a forced departure. Given the plaintiff’s stage in life, it was quite clearly a momentous decision to have made to force him from participation in the family farm and family business. There was considerable debate in the course of the trial as to why the deceased was motivated to take such a decision. On the basis of the evidence heard at the trial, it is impossible to accept that the deceased decided to terminate the plaintiff’s participation in the family business (including the farming business which he so evidently loved) purely on the basis of the ” issue ” with the phone or the delivery dockets or even on the basis that the plaintiff occasionally shouted at his mother. While the evidence in relation to shouting incidents is in fact quite thin, I do not exclude the possibility that the plaintiff may have shouted at his mother from time to time. However, none of that sufficiently explains why the deceased would take such a harsh decision to exclude a member of the family from the family business in which he had participated since he left school at age fifteen, particularly in circumstances where he had no experience of any other business, had no qualifications of any kind, and had a wife (who was no longer working) and two children of school-going age. It is noteworthy that none of the witnesses present at the meeting on the Bank Holiday Monday gave evidence that the deceased said anything about the phone or the delivery dockets or even that the plaintiff had been rude to her or had shouted at her. The stated reason was the antipathy between the plaintiff and his brother, the defendant. It is also noteworthy that the meeting took place very soon after the “tussle” which I have described above. In my view, it is likely that this “tussle” was the proverbial straw that broke the camel’s back. It seems to me to be clear that there was a very serious underlying and pre-existing family rift and it is this rift which led to the antipathy between the plaintiff and the defendant and ultimately to the tussle. It is true that, notwithstanding this rift, the deceased did offer at the meeting on the August Bank Holiday weekend to provide some financial assistance to the plaintiff in setting up some new business or launching some new career (a difficult thing to achieve at his age without any qualifications or experience). However, it subsequently transpired that very little was in fact offered by the deceased by way of financial support following his departure from the business. His evidence was that his mother continued to pay him €521 net per week from the business up to Christmas 2007 and that she also gave him a gift of €6,000 sometime after that. Thereafter, the plaintiff was left to fend for himself. At this point, it should be noted that there was no evidence at the hearing to support the contention made in the defence (as summarised in para. 8(k) above) that the plaintiff had refused the offer of support from his mother. On the contrary, the evidence was that such an offer was made; there is no evidence that any assistance was refused by the plaintiff – but the only financial support that was actually forthcoming from the deceased was as set out above.
64. In light of the considerations outlined above, I do not believe that there is any basis on which to form the view that the plaintiff’s participation in the family farm and family business was terminated on the basis of any ” issue ” with the phone or the delivery dockets or on the basis that the plaintiff shouted at his mother. On the contrary, it seems to me that there must have been some other reason underpinning the deceased’s decision to terminate the plaintiffs’ involvement in the family business. Based on the evidence of all of the witnesses who were present at the meeting which took place in the plaintiff’s kitchen on the August Bank Holiday Monday in 2007, it seems to me that the underlying reason was the antipathy which clearly existed between the plaintiff and the defendant. This is evident from what was said by the deceased in the course of that meeting. It is also evident from the comment made by the deceased to M. prior to the meeting (quoted in para. 61 above). It seems likely that the incident in the yard (described in paras. 53 to. 55 above) was what brought things to a head. In my view, it is clear that the deceased must herself have shared some of the antipathy towards the plaintiff. It is difficult to understand how a parent would have taken the course which she did unless she was motivated by some element of animosity towards him. The payment of €6,000 fell well short of any real compensation for taking such a devastating step against him. In these circumstances, it seems to me that one must look elsewhere for an understanding of what caused this antipathy and motivated the deceased to cut the plaintiff off in this way. In my view, the answer is to be found in the evidence given by the plaintiff, his wife and his aunt relating to earlier litigation between the deceased and a relation of the family who claimed adverse possession over part of the family farm. The evidence given on the plaintiff’s side was that following this litigation, there was a tangible cooling of relations with the deceased and the defendant and that the deceased was, in particular, ” furious ” that the plaintiffs’ father in law had given evidence on behalf of the relation claiming adverse possession.
65. There were in fact two disputes in which the plaintiff’s in-laws were involved as adversaries against the deceased. The first of these disputes involved a claimed right of way over a laneway which arose in 1998 or 1999 between the deceased and a half-brother of the plaintiff’s wife who lived in a house adjoining the laneway. There is very little in the evidence by way of detail in relation to this dispute. According to the evidence given by the plaintiff’s wife, this dispute created an atmosphere between the deceased and her family and the plaintiff’s wife’s family (including the plaintiff and his wife themselves). According to the plaintiff’s wife there was ” strain ” but that ” it wasn’t as severe as the next dispute “. (Day 3 at p. 91).
66. However, subsequently, in 2001 and 2002, there was litigation in the local Circuit Court (and subsequently in the High Court on appeal) relating to a small part of the family farm (adjoining the neighbouring village) between the deceased and a relation of the family. The plaintiff’s father in law gave evidence on behalf of the relation who succeeded in his adverse possession claim (which I understand was advanced by way of counter claim in response to a claim brought against him by the deceased). According to the plaintiff, this caused a rift between his wife’s family (extending also to himself) and his own family in that he ” got caught in the crossfire with the whole saga ” (Day 1, p. 43). The plaintiff said that while he had no problem with the deceased, there was tension between the two families which led to himself and his wife being ” shunned ” by the rest of his family. His evidence was that this drove a ” wedge in between my mother and myself over time after that ” (Day 1, p. 44).
67. This was confirmed by the plaintiffs’ wife in her evidence who said on Day 3 at p. 96 that there were a few occasions after the litigation in 2001 / 2002 when she went out to the family home and sensed that she was not welcome. For example, she described the kitchen falling silent when she entered.
68. In addition, the plaintiff gave evidence (and this was not challenged) that the defendant showed particular antipathy towards the plaintiff’s family following this litigation. His evidence was quite graphic. In order to maintain anonymity, I will refer for this purpose to the plaintiff’s in-laws as “the Murphy’s”. The plaintiff’s evidence was (Day 2 at p. 148): –
“It’s because what my wife’s father did when he went against – we were often in the house in [the family farmhouse] and a dispute would start and [the defendant] would say ‘you’re not going to leave the land to those half – Murphy bastards’. That happened. We heard that several times, so we did. And this was the cause of the whole problem. We wouldn’t be here today only for this”.
69. Both the defendant and the other members of the family called to give evidence on his behalf denied that their mother was furious over this court case but I have reached the conclusion that the court case did cause significant resentment on the part of the deceased and the other members of the family. This is borne out by the evidence given by the aunt (who also gave evidence on behalf of the relation in the adverse possession proceedings). In the course of her direct examination, the aunt was asked about the reaction of the deceased to the outcome of the litigation. Her evidence (Day 3 at p.40) was as follows: –
“Oh, she was furious. I mean, she was furious. The way I looked at it, you know, in these things there is no great winners in them. What took me worse was that my sister was there in a wheelchair. She had broken her leg and she had to be helped up on to the stand and helped down to the toilet. I was taking her down and all my nephews were standing around there and only a guard came over to help me. I had no-one to take her. They were not allowed – [the deceased] was there with them and they just didn’t – we were ignored and we were ignored for the last twenty years, which is very sad.”
70. There was nothing put to the aunt on cross-examination which undermined in any significant way the evidence given by her as to the deceased’s reaction to the court case. In fact, it was clear from the aunt’s evidence that she was shunned by the entire family (including the plaintiff) following the court case in circumstances where she had given evidence on behalf of the relations. The first time the plaintiff spoke to the aunt following the hearing described above was immediately in advance of the hearing of the present case. If the family were prepared to treat their aunt in this way, this seems to me to substantially corroborate what the plaintiff and his wife have said about the way in which the family resented the ” Murphy ” support for the adverse possession claimant.
71. The plaintiff’s version of events in relation to this issue is also corroborated by the changes made by the deceased to her Will in the period following the events which I have just described. In this context, it should be noted that on 18 March 1997, the plaintiff made a Will in which she left a substantial part of the family farm (which is slightly larger than the area which the plaintiff says is subject to a testamentary contract) to the plaintiff. However, in 2003, she made a new Will revoking the 1997 Will. Under that Will, the area of land which she proposed to give to the plaintiff was very substantially reduced. The 2003 Will was executed on 28 July 2003. By that time, the litigation involving the adverse possession claim of the relation had been concluded and the evidence had been given by the plaintiff’s father in law in favour of that relation. When seen in light of the evidence of the aunt, the plaintiff and his wife, the change in approach taken by the deceased in relation to the provision for the plaintiff as between 1997 and 2003 seems likely to have been her unhappiness at the involvement at the plaintiff’s in-laws in the litigation against her. This is also evident from the way in which she decided in 2003 for the first time to name the defendant as her executor. In the 1997 Will, the plaintiff had been named as her executor.
72. There was no evidence before the court which sufficiently explains the dramatic change of heart on the part of the deceased in 2003 in relation to her testamentary intentions other than the litigation which had occurred in 2001 and 2002. In all of the circumstances outlined above, I reject the evidence of the defendant and his siblings who suggested that the deceased was not concerned about the outcome of the litigation with her relation and I find that the evidence given on the plaintiff’s side is more credible on this issue. I have accordingly come to the conclusion that the litigation (and more particularly the plaintiff’s in-laws’ involvement in it) did in fact lead to significant resentment on the part of the deceased and of other members of her family (in particular the defendant) and that this formed the underlying reason why the defendant was at loggerheads with the plaintiff (eventually spilling over into a physical tussle) and also the underlying reason why the deceased ultimately in 2007 took what can only be described as a very harsh decision to terminate the plaintiff’s involvement in the family farming and sand and gravel/concrete business.
The alleged representations and the alleged testamentary contract
73. Having set out the relevant background facts, I now turn to consider the different elements of the plaintiff’s claim. The plaintiff gave evidence that a number of promises were made to him over the years. He said that the first promise was made to him in 1983 when reclamation works were being carried out on the lands. He said that his uncle said to him: –
“God, isn’t it a grand farm, won’t you have a fine farm in time to come, won’t it be a lot more than we had when myself and your father started out with just the front. . . . So my father over the years then, when we’d be working with sheep or cattle or whatever and we’d be getting hardship in the springtime with the year, with lambs being born and calves being born, and he’d say look it, if you look after the stock they’ll look after you at the end of the year and we’ll keep the farms and we’ll be able to pay everything and you’ll have a fine farm after my time. (D2 p.54)
74. When asked whether he understood that he was to get the entire farm, he said that his father’s and uncle’s intentions were that the three boys were to get the land in equal shares. This evidence was supported by evidence given by the aunt. Her evidence was that it was her belief (which appeared to be based on conversations with her two brothers) that “the three lads” were to inherit the land at the expense of the daughters.
75. In any event, the evidence given by the plaintiff as to what was said to him by his father and uncle was not challenged on cross-examination. I fully appreciate that, of course, the defendant was at a disadvantage in that both his father and uncle had died many years ago. However, no attempt at all was made to explore the evidence given by the plaintiff in relation to his evidence as to the representation or promise set out above. A number of legal arguments were nonetheless made and, in due course, I will have to consider whether what was said to the plaintiff by his uncle and father gives rise to any enforceable rights against the estate of the deceased. It will be necessary to consider whether what was said was sufficient to create any right or expectation on the plaintiff’s part. It will also be necessary to consider the argument made by the defendant that there is a serious lacuna in the plaintiff’s case in that the plaintiff has not given any evidence that the deceased was party to the promises or representations made by the father and the uncle.
76. In addition to the evidence described in para. 73 above, the plaintiff gave evidence on Day 1 (at p. 8) that during the time he worked with his father after he left school that his father often said that: –
“Sure, look, when you’re looking for money, like, he said, sure what would I want to pay you for, aren’t I leaving it to [you] when I die like . . .after my time won’t you have . . . the land, you’re working for yourself”.
77. The plaintiff also separately dealt with his interaction with his mother, the deceased, in relation to the land. What he said was (Day 1 at pp. 9 – 10): –
“Well, the promise was made by my father and uncle down the years that I was getting part of the lands. When my father passed away in ’96, he died suddenly, and she was left all the land, so she made a promise to me after my father died that I was to get the land from the [village] up to the yard at C . . .She was anxious about probate and things like that after his passing so she said to me one day at home in the kitchen . . . that I’m leaving you the land from [the village] up to the yard in C. . . which is 90 acres.”
78. The plaintiff said that the deceased made this statement in 1997 in the family home on the farm and that she also indicated that she had an appointment with a solicitor a few days later to execute her Will. The plaintiff returned to this subject on Day 2 at pp. 54 where he again referred to the “promise” made to him by the deceased after his fathers’ death and again he said that she promised him the land from the village up to C. ” where the stone wall goes through the shed “. The plaintiff described how the deceased then went to her solicitor and that when she came back after making her Will she told him that she had made a Will leaving him the land from the village up to the yard C. In the course of his evidence on Day 2, the plaintiff illustrated his understanding of what was said to him by his mother by reference to the map showing the extent of the lands left respectively to him and to each of his brothers under the 1997 Will. It would be impossible to replicate what was said by the plaintiff in this judgment without revealing details which will identify the parties. I therefore will not attempt to do so in this judgment. Essentially, the area of lands identified by the plaintiff ran from a small section shown in white on the map next to the village and covering nearly all of the lands shaded in pink as far as the lands of C, but stopping at the red line which runs diagonally in a northwest to southeast direction running at the northern end from the public road leading out of the village to lands shown in white at the southern end. I should explain that this area of lands coincides to a very large extent with the lands which the plaintiff was to inherit under the 1997 Will save that under the 1997 Will, the plaintiff was also to receive two additional fields which lay to the eastern side of the red line which I have mentioned above.
79. The plaintiff was not challenged on his evidence as to what transpired between himself and his mother in 1997. Subsequently, in the course of submissions, counsel for the defendant said that the reason for this was that the deceased was obviously not in a position to give instructions as to what transpired. I fully appreciate and accept the difficulty that arises in cases of this kind but it is still possible for a cross-examiner to explore and test the evidence of a witness even where the witness is giving evidence about a conversation which he or she had with a person who has since died. There are many ways in which to test the credibility of a witness. In circumstances where the credibility of the plaintiff on this issue has never been tested, and more particularly in circumstances where I found the plaintiff to be a very fair witness, I am now left in the position where the plaintiffs evidence on this issue has gone unchallenged. Furthermore, the will made by the deceased following this conversation in 1997 is consistent with the plaintiffs’ evidence (albeit that it provides for a more generous gift of lands than was discussed with the plaintiff in the family home). While the gift under the Will did not match precisely the terms of the promise which the plaintiff says was made by the deceased, it nonetheless coincides to a very large extent with the promise and is precisely similar to the promise save for a very small area of lands shown in white next to the village and the two fields to the eastern side of the red line described above. In all other respects, it coincides precisely with the terms of the ” promise “. In this regard, it is important to note that the plaintiff did not see the 1997 Will until after discovery. He had already set out his case in the statement of claim (in particular at para. 13(n)) before he saw the 1997 Will. Therefore, there can be no suggestion that the plaintiff retrospectively constructed a case to coincide with (or to nearly coincide with) the terms of the 1997 Will. In my view, the terms of the 1997 Will provide cogent corroboration of the evidence given by the plaintiff.
80. Each of the plaintiff’s siblings who gave evidence all said that their mother never discussed her Will with any of them. I have considered whether this undermines the evidence of the plaintiff described above in which he says that his mother did discuss her Will with him in 1997. I have come to the conclusion that it does not undermine that evidence. The plaintiff has given clear evidence of the interaction that took place between him and the deceased. As I have already mentioned, the Will was made by the deceased following that conversation which the plaintiff says took place at around the time the deceased went to see her solicitor to make her Will. My assessment of the plaintiff on this issue is that he was truthful. There was nothing rehearsed about the way in which he gave the evidence. I have no reason to disbelieve the plaintiff in relation to this evidence. I therefore accept the plaintiff’s evidence in relation to the promise which he said was made to him by his mother.
81. There is one further issue which arose in relation to what was said by the deceased to the plaintiff in 1997. On Day 2 (pp 64 – 65) the plaintiff said that his mother told him that M. would also have to be looked after, out of the gift to him. The plaintiff was somewhat vague about what was said to him in relation to this issue but, under the terms of the 1997 Will, the gift to the plaintiff was stated to be ” subject to and charged with the payment of the sum of £IR30,000 to my daughter M. . . within two years from the date of my death “. As it transpires, M. was subsequently looked after by the deceased in that land in an adjoining county was purchased in the joint names of the deceased and M. which, by virtue of the right of survivorship, M. succeeded to on the death of the deceased. According to the Inland Revenue affidavit, the value of these lands, at the date of death of the deceased, amounts to €90,000. In addition, the inland revenue affidavit discloses that M. was the joint holder of a savings account with the deceased and that on the death of the latter, she became entitled to the amount held in that account in the sum of €14,586.
82. Evidence was also given of one further interaction between the plaintiff and his mother in relation to what he would inherit. This is alleged to have occurred in the course of the conversation that took place on the bank holiday Monday in August 2007 at the plaintiffs’ home. There is a dispute on the evidence in relation to what was said by the deceased on that day. Ultimately, I am not sure that any decision that I have to make depends in any way on the conversation that took place on that day. For the reasons already discussed above, I accept the evidence of the plaintiff in relation to the promise which he said was made to him by the deceased in 1997. If that promise is enforceable, the plaintiff does not have to rely on what he says happened in August 2007. Nonetheless, lest this case go any further, I will set out my conclusion in relation to this conflict of evidence.
83. According to the plaintiff, in the course of the conversation which he had with his mother on the bank holiday Monday in August 2007, she told him that she was giving him the land up to C after her death but that she was ” keeping it until after my tim e”. The other witnesses who were present for some or all of that conversation were, as noted above, the plaintiff’s wife and M. According to the plaintiff’s wife, she was not there for the whole conversation. As explained above, she left the kitchen at one point. Her evidence was that the conversation was something of a “blur” to her because she was not expecting what happened and was not prepared for what happened. The plaintiff’s wife said that while she was there, there was a reference to the deceased ” keeping the land until after her time “. The plaintiff’s wife did not say that she heard the deceased make any promise to the plaintiff to provide for him in her Will. In these circumstances, the plaintiff’s wife is not in a position to confirm what was said by the plaintiff.
84. M. also gave evidence. On Day 4 at p. 110, she said that the plaintiff put to his mother that if he had 100 acres he would be able to farm and he would not be annoying anybody, to which his mother responded: – ” No . . . the land was hers to do with what she wanted “.
85. When the plaintiff was being cross-examined about the events on the August bank holiday Monday, it was put to him that M. would say that she had no recollection of her mother saying anything about a promise of lands to the plaintiff. However, under cross-examination she went further and on p. 125 in answer to the following question: –
“[The plaintiff] recollects that his mother said to him or gave him to understand that the lands that had been promised to him earlier were going to go to him under the Will, you don’t remember that?”
To which she said: –
“She never made a promise like that and as far as I know she never made a promise to anybody. That land was hers to do with what she wanted.”
She was quite emphatic in her evidence.
86. In relation to this conflict of evidence, I have come to the conclusion that it would be unsafe to hold that the deceased made any promise to the plaintiff during the course of this conversation in August 2007. In the first place, the evidence given by M. is very definite on this issue and she was not shaken in relation to it on cross- examination. Secondly, the plaintiff’s wife (who was not, of course, present for the entire conversation) has not been in a position to say that she heard the deceased say this even though she did hear the deceased say that she was keeping the land ” until after her time “. While I appreciate that the conversation may not have been linear, the plaintiff’s evidence was that the promise and the reference to the land being kept ” until after her time ” was all said at the same time. Thus, if the deceased had made a promise in those terms, one would expect that the plaintiff’s wife would have heard it.
87. I am conscious that the plaintiff’s wife said that the conversation was something of a “blur” because of the shock which the decision of the deceased engendered. I have to say that I expect that the plaintiff must also have been in a state of shock and while there clearly was talk about the plaintiff obtaining some land from his mother, I am not persuaded that there is clear evidence that any promise was made by the deceased. For completeness, I should make clear that it does not seem to me that the words which everyone agrees the mother said (namely that the lands were hers until after her time) is inconsistent with the promise previously made by her as described in paras. 77 to 78 above. On the contrary, the evidence given by M. on day 4 at p. 110 suggests that the plaintiff asked his mother that he should be given 100 acres of land, i.e. during the deceased’s lifetime. That was not what had been promised in 1997. What was promised in 1997 was that 90 acres of land would be given to the plaintiff under the deceased’s Will. Thus the evidence of the plaintiff and his wife, that the deceased said that she was keeping the land ” until after her time ” was not in any way inconsistent with the promise previously made by her in 1997. Furthermore, even if it could be said to be inconsistent with the promise previously made, that does not negate the promise previously made in any way if that promise is enforceable (an issue dealt with below).
88. For completeness, I should deal, here, with the case made in the defence (as summarised in para. 8 (r)-(t) above that the plaintiff deliberately delayed in commencing these proceedings in order to ensure that the deceased would not be in a position to contradict his evidence in relation to the alleged testamentary contract. During the course of the hearing, it was put to the plaintiff that he visited solicitors following the August Bank Holiday Monday meeting to take advice. However, I do not believe that there is any basis on which I could form the view that the plaintiff deliberately withheld commencing proceedings until after his mother’s death. In the first place, the plaintiff had no way of knowing in 2007 that his mother would not honour the promise previously made by her in 1997 to leave him the lands in her Will. The fact is that if such a promise was made, it only became enforceable on the deceased’s death unless there was some indication during the lifetime of the deceased that she had repudiated the alleged testamentary contract of 1997. In this context, it is clear from the evidence that the plaintiff never saw his mother’s will and in particular never saw the Will of 2011. He therefore had no way of knowing that his mother would not honour the promise. Secondly, as the plaintiff explained in his evidence On Day 2 at pp. 144 – 146, while he did attend a solicitor following the events of August 2007, it was in relation to a possible unfair dismissal claim. This is perfectly understandable given the consequences for him and his family following his expulsion from the family farm and the subsequent failure of his mother to provide him with any significant financial assistance. The plaintiff also explained that the reason why he could not bring himself to take any form of proceedings (such as unfair dismissal proceedings) during the lifetime of his mother was that he would be suing his own mother and that is not something that he wished to do. I have no doubt that the plaintiff loved his mother. Quite apart from that consideration, it is clear that the focus of the legal advice given to the plaintiff at this time was in relation to the decision to expel him from the family business. There is nothing to suggest that he had any intimation that his mother proposed to change the gift in her will which had been the subject of the promise made in 1997 or that the plaintiff sought any legal advice in relation to that promise.
89. In the circumstances, I have come to the conclusion that a promise was made by the deceased to the plaintiff in 1997 in the terms set out in para. 77 above and that there is no basis to form the view that the plaintiff deliberately withheld commencing proceedings to enforce that promise until after his mother had died. In the submissions made on behalf of the defendant, it was suggested that even if there was no deliberate decision on the part of the plaintiff to pursue his mother in 2007 in relation to the 1997 promise, there was, nonetheless, acquiescence on his part in failing to take action against his mother at that time. However, for the reasons set out in paras. 87-88 above, I do not believe that the plaintiff had any intimation that his mother would alter her Will in a manner inconsistent with the promise made by her in 1997. In those circumstances, I cannot see any basis on which any question of acquiescence could be said to arise.
Enforceability
90. What I must now consider is whether the representations made by the father and uncle as described above give rise to any enforceable claim. I must also consider whether the promise made by the deceased is enforceable. It seems to me that it is appropriate to deal with these issues first before addressing any issue that arises under s. 117 of the 1965 Act.
The representations made by the father and the uncle
91. The plaintiff submitted, on the basis of the decision of the House of Lords in Thorner v. Major [2009] 1 WLR 776 (adopted in Ireland by White J. in Finnegan v. Hand [2016] IEHC 255), that the doctrine of proprietary estoppel involves three main elements namely: –
(a) A representation or assurance made to the claimant;
(b) Reliance on it by the claimant;
and
(c) A detriment to the claimant in consequence of his (reasonable) reliance on that assurance.
92. The test laid down in Thorner v. Major is essentially the same test as that suggested by Griffin J. in the Supreme Court in Doran v. Thompson [1978] I.R. 223 at p.230. It was submitted on behalf of the plaintiff that, in cases of this kind, relatively broad brush evidence is sufficient to establish the first element of the Doran v. Thompson test – namely whether there is an enforceable representation. In terms of the clarity of the promise, the plaintiff relied in particular on the following observation of Lord Walker in Thorner v. Major at para. 56: –
“I would prefer to say (while conscious that it is a thoroughly question-begging formulation) that to establish a proprietary estoppel the relevant assurance must be clear enough. What amounts to sufficient clarity, in a case of this sort, is hugely dependent on context. I respectfully concur in the way Hoffmann LJ put it in Walton v Walton (in which the mother’s “stock phrase” to her son, who had worked for low wages on her farm since he left school at fifteen, was “You can’t have more money and a farm one day”). Hoffmann LJ stated at para 16:
“The promise must be unambiguous and must appear to have been intended to be taken seriously. Taken in its context, it must have been a promise which one might reasonably expect to be relied upon by the person to whom it was made.””.
93. It was submitted that the plaintiff, having left school at fifteen to work on the farm, acted in a manner which was consistent with the promises made to him and that the plaintiff relied on those promises. The plaintiff also relied on the observation of Geoghegan J. in Smith v. Halpin [1997] 2 ILRM 38 where he said: –
“Even if nobody knew of any conversations between father and son, I think that any reasonable person with knowledge of the family such as a friend or relation would have assumed that the intention at all material times was that the entire house would become the property of the Plaintiff upon the deaths of his parents”.
94. I do not disagree that a representation can arise by conduct and can be inferred from circumstances. I also do not doubt that, in some cases, relatively general evidence may be sufficient to establish an enforceable representation. However, the evidence that was given in relation to the representations of the father and uncle was, by any standard, very thin. I have also not been persuaded that the plaintiff was in effect forced to leave school at age fifteen. On the basis of all of the evidence that I have heard, it appears to me that the plaintiff was quite willing to leave school at age fifteen and was keen to work on the farm. At the same time, it would appear to be likely that, as the aunt said in her evidence, there was an assumption that the ” three boys ” would get the farm following the death of their father and the uncle. However, the evidence falls short of establishing that the plaintiff was to receive any particular part of the farm, such as the 90 acres that was the subject of the discussion with his mother in 1997.
95. Moreover, at the time these representations (such as they were) were made by the father and the uncle, there was no sand and gravel business and concrete business on the land. In fact, the evidence of the aunt was that the father would not have wished to commence such a business.
96. If, therefore, any claim the plaintiff had in respect of these representations was enforceable against the estate of the deceased, very difficult issues would arise as to how it could be satisfied and as to the manner in which it would be satisfied. Ultimately, it seems to me to be unnecessary to consider those questions because, in my view, the claim based on these representations is not enforceable against the estate of the deceased. The simple fact is that following the father’s death, all of the land was left to the deceased. Understandably, no steps were taken by the plaintiff at that stage to demand his share of the farm. However, the Will in which the father left everything to the deceased was patently inconsistent with the representations relied upon. As noted in para. 76 above, his father spoke of leaving land to the plaintiff ” when I die “.
97. In my view, the case made by the defendant is correct, that there is a significant lacuna in the plaintiff’s case against the deceased in relation to the representations made by the father and the uncle. In my view, the defendant is correct in that there is no evidence that the deceased ever adopted the promises or representations made by the father and the uncle. The plaintiff has given no evidence that his mother was a party to the representations that were made by the father and the uncle. His case against the deceased in relation to the promise made by her is a separate and distinct case which is based on a very specific promise made by her in relation to a specific parcel of lands namely the 90 acres discussed in paras. 77-78 above. No authority has been cited to the court that a party in the position of the plaintiff is entitled to enforce a claim of this kind against a party in the position of the deceased where there is no evidence that the latter was a party to any of the representations in issue. Moreover, any such claim would have been enforceable at the time of the father’s death. If the plaintiff wished to pursue a claim based on the representations made by the father, the time to pursue that claim was following his father’s death when a will emerged which was inconsistent with the representations described above in so far as it left everything to the deceased.
98. The case made by the plaintiff in response to the lacuna argument is that the farm was a family farm and that there is nothing to suggest that the deceased was a stranger to the intention of the father and uncle that the farm was ” for the boys ” as had been suggested by the aunt. It is suggested that it is inconceivable that the deceased was not similarly aware of the understanding or assumption that the “boys” would inherit the farm. It is therefore suggested that the deceased inherited the lands subject to the promises made by her husband and brother in law.
99. In my view, no sufficient case has been established that the deceased was in some way bound in equity to honour the representations made by her late husband and brother in law. The onus of proof in this case lies on the plaintiff and, in my view, the plaintiff has neither adduced sufficient evidence nor made any sufficiently persuasive or cogent argument to establish that any equity arises as against the deceased. If such a case were to be successfully made, it would need to be the subject of more detailed evidence, argument and analysis. However, it does seem to me that the fact that the representations were made may well be relevant to the next part of the plaintiff’s case – namely the case he makes based on the promise and representations made to him by his late mother, the deceased.
The promise made by the deceased
100. For the reasons already outlined in paras. 78 to 81 above, I am of opinion that the deceased made a promise to the plaintiff in the terms outlined in para. 77 above. The question that I now have to consider is whether this is enforceable and if so I have to consider in what manner it can or should be enforced.
101. The case which is made on behalf of the plaintiff is twofold. The plaintiff contends that the promise constitutes a representation which gives rise to a similar estoppel as that discussed above in the context of the claim arising from the representations made by the father and the uncle. In addition, the case is made based on a testamentary contract. I now deal with those issues in reverse order. I deal first with the case made on the basis of a testamentary contract. I then turn to consider the case based on estoppel.
The testamentary contract
102. Significant reliance is placed by the plaintiff on the decision of the Supreme Court in McCarron v. McCarron (Supreme Court, unreported, 13 February 1997). In that case, the claimant was a cousin of a farmer and came to work on the farm in 1976. Previously, the farmer had asked the claimant’s father for someone to come out and ” give a hand with hay and do odd bits of turns “. For several years, the claimant worked long hours helping out with the management of the farm. The claimant alleged that the farmer entered into an agreement with him in 1980 to remunerate him for this work by providing for him in his Will. Subsequently, the farmer died without making a will and the alleged agreement was therefore never honoured. The claimant had worked virtually full-time on the farm between 1976 and 1982 although his involvement later declined somewhat after he acquired a small farm of his own. In the Supreme Court, Murphy J. held that the discussions between the farmer and the claimant were very limited and that they amounted to no more than an exchange between the farmer and the claimant in which the farmer said ” I suppose you are wondering about some compensation for your work ” to which the claimant replied ” I suppose I will not be forgotten ” in response to which the farmer said to the claimant ” you’ll be a rich man after my day “. There was also a later discussion where the farmer asked the claimant did he want a formal agreement to which the claimant replied: – ” I will not put you out of your house or home “, to which the farmer said ” Right. . we will leave it at that “. Notwithstanding the rather brief and general exchange between the parties, the Supreme Court held that there was a binding agreement that should be specifically performed. Murphy J. said at p. 9 of the judgment: –
“What is noticeable from the transcript . . . was the natural courtesy . . . which often results in an unwillingness to pursue discussions to a logical and perhaps harshly expressed commercial conclusion. In other parts of Ireland, the concept of a person working long hours over a period of four years before any discussion takes place in relation to remuneration or reward might be unthinkable. Even less likely would be agreement or an expression of satisfaction at that stage that the question of compensation would not be overlooked. I would merely conclude that in some, particularly rural areas, a meeting of minds can be achieved without as detailed a discussion as might be necessary elsewhere”.
103. It will be seen from the decision of the Supreme Court in that case that a relatively general conversation may be sufficient (depending on the circumstances), to give rise to an enforceable contract. An important underlying factor in that case was that it was impossible to explain how a person in the claimant’s position would have been prepared to work long hours on the farm of a stranger without any form of remuneration whatsoever. It might be said that this factor is absent in the present case in that the plaintiff here was the eldest son of the deceased. However, in contrast to the McCarron case, the interaction between the plaintiff and the deceased here (as recorded in para. 77 above) was much more detailed and specific. A promise was made to leave the plaintiff a specific parcel of 90 acres of land running from the village up to the yard in C. Moreover, this promise was made in the aftermath of her husband’s sudden death. This promise was made against the backdrop of the representations previously made by the father and the uncle. It was also made in circumstances where, as recorded earlier in this judgment, the deceased was clearly worried about the liabilities of her late husband’s estate to the bank and where she had every incentive to secure the continued participation of her eldest son in the family farm and subsequently in the sand and gravel business. The evidence of all of the witnesses at the hearing attested to the extent of the work done by the father on the farm. Following his sudden death, there would have been an increased need to ensure that the plaintiff continued to work on the farm. While decisions were made to discontinue elements of the farming enterprise (such as the rearing of sheep), it is quite clear that the farming enterprise continued. It is also clear from the evidence of the plaintiff’s wife that the plaintiff continued to work long hours on the farm even after the sand and gravel business was established. Indeed, at the time the promise was made, there could have been no guarantee that the sand and gravel business would have been successful. Therefore, there was an obvious need for the deceased to continue the farming enterprise after her husband’s death. In all of these circumstances, it is perfectly understandable why the deceased would have wished to secure that her son, the plaintiff, would remain on the farm and provide an incentive to him for that purpose. While I have held that there is no evidence that she was a party to any of the representations made by her late husband and brother-in-law, it is nonetheless probable that she was aware of an expectation on the part of the plaintiff that he would get at least a part of the farm. The evidence given by the aunt would suggest that there was a general expectation the plaintiff and his brothers would succeed to the farm. In circumstances where her husband had left everything to her under his Will, she may also have considered herself under a moral obligation to make the promise which she did. At first sight, it may seem odd that the deceased would have made a promise to the plaintiff and not made similar promises (involving other parts of the farm) to his brothers. However, it seems to me to be understandable that the plaintiff would have been singled out by his mother in this way in circumstances where, on the basis of the evidence which I have heard, it was the plaintiff who carried out the bulk of the work undertaken on the farm alongside his father and uncle. It is also clear that his mother placed significant trust in the plaintiff at this stage. This is evident, for example, from the fact that in her 1997 Will, she appointed the plaintiff as her executor. It must be recalled that the promise was made before the litigation described in paras. 64-66 above.
104. I have considered whether a promise of this kind could be said to be supported by consideration given that, at the time the promise was made, the plaintiff had already left school at fifteen and had already done many years’ work on the farm. It might be suggested that, in the circumstances, any consideration was purely past. However, in my view, it would be wrong to suggest that all of the consideration was past. It seems to me that the promise was, in fact, supported by fresh consideration moving from the plaintiff because the plaintiff remained involved in the farm and continued to work very long hours on the farm. In addition, he contributed his lorry to the sand and gravel business which was clearly a key part of the deceased’s plans to generate income to pay off the bank. It is clear even from the evidence of the defendant that the sale of the lorry (which had been used to carry animals) was instrumental in allowing a new lorry to be purchased for the purposes of commencing a business in sand and gravel on the family farm. In my view, there was therefore ongoing consideration given by the plaintiff for the promise which his mother made to him.
105. I have also given consideration to whether there is sufficient evidence before the court to rebut the presumption that domestic family transactions are usually not intended to be legally binding. This is not an issue that was addressed in any detail by either side at the hearing. It is an issue which is addressed in considerable detail in McDermott “Contract Law” (2nd Ed., 2017) at pp. 217 – 227. The authors cite in this context the decision of Devlin J. (as he then was) in Parker v. Clark [1960] 1 WLR 286 at p. 292 where Devlin J. made clear that in an appropriate case a promise to make a bequest to a family member can be contractually binding. Devlin J. said: –
“The . . . submission in answer to the claim is that the letters, construed in the light of the surrounding circumstances, show no intention to enter into a legal relationship or to make a binding contract. No doubt a proposal between relatives to share a house, and a promise to make a bequest of it, may very well amount to no more than a family arrangement of the type considered in Balfour v. Balfour, which the courts will not enforce. But there is equally no doubt that arrangements of this sort, and in particular a proposal to leave property in a will, can be the subject of a binding contract.”
It seems to me that the promise made by the deceased here was intended to have legal effect. It is clear that this was not a vague or hastily made promise. The promise was in very definite terms. It spoke not only of the making of a bequest in favour of the plaintiff but also charging that bequest with a requirement that the plaintiff should in turn provide for M. It was made in the course of a conversation in which the plaintiff was told that the deceased intended imminently to attend her solicitors for the purposes of making a Will incorporating the promise. Thereafter, the deceased did in fact visit her solicitor and executed a Will which provided for a gift to the plaintiff in substantially similar (albeit more generous) terms to the promise made by her. Furthermore, as outlined in para. 104 above, the plaintiff provided consideration for the promise. This was not a gratuitous arrangement. It was a serious and deliberate arrangement entered into against the backdrop (described earlier) of the death of her husband which left the deceased in a situation where the plaintiff was now the primary person on whom she could depend to continue the farming enterprise previously carried on by her husband.
106. In all of the circumstances, I have come to the conclusion that an enforceable promise was made by the deceased to the plaintiff in the terms set out in para. 77 above which gave rise to a testamentary contract.
107. The next issue which I must consider is whether it is appropriate to order that this testamentary contract should now be specifically performed. In this context, the defendant has submitted that the plaintiff’s claim should be defeated by reason of laches and acquiescence. For similar reasons to those already addressed in paras. 88- 89 above, I do not believe that there is any evidence of acquiescence on the part of the plaintiff in relation to the claim based on the testamentary contract. For similar reasons also, it seems to me that the defence of laches should not succeed. While I fully appreciate that a very significant period of time has elapsed since the date when the 1997 promise was made, that is not of itself sufficient in order to establish a defence of laches . As Biehler explains in ” Equity and the Law of Trusts in Ireland ” (6th Ed., 2016} at pp. 32 – 33: –
“In deciding whether the defence of laches has been established, a court must first consider whether the plaintiff has delayed unreasonably in bringing his claim and secondly, assess whether prejudice or detriment has been suffered by the defendant as a result. Delay of itself will almost invariably be insufficient and clearly the period of time necessary to invalidate a claim will vary according to the circumstances of each case. . . .”
108. In the present case, there is, in my view, no basis to conclude that the plaintiff has delayed unreasonably in bringing his claim. He brought the proceedings very promptly after the grant of probate was eventually taken out by the defendant 20 months after the death of the deceased. On that basis alone, it seems to me that the defence of laches must fail. Quite apart from that consideration, it seems to me that there is in fact no evidence of circumstances that would render it inequitable to enforce the claim. This is an essential element of the doctrine of laches as Keane J. (as he then was) explained in J.H. v. W.J.H . (High Court, unreported, 20 December 1979) at p. 35: –
“I have no doubt that the interval of time which elapsed before the proceedings were issued in the present case could properly be described as substantial. That, however, is not sufficient . . .there must also be circumstances which render it inequitable to enforce the claim after such a lapse of time.”
109. As acknowledged in the defendant’s written submissions at para. 24, if a defendant has altered his or her position or acted to his or her detriment, as a result of the plaintiff’s inaction over a substantial period of time, the defence of laches may be successfully invoked. No case is made in the submissions that the defendant here has altered his position or acted to his detriment (although such a case had been pleaded in the defence, as summarised in para. 8(p) above). Instead, it is submitted on behalf of the defendant that ” detrimental reliance is not an essential ingredient of laches, and it may be replaced by some other form of prejudice “.
110. I do not disagree with the defendant’s submission that detrimental reliance is not, of itself, an essential ingredient of laches . I agree that any prejudice which would make it inequitable for the plaintiff to succeed may be sufficient. However, I reject the suggestion that it would be inequitable to permit the plaintiff to succeed on foot of his specific performance claim. While I fully appreciate the difficulty that arises for the defendant as a consequence of the death of the deceased, there are in fact very few cases where a plaintiff will be able to assert a cause of action in respect of a testamentary contract prior to the death of the relevant promisor. This is for the simple reason that any testator or testatrix can, as a matter of fact, change their Will at any time prior to death without knowledge on the part of a potential beneficiary. A potential beneficiary will often not be in a position, therefore, to assert any cause of action until the terms of the will become public after death. There may inevitably be a significant lapse of time between the making of the promise and the death of the promisor. In this case, for the reasons which I have already set out above, I have come to the conclusion that the plaintiff was unaware of any intention on the part of the deceased to alter her will. It is quite clear from the evidence that the plaintiff continued to love his mother even after he was expelled from the business of the company and there is nothing to suggest that he had any inkling that she would hit him with the double blow not only expelling him from the family business in 2007 but also rescinding in 2011 the promise previously made by her in 1997. Thus, the plaintiff could not be said to have unreasonably delayed in bringing the proceedings. While the defendant is at a disadvantage in evidential terms, this is not a disadvantage that arises as a consequence of any culpable failure on the part of the defendant to commence his proceedings at an earlier time. It would not be inequitable in those circumstances to order specific performance in this case.
111. I therefore propose to make an order for the specific performance of the testamentary contract described above. That order will require the defendant, as personal representative of the deceased, to transfer to the plaintiff the 90 acres that were identified during the course of the court hearing which run from the village to the yard at C. That is the extent of what was promised to the plaintiff under the testamentary contract. The gift to him under the 1997 Will is more extensive than what was promised to him but, in my view, the plaintiff is only entitled to enforce the promise. He is not entitled to take the benefit of the 1997 Will. To ensure that any order made by the court is capable of precise interpretation and enforcement, I will direct that the plaintiff’s solicitor should prepare a map based on the evidence given in the course of the hearing precisely delineating the 90 acres in question. That map should be supplied to the defendant’s solicitor in the first instance so that the defendant’s side can make any necessary suggestions in relation to the map. In the event of any dispute between the parties, I will rule on that dispute. In circumstances where the small parcel of lands given by the deceased to the plaintiff under the 2011 Will forms part of the 90 acres described above, no issue arises in respect of double recovery. Nonetheless, for clarity, I will make a declaration that the lands to be transferred to the plaintiff are in substitution for any gift to the plaintiff under the 2011Will.
112. I have not lost sight of the fact that, as part of the 1997 contract, the deceased told the plaintiff that M. would also have to be looked after out of the gift to him. This is confirmed by the terms of the 1997 Will under which the gift to the plaintiff was stated to be subject to and charged with the payment of IR£30,000 to M. within two years following the death of the deceased. I have given consideration as to whether the decree of specific performance should be made subject to a similar charge. I have, however, come to the conclusion that in the circumstances outlined in para. 81 above it would not be appropriate to do so. As noted in para. 81 above, it is clear that M. was subsequently looked after by the deceased in a number of ways: –
(a) In the first place there was land purchased in the joint names of the deceased and M. Thus, M. has had the benefit of those lands following the death of the deceased. The value of these lands amount to €90,000;
(b) In addition, M. has received a sum of €14,586 in respect of the savings account which had been placed by the deceased in the joint names of herself and M.
The estoppel claim based on the 1997 promise
113. In light of the conclusion which I have reached in relation to the testamentary contract, it is not strictly necessary that I should form any view in relation to the alternative claim based on estoppel. However, lest I am wrong in the view which I have formed in relation to the testamentary contract, I will, for completeness, set out my views in relation to the claim based on estoppel.
114. In para. 91 above, I have set out the three well-established elements of a claim based on proprietary estoppel. While the plaintiff has sought to cast his claim in promissory estoppel, proprietary estoppel and/or legitimate expectation, I agree with the submission made on behalf of the defendant that the case is more properly characterised as a proprietary estoppel claim.
115. For the reasons already discussed above in the context of the testamentary contract claim, I have come to the conclusion that a promise was made to the claimant. Thus, it seems to me that the first element of a proprietary estoppel claim has been satisfied in this case.
116. I must now consider whether the second element (reliance) and the third element (detriment) have also been established.
117. Insofar as reliance is concerned, this issue is not addressed by the defendant in the legal submissions delivered on his behalf. This is unsurprising in light of the evidence which I have heard from the plaintiff and his wife in the course of the hearing. At the time the promise was made in 1997, the plaintiff was still a young man, he was not long married, both he and his wife could, in the absence of the promise, have made some attempt to restart their life in a different career or business. That is not what happened. Subsequent to the promise, the plaintiff remained on the family farm and was a key participant in the establishment of the sand and gravel business. Furthermore, his wife ultimately took a decision not to continue her career following the expiry of a career break. All of these steps taken by the plaintiff and his wife are consistent with reliance on the promise that ultimately the plaintiff would have security of tenure (so to speak) in the farm into the future. In these circumstances, there is no issue in the proceedings but that the plaintiff relied on the promise made to him in 1997.
118. There is, however, an issue in relation to detriment. It is submitted on behalf of the defendant that the plaintiff, in seeking to enforce the 1997 promise by way of proprietary estoppel, must rely on detriment incurred after the promise was made. The defendant stresses that it is ” common case ” that the plaintiff was remunerated for all work carried out in the course of his employment in the family farm business and in the family sand and gravel business. The defendant therefore submits that no detriment has been sustained by the plaintiff. In making this case, the defendant submits that the detriment suffered by a claimant in the position of the plaintiff must be of a substantial nature. Reliance is placed by the defendant on Nagus v. Bahouse [2008] 1FLR 381 and on the following statement by Biehler (op. cit. at pp. 835 – 836): –
“Detriment will be suffered where the assurance on which reliance is placed is withdrawn and it is the fact of detriment having been suffered which will render it unconscionable for the legal owner to insist on enforcing his rights. While the detriment suffered by the claimant will usually involve expenditure of money or the building of premises on another’s land, it would appear that it need not consist of the payment of money or other quantifiable financial detriment so long as it is something substantial”.
119. There are three bases on which the defendant contends that the plaintiff has not suffered detriment: –
(a) First, as noted above, it is said that the plaintiff has in fact been remunerated for all of the work he did on the farm;
(b) Secondly, it is contended that the work done by the plaintiff was not as substantial as he claims and therefore could not be said to be sufficient to constitute ” detriment “;
(c) Thirdly, it is alleged by the defendant that the detriment suffered by the plaintiff is wholly disproportionate to the value of the lands which the plaintiff seeks to recover.
120. I am not persuaded by any of these arguments. My views can be briefly stated as follows: –
(a) The first argument of the defendant fails to address the factors identified in para. 117. In my view, if no promise had been made to the plaintiff in 1997, or if the plaintiff knew in 1997 that the promise made at that time would not be honoured, he could have taken steps at that stage while he and his wife were still relatively young to start a new career or a new business. It must be borne in mind that he could, for example, have developed his haulage business. Instead, the plaintiff stayed on the farm where he worked very long hours, he sold his lorry to assist in the setting up of the new family sand and gravel business and he dedicated the rest of his life exclusively to the family farming and sand and gravel businesses. In my view, that is by any standard, substantial detriment since the plaintiff thereby tied himself to the family farm and the family business little knowing that he would subsequently find himself expelled from that business at a stage in his life when, as is well known, it is much more difficult to strike out into a new career. Equally, the plaintiff little knew that he would be expelled from the family business at a time when he had significant commitments, in particular the need to provide for his wife and two school-going children;
(b) I reject the second argument advanced on behalf of the defendant. For the reasons discussed in paras. 19-36 above, I have come to the conclusion that the plaintiff worked very long hours on behalf of the family business then owned by the deceased. In my view, the work undertaken by the plaintiff and the other matters described in subpara. (a) above show very clearly that the detriment in this case was substantial;
(c) The third argument made by the defendant is more appropriately addressed in the context of the next issue to be considered – namely the “manner” in which the equity in favour of the plaintiff should be satisfied.
How should the equity in favour of the plaintiff be satisfied?
121. In the submissions made on behalf of the defendant, it was suggested that any equity which the court may find in favour of the plaintiff should be satisfied by an award of monetary compensation. My attention was drawn to the decision of the Court of Appeal in Naylor v. Maher [2018] IECA 32 where Peart J. referred to the diverging strands of jurisprudence which have developed in the United Kingdom and Australia respectively relating to whether an ” expectation-based approach ” or a ” detriment-based approach ” should be taken by the courts in cases of this kind. Peart J. referred to the way in which this is dealt with in Snell’s Equity (33rd Ed.) at para. 12-1408 in in the following terms: –
” . . uncertainty arises as the courts have yet to choose clearly between two competing approaches. On the first approach the starting point is that B’s expectation will be protected, and a departure from this is permitted only if it is clear that such an order would impose a disproportionate burden on A. On this view . . . the concept of proportionality has only a negative role to play. On the second approach, there is no presumption in favour of making B’s expectation good, and the extent of relief will be determined principally by the need for such relief to do no more than ensuring that B suffers no detriment as a result of B’s reasonable reliance on A; although B may be left to suffer some detriment if A can show that such an outcome would not on the facts ‘shock the conscience of the court’.”
122. In Naylor v. Maher , Peart J. did not consider it necessary to decide which approach is more appropriate. On the facts of the Naylor case, Peart J. considered that it would not be a sufficient satisfaction of the plaintiff’s claim that he should be recompensed in purely monetary terms. Peart J. said at p. 11: –
“The Court when exercising its equitable jurisdiction . . . must be guided by correct equitable principles, which necessarily includes a consideration of proportionality and fairness between the parties. The Court is not confined to a consideration of how much money will suffice to compensate him for the loss of his entitlement to the lands. The present case is a good example of where the court’s consideration of how the plaintiff’s claim in equity to the lands ought to be satisfied must embrace more than simply how much money the plaintiff has lost by making a decision to move back to the family farm, and remaining there in reliance upon the representations made to him. The detriment to him is not confined to a reduction of income or other purely monetary loss. He altered the course of his life. . . ….”
123. While Peart J. made clear that there are cases where it may be just in the circumstances that the particular equity should be satisfied by a pecuniary award, he did not think it would be appropriate in that case to do so. Instead, he held that the circumstances in the Naylor case were such that the appropriate way in which to satisfy the equity was to essentially enforce the representation that had been made to the plaintiff there that he would receive the relevant farm. In coming to this conclusion, one of the factors relied upon by the court was explained by Peart J as follows at pp. 10 – 11: –
“In addition, it is important also to state that the representations made to the plaintiff by the deceased that he would get these lands, and the reliance which the plaintiff placed upon them, in truth amount to a contract which ought to be fulfilled. The deceased should be kept to his contract . . .The satisfaction of the plaintiff’s equity by receiving a transfer of the lands will attend to this, and does not offend good conscience.”
124. It is clear from Naylor v. Maher that it is open to a court to seek to satisfy an equity by a monetary award. There are cases where such a course would be entirely appropriate. However, in my view, this is not one of them. It is quite clear from all of the evidence that I have heard that the main interest in the plaintiff’s life has been farming. Moreover, he has spent by far the greatest part of his life on the family farm until he was expelled from it in 2007. He did not leave voluntarily. Secondly, by the time the plaintiff was expelled from the family farm, he was not qualified to do anything other than farming. By that stage he had worked for nearly three decades on the family farm. Thirdly, in common with the Naylor case, the plaintiff here was promised a specific parcel of lands, namely the 90 acres in question. Those 90 acres were specifically identified by the deceased. Thus, the transfer of 90 acres to the plaintiff was precisely what the deceased herself envisaged in very explicit terms. Fourthly, no case has been made to me that the satisfaction of the equity in this way would impose a disproportionate burden on the defendant or any of the other members of the family. While it was argued in general terms that the claim of the plaintiff was disproportionate, no argument was made either in the written submissions or in the oral submissions of counsel that either the defendant or any of his siblings would suffer some unintended or disproportionate burden by having the equity satisfied by means of a transfer of lands rather than a monetary award. In the submissions, no case was made that steps had been taken by the defendant or other members of the family on the 90 acres in question that created an equity in their favour over this parcel of lands which should be given a greater priority than that of the plaintiff. While, as noted in para. 8(p) above, such a case had been made in the defence, it was not developed in any real way at the trial.
125. In these circumstances, I believe that the only appropriate way in which to satisfy the equity of the plaintiff in this case is to make a declaration, in the alternative to the order for specific performance proposed in para. 111 above, that the plaintiff is entitled to the 90 acres described in para. 111 above in satisfaction of the equity arising in respect of his parallel proprietary estoppel claim. In circumstances where I propose to make an order in the terms of para. 111, in satisfaction of the plaintiff’s claim for specific performance of the testamentary contract, I do not believe that it is necessary to make any further order for the transfer of the lands in satisfaction of the equity which I have just described.
126. For completeness, I should mention that I have, of course, had regard to the decision of Laffoy J. in Coyle v. Finnegan [2013] IEHC 463 on which the defendant placed some reliance. There, Laffoy J. held that the equity raised by the plaintiff in that case should be satisfied by an award of monetary compensation for the labour and services provided by the plaintiff to the deceased. However, in my view, that case is clearly distinguishable. In that case, there was no evidence of an unconditional promise. On the contrary, the promise made by the deceased there to the plaintiff in that case was expressly stated to be revocable. Furthermore, it appears that in that case, the plaintiff had ceased working (of his own accord) on the deceased’s land several years before the death of the deceased such that the deceased had to rely on others to assist him in the maintenance and running of his farm. It seems to me that the approach taken by Laffoy J. in that case was very much influenced by the individual facts and circumstances of the case which, in my view, are quite different from the facts and circumstances of this case.
The section 117 claim
127. In light of the findings which I have made above in relation to the testamentary contract and the proprietary estoppel claims, it is unnecessary for me to consider the plaintiff’s claim pursuant to s. 117 of the 1965 Act. However, in the event that my judgment in relation to those issues is held to be erroneous, I will, for completeness, also set out my findings in relation to the s. 117 claim.
128. It is unnecessary to set out the text of s. 117 in this judgment. The text is well known and is accessible to anyone who wishes to read this judgment. There was no dispute between the parties as to the principles which are applicable to an application under s. 117. Counsel for the defendant expressly acknowledged that the principles are accurately and comprehensively described in Spierin ” Succession Act 1965 and Related Legislation: A Commentary ” (5th Ed.), 2017. At p. 399, Spierin observes that any determination under s. 117 is reached by way of a two-stage process: –
(a) the court must first decide whether the testator or testatrix has failed in his or her moral duty to make provision for a child;
(b) only if he or she has so failed, will the court proceed to the second stage which is to decide what provision should be made for the child.
129. Spierin also refers to the very helpful judgment of Kearns J. (as he then was) in Re ABC: XC v. RT [2003] 2 I.R. 250 at p. 263 where the applicable principles were summarised as follows: –
“(a) The social policy underlying Section 117 is primarily directed to protecting those children who are still of an age and situation in life where they might reasonably expect support from their parents against the failure of parents, who are unmindful of their duties in that area
(b) What has to be determined is whether the testator, at the time of his death, owes any moral obligation to the children and if so, whether he has failed in that obligation.
(c) There is a high onus of proof placed on an applicant for relief under Section 117 which requires the establishment of a positive failure in moral duty;
(d) Before a court can interfere there must be clear circumstances and a positive failure in moral duty must be established.
(e) The duty created by Section 117 is not absolute.
(f) The relationship of parent and child does not itself and without regard to other circumstances create a moral duty to leave anything by will to the child.
(g) Section 117 does not create an obligation to leave something to each child,
(h) The provision of an expensive education for a child may discharge the moral duty as may other gifts or settlements made during the lifetime of the testator.
(i) Financing a good education so as to give a child the best start in life possible, and providing money, which if properly managed, should afford a degree of financial security for the rest of one’s life does amount to making “proper provision”.
(j) The duty under Section 117 is not to make adequate provision but to provide proper provision in accordance with the testator’s means.
(k) A just parent must take into account not just his moral obligations to his children and to his wife, but all his moral obligations such as those owed e.g. to aged and infirm parents.
(l)In dealing with a Section 117 application, the position of an applicant child is not to be taken in isolation. The court’s duty is to consider the entirety of the testator’s affairs and to decide upon the application in the overall context. In other words, while the moral claim of a child may require a testator to make a particular provision for him, the moral claims of others may require such provision to be reduced or omitted altogether.
(m) Special circumstances giving rise to a moral duty may arise if a child is induced to believe that by, for example, working on a farm he will ultimately become the owner of it thereby causing him to shape his upbringing, training and life accordingly.
(n) Another example of special circumstances might be a child who had a long illness or an exceptional talent which it would be morally wrong not to foster.
(o) Special needs would also include physical or mental disability.
(p) Although the court has very wide powers…such powers should not be construed as giving the court a power to make a new will for the testator.
(q) The test to be applied is not which of the alternative courses open to the testator the court itself would have adopted if confronted with the same situation but rather, whether the decision of the testator to opt for the course he did, of itself and without more, constituted a breach of moral duty to the plaintiff.
(r) The court must not disregard the fact that parents must be presumed to know their children better than anyone else.”
130. Not all of those principles will be relevant in any individual case. As the decision of Laffoy J. in A v. C [2007] IEHC 120 makes clear, it is necessary to identify the particular principles that are relevant to an individual case. For present purposes, it seems to me that those set out at subparas. (i), (k), (n) and (o) are not relevant here and therefore do not require to be considered by me. I will confine my consideration of the circumstances of this case to the remaining principles set out by Kearns J.
131. I must bear in mind the social policy underlying s. 117. At first sight, it may appear incongruous that someone in the position of the plaintiff (who was almost 50 years old at the date of death of the deceased) could nonetheless be considered to be of an age and situation in life where he could reasonably expect support from his mother. However, as Keane J. (as he then was) observed in EB v. SS [1998] 4 IR 527 at p. 560: –
” . . the legislature, no doubt for good reasons, declined to impose any age ceilings which would preclude middle aged or even elderly offspring from obtaining relief, . . ..”
132. There is accordingly no bar to the claim made by the plaintiff in these proceedings merely on account of his age. Nonetheless, as Spierin at p. 417 highlights, it is still the case, in light of the decision of the Supreme Court in Re. IAC [1990] 2 IR 143, that a mature applicant ” will have a heavy onus to discharge “.
133. I must therefore consider whether the plaintiff in this case has discharged the heavy onus which lies upon him to establish a positive failure of moral duty on behalf of his mother to make proper provision for him. In this regard, it seems to me that the following facts and circumstances are relevant: –
(a) In this case, at the time of death of the deceased, it is common case that the plaintiff was living in a house with no mortgage commitments. However, he was providing for his wife and two school-going children. His income was quite modest. He had no significant savings. He had no financial resources to cushion him or his family against any financial demands or shocks which might occur in the future. Moreover, as a consequence of leaving school at age fifteen, and having spent his lifetime up to 2007 working on the farm (and from 1997 in the family sand and gravel business) the plaintiff had no qualifications or experience of any kind to undertake any other form of employment. Nor did he have the means to buy a farm for himself or to set up any significant business. He resorted to operating a hackney business which did not generate very much by way of income. In contrast, the deceased left an estate which according to the Inland Revenue affidavit had a total net value of €3,702,838. The lands alone (with the buildings) had a gross value of €2,236,500. As I understand it, the valuation does not include the value of the good will of the sand and gravel and concrete making business.
(b) It is true that certain provision had been made for the plaintiff during his lifetime including assistance with the acquisition of the house in the local village. In this context, it does not seem to me that the fact that the plaintiff was paid a salary is of any significance in the context of s. 117. The plaintiff was paid (such as it was) for work done. Moreover, the plaintiff was not alone in having some provision made for him during the lifetime of the deceased. It is also clear from the full copy of the Inland Revenue affidavit that the plaintiff’s siblings also had some provision made for them during the lifetime of the deceased. Thus, for example, the defendant and J. received significant gifts during the lifetime of the deceased. The defendant received a gift of land valued at €100,000 while J. received a cash gift of €32,847 and a site with a value of €50,789. In addition, M. received a half interest in the property in the nearby county with a value of €90,000 to which she succeeded on the death of her mother.
(c) There is no evidence before the court that any of the siblings of the plaintiff were living, at the time of death of the deceased, in anything like the reduced circumstances in which the plaintiff found himself.
(d) The deceased does not appear to have considered that she should make any significant provision for her daughters in her will. The defendant did not adduce any evidence of the financial circumstances of any of his sisters. However, it is notable that none of the daughters has made a claim under section 117. Furthermore, neither of the daughters who gave evidence before me suggested that they were living in straitened circumstances.
(e) On the other hand, the deceased clearly had a desire that both the defendant and J. should be provided for in her will. I have no doubt that she considered herself under a moral obligation to provide for both the defendant and J. given their respective involvement in the family sand and gravel business and concrete making business. In my view, their roles in that business gave them a moral claim for appropriate provision to be made for them by the deceased and it is therefore unsurprising that she should wish to be generous to them. In addition to her moral duty to the defendant and J., I think it is likely that she considered that it would be wise to make appropriate provision for them in order to ensure that the family business (in which they had participated since 1997) should continue into the future.
(f) On the other hand, I must also bear in mind that no evidence was given to the court to the effect that it was essential that the defendant and J. should have provision made for them of the order set out in the last Will of the deceased.
(g) There is no question in this case that any of the children received an expensive education albeit that the deceased appears to have had a desire that each of the daughters should remain in school until they had sat the Leaving Certificate examinations. Insofar as the three boys are concerned, they are all in an equal position insofar as the extent of their respective education is concerned. However, the fact that their education was relatively limited in each case is a factor which, in my view, a just and prudent parent would bear in mind when considering what provision should be made for them in his or her will. Their limited education meant that they were less well equipped to build a career for themselves than might otherwise have been the case. In such circumstances, one would expect that the just and prudent parent would make provision for each of them in his or her will where (as here) the parent had the means to do so.
(h) As the ABC case makes clear, the court on an application of this kind can take into account special circumstances which might give rise to a moral duty where a child is for example, induced to believe that by working on a farm, he or she will ultimately become the owner of it. In my view, this is undoubtedly a consideration which arises in the present case. Even if none of the representations made to the plaintiff in the present case (either by his father, his uncle or his mother, the deceased) were enforceable against the deceased’s estate, there is no reason to doubt that the statements quoted in paras. 73, 76 and 77 above were made. The plaintiff was led to believe that he would receive an interest in the farm. That was very clearly a consideration to which the deceased, as a just and prudent parent, ought to have borne in mind when it came to making her will.
(i) Furthermore, the plaintiff’s work on the farm from age fifteen onwards was a huge part of his life. Thus, quite apart from any representations made to him, his experience on the farm from such an early age most definitely shaped his upbringing, training and life. In my view, quite apart from the representations, this seems to me to be a factor which the deceased, if she were to act as a just and prudent parent, would have to bear in mind in considering what provision she should make for her children under her will.
(j) On the other hand, I must bear in mind that similar considerations apply to the defendant and to J. at least insofar as the sand and gravel business is concerned. While the evidence before me demonstrates that the plaintiff had a much more significant role on the farm than either the defendant or J., it is also clear that both the defendant and J. had very substantial roles in the family sand and gravel business. Furthermore, it appears equally clear that, as between J. and the defendant, it is the latter who had the greater role within the sand and gravel business.
(k) Another factor which has to be borne in mind is the manner in which the plaintiff was expelled from the family business in 2007. That expulsion took place at the height of the building bubble that had gripped the State at that time. The sand and gravel business and the related concrete making business was therefore booming at that time and there is no suggestion that there was any inkling at the time that the business was likely shortly afterwards to go into a decline. In those circumstances the expulsion was particularly harsh.
(l) In my view, this factor has the potential to increase any moral duty owed by the deceased to make provision for the plaintiff. Having been cast out of the family business and left to fend for himself (notwithstanding his age and lack of experience, all of which made the prospects of a successful alternative career very poor) this seems to me to constitute a further circumstance that I must now bear in mind in considering whether there was a moral duty on the part of the deceased to make more significant provision for the plaintiff in her Will than the bequest actually made for him.
(m) A further factor that must be borne in mind is the contention made on behalf of the defendant that the plaintiff was abusive to his mother. However, while that case was certainly made by the defendant, I have found (as para 63 above makes clear) that there is very little evidence of any abuse. I do not discount the possibility that the defendant may have shouted at his mother from time to time. However, it would seem to me that there would have to be much more significant evidence of abuse before this factor could carry any significant weight in the overall consideration of all circumstances.
(n) I must also bear in mind that, as I have already found, the deceased resented the participation of the plaintiff’s in-laws in the litigation described above. In my view, while that feeling of resentment may be understandable, it is not a consideration that any just and prudent parent should properly bear in mind when it comes to consideration as to how that parent’s estate should be dealt with after death. I regret to say this but, in my view, a just and prudent parent should not harbour resentment or antipathy in such circumstances. I therefore do not believe that this is a factor which can ultimately carry any weight in my consideration as to whether there was a failure of moral duty on the part of the deceased. In particular, I do not believe that it justifies the rather modest provision made for the plaintiff in the Will as compared to the provision made for the defendant and J.
(o) The difference between the provision made for the defendant and J. on the one hand and the provision made for the plaintiff on the other is striking. It is impossible to account for it other than on the basis that the deceased harboured an ongoing resentment in respect of the participation by the plaintiff’s in-laws in the litigation described above. It is almost as though the deceased wished to punish the plaintiff twice. In the first place, he was punished by his expulsion from the family business in 2007. Secondly, he was punished by the lack of provision made for him in the will notwithstanding his very modest circumstances. In my view, a just and prudent parent would not act in this way. On the contrary, it seems to me that a just and prudent parent would wish to reward all of her sons in a similar way in respect of the very significant contribution which each of them had made to the respective businesses carried on by her and previously by her husband and brother in-law. Thus, a just and prudent parent would, in my view, wish to reward the plaintiff for the work done by him on the farm. In addition, it seems to me that a just and prudent parent would wish to compensate the plaintiff for the fact that he had been expelled from the family business in 2007 and left to fend for himself.
134. Having regard to the considerations outlined in para. 133 above, I have come to the conclusion that the deceased here did fail in her moral duty to make proper provision for the plaintiff in her last will. In my view, the plaintiff, in the very particular circumstances of this case, has satisfied the high onus that rests on him to demonstrate that there was a failure of moral duty on the part of the deceased. While the deceased had a moral duty to provide for the defendant and for J., I am of the view that there was a manifest failure on her part to make proper provision for the plaintiff in accordance with her means. She had an extensive estate. The plaintiff had obvious needs. He had been left in a very difficult position following his expulsion from the family business in 2007. By reason of his leaving school at such an early stage and by reason of his lack of experience for anything other than work on the family farm and in the family business, a just and prudent parent would, in my opinion, have made more significant provision for him. The gift to him under the will was disproportionately small when compared with the gifts to the defendant and J. (the other children to whom she undoubtedly owed moral duties having regard to the roles which they had played in the family business).
135. In light of the conclusion which I have reached as set out in para. 134, I must now consider what provision should be made for the plaintiff out of the estate of the deceased.
136. In order to consider what provision should properly be made for the plaintiff, it is necessary to consider the terms of the Will made by the deceased on 31st August, 2011. Leaving aside the very small gifts to the daughters of the deceased, the estate was divided in the following way:-
(a) J. received a gift of a very small parcel of lands at C.; I do not have a valuation for those lands. However, these lands are so obviously small in area that they can be discounted for present purposes.
(b) The defendant was given two separate parcels of land namely 75.8 acres at G. and 123 acres at C. & M. In the course of the hearing, I was provided with an agreed valuation of these lands as at June 2018. While this is a current valuation rather than one at the date of death, it seems to me that it can usefully serve as a proxy in order to assess the relative value of the gifts to the defendant as at the date of his mother’s death. According to the agreed valuation by J.P. & M. Doyle, the value of the lands comprising 75.8 acres as of June 2018 was €1.5m and the value of the parcel of 123 acres as at the same date was €1,750,000. This suggests that the value per acre of the 77.8 acre farm is greater than the value per acre of the 123 acre farm.
(c) The plaintiff received a gift of 3.5 acres of land at M. with a value as at June 2018 of €100,000. Again, that seems to me to serve as a useful proxy for the value of those lands at the date of death.
(d) The shares in the family company were divided as between J. and the defendant. J. received 40% of the shareholding in that company while the defendant received 60%. In the Inland Revenue affidavit the total value of the shares in the company, as at the date of death of the deceased, was €508,725.
(e) In addition, the deceased left her total shareholding in a further company (which owns 55 acres elsewhere) to J. However, although the value of the 55 acres as at June 2018 was agreed at €750,000, the evidence given by the deceased’s accountant at the trial was that the value of that company was nil in circumstances where it had significant liabilities to the main family company mentioned at (d) above.
(f) The deceased also left her livestock and machinery to the defendant and J. (to be divided equally between them).
137. It is clear, therefore, that the defendant received the bulk of the estate of the deceased. J., in the course of his evidence at the trial, made no complaint about this. The value to him of his shares in the family company is of the order of €200,000 while the value of the shares in the family company to the defendant is of the order of €300,000. This is on a very rough basis, having regard to the fact that, as noted above, the total value of the shareholding held by the deceased in the family company was stated to be €508,725.
138. The total value of the gifts to the defendant (excluding the livestock and machinery) was, therefore, of the order of €3,550,000. In contrast, the total value of the gift to the plaintiff was €100,000 (again using the June 2018 valuation as a proxy for the value at the date of death of the deceased).
139. If one were to take the values given in the Inland Revenue affidavit, the total value of the gifts – as at the date of death of the deceased – was just over €3m in the case of the defendant while the total value of the gifts to J. was €748,547. In both cases, these values are stated to include benefits passing on survivorship. In contrast, the value of the gift to the plaintiff was €42,000.
140. For the purposes of this exercise, I do not propose to take into account the value of the family homes of both the plaintiff and the defendant. Based on the J.P. & M. Doyle valuations of June 2018, the valuation of both properties was very similar. Leaving the value of the respective family homes aside, it is clear that the defendant is to receive the Lion’s share of the estate under the Will. The share to J. is significantly less. In those circumstances, I do not believe that it would be appropriate to interfere with the gift to J. under the Will. It seems to me, on the contrary, that any adjustment in favour of the plaintiff must be at the expense of the defendant.
141. In my view, the deceased was, of course, fully entitled to make a more generous gift to the defendant than to the plaintiff. However, it seems to me that the disparity between the gifts is extreme and that a just and prudent parent would not, in light of the considerations outlined in para. 133 above, permit such a disparity to exist. If one were to take the total value of the lands described in the Will (excluding the gift of lands to J.), the total value (again using the June 2018 valuations as a proxy) was €3,350,000. This is made up of €1.5m in respect of the lands at G., €1,750,000 in respect of the lands at C. & M. and €100,000 in respect of the lands given to the plaintiff under the Will. It seems to me that, while continuing to honour the deceased’s intention to favour the defendant, a more appropriate split in terms of value would be in the range of one third to two fifths to the plaintiff and two thirds to three fifths to the defendants. In terms of figures (based on the 2018 valuation), the range would be of the order of €1,117,000 to €1,340,000 to the plaintiff with a range of €2,233,000 to €2,010,000 to the defendant. I stress that these are no more than broad brush figures. They are not intended by me to be anything more than a very rough and ready guide as to how the estate should be divided by a just and prudent parent. In light of the history of the plaintiff in relation to the farm, I am convinced that a just and prudent parent would provide for him by means of a gift of land rather than a gift of money out of the estate.
142. If the plaintiff were to receive all of the lands given to him under the 1997 promise, I was informed at the hearing that he would receive 73% of the 123 acres at C. & M. which are given to the defendant under the Will. In round terms that would equate, by my calculations, to €1,277,500 (i.e. 73% of €1,750,000). In my view, that is within the range of values which I believe a just and prudent parent would consider (allowing for the desire of the deceased to favour the defendant over her other children including the plaintiff while at the same time making proper provision for the latter). In these circumstances, it seems to me that the appropriate provision to be made for the plaintiff is to give him the lands which were promised to him in 1997 – namely the lands from the village up to C. ” where the stone wall goes through the shed “. In other words, the provision to be made for the plaintiff should be the lands which were to be given to him under the 1997 Will less the two additional fields which lay to the eastern side of the red line described by me in para. 78 above.
143. While I do not have any separate valuation for this area of lands, this would seem to me to be appropriate having regard to the range of values outlined in para. 141 above while at the same time ensuring that the plaintiff receives a gift of land rather than of monies. I appreciate that, by proceeding in this way, the ultimate value of the gift to the plaintiff may transpire to be somewhat less (or perhaps somewhat more) than the range of values set out in para. 141 above. However, as I have sought to emphasise, this range of values is no more than a rough and ready attempt on my part to ensure that proper provision is made for the plaintiff while at the same time continuing to honour (insofar as it can be done without encroaching on the proper provision to be made for the plaintiff) the wish of the deceased to favour the defendant in her Will.
Conclusion
144. While I have attempted to deal with the case under s. 117 of the 1965 Act in the event that I am wrong in the conclusion which I have reached in relation to the claim made by the plaintiff on foot of the testamentary contract and representations, I do not believe that it would be appropriate for me to make any order under section 117. I have dealt with s. 117 solely for the purposes of setting out my view, in the event, that I am subsequently held to be wrong in the conclusion which I have reached in relation to the contractual and estoppel elements of the plaintiff’s case. In my view, subject to hearing any submissions from the parties to the contrary, the only orders to be made in this case are those set out in paras. 112 and 125 above.
145. As it happens, there is no distinction between the extent of the remedy to be granted under s. 117 on the one hand (were it necessary to make an order under that section) and the extent of the remedy to be granted in respect of the testamentary contract and related proprietary estoppel claim on the other. I should make clear for completeness that, in light of the relief granted in respect of the latter claims, I can see no basis on which the plaintiff could also expect that provision be made for him under s. 117.
Darragh & anor v Darragh
[2018] IEHC 427 (23 July 2018)
JUDGMENT of Mr. Justice Denis McDonald delivered on the 18th day of July 2018
The motion before the court
1. In these proceedings (which were commenced by Plenary Summons issued on 17 May, 2017), the Defendant has brought a motion seeking the following relief:-
(a) An Order dismissing the proceedings on the basis that the Plaintiffs have no locus standi to maintain the proceedings;
(b) In the alternative, the Defendant seeks an Order dismissing the proceedings on the basis that the Plaintiffs have no reasonable cause of action;
(c) An Order is also sought setting aside all caveats, warnings and appearances entered in relation to the estate of the late Mr. Austin Darragh deceased;
(d) The Defendant also seeks an Order preventing the Plaintiffs from lodging any further caveats in respect of the estate of the deceased.
Background
2. The Defendant is the widow of the late Austin Darragh (“the Deceased”) who died, testate, on 4 October, 2015. The Defendant married the Deceased in 1998. The Deceased had previously been married to Marie Therese (Terry) Roddy on 11 April, 1950. His first wife died on 8 August, 1992 following a long illness. The Deceased and his first wife had four children including both of the Plaintiffs in these proceedings. Prior to her marriage to the Deceased, the Defendant had previously been married and had two sons of her own, namely Colm McDonnell and Richard McDonnell.
3. By his Will made on 22 July, 2011, the Deceased made the following provisions:-
(a) In the event that the Defendant survived him for a period of 30 days, he gave the entire of his estate to her and appointed her as his executrix;
(b) In the event that the Defendant did not survive him by 30 days, he appointed Colm McDonnell and Tom McGuinness as his Executors and Trustees, and directed them to convert his Estate into money and divide it equally between his four children and two stepchildren, Colm McDonnell and Richard McDonnell.
4. Prior to the commencement of these proceedings on 17 May, 2017, the Plaintiffs had issued a motion which was listed in the Probate (Non-Contentious) List on 3 April, 2017 in which they sought the following relief:-
(a) An Order directing the Defendant in these proceedings to produce all testamentary papers;
(b) An Order directing the Defendant and her solicitors to provide for inspection “all or any mutual Wills from in about July 2011, or as the case may be ….to swear positively that there never were then nor are now any such mutual Wills”;
(c) An Order directing the Defendant to provide an account to the court in relation to the proceeds of sale of certain property;
(d) The appointment of an independent administrator.
5. The motion in the Probate List was supported by a lengthy affidavit sworn by the Plaintiffs in these proceedings (containing 41 paragraphs). There is a dispute between the parties as to what occurred before the Probate Judge, Baker J. The Defendant maintains that Baker J. “saw the matter for what it was” which I understand to be a suggestion that Baker J. considered that there was no foundation to the relief sought in the probate motion. In a later affidavit sworn by the Defendant, it is suggested that Baker J. considered that the application “had no merit”. However, the Plaintiffs dispute this. They maintain that Baker J. “saw herself lacking jurisdiction …to deal with matters, which had become contentious …”. There is also a dispute as to whether an affidavit was to be filed by the Defendant in the course of the proceedings before Baker J. The Plaintiffs maintain that there was a failure to file such an affidavit. The Defendant maintains that no such affidavit was ever required. I am in no position to determine which of these versions of events is correct. Neither side sought to place in evidence before me the Digital Audio Recording (“DAR”) of the hearing before Baker J. In the circumstances, all I can do is to note that under the terms of the Order made by Baker J., the application made by the Plaintiffs at that time was dismissed reserving the costs of the application to be determined in these proceedings. At this point, it should be noted that the present proceedings were commenced prior to the conclusion of the matter before Baker J.
The claim made in the present proceedings
6. Given the nature of the application currently before the court, it is essential to analyse the nature of the relief which has been claimed by the Plaintiffs in these proceedings. To date, no Statement of Claim has been delivered. This is in circumstances where, as counsel for the Plaintiffs has explained, no affidavit of scripts has yet been filed by the Defendant. The Plaintiffs rely on the provisions of Order 20, Rule 5 which provides that in a probate action, the plaintiff “shall not be bound to deliver a Statement of Claim until the expiration of eight days after the Defendant has filed his Affidavit as to scripts”. As described in more detail in paragraph 10 below, counsel for the Plaintiffs has maintained that it is crucial that the affidavit of scripts should be delivered before the Plaintiffs deliver their Statement of Claim.
7. The claim of the Plaintiffs, as set out in the General Indorsement of Claim in the Plenary Summons, is (verbatim) as follows:-
“1. The Plaintiffs claim as the son and daughter of Austin Darragh deceased who died on the 4 October, 2015 that the Defendant widow of the deceased and who has failed to prove a purported testamentary paper of the 22 July, 2011 (produced in copy by her son Colm McDonnell to the first Plaintiff somewhat over 30 days beyond the death of the reputed testator) that she produce said original purported testamentary paper to the High Court and have same condemned or proved in solemn form of law.
2. The Plaintiffs further claim that the said Defendant produce at the same to the High Court the mutual Will of the Defendant made in 2011, where the Defendant as respondent to a specific probate motion in that behalf has failed to deny on oath her execution of such mutual Will in 2011.
3. The Plaintiffs in the premises seek the appointment of an independent Administrator with or without Will or mutual Will annexed, as the case may be, pursuant to the inherent jurisdiction of the Court, or by special statutory grant under Section 27(4) of the Succession Act, 1965.
4. Further or other Reliefs including injunctive Reliefs.
5. The reception of the Plaintiffs’ Affidavit of the 10th March, 2017, if necessary into these proceedings”.
8. It will be noted that insofar as the first relief in the Indorsement of Claim is concerned, no grounds are given as to why the Will should be condemned, or as to why the Defendant should be required to prove the Will in solemn form of law. In truth, while framed in terms that the Will should either be condemned or approved in solemn form of law, the Plaintiffs (as both their affidavits and the submissions made on their behalf clearly show) are seeking evidence which may assist them in a possible challenge to the Will, and in particular, which may assist them in identifying a sustainable ground on which such a challenge might be advanced.
9. In a probate action seeking to condemn a Will, one would ordinarily expect that the indorsement of claim would state in brief and general terms the basis on which such relief is sought such as:-
(a) The Will was not executed in compliance with the statutory rules in Section 78 of the Succession Act, 1965 (“the 1965 Act”); or
(b) The testator did not know and approve the Will; or
(c) The testator was not of sound mind, memory and understanding at the time he made his Will such as to lack the necessary testamentary capacity required by Section 77 of the 1965 Act; or
(d) The execution of the Will was tainted by duress or undue influence.
10. When I raised that issue with counsel for the Plaintiffs (i.e. as to why paragraph 1 of the Indorsement of Claim was pleaded in the manner set out above), I was informed that the Plaintiffs are essentially reserving their position until after they see an affidavit of scripts from the Defendant. The Plaintiffs rely on the provisions of Order 20 Rule 5 (as set out above) and on Order 12, Rules 27-29 which envisage that in probate actions, the plaintiff and defendant are each required to file an affidavit of scripts. The Plaintiffs, here, have each filed affidavits of no scripts. They say that they are now entitled, in this action, to expect that an affidavit of scripts will be sworn by the Defendant. On receipt of the Defendant’s affidavit of scripts, I was informed that the Plaintiffs will make a “cool and calm decision” as to whether to proceed with the challenge to the Will and, if so, to decide on the grounds of such challenge. Counsel for the Plaintiffs said that perhaps the Plaintiffs’ suspicions have become “too gothic” and that when the Plaintiffs see the scripts, they will either be assuaged or they will take the matter further.
11. When I enquired of their counsel as to what the Plaintiffs believe an affidavit of scripts may show, his response was that it may assist in determining whether there were mutual Wills made by the Deceased and the Defendant. It was also suggested by counsel that the scripts may show that the Deceased was not fully aware of his financial circumstances, and this would assist (so it was suggested) the Plaintiffs in making a case of undue influence or in mounting a challenge to the execution of the Will. As noted in paragraph 26 below, the Plaintiffs in their affidavits filed in the course of the present application have also suggested that if the scripts show that the Deceased was not fully aware of his financial circumstances, this may assist them in making a case that he lacked the necessary testamentary capacity. The Plaintiffs rely on the following statement fromMiller on Probate, chapter 25, at p 282 where the author says:-
“In several cases which have been tried, it has been found that parties have sworn to an ignorance of all testamentary papers save the one in controversy, and yet, at the hearing of the cause, the same persons, or their solicitors, have produced and given in evidence most important and manifest testamentary papers, which ought to have been lodged as scripts, and which, perhaps, if lodged and inspected by the opposite party, would have satisfied him that further litigation would be hopeless. Thus, the letters from the testator giving instructions for his will are within the rule, and yet they are seldom lodged, but always read and relied on at the hearing, and in several cases the Judges have strongly urged the necessity of preserving and lodging the envelopes in which wills, etc. are found …and their value in evidence has been frequently seen”.
12. The Plaintiffs draw attention to the wide range of testamentary papers that fall within the ambit of “scripts” as explained byMiller. The Plaintiffs clearly hope that among the documents to be disclosed in the Defendant’s affidavit of scripts will be the instructions given by the Deceased, and perhaps also the notes of any meeting between the Deceased and his solicitor. Whether these would disclose any facts that might give a basis to challenge the will is a matter of speculation,
13. Counsel for the Plaintiffs also submitted that the present motion by the Defendant was a “pre-emptive strike” designed to avoid having to swear an affidavit as to scripts. On the other hand, in light of the considerations identified in paragraphs 8-10 above, an issue arises as to whether these proceedings can truly be considered to be a “probate action” requiring the delivery of an affidavit of scripts. In particular, a question arises as to whether a plaintiff is entitled to launch proceedings on the basis outlined above in the hope that evidence will emerge in the affidavit of scripts to be filed by an executor that will enable the plaintiff to formulate a case. This is an issue that I address in more detail below.
The evidence before the court
14. The Affidavit of the Defendant grounding this application was sworn on 14 July, 2017. In that affidavit, the Defendant suggests that these proceedings were launched when it became clear that the Probate Judge (Baker J.) was not disposed to grant the application before her. She also suggests that the Probate Judge said there was no need for the Defendant to swear a replying affidavit to the affidavit grounding the motion brought by the Plaintiffs in the Probate List. As I have already indicated, I am not in any position to form a view on what might have been in the mind of the Probate Judge in circumstances where the present application has been heard on the basis of affidavit evidence only, neither side has supplied a transcript of the hearing before the Probate Judge, and where the parties are not ad idem as to what occurred before her.
15. In relation to the first relief sought in the Plenary Summons, the Defendant says that it is her intention to prove the Will of the Deceased in common form, but that she is currently prevented from doing so because of the caveats which have been lodged in the Probate Office. It is also contended that the Plaintiffs have nolocus standito pursue the claim made in paragraph 1 of the Plenary Summons in circumstances where they have no interest in the estate of the Deceased.
16. With regard to the relief sought in paragraph 2 of the Plenary Summons, the Defendant says that any matters relating to her own estate (including whether she has made a Will and the terms of any such Will) are “entirely private matters and confidential to me”. The Defendant also refers to the affidavit of her solicitor, Brian Ó Longaigh, in which he says that the Will made by the Deceased was a “stand alone document”, and that he was not instructed by the Deceased to make a mutual Will for him along with any other person.
17. Mr. Ó Longaigh also refers to the affidavit sworn by Elizabeth Gilmartin, one of the attesting witnesses to the Deceased’s Will, in which she briefly describes the circumstances in which the Will was executed.
18. In paragraph 21 of her affidavit, the Defendant says that she did not make a mutual Will. In the same paragraph, she maintains that even if she had made such a Will, any cause of action arising from it would only accrue after her death.
19. With regard to the relief claimed in paragraph 3 of the Indorsement of Claim (where an Order is sought appointing an independent administrator), the Defendant maintains that there are no special circumstances rendering it necessary or appropriate for the court to grant representation to a person other than herself. She draws attention to the fact that she is not only the sole executrix, but she is also the universal legatee of her late husband, the Deceased.
20. In her affidavit, the Defendant also contends that the present proceedings are not being pursued in abona fideway. One of the matters the Defendant advances in support of that proposition is the fact that prior to the commencement of the proceedings, enquiries were made by the Plaintiffs of her solicitors as to whether her solicitors had authority to accept service of the proceedings. Notwithstanding that her solicitors confirmed that they had such authority, the second named Plaintiff served the proceedings personally on the Defendant.
21. The question of thebona fidesof the Plaintiffs in pursuing these proceedings is further addressed in the written submissions delivered on behalf of the Defendant. In those submissions, it is suggested that the fact that the Plaintiffs have changed solicitors on a number of occasions suggests that advice has been given to the Plaintiffs that did not suit them. This seems to me to be pure speculation and I do not have regard to it in my consideration of the issues which I have to determine. It is also suggested in the submissions that the Plaintiffs know that they have no grounds whatever for challenging the Will, and concern is expressed at the costs incurred in having to deal with these proceedings which will ultimately diminish the value of the estate which has been left by the Deceased to the Defendant, his widow. Reference is also made in the submissions to the decision of the Supreme Court inElliott v. Stamp[2008] 3 IR 387 at pp 395-396 where Kearns J. (as he then was) said:-
“It is beyond doubt that estates can be entirely dissipated by legal proceedings brought by disappointed parties whose intention may be to force the executor into some form of settlement or to vindictively waste the assets in legal proceedings which, even if capable of being seen as properly brought at the outset, can no longer be seen as such once the full picture has been made available by those defending the proceedings. I see this as the equivalent in probate terms of a lodgment or tender made in a personal injuries action. I believe it is an approach which should be adopted whenever possible. It would represent a valuable protection for the estates of deceased persons, without in any way diluting the principles enunciated in Vella v. Morelli. 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”.
However, in my view, the decision in that case is of limited relevance here. As the judgment of Murphy J in the High Court [2006] IEHC 336 at paragraph 1 makes very clear, the plenary summons in that case expressly sought declarations that the will in issue was not validly executed, the testator was not of sound disposing mind, and the will had been procured by acts of undue influence brought to bear upon the testator by the defendants to those proceedings. This is in marked contrast to the present case. Furthermore, it seems to me that the principle which emerges from the judgment of Kearns J would only be applicable where a plaintiff brings proceedings forward to trial notwithstanding full disclosure of all facts and documents by the defendants at an early stage of the proceedings which show the case not to be maintainable. The decision does not therefore seem to me to be immediately relevant to this case in which the claim is pleaded quite differently and where the issue is whether the case should be dismissed at an interlocutory stage.
22. Moreover, the Plaintiffs strongly contest that full disclosure has been made in this case. They say they need to see the scripts (which would include any note of instructions given by the Deceased to his solicitor in relation to his Will) in order to assess whether there is a basis to challenge the Will. They raise a number of issues in their replying affidavit sworn on 13 October, 2017. They also ask the court to take into account what they previously said in their affidavit sworn in support of their motion in the Probate List. That affidavit was sworn on 10 March, 2017. In that affidavit, the Plaintiffs explained that their application to the Probate Judge was essentially premised upon the footing that the Deceased and the Defendant made mutual wills in July 2011. However, it is noteworthy that there is nothing in that affidavit which provides any actual evidence that mutual wills were made in July 2011. The furthest the affidavit goes is to refer to a letter from Crowley Millar, solicitors for the Defendant, written on 15 November, 2016 in which they stated that:-
“We are satisfied that both Austin and Anna Darragh had full capacity and were fully aware of the nature of the Wills they made in 2011”.
In my view, that letter does not, of itself, suggest that the wills were mutual in nature. I examine in more detail below the issues that arise in relation to mutual wills and what must be established in order to make a case based on mutual wills. It is sufficient to note, at this point, that the mere fact that wills are executed at or close to the same time is not evidence that the wills are intended to be mutual wills.
23. In the affidavit sworn in March 2017, the Plaintiffs say that the Deceased was 85 years old when he signed the Will in 2011. They also suggest that he was very reliant on painkillers and anti-inflammatory medication at this time, and that he had also been drinking heavily. They do not go so far as to allege that he lacked testamentary capacity. They say that the Deceased was aware that his youngest daughter suffered with a serious bipolar disorder and that she had been hospitalised on numerous occasions since the diagnosis was made. The Deceased was also aware that one of the Plaintiffs was in poor financial circumstances, and they maintain that under earlier Wills, their father had provided for his own children. In this regard, I do not know whether it is the intention of those children of the Deceased to bring proceedings under Section 117 of the 1965 Act. However, I note that previously, in the initial letter that was sent on behalf of the second named Plaintiff on 13 November, 2015, Messrs. Early & Baldwin (his then solicitors) intimated that a claim under Section 117 might be brought. This was the only form of proceeding that was indicated at that time.
24. A number of allegations are made in the affidavit suggesting that, prior to the death of the Deceased, the Defendant sought to prevent or discourage one of the Plaintiffs from visiting his father. There are also allegations that, after the funeral, none of the Deceased’s four children was invited back to the family home.
25. Much of the affidavit is concerned with a meeting which took place in the Stillorgan Park Hotel on 30 November, 2015 when Colm McDonnell, one of the Defendant’s sons, provided a copy of the Will to the Plaintiffs together with a document dealing with the proceeds of sale of an asset of the Deceased apparently sold in 2006 or 2007. There is also an allegation that part of the proceeds of this asset were “earmarked” by the Defendant to assist her first husband who it is alleged was in financial difficulty. However, the basis for this allegation has not been set out in the affidavit. On the basis of the evidence currently before the court, it is difficult to avoid the conclusion that the allegation is based on pure speculation. Given the speculative nature of this allegation, I do not believe that it is a matter to which the court can properly have regard.
26. In the subsequent affidavit sworn by them on 13 October, 2017, the Plaintiffs reiterate that the statement of account (which they say was produced to them by the Defendant’s son at the meeting on 30 November, 2015) was misleading. They also maintain that at the time of execution of the 2011 Will, their father was not correctly apprised of the extent of his assets. They rely on the Law Society (Best Practice) Guidelines issued in February 2009 dealing with the drafting of wills for elderly clients. They suggest that “full testamentary awareness could not have been met as our father, his solicitors and his accountant did not know the quantum or whereabouts of monies he had …”. Yet, the indorsement of claim on their plenary summons makes no claim to that effect
27. The Plaintiffs say that upon receipt of the Defendant’s affidavit of scripts, “we may seek the following reliefs” (emphasis added). For present purposes, it is unnecessary to set out all of the relief which “may” be sought by the Plaintiffs. It is sufficient to note that among the relief which possibly may be claimed in the future includes:-
(a) A declaration that the Deceased was not fully apprised of the disposing effect of his Will as he did not know the extent of his assets “amounting to undue influence or lack of testamentary capacity”;
(b) A declaration that the Defendant be restrained from revoking or altering her mutual will;
(c) A declaration that the Will of the Deceased dated 22 July, 2011 is “void/voidable due to lack of appreciation by the Deceased of the extent of his assets and/or a lack of disclosure to him of the Defendant’s intentions with his (extant) assets, where she continually failed to reveal her plan to financially assist her first family at the expense of step-children; amounting to lack of testamentary capacity/undue influence and/or deceit upon the Deceased”.
28. With regard to the allegation that there were mutual wills executed by the Deceased and the Defendant at the same time, the Plaintiffs say that the necessary mutuality can be inferred by a court following a “scrupulous analysis of all of the facts, documentation, and other relevant considerations”.
29. The Defendant swore a further affidavit on 22 December, 2017 in which she says that the Plaintiffs have not advanced any ground to justify why she should have to prove the Will of the Deceased in solemn form of law. She also maintains that no grounds have been advanced for her removal as executrix. She complains that the proceedings have been brought in an effort to diminish the value of the estate available to her in circumstances where she contends that the Plaintiffs are aggrieved that she is the sole beneficiary. In response to that suggested grievance, she says she is 74 years of age and she needs the provision made for her by the Deceased in order to “live out my life”.
30. The Defendant also says that there is no evidence to suggest that the Deceased lacked capacity. She draws attention to the affidavit evidence that is available both from Mr. Ó Longaigh and from Elizabeth Gilmartin that the Will was executed in accordance with the requirements of the 1965 Act. She says that a duly executed Will carries with it a presumption of capacity, and that the onus of proof lies on the Plaintiffs to establish any lack of capacity or any undue influence. The Defendant maintains that no evidence has been placed before the court to suggest that the Deceased was unduly influenced by anyone. In circumstances where she was married to her husband for a period of 17 years at the date of death, she suggests that the terms of the Will are unsurprising.
31. Insofar as the Plaintiffs suggest that mutual wills were executed by the Defendant and the Deceased, the Defendant says that the Plaintiffs are engaged in pure speculation, and that they have placed nothing before the court to undermine the evidence given by her and by Mr. Ó Longaigh in relation to this issue.
32. With regard to the allegation that the Deceased did not know the quantum or whereabouts of the assets the subject matter of his estate at the time he made his Will, the Defendant says that the allegations made by the Plaintiffs are “entirely fanciful and without foundation”. She relies also on a supplemental affidavit sworn by Mr. Ó Longaigh on 8 January, 2018 in which he says that the Deceased was a very astute man and that he has no reason to doubt that the Deceased was fully conversant with his assets at the time he made his Will. For completeness, it should be noted that Mr. Ó Longaigh does not, however, exhibit any relevant note of his meeting with the Deceased or of any written instructions obtained by him from the Deceased.
33. There was a final affidavit sworn by David Darragh, the second named Plaintiff, on 29 May, 2018. In that affidavit, Mr. Darragh gives further detail about a complaint (which had been mentioned in the previous affidavit evidence) made by him to the Chartered Accountants Regulatory Board (“CARB”) in respect of Colm McDonnell (the son of the Defendant) who is a chartered accountant, and therefore subject to regulation by CARB. The complaint related to the statement of account furnished by Mr. McDonnell to Mr. Darragh at the meeting on 30 November, 2015. Mr. Darragh’s complaint was essentially rejected by CARB in circumstances where the relevant statement of account was not prepared by Mr. McDonnell but by Tom McGuinness, the “family accountant”. In his affidavit, Mr. Darragh contends that the furnishing of this account by Mr. McDonnell on behalf of the Defendant was intended to mislead the Plaintiffs. While this is an issue which has occupied space in several of the affidavits before the court, the relevance of this issue to the relief now claimed in these proceedings is not immediately apparent. While the Plaintiffs have claimed in their affidavit that the account furnished to them by Mr. McDonnell at the meeting on 30 November, 2015 was inaccurate in a number of respects, no case is made in these proceedings against Mr. McDonnell. There is, in fact, no cause of action pleaded on the basis of the alleged inaccuracies in the statement of account. Moreover, the assets of the estate will all have to be dealt with in due course in the usual Inland Revenue affidavit, and that affidavit will have to be accurate in all respects. It is at the point that the Inland Revenue affidavit is sworn that a true and accurate account will have to be given of the estate of the Deceased.
34. In the circumstances, I do not believe that it is appropriate that I should discuss in any detail in this judgment the allegations and counter-allegations that are made in relation to the statement of account and the meeting on 30 November, 2015.
The principles to be applied
35. As set out in paragraph 1 above, one of the principal forms of relief sought by the Defendant in this application is an Order dismissing the proceedings on the basis that the Plaintiffs have no reasonable cause of action. I was therefore surprised that, in the course of the hearing before me, neither side produced any authorities relating to the court’s jurisdiction to dismiss proceedings on that ground. In those circumstances, I drew to the attention of counsel for both parties the decision of the Supreme Court inLopes v. Minister for Justice[2014] 2 IR 301 and asked for their submissions in relation to the case. At this point, I should make very clear that it is not for the court to identify relevant authorities to the legal representatives of the parties. It is the responsibility of the legal representatives to place before the court the applicable authorities which are relevant to any application before the court. It is, of course, not usually necessary to place before the court every single authority on a particular issue. However, in my view, it is crucial that the legal representatives of the parties should place before the court the most relevant authorities, including any applicable Supreme Court or Court of Appeal authorities (which are obviously binding on the High Court). Where significant relief of the kind sought on this application is in issue, it is unsatisfactory that the legal representatives for the parties should proceed to argue the application without reference to the relevant authorities which set out the principles which must be applied by the court on an application of this kind.
36. InLopes, Clarke J. (as he then was) carefully reviewed the case law in relation to the court’s jurisdiction to dismiss proceedings and summarised the principles which must be applied. For the purposes of this judgment, it appears to me that those principles can be further synopsised as follows:-
(a) If on the basis of the facts pleaded, a case is bound to fail, then the proceedings should be dismissed under Order 19, Rule 28.
(b) In contrast, the inherent jurisdiction of the court can be invoked where it is possible to establish the facts at an interlocutory stage with clarity, and where it is possible to show (again with clarity) that those facts do not support the claim made such that the court can conclude that the proceedings are bound to fail on the merits.
(c) The inherent jurisdiction of the court should, however be sparingly exercised. The court should be slow to entertain an application to dismiss.
(d) In responding to an application to dismiss a claim, all that a plaintiff needs to do is to put forward a credible basis for suggesting that the plaintiff may, at trial, be able to establish the facts which are asserted and which are necessary for success in the proceedings. The court should bear in mind that, in a plenary action, a plaintiff has available the range of procedures provided for in the rules to assist in establishing facts such as discovery, interrogatories and the summoning of witnesses by subpoena. Some of these steps are not available at an interlocutory stage, in the case of others, it is usually not practicable to take such steps prior to the hearing of an application to dismiss.
(e) There are certain types of cases which are more amenable to an assessment of the facts at an early stage. This is especially so in cases which are wholly or significantly dependent on documents.
(f) Although not specifically stated by Clarke J. inLopes v. Minister for Justice, it is also clear from the case law that the onus lies on a defendant in an application of this kind to demonstrate that it is very clear either that the plaintiff’s claim is bound to fail or that it should be struck out under Order 19, Rule 28.
(g) Again, although not specifically mentioned by Clarke J. inLopes v. Minister for Justice,it is also clear from the judgment of McCarthy J in the Supreme Court inSun Fat Chan v. Osseous Ltd. [1992] 1 I.R. 425 (which is cited by Clarke J. in Lopes at p. 428) that if a statement of claim admits of an amendment which might, so to speak, save it and the action founded on it, then the action should not be dismissed. The same principle would, of course, apply in cases where a statement of claim has not been delivered, to an indorsement of claim. I would add that, in my view, if this principle is to be applied in any particular case, an intimation would have to be given by the plaintiff or his legal representatives that the plaintiff proposes to amend the claim.
37. When I enquired of counsel for the Defendant whether the present application was based on Order19, Rule 28 or on the inherent jurisdiction of the court, I was informed that the application was being moved on the basis of the inherent jurisdiction of the court.
38. In addition to the principles governing applications of this kind, it is also necessary to consider a number of other legal principles which are relevant to the issues which require to be considered by the court in this case. However, rather than attempting to summarise those principles at this point in the judgment, I believe it would be more helpful to consider these principles in the context of the individual issues which arise. I now turn to consider those issues.
The relief claimed
39. It seems to me that the appropriate course to take here is to consider, in turn, each of the forms of relief claimed in the Indorsement of Claim and to assess whether the Defendant has satisfied me that it is clear that the Plaintiffs are not entitled to succeed in relation to each such claim. I take the view in this case that it is more practicable to consider this issue first before addressing any questions oflocus standi. Obviously, if it is clear that the cause of action fails, then any issue oflocus standibecomes moot.
The relief claimed in paragraph 1 of the Indorsement of Claim
40. The terms of paragraph 1 of the Indorsement of Claim are set out in paragraph 7 above. As noted in paragraph 9 above, no grounds are advanced by the Plaintiffs for the relief sought by them in paragraph 1. As recorded in paragraph 10 above, counsel for the Plaintiffs very frankly acknowledged that the Plaintiffs propose to reserve their position until after delivery of an affidavit of scripts from the Defendant. Following delivery of that affidavit, and the inspection by them of the scripts available to the Defendant, the Plaintiffs will then make a decision as to whether to proceed with a challenge to the Will, and if so, on what grounds. This seems to me to raise a fundamental issue as to whether a plaintiff is entitled to proceed in this way. While it is true that, as counsel for the Plaintiffs has submitted, the Rules envisage that a plaintiff, in a probate action, is not required to deliver a statement of claim until after the Defendant has delivered an affidavit of scripts, it is, in my experience, unprecedented for a plaintiff, in such an action, to plead a case in the terms set out in paragraph 1 of the Indorsement of Claim here. As noted further below, the claim made in paragraph one is self-contradictory. Furthermore, in my experience, it would be normal practice that a plaintiff, in such an action, will set out in the indorsement of claim the grounds on which such relief is claimed. Indeed, this is not peculiar to probate actions. Order 4, Rule 2 of the Rules specifically states that the indorsement of claim on a plenary summons should set out not only the relief claimed, but “the grounds thereof expressed in general terms ….”. There is accordingly no necessity for the indorsement of claim to be detailed. However, it must, in my view, set out the basic grounds on which the relief is claimed.
41. It is unsurprising that Order 4, Rule 2 requires that the indorsement of claim on a plenary summons should set out not only the relief claimed, but the grounds for that relief (albeit expressed in general terms). In that way, the plaintiff will plead his or her cause of action. This is consistent with the basic requirements that need to be in place in order to constitute a cause of action. In order to have a cause of action, the plaintiff must not only have a desire to obtain relief, but must also have the necessary grounds to seek such relief. That is reflected, for example, in the approach taken by Lord Esher M.R. inRead v. Brown(1888) 22 QBD 128 at p 131 which was, subsequently, specifically approved by the Supreme Court in this jurisdiction inHegarty v. O’Loughran[1990] 1 IR 148 at p 154 (in the context of deciding when a cause of action can be said to accrue).
42. Thus, for example, in a breach of contract claim, it is necessary for the plaintiff to claim not just damages but to specifically claim damages for breach of contract. Similarly, in a case alleging damages for negligence and breach of duty, it is necessary for the indorsement of claim to set that out. An indorsement of claim which simply claimed “damages” on its own – without describing in general terms the basis for that claim – would not disclose a cause of action. For completeness, I should make clear that this does not mean that every single paragraph in an indorsement of claim on a plenary summons must set out the grounds for the relief claimed. There are many circumstances where this is unnecessary. For instance, where a particular cause of action is pleaded, there may well be a variety of additional relief that can be sought flowing from that cause of action. For example, in a claim for a declaration that trustees are in breach of their duty as trustees or seeking a declaration that trustees have misappropriated assets of the trust, it would be common for the indorsement of claim to plead not only damages for breach of trust, but also to plead that the plaintiff seeks all necessary accounts and enquiries together with other consequential relief. The grounds for seeking such accounts or consequential relief do not have to be set out in the indorsement of claim once the relevant cause of action is pleaded earlier in the indorsement.
43. I should also make clear that, crucially, in the present case, this is not some mere pleading point. Obviously, if it were simply a case that an error had been made in pleading the Plaintiffs’ claim, this could be readily remedied. The indorsement of claim could be amended. This is consistent with the approach suggested by McCarthy J. inSun Fat Chan v. Osseous. However, in light of what I have been told by counsel for the Plaintiffs, and in light of what the Plaintiffs themselves say in their affidavit sworn on 17 October, 2017, this is not merely a pleading point. It is a point of real substance. The Plaintiffs, by their own admission, do not know whether or not they have a cause of action against the Defendant. They are not in a position to describe – even in a general way – the grounds on which they seek relief. It is evident from the submissions that were made to me that, at this point, the Plaintiffs are depending upon the delivery of the affidavit of scripts in order to assess whether they have any grounds on which to challenge the Will and, if so, to identify the relevant grounds of challenge. That is very evident from the exchange between the court and counsel (as recorded in paragraphs 10-11 above) and from the terms of the Plaintiffs’ affidavit sworn on 13 October, 2017. Furthermore, in paragraph 28 above, I have summarised what the Plaintiffs explain in their affidavit they “may” seek depending upon what emerges (if anything) from the Defendant’s affidavit of scripts.
44. It is clear that the Plaintiffs would like to find some ground for challenging the Will, but they are not in a position to identify what that ground is. They are trying to find some evidence to support a case based on undue influence or lack of testamentary capacity in order to identify a cause of action they might possibly rely on following which they will formulate and plead such a claim. I have to say that I do not believe that there is any proper basis on which a plaintiff can proceed in this way.
45. The Plaintiffs have not contended that they currently have a basis on which they could claim that the Deceased lacked testamentary capacity or that his Will was not duly executed or that the Will was procured through the undue influence of any person. As noted previously, they have been very frank. They have said that when they see the Defendant’s affidavit of scripts, they will either be assuaged or they will take the matter further. If they take the matter further, they appear to contemplate that they might (depending on what emerges from this affidavit of scripts) seek to make a case based on undue influence or lack of testamentary capacity or they may seek a declaration that the Defendant is not entitled to revoke or alter her alleged mutual Will.
46. The Plaintiffs are essentially saying that they cannot form a view as to whether they have any cause of action against the Defendant or whether they can formulate a claim against the Defendant unless and until they see her affidavit of scripts – following which they may – or may not – be able to advance and formulate a claim. This seems to me to be equivalent to what were once known as “fishing bills” which have long been regarded as impermissible. It is hardly necessary to cite any authority for that proposition. To the extent that it might be said to be necessary to cite authority, it seems to me to be found in the decision of Morris J. (as he then was) inLaw Society of Ireland v. Rawlinson[1997] 3 IR 592 (dealt with further below).
47. It is also well settled that there is no independent action for discovery save in the very exceptional circumstances described by the House of Lords inNorwich Pharmacal v. Customs & Excise[1974] AC 133 which was followed by the Supreme Court in Ireland inMegaleasing U.K. Ltd v. Barrett[1993] ILRM 497 in which the Supreme Court stressed that such a jurisdiction will only be exercised upon “very clear and unambiguous establishment of a wrongdoing” (see the judgment of Finlay C.J. at p 503). Save in those very particular circumstances, the correct position is, in the words of Lord Morris of Borth-y-Gest inNorwich Pharmacalat p 180:
“…..in general, the cases support the view that no independent action for discovery lies against a party against whom no reasonable cause of action can be alleged ….”.
48. InLaw Society v. Rawlinson, Morris J. drew attention to what had been said by Scrutton L.J. inGayle v. Denman Picture Houses Ltd[1930] KB 588 at p 590 where he described the plaintiff’s application for discovery before delivering a statement of claim as a “daring experiment”. He said:-
“I do not question for a moment that under the wide words of [the relevant rules of court] there is power to make such an order, but equally I think that it should not be made unless in most exceptional circumstances. A plaintiff who issues a writ must be taken to know what his case is. If he merely issues a writ on the chance of making a case, he is issuing what used to be called a “fishing bill” to try to find out whether he has a case or not. That kind of proceeding is not to be encouraged. For a plaintiff after issuing his writ but before delivering his statement of claim to say, “show me the documents which may be relevant, so that I may see whether I have a case or not”, is a most undesirable proceeding”.
49. That approach was followed in Ireland by Morris J. in theLaw Society Case. While Morris J., in that case, came to the conclusion that there were exceptional circumstances which made it appropriate to direct discovery prior to delivery of a statement of claim, he did so in very particular circumstances where he was satisfied that the plaintiff there was already in possession of sufficient information to enable it to prepare and deliver a statement of claim reflecting the basic ingredients of the case which it wished to advance against the defendant. For that reason, Morris J. said that it was not impermissible to proceed in that way. The discovery was sought in that case with a view to ensuring that the plaintiff would be able to plead a concise and clear statement of claim. There is no suggestion in that case that the plaintiff had not already pleaded its cause of action in the indorsement of claim. For that reason, the proceedings could not be said to be a “fishing bill”. Morris J. said at p 597:-
“….it appears to me beyond doubt that the plaintiff is already in possession of such information as would enable it to prepare and deliver a statement of claim reflecting the basic ingredients of the case which it wishes to make against the defendant. This is not a “trawling exercise” nor is it what has been described as a “fishing bill”. There is a clear and concise case to make. This case would undoubtedly, when discovery had been made, require alteration and amendment so as to include in or exclude from the statement of claim various particulars. Given the complexity of the case, the nature of the plaintiff’s statutory obligations to make good the solicitor’s default from the compensation fund, the fact that there clearly exists a stateable case capable of being pleaded in general terms and, finally, the desirability of having a concise and clear statement of claim which will enable the defendants to know the case which they have to meet, I am satisfied that this case falls into the category of exceptional cases referred to in the authorities ….”.
50. Thus, it will be seen that in contrast to the present case, the plaintiff in theLaw Society casealready had identified its cause of action as against the defendant, and simply required to see the defendant’s documents in order to plead its case in a clear and comprehensive way in its statement of claim. In such circumstances, there was no element of “trawling” or “fishing” to see whether it had a case to make against the defendant. However, in contrast in this case, in light of what has been said to the court both in submissions and in the affidavits sworn by the Plaintiffs, it is clear that the Plaintiffs are not able to say whether they have any claim to make to challenge the Will or to identify any grounds on which to mount such a challenge. The Plaintiffs here are, by their own admission, trawling in the hope that an affidavit of scripts will provide them with evidence to support some form of claim against the Defendant whether based on a challenge to the Will, or based on the existence of an allegedly mutual will.
51. I fully appreciate that the well-established principles discussed at paragraphs 47-51 above arise in the context of discovery. While the Plaintiffs are not seeking discovery (as such) in order to assess whether they have a cause of action, they are (again by their own admission) demanding that an affidavit of scripts be filed by the Defendant in order to see whether it might throw up material that might possibly support a cause of action. There seems to me to be a clear parallel between the approach of the Plaintiffs in this case and the approach taken where a plaintiff (as described in paragraph 46 above) seeks discovery in order to see whether he or she has a cause of action against a defendant. If it is impermissible for a plaintiff to seek discovery in order to know whether he or she may have a cause of action against a defendant, I find it impossible to see how it can be permissible to commence proceedings in the manner which the Plaintiffs have done here on the basis that, having themselves filed affidavits of no scripts, they can then demand that the Defendant file an affidavit of scripts – all with a view to seeing whether those scripts provide them with some evidential basis on which to identify a cause of action and mount a claim. If it were permissible to proceed in that way, it would become commonplace for disaffected relations unhappy with the provision (or lack of it) made for them in a will to launch proceedings in a similar way, pleading no cause of action and filing an affidavit of no scripts in the hope that any scripts produced by the defendant executor or executrix may provide them with some basis to challenge the will which has left them disappointed.
52. It is, of course, true that the Rules envisage that it is not necessary to deliver a statement of claim prior to delivery of the defendant’s affidavit as to scripts. It appears to me that the rationale underlying that rule is straightforward. For example, while a plaintiff may challenge a will on the grounds of undue influence or lack of testamentary capacity, it may well be impracticable for a plaintiff to plead his or her case comprehensively until it is known what scripts exist. If the statement of claim were delivered prior to receipt of the affidavit of scripts, this would run the danger that the statement of claim might subsequently have to be amended in circumstances where it had been delivered in ignorance of material which should properly be referenced in the statement of claim. However, in those cases, the plaintiff would have pleaded a cause of action in the indorsement of claim in relation to the relevant will. In other words, the plaintiff in such cases would identify in general terms in the indorsement of claim on the plenary summons the grounds on which he or she challenges the will. In such cases, the plaintiff would not be fishing for evidence but would have pleaded a cause of action in the indorsement of claim. That would be consistent with the approach taken inLaw Society v. Rawlinson & Hunterwhere the plaintiff was able to plead its cause of action, but needed discovery in order to properly and comprehensively plead its claim in its statement of claim.
53. In my view, that is a different situation to the present case. What confronts the court in the present case is a claim in paragraph 1 of the Plenary Summons which does not, in fact, plead any cause of action at all. It is simply a claim for relief with no grounds set out for the relief claimed. As noted above, this is not some simple failure of pleading. It is as a result of the deliberate decision of the Plaintiffs to commence proceedings even though they are not in a position to identify, at this point, any cause of action they might have on the basis of which the Will could be challenged.
54. In addition, the nature of the relief claimed in paragraph 1 is inherently contradictory. On the one hand, the Plaintiffs seek to require the Defendant to prove the Will in solemn form. Yet, on the other, it is sought to have the Will condemned. In both instances, no grounds (even in the most general terms) are set out in the Indorsement of Claim to support either of these claims. I cannot see how a plaintiff could plausibly proceed in that way. It would allow them to claim victory in the proceedings whatever view the court took of the will.
55. As noted previously, the reality is that the Plaintiffs wish to find a basis to attack the will, not prove it. In addition, it must be borne in mind that the Plaintiffs are children of the Deceased. If they thought there was a case to be made that their father lacked testamentary capacity, one would expect that they should be in a position to mount that case by reference to their own evidence or by reference to the evidence of some other witness. I note, for example, that their father’s housekeeper is mentioned in the affidavit evidence before the court. There must be other persons who were familiar with the Deceased at the time he executed his Will in 2011, and the Plaintiffs should therefore be in a position (if they thought they had a cause of action) to plead their case and subsequently call such persons as witnesses at the trial. In so far as any claim based on undue influence is concerned, if the Plaintiffs wished to make such a case, they would have the burden of showing that the Deceased, in writing his will, was acting under the influence of some other person. Unlike in the case of aninter vivostransfer (where, in certain relationships, undue influence will be presumed), there is no presumption of undue influence in probate law in the case of a will. This was re-iterated by Murphy J inLambert v Lyons[2010] IEHC 29. Thus, if the Plaintiffs here wished to advance a claim of undue influence, they would have to prove it as a fact.
56. In my view, it is clear that paragraph 1 of the indorsement of claim does not disclose a cause of action. As noted above, this is not a case where there is simply a defect in the pleading. On the contrary, the Plaintiffs have candidly admitted that they do not currently have a basis for contesting the Will. In the course of the hearing of the Defendant’s motion, there has been no application to amend the Indorsement of Claim in order to plead a cause of action. Instead, as noted above, the Plaintiffs have candidly admitted that they need to see such scripts as the Defendant may have before deciding on whether they have a basis for making a claim of some kind. In these circumstances, this is not simply a case where a plaintiff’s indorsement of claim does not disclose a cause of action. It is a case where the Plaintiffs have, by their own admission, no cause of action at this point.
57. Furthermore, the Plaintiffs have put forward no credible basis for suggesting that they may be able to establish any facts at trial that will enable them to sustain a challenge to the Will. This is not surprising in circumstances where they are not even in a position to identify a cause of action at this stage. In the course of the hearing before me, counsel for the Plaintiffs drew attention to what was said by Clarke J. inLopes v. Minister for Justice(after I had brought that decision to the attention of the parties) where Clarke J indicated that, in responding to an application of this kind, all that a plaintiff needs to do is to put forward a credible basis for suggesting that the plaintiff may, at trial, be able to establish the facts which are asserted and which are necessary for success in the proceedings. As Clarke J. observed in that case, the court, on hearing an application of this kind, should bear in mind that, in a plenary action, a plaintiff has available the range of procedures provided for in the Rules to assist in establishing facts such as discovery, interrogatories and the summoning of witnesses by subpoena. However, in my view, this presupposes that the plaintiff has, in the first instance, asserted a specific cause of action or asserted specific facts that might be said to give rise to a cause of action. In such circumstances, a plaintiff could, of course, rely on this principle and say to the court, on an application of this kind, that, although he or she is not at this point in the proceedings in a position to place direct evidence before the court in support of his or her case, the plaintiff expects that this can be done by calling appropriate witnesses who the plaintiff believes will be in a position to give evidence of the particular kind necessary for success in the proceedings in question. In my view, that is what Clarke J. had in mind when he adverted to this possibility in his judgment inLopes. In such circumstances, mere affidavit evidence from the relevant defendant denying the asserted claim would not be sufficient to unseat such a plaintiff. The relevant defendant would have to go much further and demonstrate either that there was no evidence to support the plaintiff’s case, or that, even with the benefit of the evidence which the relevant plaintiff suggests would be available at trial, the plaintiff would nonetheless have an unsustainable case.
58. The difficulty, however, facing the Plaintiffs in these proceedings is that they do not even get off the starting block. Not only has no cause of action been pleaded by them, but they have admitted that they currently do not have any basis to suggest that there is any evidence which might be available at a trial to support any cause of action. They are simply hoping or speculating that the scripts to be disclosed by the Defendant (in the event that the proceedings are not dismissed) will provide them with the necessary evidence. That is why – as they candidly admit – they need to see the scripts following which, as they have frankly acknowledged, they will then make a decision as to whether to pursue a case or not.
59. In my view, the Plaintiffs are not entitled to proceed in that way. I have formed that view for the reasons set out above – in particular, the reasons set out at paragraphs 51-57 above. Accordingly, I am compelled to hold that the Plaintiffs cannot succeed in the claim made by them in paragraph 1 of the Indorsement of Claim. I must now consider whether there is any other sustainable case made on behalf of the Plaintiffs in the Plenary Summons.
Mutual Wills
60. Before turning to the nature of the claim made by the Plaintiffs in the Indorsement of Claim in relation to mutual Wills, it may be helpful if I first briefly outline some of the applicable principles in relation to mutual Wills.
61.Brady on the Law of Successionexplains the concept of mutual wills in the following terms (at paragraph 1.12):-
“The constructive trust has also been employed by the courts with respect to mutual wills which arise when two people, usually but not invariably husband and wife, make wills under each of which property is left to the survivor of them with remainder to named beneficiaries, usually their children. The essence of the mutual will is that it is made in pursuance of an agreement that it shall not be revoked without the prior agreement of the other party and such agreement must constitute a contract at law, a mere understanding or arrangement being insufficient ….”.
62.Bradyalso explains that there is a dearth of Irish case law on the subject of mutual wills. There are, however, a number of English cases on the subject. In addition, as counsel for the Plaintiffs said in the course of the hearing, the subject is extensively treated byBiehlerin “Equity and the Law of Trusts in Ireland”, 6th edition, 2016, at pp 272-278. At p 272,Biehlersuccinctly summarises the position as follows:-
“Where two people, usually although not necessarily husband and wife, make an arrangement concerning the disposal of their property and execute mutual wills which are intended to be irrevocable and the survivor subsequently alters his will, his estate will be held by his personal representatives on a constructive trust to give effect to the arrangement provided for in the mutual will. However, before such a trust will arise, there must be evidence of an agreement to make mutual wills in substantially similar form and not to revoke them. As McPherson J. stated in Bigg v. Queensland Trustees Ltd:
“What matters is proof that the parties made an agreement to execute their wills in that form and that, expressly or by implication, they contracted not to revoke them”.
In determining whether the necessary agreement exists, the courts will have regard to the terms of the wills but may also infer evidence of an agreement from the conduct of the parties and the surrounding circumstances. The mere fact that the wills were made simultaneously and in substantially similar terms is not of itself sufficient proof that the parties have entered into a legally binding agreement not to revoke them”.
63. The author further observes at p 273:-
“While the fact that the wills are made simultaneously and in the same form is not per se proof of an agreement sufficient to justify the imposition of a constructive trust, it may be a relevant factor to be taken into account in determining whether such an agreement exists. In Re: Cleaver, where a husband and wife made similar wills at the same time and subsequently altered them in the same manner, it was held that the trusts set out in these wills would be enforced….In the circumstances, Nourse J. was satisfied that there was sufficient evidence of an agreement shown by the similarity of the provisions and the fact that the changes were made simultaneously”.
64. It was suggested in paragraph 56 of the Defendant’s written submissions that, to succeed in an action to prove a mutual wills agreement, it should be clear on the face of the Wills that they are mutual. In my view, that is not the correct position. Furthermore, althoughWilliams on Wills, 6th edition, is cited as authority for this proposition, I do not believe that this is borne out by a consideration of the authorities.
65. In fact, the authors ofWilliams on Wills, at pp 20-21, themselves explain that an agreement in relation to mutual wills can be put in place in a number of different ways. The authors say:-
“The agreement may be incorporated in the will by recital or otherwise …., or it may be proved outside the will ….It may be oral or in writing …., but it would seem that insofar as such agreement affects a disposition of land, it must be in writing ….The mere simultaneity of the wills and the similarity of their terms are not enough taken by themselves to establish the necessary agreement …., which must be established by clear and satisfactory evidence of the balance of probabilities ….Proof of the precise terms of the agreement is essential, for any subsequent imitation of the powers of disposition of any party is dependent upon the precise restriction being proved to have been agreed between the parties ….”.
66.BiehlerandWilliamsare both therefore agreed that an agreement in relation to mutual wills does not have to be expressed in the wills themselves, but can arise in any of the ways in which a contract can be made. The authorities are clear, however, that an agreement of this kind must be proved.Bradyat paragraph 1.12 stresses that a mere understanding or arrangement is insufficient. There must be an agreement.
67. Where there is evidence of an agreement as to mutual wills, a trust will come into effect on the death of the first testator to die (at least where the agreement is to the effect that neither testator will revoke or alter his or her respective will). In such circumstances, an immediate equitable obligation arises by operation of law for the benefit of the persons who had been intended by the testators to benefit under the wills in question. This was confirmed in the decision of the Court of Appeal in England inOlins v. Walters[2009] Ch 212. In that case, the defendant and his wife (who had married in 1934) made wills in 1988 in almost identical terms. They each appointed the other and the claimant, Mr. Olins (who was their grandson and a solicitor) as executors and each left the other their entire residuary estate absolutely. Subsequently, in 1998, they executed in the presence of Mr. Olins two codicils to the wills in similar terms under which they each agreed that they would not at any time in the future seek to change the testamentary arrangements for the distribution of their estates without the other’s consent, and that, after the first of them had died, no changes would be possible. Subsequently, the wife died in May 2006. By that time, relations between the surviving husband and Mr. Olins had deteriorated. Following the death of the wife, Mr. Olins contended that there was a mutual wills agreement in place between his late grandmother and her husband, the defendant. This was denied by the surviving husband who actually gave evidence at the trial. This was described by Mummery L.J. as a “novel aspect of the case”. In all of the previous cases, both testators had died prior to the relevant trial. The husband denied the existence of any agreement as to mutual wills with his wife.
68. However, the husband’s evidence was rejected by the English High Court in favour of the evidence of Mr. Olins (who, as noted above, had been present when the codicils were executed). The husband appealed to the Court of Appeal contending that there was insufficient evidence of a contract. This was rejected by the Court of Appeal. In his judgment, Mummery L.J. said at p 221:-
“35. In my judgment, ….[the] submissions and insufficiency of the terms of the contract …do not accurately reflect the fundamental principles of mutual wills.
36. It is a legally necessary condition of mutual wills that there is clear and satisfactory evidence of a contract between two testators. However, the argument resting on the alleged insufficiency or uncertainty of the terms of this contract is misconceived. The case for the existence of mutual wills does not involve making a contractual claim for specific performance or other relief. The claimant in a mutual wills case is not even a party to the contract and does not have to establish that he was.
37. The obligation on the surviving testator is equitable. It is in the nature of a trust of the property affected, so the constructive trust label is attached to it. The equitable obligation is imposed for the benefit of third parties, who were intended by the parties to benefit from it. It arises by operation of law on the death of the first testator to die so as to bind the conscience of the surviving testator in relation to the property affected.
38. It is a legally sufficient condition to establish what the judge described as “its irreducible core” …which he analysed as a contract between two testators, T1 and T2:
“That in return for T1 agreeing to make a will in form X and not to revoke it without notice to T2, then T2 will make a will in form Y and agree not to revoke it without notice to T1. If such facts are established, then upon the death of T1 equity will impose upon T2 a form of constructive trust (shaped by the exact terms of the contract that T1 and T2 have made). The constructive trust is imposed because T1 has made a disposition of property on the faith of T2’s promise to make a will in form Y, and with the object of preventing T1 from being defrauded”.
39. In my judgment, that is an accurate and clear statement of the equitable principle. [Counsel] accepted that. He agreed that Mr. Walters would be bound by a constructive trust, but only if sufficient terms of the contract were established to raise one.
40. The answer to the sufficiency point is, I think, summed up in a single sentence in Snell’s Equity ….: “Mutual wills provide an instance of a trust arising by operation of law to give effect to an express intention of the two testators”.
41. The intentions of Mr. Walters and the deceased were sufficiently expressed in the contract to lay the foundations for the equitable obligations that bind the conscience of Mr. Walters, as the survivor, in relation to the deceased’s estate. The judge found all that he needed to find in order to hold that, contrary to the contentions of Mr. Walters, mutual wills existed. …..
42. It had been accepted on behalf of Mr. Walters in submissions to [the High Court] that, if there was a valid contract for mutual wills, the doctrine operated by imposing a constructive trust on him as the survivor, because the deceased had performed her promise to leave her estate to him. In my judgment, the trust is immediately binding on him in relation to the deceased’s property left to him on the basis of the contract. It is not postponed to take effect only after the death of Mr. Walters when the property, or what may be left of it, comes into the hands of his personal representative. …”. (Emphasis in original).
69. It will be seen, therefore, that in cases where there is evidence of an agreement by two testators to execute mutual wills for the benefit of named beneficiaries on the basis that such wills would not be revocable, an immediate constructive trust will arise in favour of those beneficiaries upon the death of the first of the testators to die. Thus, if there was evidence in the present case of the existence of an agreement as to mutual wills (expressed to be irrevocable without the consent of both parties), and if the survivor (in this case the Defendant) were to deny the existence of any trust in favour of the beneficiaries, that would give rise to an entitlement on the part of the beneficiaries (including the Plaintiffs here) to bring proceedings seeking appropriate declaratory and other relief as to the existence of a constructive trust and for orders that the survivor (in this case the Defendant) should comply with the terms of that trust and not revoke or alter the terms of her Will in the future.
70. Notably, the Plaintiffs in this case do not have evidence of the existence of mutual wills. At best, they have a suspicion that mutual wills may possibly have been written by the Deceased and the Defendant. Of course, to succeed, they would need to be in a position to adduce evidence not only that wills were executed by both the Deceased and the Defendant, but that there was an actual agreement between the Deceased and the Defendant that the wills were mutual in the sense described above and irrevocable. In my view, it is important to bear this in mind when considering the nature of the relief sought by the Plaintiffs in relation to this issue.
The relief claimed in paragraph 2 of the Indorsement of Claim
71. I now turn to the specific relief claimed by the Plaintiffs in paragraph 2 of the Indorsement of Claim. I have quoted the full terms of paragraph 2 in paragraph 7 above. It will be recalled that in paragraph 2, the Plaintiffs claim that the Defendant should produce the “mutual Will of the Defendant made in 2011, where the Defendant is responding to a specific probate motion …has failed to deny on oath her execution of such mutual Will in 2011”.
72. It is noteworthy that no declaration is sought that there is any agreement as to mutual wills, or that the Defendant is now bound by the terms of any such alleged mutual will such that she is no longer entitled to revoke it or alter it. As noted in paragraph 26(b) above, the Plaintiffs in their affidavit sworn on 13 October, 2017 say that they “may” seek relief (following receipt of the Defendant’s affidavit of scripts) in the form of a “declaration that the Defendant be restrained from revoking or altering her mutual Will”.
73. Thus, the claim made in paragraph 2 of the Indorsement of Claim is not a substantive claim in relation to mutual wills. It simply calls for the production of the Defendant’s Will. No authority has been cited for the proposition that a party in the position of the Plaintiffs here is entitled to bring proceedings demanding that the author of any alleged mutual will should make available his or her will. Paragraph 2 of the Indorsement of Claim seems to run directly counter to the authorities noted in paragraphs 47-51 above.
74. There might possibly be a basis for seeking such relief if there was some substantive relief claimed in the Indorsement of Claim relating to a mutual will or an agreement as to mutual wills. As noted above, no such claim is made. Instead, the Plaintiffs are again saying, in effect, that they reserve their position pending the receipt of the affidavit of scripts following which they “may” seek relief of the kind described in paragraph 26(b) above. In other words, the Plaintiffs are again seeking to establish whether there is a mutual will in existence and whether any of the instructions that may be held in respect of the Deceased’s Will suggests the existence of an agreement between the Deceased and the Defendant in relation to executing mutual and irrevocable wills. This seems to me to give rise to the same impermissible “fishing” exercise as is already described in the case of the relief claimed in paragraph 1 of the Indorsement of Claim.
75. In light of the considerations identified in paragraphs 72-74 above, it seems to me that there is no plausible basis on which relief of the kind set out in paragraph 2 of the Indorsement of Claim can be sought. Accordingly, I have come to the conclusion that this aspect of the Plaintiffs’ claim is also bound to fail.
The Third relief claimed: the appointment of an independent administrator
76. A significant issue arises as to whether the Plaintiffs could be said to have anylocus standito bring a claim of this nature. In light of the fact that the Defendant survived her husband for more than 30 days, the Plaintiffs have no interest in the estate of the Deceased. I consider the issue oflocus standiin paragraph 86 below. However, even if it could be said that the Plaintiffs havelocus standi, it is quite clear from the case law that a claim of this kind will not succeed unless there is very clear evidence of misconduct on the part of an executor (or in this case an executrix). The relevant principles are comprehensively explained by Lynch J. in the Supreme Court inDunne v. Heffernan[1997] 3 IR 431 at pp 442-443 as follows:-
“An order removing the defendant as executrix (which would be made by virtue of Section 26(2) and not Section 27(4) of the Succession Act, 1965) and appointing some other person as administrator with the Will annexed by virtue of s.27(4), is a very serious step to take. It is not justified because one of the beneficiaries appears to have felt frustrated and excluded from what he considered his legitimate concern. It would require serious misconduct and/or serious special circumstances on the part of the executrix to justify such a drastic step”.
77. Lynch J. in that case criticised the approach taken by Smyth J. in the High Court who had relied on a decision inRe: Martin Glynn Deceased[1992] 1 IR 361. Lynch J. (at p 443) readily distinguished the decision inMartin Glynn Deceased. Lynch J. said:-
“The learned trial judge also relies on the case of in Re: Martin Glynn, Deceased [1992] 1 IR 361, as supporting an order for the removal of the defendant as executrix in this case. The circumstances of in Re: Martin Glynn, Deceased were most extraordinary. The person nominated by the testator to be his executor was convicted of the murder of the testator’s sister to whom the testator had devised and bequeathed his farm as tenant for life with remainder to his executor. By the murder, for which the executor was sentenced to life imprisonment, the executor would have accelerated the vesting in possession of the remainder interest in the farm in himself, if that interest was not forfeited by his crime. The issue was whether or not the gift of the remainder interest would be forfeited and whether the question would have to be determined by proceedings between the estate of the testator and the person nominated to be executor personally. As a matter of common sense, it was held in those circumstances that a grant of probate would not be made to the nominated executor and the Chief State Solicitor was given liberty to apply for and ultimately obtain an unlimited grant of administration with the will annexed pursuant to s.27(4) of the Succession Act, 1965.
When read in the light of its own facts, the decision in Re: Martin Glynn …has no relevance to this case. When an executor is appointed and proves the will and thus accepts the duty of administering the testator’s estate, he or she can be removed, not pursuant to s.27(4) but pursuant to s.26(2) of the Act of 1965, but there must be serious grounds for overruling the wishes of the testator. If such an order is made, then of course s.27(4) enables the court to appoint another person as administrator with the will annexed”.
78. Obviously, in theMartin Glynncase, there was very strong evidence of very serious wrongdoing. The reason why an order was made in that case can be readily understood. The Supreme Court decision inDunne v. Heffernanmakes very clear that it is only in cases where very serious grounds are established that the choice made by the testator (in this case the Deceased) will be overridden by the court.
79. The Defendant here has said that she wishes to act in her capacity as executrix and to prove the Will in common form, but is currently prevented from doing so by the existence of the caveats which have been filed on behalf of the Plaintiffs. The decision inDunne v. Heffernanrepresents the law, and is binding on me and on the Plaintiffs. That decision identifies not only the very high bar that exists before the court will be persuaded to intervene, but it also makes clear that Section 26(2) is the relevant statutory provision which would have to be engaged. Even if the Plaintiffs were beneficiaries named in the Will, they would not be entitled to an Order under Section 26(2) (which it should be noted they have not sought in the Indorsement of Claim here) without proof of serious misconduct on the part of the Defendant.
80. Section 26(2) provides that the High Court will have power to revoke, cancel or call any grant of probate. Section 27(4) provides that the High Court may, by reason of special circumstances, order that administration be granted to such person as it thinks fit where this appears to the court to be necessary or expedient.
81. An example of a case where the court was prepared to remove a person as executor is to be found in the decision of Macken J. inFlood v. Flood[1999] 2 IR 234. In that case, applying the principles set out by Lynch J. in the Supreme Court inDunne v. Heffernan, Macken J. was satisfied that the party seeking relief had shown that a very serious matter had arisen in the administration of the estate which required the removal of the defendant as executor. In that case, however, there was clear evidence that the defendant had a conflict of interest in acting as executor of his father’s estate. In that case, the testator had transferred monies into a joint account in the names of the defendant and his sister. The monies were subsequently withdrawn and utilised by the defendant himself, prior to his father’s death, to purchase land in his own name. There was an obvious question in that case as to whether the farm purchased by the defendant could be considered to be personally owned by the defendant or was, in truth, held as trustee on behalf of his late father’s estate. The conflict of interest was apparent on the face of the evidence before the court, and it is understandable why Macken J. took the view that in those particular circumstances, an order of this kind should be made.
82. More recently, the Court of Appeal has re-emphasised the need for any person seeking relief of this nature to show that it is truly necessary. InDunne v. Dunne[2016] IECA 269, the Court of Appeal overturned a decision of Cregan J. in the High Court in which he had found a “serious and indefensible” conflict of interest on the part of an executor who was sued by his siblings on the basis that he had failed and neglected to distribute their shares to him. In his defence, the defendant executor raised a number of defences including a claim of adverse possession as against the plaintiffs. They responded to this defence by seeking to have him removed as executor. As noted above, Cregan J. acceded to this application in the High Court. However, his decision was overturned by the Court of Appeal. In the judgment of the court given by Peart J., he referred to what had been said by Macken J. inFlood v. Flood(above) at pp 243-244 where she said:-
“A court should not remove an executor from his role, unless it is satisfied that it is necessary to do so. It is clear from the decision in Dunne v. Heffernan …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 special circumstances on the part of the executor to justify such a drastic step”.
83. Peart J. identified that very significant costs would arise where a legal personal representative is replaced. He said at p19:-
“One reason why a legal personal representative should not be replaced unless it is necessary …is that to do so imposes an extra level of expense upon the estate. Inevitably perhaps, the new independent replacement will be a professional person, or at least somebody who is not a volunteer and who will be entitled to be paid for his services. Where litigation is involved, in particular, this will lead to a considerable drain on the resources of the estate, and to the detriment of the beneficiaries. This must be avoided in all but those cases where it is necessary”.
84. In that case, the plaintiffs had argued that it was necessary to replace the defendant since they would be at litigious disadvantage or prejudice in the ongoing High Court proceedings in which the adverse possession claim had been raised in the event that the defendant remained in place as personal representative. They maintained that they had real concerns that the defendant would not cooperate in the proceedings, and that he would be incentivised not to make available relevant documents to them. Peart J. dismissed this concern in the following terms at p 21:-
“In my view, this particular fear is speculative only, and given the fact that it has been made clear to this court that the defendant wishes to have the issue determined by the High Court and that he will simply abide by whatever order the court may make and administer the estate accordingly, I would not accept that this could be a basis for his removal at this stage. …”.
85. In my view, while the facts of the present case are quite different to those which confronted the Court of Appeal inDunne v. Dunne, the circumstances are nonetheless similar in that the concerns expressed by the Plaintiffs here are of a very speculative kind. The Plaintiffs have not pointed to the existence of any evidence – as opposed to unsubstantiated assertion – that might justify the relief claimed at paragraph 3 of the Indorsement of Claim.
86. Moreover, in circumstances where the Plaintiffs are not making any substantive claim in relation to mutual wills in these proceedings, it is impossible to see how they could be said to havelocus standito seek relief of this kind even if there was some evidence to give rise to some ground to unseat the Defendant from her position as executrix. Unless a claim had been made in the proceedings that the Defendant was bound by an agreement with her late husband to irrevocably make a will in similar terms to his own such as to give rise to a constructive trust on his death, there is no conceivable basis on which the Plaintiffs could be said to havelocus standito advance a case based on some alleged conflict between the Defendant’s duties to the beneficiaries of the constructive trust on the one hand and her own interests on the other. As the decision of the English Court of Appeal inOlins v. Waltersexplains, the beneficiaries under a mutual will (where there is evidence that two testators had entered into an agreement to put irrevocable mutual wills in place) would have locus standi to enforce the constructive trust which arises on the death of the first of the testators to die. However, no such claim is advanced here. Moreover, the Plaintiffs have not identified any evidence – as opposed to pure speculation – which points to the existence of any agreement between the Deceased and the Defendant that would give rise to such a constructive trust.
87. In the absence of a sustainable claim in relation to mutual wills, the Plaintiffs have no interest in the estate of their late father or in any constructive trust arising on his death, and therefore have no basis to seek relief of this nature. In the circumstances, I believe that the Plaintiffs have no sustainable basis to seek the relief claimed in paragraph 3 of the Indorsement of Claim.
Conclusion
88. For all of the reasons outlined above, I have formed the view that there is no basis on which the Plaintiffs would be entitled to succeed in the claims made by them in paragraphs 1-3 of the Indorsement of Claim on the Plenary Summons. In those circumstances, the consequential relief claimed at paragraphs 4 and 5 fall away. I therefore believe that it is appropriate to make an order under the inherent jurisdiction of the court dismissing the Plaintiffs’ claim in its entirety. Furthermore, as far as the relief claimed in paragraph 3 is concerned, it would seem to me that it is appropriate to dismiss the proceedings also on the basis that the Plaintiffs have nolocus standito maintain a claim of that kind.
89. It would seem to follow that there should also be an order setting aside all caveats, warnings and appearance entered in relation to the estate of the Deceased.
90. The Defendant also seeks an order preventing the Plaintiffs from lodging any further caveats in respect of the estate of the Deceased. However, I have not been addressed as to the basis on which the court could now make such an order. If any such order is to be pursued, I would need to hear argument as to the basis on which such an order could properly be made.
Mackey v Jones
19 April 1958
[1959] 93 I.L.T.R 177
Judge Deale
Judge Deale:
The principal claim in this action is for a declaration that the defendant, the personal representative of Richard Jones deceased, holds in trust certain lands of the deceased, to which she has succeeded as such personal representative. This claim is based on the alleged oral contract made about the year 1943 between the deceased and the plaintiff, who was then about fourteen years of age. The alleged contract arose from a conversation which took place in January, 1943, between the plaintiff’s mother and the deceased, and from acts of what are alleged to be part performance by the plaintiff. On the 17th March, 1943, the plaintiff went to the deceased’s farm and there lived with him and his wife, doing almost, though not all, the work needed to be done on a small farm such as the *177 deceased had. This is the alleged part performance and it is submitted that a contract to bequeath the lands by will to the plaintiff was thereby made and performed. If this conversation created a contractual relationship between the parties, certain difficult legal questions arise as to its effect, but if it did not then the only question is what is the right of the plaintiff to be paid for the work done.
In my opinion, there was no contract to leave the lands to the plaintiff, and, indeed, no contract of any kind arose out of the conversation. The conversation, in my opinion, amounted to nothing more than a statement of intention or wish by the deceased; the words of the deceased relied on are worth repeating:—“He (the plaintiff) could have the place when he (the deceased) was done with it” And on another occasion the deceased said by way of affirmation of the alleged contract —“You need not give him pocket-money. I will give him anything he wants. He can have the place when I am done with it”. In my opinion, a reading of these words makes it plain that no promise was made and it is unnecessary to dwell on the point, even if the words did amount to a promise and if the whole conversation could bind the deceased in a contractual manner, there is a further difficulty in the plaintiff’s way. He was not a party to the proposal. He was not consulted about it and in no way considered the matter, he was simply told by his mother to go to his uncle’s farm and he obeyed. Of course, it may be said that at the age of fourteen years he could do little else, being under the control of his parents, but that does not mean that he was a party to any contract that could be implied from the conversation. Any young boy can make a contract if it is for his benefit, but before he can be said to contract, it must be shown that the affirmation of the contract resulted from acceptance by him of an offer. Here, in my opinion, he did not accept the offer, if offer it was; he obeyed his mother’s orders and that was not enough to create the relationship of contracting parties between the deceased and himself. The first part of the claim fails.
Accordingly, I turn to the alternative claim, for wages for work done and services rendered as an employee under an implied contract for services. The evidence disclosed that the plaintiff received no wages or money from the deceased except for two occasions during the whole of the fourteen years for which the plaintiff worked for him. It was quite a remarkable state of affairs and raises, of course, the question what was the exact relationship between the parties. The plaintiff said—and I accept—that his requests for money were granted from time to time at the beginning but that ever afterwards the deceased refused to make payments, saying that the plaintiff was, after all, working for himself. The plaintiff accepted these refusals and was content to work without payment, believing that he would inherit. I should point out that this acquiescence did not create a contract to work without wages in return for a legacy, since no such promise was ever made. It was, instead, an agreement to work in the expectation that the legacy would be given—a very different matter. If it had been the former it might have created difficulties on the decision in Maddison v. Alderson (1883) 8 App. Cas. 467, though that is not at all certam having regard to s. 19 of the Agricultural Wages Act, 1936. But that the plaintiff was not working for nothing is plain, in my opinion, and was known to the defendant, to whom the requests for money could only mean that money was expected of him. How could the deceased have thought otherwise?
Mr. Maguire urges that the relationship of master and servant did not exist between the two, because of the grazing rights the plaintiff received, because of his relationship in blood to the deceased, and the manner in which the plaintiff was treated as a member of the family. He was so treated—naturally being a nephew living with his uncle (and his aunt until her death)—but although he looked upon himself in that light the plaintiff was, nevertheless, in the position of a servant in his liability to do the work. If the matter is in doubt, one has only to suppose what would the deceased have said if one day the plaintiff had decided to take the day off and do no work or if he had refused to do a particular task expected of him or allocated to him? I should think that he would have been summarily ordered by the deceased to do the work and would straightaway have agreed. In my opinion, the contract here was one of master and servant with the understanding on both sides that the plaintiff was not working for nothing and that his wages were to be satisfied by the bequest of the land. The bequest not having been made, in my opinion, the plaintiff is entitled to receive the wages. If objection is raised that the agreement, or whatever may be the true agreement, is unenforceable, it seems to me that the objection is met by s. 19 of the Agricultural Wages Act, 1936. Section 19 (1) provides that wages as fixed by the *178 Board under the Act must be paid for agricultural work, which the plaintiff was doing, and s. 19 (2) makes it an offence not to comply with s. 19 (1). Sect. 19 (6) makes void any agreement to pay wages in contravention of s. 19, and also avoids an agreement to abstain from exercising the right to enforce the payment of wages otherwise than in accordance with s. 19.
Accordingly, it seems to me that the plaintiff must recover Sect. 3 of the Agricultural Wages Act, 1945, has limited the period of recovery of two years, unfortunately for the plaintiff, who has spent the best years of his life working for nothing.
I give a decree for £363 17s. 6d., the sum claimed, and costs.
Cases Legal Actions & Death
Prendergast v McLaughlin
[2009] IEHC 250
JUDGMENT of Mr. Justice O’Keeffe delivered on the 20th day of May, 2009
1. In these proceedings, the Plaintiff claims a declaration that he is entitled on the death of the late Patrick Dempsey, Deceased, formerly of Ballinamona, Clifden in the County of Kilkenny, to the entire beneficial interest of the lands comprised in the estate of the said Deceased at Ballinamona, Clara in the County of Kilkenny, pursuant to promise made to, and reliance by the Plaintiff thereon during the lifetime of the said Deceased that the interests in these lands would devolve to the Plaintiff after his death and further pursuant to consideration given by the Plaintiff.
2. On 21st day of April, 2008, the High Court made an order pursuant to O. 25 of the Rules of the Superior Courts directing that the following point of law be determined as a preliminary issue prior to the substantive hearing of this action.
Whether the Plaintiff’s claim is statute barred pursuant to the provisions contained in Part II and in particular Section 9 of the Civil Liability Act 1961, as amended, and pursuant to the provisions contained in the Statute of Limitations Act 1957, as amended, by the Statute of Limitations (Amendment) Act 1991.
3. The following facts are agreed by the Defendant and the Plaintiff for the purpose of determining the preliminary issue between the parties and strictly without prejudice to the Defence delivered herein. For the purpose of the substantive hearing, no admissions are being made on behalf of the Defendant herein.
(i) The Defendant is the personal representative of the late Patrick Dempsey, Deceased, formally of Ballinamona, Clara in the County of Kilkenny, who died on 28th August, 2003 (hereinafter “the Deceased”). The Deceased died intestate and a Grant of Letters of Administration Intestate were taken within the name of the Defendant as a lawful nephew of the Deceased on 27th February, 2006.
(ii) The Plaintiff is a farmer and resides at Clarabricken, Clifden, County Kilkenny.
(iii) John Dempsey was the late brother of the Deceased, and died on 11th July, 2000 and made his last Will and Testament on 7th April, 1997. The said, John Dempsey, bequeathed the farmlands hereinafter mentioned to the Deceased together with a small legacy of the Plaintiff in the sum of £2,000 (€2,539.48). A grant of probate was extracted by the Deceased in the estate of his brother, John Dempsey on 18th December, 2000.
(iv) The Deceased and late John Dempsey were bachelors who lived together in the farmhouse and land situate at Ballinamona, Clara, County Kilkenny and contained in Folio 2516, Register of Freeholders, County Kilkenny.
(v) The farmlands situate at Ballinamona consisted of approximately 85 to 90 acres and were in the sole ownership of the late John Dempsey. The Deceased was the owner of a separate farm at Rathbourne, County Kilkenny and consisting of approximately 156 acres and contained in Folio 859, Register of Freeholders, County Kilkenny.
(vi) The Plaintiff was a neighbour of the Deceased.
(vii) The Plaintiff alleges and for the purpose of trying the preliminary issue, it is agreed that he assisted both the Deceased and the late John Dempsey in working and maintaining the farmlands at Ballinamona for a period in excess of 25 years prior to the date of the death of the Deceased and the late John Dempsey in working and maintaining the farmlands at Ballinamona for a period in excess of 25 years prior to the date of the death of the Deceased.
(viii) The Plaintiff alleges and it is agreed for the purpose of the preliminary issue, that the Plaintiff was repeatedly told by the late John Dempsey and the Deceased that the farmlands at Ballinamona would be left to him after both had died. The Plaintiff relied upon these repeated promises and assurances by both the late John Dempsey and the Deceased continued to provide assistance in the management and running of the farm at Ballinamona and thereby acted to his prejudice.
(ix) It is alleged and agreed for the purpose of the preliminary issue, that in or about the month of July 1998, that a meeting took place between the late Patrick Dempsey, the Deceased William Dempsey, also Deceased (being a brother of the said Patrick and John Dempsey and the Plaintiff. At the said meeting, John Dempsey stated he was leaving the lands in Ballinamona to the Plaintiff. It is alleged and agreed for the purpose of trying the preliminary issue that John Dempsey, Patrick Dempsey and William Dempsey agree to this arrangement and with this assurance the Plaintiff continued to provide assistance in the working of the farm at Ballinamona.
(x) It is agreed that the late John Dempsey died on 11th July, 2000 and by his last Will and Testament dated 7th April, 1997, demised and bequeathed the farmlands at Ballinamona to the late Patrick Dempsey together with a small legacy to the Plaintiff in the sum of €2,539.48 (IR£ 2,000) after the death of the late John Dempsey, the Plaintiff continued to provide assistance on the farmlands at Ballinmona.
(xi) It is alleged and agreed for the purpose of trying the preliminary issue, that some 6 or 7 weeks before the death of the said Patrick Dempsey, Deceased, on 28th August, 2003, the Deceased asked the Plaintiff to visit him. The Deceased informed the Plaintiff at the said meeting that he had given instructions to a solicitor, Mr. Martin Crotty, Solicitor of 45 Parliament Street, Kilkenny, to make a Will and that in the Will he was leaving the farm at Ballinamona to the Plaintiff. Thereafter, the Plaintiff continued to assist the Deceased with the management and maintenance of the farmlands at Ballinamona until his unexpected death on 28th August, 2003.
(xii) It is agreed solely for the purpose of trying the preliminary issue that on or about July 2003, the Plaintiff instructed his solicitor, Martin Crotty, to make a draft Will, which said Will was never executed.
4. In Part II of the Civil Liability Act 1961 (hereinafter “the 1961 Act”), section 9 provides as follows:-
“(1) In this section ‘the relevant period’ means the period of limitation prescribed by the Statute of Limitations or any other limitation enactment.
(2) No proceedings shall be maintainable in respect of any cause of action whatsoever which has survived against the estate of the deceased person unless either –
(a) proceedings against him in respect of that cause of action were commenced within the relevant period and were pending at the date of his death, or
(b) proceedings are commenced in respect of that cause of action within the relevant period or within the period of two years after his death, whichever period first expires.”
Section 8 of the 1961 Act provides as follows:-
“(1) On the death of a person on or after the date of the passing of this Act all causes of action (other than excepted causes of action) subsisting against him shall survive against his estate.
(2) Where damage has been suffered by reason of any act in respect of which a cause of action would have subsisted against any person if he had not died before or at the same time as the damage was suffered, there shall be deemed, for the purposes of subsection (1) of this section, to have been subsisting against him before his death such cause of action in respect of that act as would have subsisted if he had died after the damage was suffered.”
5. Section 6 of the 1961 Act defines an excepted cause of action as meaning:-
“(a) a cause of action for breach of promise to marry or for defamation or for seduction or for inducing one spouse to leave or remain apart from the other or for criminal conversation, or
(b) any claim for compensation under the Workmen’s Compensation Act, 1934.”
The Submissions of the Defendant
6. Mr. Robert Haughton, S.C. on behalf of the Defendant submitted that the Plaintiff’s cause of action is “a subsisting cause of action” within the meaning of section 8 of the 1961 Act. As such, it survives against the estate of the Deceased as the claim is based on the sole ground that the Deceased failed to fulfil the alleged promise that he had made in his lifetime to bequeath certain lands to the Plaintiff in consideration of the Plaintiff continuing to assist him (and his predeceased brother) in their farming work. It was, therefore, a claim based on an alleged breach of contract and had been so pleaded.
7. The Deceased died on 23rd August, 2003 and as there was no proceedings in being at the time of his death therefore in order to come within the relevant limitation period provided by section 9 of the 1961 Act, these proceedings ought to have been commenced within two years of that event, that is on or before 22nd August, 2005. Proceedings were not commenced until the plenary summons issued on 25th July, 2006. Hence, it was submitted the Plaintiff’s claim was statute barred under the provisions of section 9(2)(b) of the 1961 Act. Section 9 of the Act provides that no proceeding shall be maintained in respect of “any cause of action whatsoever which has survived against the estate of a Deceased person” unless those proceedings come within paragraphs (a) or (b). Reference was made to the words in section 9(2) “any cause of action whatsoever”. It was submitted that the meaning of this phrase is clear and unambiguous, that the words should be given their natural and ordinary meaning in accordance with the norms of the statutory interpretation. Reference was made to D.B. v. Minister for Health and Children [2003] 3 IR 12, where the Supreme Court reiterated with approval the dicta of the Supreme Court in Howard v. Commissioners of Public Work [1994] 1 I.R. 101 including the following passage from Denham J.:-
“Statutes should be construed according to the intention expressed in the legislation. The words used in the statute best declare the intent of the Act. Where the language of the statute is clear we must give effect to it, applying the basic meaning of the words.”
8. It was submitted that there was no necessity to look beyond the literal interpretation of the words themselves as they are clear, unambiguous and do not suggest or imply any degree of the consistency or absurdity. The phrase “any cause of action whatsoever” must include all actions that can be maintained by one person against another or howsoever arising including proceedings including equitable relief. The use of the words “whatsoever” brings all actions into account.
9. It was submitted that even if one is to take the purposive approach to the interpretation of the sub-section, the inclusion of “all causes of action” must be considered in the light of the goals sought to be achieved by s. 9 in limiting the liability of an estate to claims brought within a defined period and to thereby allow the estate to be duly administered without delay and, hence, at latest, after the expiry of the relevant time period. In support of this, reference was made to the Supreme Court decision in Moynihan v. Greensmyth [1977] 1 I.R. 55.
10. It was submitted that the legislature intended to introduce an absolute time period outside of which the estate of the deceased person could not be troubled by any litigation, notwithstanding the possible harshness that might occur.
11. Section 9 was not introduced by the legislature, it was contended, as an amendment to any of the provisions of the Statute of Limitations 1957. The section is not expressed in those terms, as it would be, if it were a simple amendment to s. 11 of the Statute of Limitations 1957. The section is expressed in absolute terms and was introduced as an all-encompassing provision, providing an omnibus limitation period in all causes of action surviving the death of the person. No exceptions are permitted, in direct contrast to s. 11 (9)(a) of the Statute of Limitations 1957, and to s. 45 of the Statute (as inserted by s. 126 of the Succession Act 1965). In the latter case, the limitation period is inserted in the original Statute, thus providing a new limitation period for claims to a share in the estate of a deceased person. No qualifications were expressed to s. 9 of the 1961 Act, and if the legislature had intended that there should be exceptions of special cases, it would have amended the Statute of 1957, or provided that the specific s. 9 be subject to those provisions of the Statute.
12. It was submitted that the plaintiff’s cause of action in these proceedings, whether in contract, quasi-contract or equity, fell within the statutory definition of “any cause of action whatsoever”.
13. It was submitted that whilst the common law rule that death ended all actions in personal torts has now been usurped by s. 8 of the 1961 Act, s. 9 applies to “any cause of action on which is survived against the estate of a deceased”. The cause of action which the Plaintiff sues upon is founded on breach of an alleged promise. At para. (1) of the reliefs sought, this plaintiff seeks a declaration of beneficial interest of the lands “pursuant to promise made to and reliance by the plaintiff thereon . . . and further pursuant to consideration given by the plaintiff.” Similarly, the second relief sought by the plaintiff is an order for the “performance of the said promise”.
14. The plaintiff’s cause of action, it was submitted, is founded in contract or quasi-contract. The plaintiff was suing the defendant in his capacity as personal representative of the Deceased, Patrick Dempsey, for breach of the Deceased’s promise to bequeath the lands to the plaintiff. That breach could only have occurred during the lifetime of the Deceased and the cause of action therefore accrued before the death of the Deceased.
15. The Deceased cannot breach a promise post mortem. It was submitted that the same principle applies in the case of quasi-contract. However, to the extent that the Plaintiff may base his claim on promissory estoppel, it would be a claim not arising after the death of the Deceased, but a claim subsisting, because that claim can only be founded on some unconscionable conduct of the deceased during his lifetime. The plaintiff’s cause of action arises on the failure of the deceased to execute a Will bequeathing the lands to him during his lifetime, even though evidence relating to such cause of action may emerge after death but the plaintiff’s cause of action, if there is such, subsisted during the lifetime of the deceased.
16. The defendant relied on the decision of Fennelly J. in the Circuit Court appeal case of Corrigan v. Martin (Unreported, 13th March, 2006) where the court held that a cause of action on foot of a promise to leave lands to a plaintiff, was a cause of action subsisting at the date of death and consequently the provisions of s. 9(2) applied. In that case, the plaintiff being a nephew of the deceased had injured himself on the defendant’s farm. The deceased was uninsured and agreed that he would transfer or devise the lands to the deceased in consideration for the plaintiff’s forbearance in suing the deceased. In addition, the plaintiff also pleaded that he worked on the farm. Fennelly J. at p. 6 of his judgment categorised the plaintiff’s cause of action as one falling within s. 8(1) as follows:-
“Firstly, I am satisfied that the correct interpretation of the plaintiff’s cause of action’s in the light of the section [8] is that the obligation of the deceased was to perform the contract during his lifetime and not at the moment of his death. Hence, the cause of action was complete immediately before his death. It is unnecessary to decide how long before the death. The cause of action, therefore, subsisted at the moment of death and survived against his estate by virtue of section 8(1). Secondly, I am satisfied that the Oireachtas intended by the strong and clear language of section 9(2) to apply a maximum two year limitation period to all claims against the estates of deceased persons. Section 8(1) applies to ‘all cause of action (other than excepted causes of action) subsisting against him’ (none of the excepted cases is relevant). The Oireachtas intended that provision to apply to all causes of action coming into existence right up to the point of death itself. It is unreal and almost metaphysical to distinguish between causes of action existing immediately prior to the death and those which matured on the death itself. I do not believe that the Oireachtas can have intended to make such fine distinction. It would serve no useful purpose which has been identified in this case.”
17. Fennelly J. also approved the dicta of O’Higgins C.J. in the Supreme Court in Moynihan v. Greensmyth at 372, where the stated:
“One relevant consideration is that those charged as executors or administrators of estates of deceased persons are entitled and, indeed, bound to carry out their tasks with reasonable expedition and that creditors of the estate and, ultimately, the beneficiaries are entitled to have the estate administered within a reasonable time. I believe the Oireachtas deliberately chose to impose a short but fair time limit on claims so that these desirable objectives would be achieved.”
18. Fennelly J. dismissed the plaintiff’s submission that as the Statute of Limitations Act 1957, did not impose a statutory limitation period for claims seeking specific performance, that s. 9(2) does not apply to such claims as there is no “relevant period” within the meaning of s. 9(1). The court held that s. 9(2) was clear in that no action was maintainable unless it was instituted within the earlier of the time period set out in s. 9(2)(a) or (b) and stated at p. 8:-
“The important and governing words are the introductory ones. The action cannot be maintained unless the plaintiff can bring himself within one of the two subparagraphs, in this case subparagraph (b). This is not affected by the fact that there is “no relevant period” for the purposes of the Statue of Limitations. The applicable period is the one which “first expires”. That may or may not be the two year period. If the “relevant period” expired within two years of death, the claim is barred. If there is no such period, it is barred after two years. I believe this interpretation is in accordance with common sense and the clear intention of the legislature.”
19. Accordingly, it was submitted the plaintiff’s cause of action, if not based on common law but on equitable grounds, only comes within s. 9(2) and is not maintainable against the estate of the Deceased since it falls outside of the relevant periods allowed under either paras. (a) or (b). The Act of 1961 permitted of no exceptions based on equity.
20. As an alternative argument, the defendant submitted that “damage” complained of by the plaintiff is the loss of property and that the “act” which the plaintiff complains of is the failure by the deceased to devise or bequeath the lands prior to his death. He referred to the plaintiff’s claim that the “damage” may have been discovered after death and that no cause of action accrued before death. If that is the case (which was not accepted by the defendant) the provisions of s. 8(2) apply and the cause of action is one deemed to have been subsisting if the deceased died after he had suffered the damage. This is because under the section the damage is deemed to have been suffered before the deceased died and therefore the cause of action was one which was subsisting before his death.
21. He submitted that if there was doubt as to interpretation of s. 8(2), the court must adopt a purposeful purposive approach and that the statutory purpose behind s. 8(2) is to provide a finite time period within which a third party, other than a beneficiary under a Will, may make a claim against a deceased and to allow the estate of the deceased to be administered in a timely fashion.
Submissions of the Plaintiff
22. Mr. David Hardiman, S.C., on behalf of the plaintiff, submitted that the plaintiff’s claim was to enforce the fulfilment of a promise upon which, for many years, he placed reliance by acting to his material detriment. The claim lies in equity and is long established as equitable/proprietary/promissory estoppel by giving rise to a constructive trust. The circumstances from which such a claim can arise is a promise of inheritance as was evidenced in Basham v. Basham, [1987] 1 A.E.R. 405 and McCarron v. McCarron, (Supreme Court, 13th February, 1997). Alternatively, it was submitted that a promise can be made which does not give rise to a dispute until a testamentary context arises.
23. He referred to two decisions of Barron J., the first in Reidy v. McGreevy and Others, (High Court, 19th March, 1993) and Governor and Company of Bank of Ireland v. Kathleen O’Keeffe, (High Court, 3rd December, 1986). In the Reidy case, the son of the deceased claimed to be remunerated for staying at home and working his father’s land over two periods prior to the father’s death. He claimed that on both occasions he did so as the result of promises by his father that if he did so he would exercise a special power of appointment vested in him (the father) in favour of the plaintiff. The claim was based upon the existence of a constructive trust and in relation to an issue concerning the statute of limitations, Barron J. stated at p. 5:-
“The claim based upon the existence of the constructive trust is covered by the decision of Costello J., in J.R., a Ward of Court, delivered on 2nd October, 1992. Where it would be unconscionable to disregard a promise such as that alleged here, the Court will declare the existence of a constructive trust. The question which arises here is whether such a claim is one available against the promisor and so capable of being barred after the lapse of two years from the date of his death.
The nature and extent of the claim is dependent upon the facts. What may be unconscionable upon one set of facts, may not be upon another set. So, depending upon the facts, the plaintiff may be entitled to an estate in property; to a charge over it; or to nothing. But whatever the facts, the claim could not be maintained until the death of the testator because it could not have been ascertained until then, that he had failed to honour his promise. Of course if he had repudiated his promise in his life time, this would have given rise to a cause of action at that stage.”
24. In Bank of Ireland v. O’Keeffe, the bank issued proceedings against the defendant as legal personal representative of her late husband Michael O’Keeffe who died on 11th February, 1982. The proceedings were in respect of monies due on a continuing guarantee. A demand for payment on foot of the guarantee was made against the deceased’s estate on 6th May, 1982 and the proceedings were issued on the 19th February, 1985, Barron J. at p. 50 stated:-
“The claim which is brought is one which was not maintainable until after demand made and no cause of action could have arisen until such demand was made – see In re: J. Brown’s estate, Brown v. Brown, [1893] 2 Ch 300. In that case there was a joint and several covenant in a mortgage by the deceased and his son to pay the principal on demand and in the meantime to pay interest. The deceased joined in the mortgage as a surety only. Seven years after his death a demand had been made against his estate on foot of the covenant. It was held that no cause of action had accrued against his estate until such demand. It seems to me that similarly in the present case no cause of action existed whereby the plaintiff could sue either the deceased or his estate until demand had been made. Since demand was not made until after the death of deceased, it follows there was no cause of action subsisting against him at the date of death.”
25. The plaintiff submitted that a will speaks from death and that the failure of will to satisfy a promise cannot speak any earlier. Any concept about wrong in law or equity involves both obligation and breach. It was submitted that the defendant’s concept of limitation in this case confuses the two elements. Until the contingency in a promise is breached, no wrong is done. However, it is submitted that the operation of s. 9 of the 1961 Act is based on the survival of a subsisting cause of action against a deceased. Until the deceased in this case died or the execution of his Will (or perhaps until the defendant refused to honour the deceased’s promise), no cause of action arose. It was submitted that this was the fundamental logic which underlined the judgment of Barron J. in Reidy’s case. It was submitted that no special principle of interpretation of s. 9 was required. Its meaning was plain, where a person can be sued whilst alive, the claim must be issued within two years of his death at the latest. This is not changed merely because section 9 refers to “any cause of action whatsoever”.
26. It was submitted that the promise of inheritance creates an interest equivalent to that of a beneficiary who has six years right of action after death. There is no discordance it was submitted in the availability of this period with any policy of finality. A personal representative can be sued on his contract for the same length of time, and if he distributes without regard to liabilities, he may likewise be sued. If the defendant argues that a period of two years manifested a policy for early closure of claims the argument shows no awareness of the context of administration.
Supplemental submissions
27. The plaintiff submitted that two fundamental points of difference arose from the present case and the decision in Corrigan v. Martin. Firstly, it was stated in Corrigan the application was to “transfer and/or devise”. It was stated that the court expressly found that “the correct interpretation of the plaintiff’s cause of action . . . is that the obligation of the deceased was to perform the contract during his lifetime and not at the moment of his death.” This was an inescapable conclusion if the plaintiff’s claim pleaded a “transfer” which could only be inter vivos. First, it was claimed that the decision was based on such an interpretation and was of no wider effect. Secondly, it was claimed that the part played in the Corrigan case by the deceased’s death was no more than the last point at which his obligation could be fulfilled. His death was not a point in time at which the obligation arose, but merely the point in time to which the obligation extended. It was submitted that no reference was made in Corrigan’s case to circumstances in which an obligation arises specifically and only by Will as in the testamentary case of equitable estoppel. It was claimed that the Corrigan decision had no discussion of or application to testamentary estoppel claim that the only authority in this area is Reidy v. McGreevy.
Decision
28. Reverting to the statement of agreed facts, the relevant facts are:-
“That the plaintiff was repeatedly told by the late John Dempsey and the deceased that the farmlands at Ballinamona would be left to him after both had died. The plaintiff relied upon these repeated promises and assurances by both the late John Dempsey and the deceased, continued to provide assistance in the management and running of the farm at Ballinamona and thereby acted to his prejudice…”
29. Relevant facts state that in or about July 1998 a meeting took place between the late Patrick Dempsey, the Deceased, William Dempsey also deceased (being a brother of the said Patrick and John Dempsey) and the plaintiff. At the said meeting, John Dempsey stated that he was leaving the lands at Ballinamona to the plaintiff, the Deceased asked the late John Dempsey to leave the lands at Ballinamona to the Deceased and that the Deceased in turn bequeath them to the plaintiff. It was alleged and agreed, John Dempsey, Patrick Dempsey and William Dempsey agreed to this arrangement and with this assurance, the plaintiff continued to provide assistance in the working of the farm at Ballinamona.
30. I accept the defendant’s submission that the plaintiff’s cause of action is founded in contract or quasi contract as the plaintiff is suing the defendant in his capacity as personal representative of the deceased, Patrick Dempsey for breach of the deceased’s promise to bequeath the lands to the plaintiff. The breach could only have occurred during the life time of the deceased and the cause of action therefore accrued before the death of the deceased. I also conclude, based on the agreed facts that the plaintiff’s claim can alternatively be based on promissory estoppel or equity. As such it is not a claim arising after the death of the Deceased but a claim subsisting at death, namely, the failure of the Deceased to execute a Will bequeathing the lands to the plaintiff during his lifetime. I do accept that the evidence relating to such cause of action emerged after death, the plaintiff’s cause of action in contract, quasi contract or in equity subsisted during the lifetime of the Deceased. I reject the plaintiff’s submission to the contrary.
31. Furthermore, I prefer the reasoning of Fennelly J. in Corrigan v. Martin to that of Barron J. in Reidy’s case. In the Corrigan case Fennelly J. analysed in detail the interplay between ss. 9 and 8 of the Act. There is no such analysis or examination of the two sections in the Reidy case. In referring to s. 8(1) which applies to “all cause of action (other than excepted causes of action) subsisting against him” Fennelly J. stated:-
“The Oireachtas intended that provision to apply to all causes of action coming into existence right up to the point of death itself. It is unreal and almost methaphysical to distinguish between causes of action existing immediately prior to the death and those which matured on the death itself. I do not believe the Oireachtas can have intended to make such a fine distinction. It would serve no useful purpose which has been identified in this case.”
I would in particular adopt the foregoing passage.
32. In my opinion the facts in Bank of Ireland v. O’Keeffe are distinguishable to the instant case, the cause of action only arose once the letter of demand had been sent on foot of the guarantee.
33. When a cause of action has survived the estate of the deceased while two alternative periods are provided under s. 9(2)(a) and (b), subparagraph (a) does not apply as no action was pending the date of death of the deceased.
34. In Corrigan v. Martin, Fennelly J. had to consider an agreement whereby the Deceased would “transfer and/or devise the lands to” the Plaintiff. The factual position in that case is that it refers to a “transfer” but is also based on an obligation to “devise” the lands to the Plaintiff. In the instant case there is an obligation as set out on the agreed facts, that the Deceased in turn bequeath the lands to the Plaintiff. The words of Fennelly J. are apt in the present case in:-
“That the obligation of the deceased was to perform the contract during his lifetime and not at the moment of his death. Hence the cause of action was completed immediately before his death…the cause of action, therefore subsisted at the moment of death and survived against his estate by virtue of section 8(1).”
35. The period provided under (b) is the earlier of the relevant period, being the expiry of the limitation period under the provisions contained in 1957 Act or alternatively the period of two years from the date of death of the deceased. As the deceased died on 28th August, 2003 proceedings ought to have been issued by 27th August, 2005, the period of two years after the death of the deceased. The proceedings did not issue until the 25th July, 2006 and accordingly the plaintiff’s claim whether it arises in contract, quasi contract or in equity is statute barred.
Cavey v Cavey
[2014] IESC 16
Judgment of Mr. Justice Clarke delivered the 4th March, 2014.
1. Introduction
1.1 Maurice Paul Cavey, the father of each of the parties to this appeal, died on the 18th December, 2006. Each of the defendants/respondents (“the executors”) are named in his last will and testament as executors. Probate of that will was, on that basis, granted to the executors on the 13th March, 2008. The plaintiff/appellant (“Mr. Cavey”) is clearly dissatisfied with the terms of that will and initially commenced proceedings, under s. 117 of the Succession Act 1965 (“section 117”), on the 12th December, 2008 (“the first proceedings”). The first proceedings were heard by Laffoy J. on the 23rd April, 2009, and were dismissed. Mr. Cavey appealed that decision to this Court but subsequently advised the Court that he was withdrawing his appeal on the 23rd July, 2010. Four days later, on the 27th July, 2010, Mr. Cavey commenced these proceedings (“the second proceedings”). The substance of his claim in these second proceedings arises out of what was said to be a representation made to him by both of his parents to the effect that he would inherit the family home. It is said that he acted on that representation and claims, under the doctrine of promissory estoppel, that he is thereby entitled to relief. In all of these proceedings, and on this appeal, Mr. Cavey has acted as a litigant in person.
1.2 The executors brought a motion before the High Court seeking to have the proceedings dismissed under alternatively:-
(a) an allegation that the proceedings were an abuse of process in accordance with the rule in Henderson v. Henderson (1843) 3 Hare 100 and/or
(b) that the proceedings must invariably fail as being statute barred having regard to the provisions of s. 9 of the Civil Liability Act 1961 (“the 1961 Act”).
1.3 That application was heard by Herbert J. who delivered judgment on the 7th February, 2012 (C v C & Ors [2012] IEHC 537). Herbert J. held that the proceedings were statute barred under the provisions of the 1961 Act, that they were, therefore, bound to fail, and that it was appropriate to exercise the Court’s inherent jurisdiction to dismiss the proceedings on that basis. Herbert J. did not, in those circumstances, consider it necessary to determine whether the proceedings might also be considered to be an abuse of process under Henderson v. Henderson. Mr. Cavey has appealed to this Court against that decision. I, therefore, turn to the basis of Mr. Cavey’s appeal.
2. The Appeal
2.1 In substance the case made by Mr. Cavey on this appeal was that the trial judge was incorrect in the way in which he interpreted the relevant provisions of the 1961 Act. The basis which Mr. Cavey put forward for that proposition was to suggest that he had, in fact, started proceedings (being the first proceedings) within the two year limitation period provided for in s. 9 of the 1961 Act. Thus, he argued, he had, in fact, started proceedings within time.
2.2 Apart from the fact that these second proceedings are not the proceedings said to have been started with the limitation period, a further difficulty with that argument is, of course, that the first proceedings were very different relying, as they did, on a statutory entitlement to have proper provision made in circumstances where a court is satisfied that a deceased has failed in a moral duty to make such proper provision for a child. When that point was raised with him by the Court, Mr. Cavey indicated that he had, at the trial of the first proceedings, raised the question of promissory estoppel. However, it is clear from the transcript of the hearing before Laffoy J. that she determined that the only case before her on the pleadings was a claim under section 117. The relevant passage from the transcript reads as follows:-
“Ms. Justice Laffoy: The only matter that is before me is a Section 117.
Mr. Cavey: Yes, I wasn’t sure when I was preparing the papers if promissory estoppel came under the heading of 117 or if it was an entirely separate matter.
Ms. Justice Laffoy: Well, the only matter that is before me is a Section 117 and the determination I will make is whether you late father failed in his moral duty to make provision for you in his will in accordance with his needs and doing that I take into account the provision he did make for you in his will.”
2.3 On that basis counsel for the executors argued that it had been definitively and finally determined that the only case which was before the courts up to the time when Laffoy J. heard Mr. Cavey’s claim in the first proceedings was one brought under section 117 and not, therefore, one involving any claim in promissory estoppel. On that basis counsel further argued that it was not now open to Mr. Cavey to suggest otherwise for he had brought an appeal against the decision of Laffoy J. and had then withdrawn that appeal. Counsel argued that the mere fact that Mr. Cavey mentioned the possibility of a claim in promissory estoppel when the case was at hearing before Laffoy J. did not mean that he had brought such a claim. The bringing of a claim, counsel argued, required that the case as pleaded include such a claim. No claim in promissory estoppel having been made in the first proceedings, counsel argued that the only case in promissory estoppel ever properly brought by Mr. Cavey was the one which is the subject of these second proceedings and this appeal. As is clear from the dates referred to earlier, these second proceedings were commenced over three and a half years after the death of Mr. Cavey’s father and thus, counsel argued, were well outside the limitation period of two years provided for in s. 9 of the 1961 Act.
2.4 Because Mr. Cavey was a litigant in person and notwithstanding the fact that the point was not raised by him, the Court invited counsel for the executors to also address a second question. While it will be necessary to turn to the text of s. 9 of the 1961 Act in due course, it is clear that s. 9(2) refers to and governs the limitation period in respect of a cause of action which “has survived against the estate of a deceased person”. The question which the Court invited counsel for the executors to address is as to how it is appropriate to characterise, in the context of that phrase, a claim in promissory estoppel which is to the effect that a person was in breach of a legal obligation to bequeath property in a will. Can it be said that such a claim is one “which has survived against the estate of” that person? In one sense such a claim can only arise when the person dies for it remains theoretically possible, up to the moment of death, that the relevant person could comply with their legal obligation by making or changing their will in such a way as to comply with whatever promise had been made. On one view, therefore, it might be said that a claim in promissory estoppel of that type only arises on death, is not, therefore, the type of claim covered by s. 9(2) of the 1961 Act and, thus, is not statute barred. Counsel argued that such a claim is, in its nature, a claim that the deceased had, during his life, failed to do something even though the time at which it could have been done was at any time up to the moment of death. It followed, counsel argued, that the claim was one which could properly be described as one which, if it existed, would have “survived against the estate of the deceased person”, was thus covered by s. 9(2) of the 1961 Act and was thus, on the facts of this case, statute barred.
2.5 In addition, it should be emphasised that counsel also argued that, in the event that this Court was against him in resisting the appeal from the judgment of Herbert J. on the ground of the Statute of Limitations, he would also wish this Court to consider the point argued before, but not decided by, Herbert J. as to whether the claim brought in these proceedings amounted to an abuse of process.
2.6 Thus, three issues potentially arise. The first is as to whether Mr. Cavey’s point about his prior proceedings is correct.
2.7 The second is the point concerning whether a claim of this type can properly be said to be a claim which has survived against the estate of the deceased and, thus, be statute barred.
2.8 The third, which only arises in the event that the appeal is successful on one or other of the other two points, is as to whether the proceedings ought nonetheless be dismissed as an abuse of process. I turn first, therefore, to Mr. Cavey’s own point.
3. Mr. Cavey’s Point
3.1 I am satisfied that there is no substance to the point argued in person by Mr. Cavey on this appeal. I fully appreciate that the courts afford all due consideration to persons who litigate without the benefit of legal advice or assistance. But the courts cannot go so far as to disadvantage those who are sued by a litigant in person. Mr. Cavey chose to bring his first proceedings under section 117. In the claim made by him in the documents filed in court, there was no mention, good, bad or indifferent, of a claim in promissory estoppel.
3.2 Mr. Cavey indicated that he believed that he could bring a claim in promissory estoppel in the context of a claim under section 117. I am prepared to accept that he did have that belief. But it is plainly wrong. The claims made in the first proceedings and these second proceedings are entirely different. The first involves the suggestion that a deceased person has failed in their moral duty to make adequate provision for a child. The second is a claim that a person (not necessarily a parent) has made a promise, relied on, as to what they will do in their will and has failed to meet that promise. There is absolutely no overlap between the two cases.
3.3 It is true that there was, as per the transcript reference already cited, a mention made by Mr. Cavey at the trial before Laffoy J. of promissory estoppel. It is clear that Laffoy J. ruled, as she was bound to rule on the papers, that the only claim before her was one brought under section 117. Even if it had been possible to amend or otherwise reconstitute Mr. Cavey’s first proceedings, at that time, to include a claim in promissory estoppel, that claim would already have been out of time by that stage. The hearing before Laffoy J. was also well over two years after the date of death of Mr. Cavey’s late father. Therefore, even on the basis of his own argument, the first time that Mr. Cavey brought before the Court any mention of a claim in promissory estoppel was outside the limitation period.
3.4 In any event, Laffoy J. ruled that the original claim was a claim under section 117 and only such a claim. No appeal against the judgment of Laffoy J. was pursued. That point must now be taken to have been definitively decided. There is, therefore, just no basis on which it can be said that Mr. Cavey brought a claim based on promissory estoppel at any time prior to the institution of these proceedings.
3.5 In addition, it does need to be noted that the one set of proceedings which were commenced within two years of the death of Mr. Cavey’s late father are no longer, of course, in being, having been dismissed by Laffoy J., and then having been the subject of an appeal to this Court but where that appeal was withdrawn. What the executors seek to dismiss are these second proceedings which were, in any event, commenced outside of the two year period.
3.6 As already pointed out, these proceedings were commenced by Mr. Cavey more than three and a half years after his late father’s death which is well outside the limitation period provided for if it can properly be said that this is a claim governed by s. 9(2) of the 1961 Act as being a claim “which has survived against the estate of a deceased person”. I, therefore, turn to that question.
4. Is this Claim one which “has survived against the Estate”?
4.1 It is appropriate to start by making reference to the terms of the section itself. Section 9 of the 1961 Act provides as follows:-
“9.—(1) In this section “the relevant period” means the period of limitation prescribed by the Statute of Limitations or any other limitation enactment.
(2) No proceedings shall be maintainable in respect of any cause of action whatsoever which has survived against the estate of a deceased person unless either—
(a) proceedings against him in respect of that cause of action were commenced within the relevant period and were pending at the date of his death, or
(b) proceedings are commenced in respect of that cause of action within the relevant period or within the period of two years after his death, whichever period first expires.”
4.2 It clearly follows that, if the claim which Mr. Cavey seeks to make can properly be described as a claim which survives against the estate of his deceased father, the claim would require to have been brought, under s. 9(2)(b), within two years of his late father’s death. The claim was clearly not so brought and must, therefore, be regarded as statute barred if it is proper to characterise it as being a claim which survived against the estate of his late father.
4.3 It seems to me that the proper approach to this question is to focus on the elements of the relevant cause of action. Assuming that all the necessary ingredients for a promissory estoppel can be established, then it follows that there was a legal obligation on a person, during their life, to make a will which complies with the promise made. While it is true that the person can make such a will at any time before death, it nonetheless follows that it is a failure to act during the lifetime of the deceased which gives rise to the cause of action.
4.4 This question has not yet been determined this Court but has been the subject of a number of decisions by the High Court most recently in the decision of O’Keeffe J. in Prendergast v McLaughlin [2011] 1 IR 102. In that case, the plaintiff alleged that he had been promised, in return for his assistance in working and maintaining farmlands, that he would be bequeathed those lands following the death of the owners. The plaintiff asserted that, in reliance of those representations, he continued to work on the lands to his detriment. The surviving owner died intestate and the plaintiff then sought to claim the entire beneficial interest in the lands. However, on a preliminary point, it had to be determined whether the plaintiff’s cause of action was one which “survived against the estate of a deceased person” and, thus, was governed by the relevant two year limitation period. Having examined conflicting lines of authority on the issue, O’Keeffe J. favoured one of those lines being the approach adopted by Fennelly J., hearing a Circuit Court appeal in Corrigan v. Martin (Unreported, High Court, 13th March 2006), in a case concerning a pre-existing obligation by a deceased to “transfer and/or devise” lands. Fennelly J. stated, at p. 6 of his judgment:
“[T]hat the obligation of the deceased was to perform the contract during his lifetime and not at the moment of his death. Hence the cause of action was completed immediately before his death … the cause of action, therefore subsisted at the moment of death and survived against his estate by virtue of s. 8(1) [of the 1961 Act].”
O’Keeffe J., therefore, concluded that the plaintiff’s claim was statute barred, being a claim subsisting at the time of death and not initiated within a two year period from the date of death.
4.5 As to the other line of authority, Barron J., in Reidy v. McGreavey, (unreported, High Court, Barron J., 19th March, 1993), had taken a different view. At p. 5 of his judgment Barron J. stated “… the claim could not be maintained until the death of the testator because it could have been ascertained until then, that he had failed to honour his promise. Of course if he had repudiated his promise in his lifetime, this would have given rise to a cause of action at that stage”. O’Keeffe J. in Prendergast, expressly preferred the approach of Fennelly J. in Corrigan to that of Barron J. in Reidy.
4.6 It seems to me that a significant distinction is made in s. 9(2), so far as claims against an estate are concerned, between a cause of action which results from an act or omission of the deceased, on the one hand, and a cause of action which may exist against those in charge of the administration of the estate of the deceased, on the other. If Mr. Cavey had a cause of action in promissory estoppel at all, it can only be because he might be able to establish that his late father was in breach of a legally enforceable promise in respect of bequeathing the family home to him. If such could be established it would be a failure, during his life, on the part of his late father to make an appropriate will to comply with his promise that gives rise to the claim.
4.7 That involves an allegation of a failure on the part of his father rather than a failure by the estate itself. How otherwise could such a claim be brought? It necessarily involves a claim against the estate but arising out of a failure on the part of the deceased. It seems to me that such a claim necessarily comes within the scope of the phrase “a claim surviving against the estate of the deceased” even if it is true that a deceased could have avoided such a claim being capable of being brought by complying with their promise to bequeath the relevant property up to the moment before their death.
4.8 I am, therefore, satisfied that, on a proper interpretation of the effect of s. 9 of the 1961 Act, a claim in promissory estoppel arising out of an enforceable promise by a person to leave property by will, is a claim which can properly be characterised as one which survives against the estate of that person in the sense in which that term is used in the section. It follows that the claim brought in these proceedings could only be maintained by Mr. Cavey if it had been commenced within two years of his late father’s death. The claim not having been so commenced, it is clearly statute barred. It follows that Mr. Cavey’s proceedings are bound to fail on that basis and should be dismissed.
5. Conclusions
5.1 It follows that I am satisfied that there is no basis for suggesting that Mr. Cavey commenced proceedings within the two year period specified in s. 9 of the 1961 Act. The first proceedings, which he commenced within that period, were dismissed and an appeal against that dismissal withdrawn. Those proceedings are no longer in being. In any event, the first proceedings could not be described as proceedings which raised the cause of action now sought to be litigated, that is a claim in promissory estoppel, at all. The fact that there was mention at the trial (which occurred outside the limitation period) of a possible claim in promissory estoppel does not alter that fact and does not displace the clear finding of the trial judge in the first proceedings that the claim before her was one under section 117 and no other claim.
5.2 I am also satisfied that a claim of this type, being a claim in promissory estoppel which arises out of a contention that a person was required to make a bequest by will, is a claim which can be said to survive against the estate of the person concerned for the purposes of s. 9 of the 1961 Act. It follows that a claim of this type is required to be brought, at the outside, within two years of the date of death of the relevant deceased. Because, as already pointed out, the only claim which has been brought by Mr. Cavey involving this cause of action is the one brought in these second proceedings, which were commenced significantly more than two years after the death of his late father, then it follows that this claim and these second proceedings are statute barred.
5.3 It also follows that the trial judge was correct in his interpretation of s. 9 of the 1961 Act and its application to the facts of this case and the appeal must, on that basis, be dismissed. It further follows, for reasons similar to those indicated by the trial judge, that it is, in those circumstances, unnecessary to address the alternative basis for dismissal put forward on behalf of the executors being that the proceedings ought be dismissed as an abuse of process under the rule in Henderson v. Henderson.
Allied Irish Banks v Pollock
[2016] IEHC 581
JUDGMENT of Ms. Justice Baker delivered on the 21st day of October, 2016.
1. Allied Irish Banks plc (the “Bank”) seeks judgment against the defendants arising from two loan facilities both of which were made in 2009 in the respective sums of €519,803.01 (“facility one”) and €2,236,953.60 (“facility two”). Both loans were accepted by the borrowers in the Bank’s written form of acceptance and signed on 20th July, 2009 and the monies drawn down on 31st August, 2009. The loans were secured over certain real property in the title of the first defendant and her now deceased husband, Tom Pollock. This judgement is given in the claim by the plaintiff against the second defendant only as the personal representative in the estate of Mr. Pollock. The claim against the third defendant has been discontinued, and judgment has already been granted against the first defendant, Mrs. Pollock.
2. When the matter came on for hearing before me on a motion for summary judgment, counsel agreed that the appropriate way to deal with the action against the estate of the deceased was to deal with the preliminary point of law arising, whether the action against the estate was statute barred. In those circumstances the matter was adjourned to enable the preparation of legal submissions and the matter was reconvened for further argument.
3. It is well established that the court has a jurisdiction to determine an issue of law on the hearing of a summary motion and Clarke J. in McGrath v. O’Driscoll & Ors. [2006] IEHC 195, [2007] 1 ILRM 203, made it clear that the court could determine such a question provided:
“…the issues which arise are relatively straightforward and where there is no real risk of an injustice being done by determining those questions within the somewhat limited framework of a motion for summary judgment.”
4. The correct approach appears to me to be explained by the Supreme Court in Danske Bank a/s trading as National Irish Bank v. Durkan New Homes & Ors. [2010] IESC 22, that the court may, but is not obliged to, determine a matter of law on a motion for summary judgment.
5. The matter which arises in this case is not one which engages issues of disputed facts. I consider that there is no risk of injustice being done to either party should I determine the question of the accrual of the cause of action on the motion for summary judgment, because both counsel have been given an opportunity to furnish written submissions, there is no disputed fact, and the question is one that can be determined on a consideration of the legal principles and arguments, and on a true construction of the written contract documents.
Facts
6. Thomas Pollock died on 7th November, 2010 and a grant of probate issued in his estate to one of his executors, William Roche, on 22nd January, 2015, the other executor, the third defendant, having renounced his right to probate.
7. The estate of the deceased argues that by virtue of s. 9 of the Civil Liability Act 1961 (the “Act of 1961”) the claim against the estate is statute barred, the proceedings not having been commenced within two years of the death of the deceased on 7th November, 2010. Proceedings were commenced on 3rd March, 2015 and the question of whether the action is time barred is the sole matter that I deal with in this judgment.
8. Section 9 of the Act of 1961 applies to a cause of action which subsisted at the date of the death and not a cause of action which arose after death. Whether the cause did subsist at the date of death of Mr. Pollock is the matter to considered.
9. No demand for payment was made at any time prior to 7th November, 2010, and the Bank does not present any argument that any valid letter of demand was served until 4th February, 2015, after a grant of probate had issued in the estate of the deceased. If the cause of action can be said to accrue only when demand was made, then the action is not one to which the provision of s. 9(2) apply, the six year time limitation provided by the Statute of Limitations 1957 is the relevant limitation, and the proceedings are not statute barred.
10. The case then comes down to a determination of two questions:
(a) The date of the accrual of the plaintiff’s cause of action against the second defendant, and whether the cause of action was subsisting at the date of the death of the deceased; and
(b) Whether the proceedings are now capable of being maintained by the Bank against the second defendant having regard to ss. 8 and 9(2)(b) of the Act of 1961, as amended.
The loan sanctions
11. The claim in debt arises from two facilities contained in a letter to the first defendant and the deceased, and it is accepted that, although the language used in the operative parts of the letter is somewhat different, a proper construction should yield the result that each of them was repayable in the same manner and at the same time.
12. Facility one contained a clause dealing with the obligation of the borrower to repay the monies as follows:
“Repayment: On demand and at the pleasure of the Bank, subject to clearance in full by way of refinance or otherwise by 30/09/2009. Monthly reductions of €5,000 to apply in the interim.”
13. The equivalent clause in facility two reads as follows:
“Repayment: On demand and at the pleasure of the Bank, subject to capital and interest moratorium until 30/09/2009. Facility to clear in full by way of refinance or otherwise at that stage. Interest to be rolled up within the facility in the interim.”
14. In each case, the purpose of the loan was described as “continuation of existing loan…”, and those existing facilities were identified by reference to the amounts borrowed (or outstanding) in respect of each. The second facility was described as being for the purposes of the continuation of an existing loan facility originally sanctioned to assist with the purchase of investment properties, and to repay the capitalised interest for seven sequential months between December, 2008 and June, 2009.
15. The Bank’s general terms and conditions contain at clause 3 the following sub-clauses:
“3.1.1 Loan account facilities are repayable on demand. However, in normal circumstances, the Bank expects that the loan will be available as stated in the letter of sanction.
3.1.2 Without prejudice to the Bank’s right to demand repayment at any time, the happening of any of the events set out in clause 4.2 may lead to the Bank making demand for payment, with or without notice to the Borrower.”
16. General condition 4.2 identifies an “event of default” as follows:
“4.2 A term loan though expressed to be repayable over or within a specified period may be terminated by the Bank and the Bank may demand early repayment at any time with or without notice to the Borrower upon the occurrence of any of the following events:”
17. The relevant events of default were a failure on the part of the borrower to make repayment on the date due, or the death of the borrower or any guarantor of the borrower.
The arguments
18. The plaintiff argues that the cause of action against the second defendant accrued only when a valid demand was made by the plaintiff against the estate of the deceased. The evidence is that a letter of demand was served on 4th February, 2015 following the extraction of a grant in the estate of the deceased. The Bank does not rely on an earlier letter of demand sent on 13th May, 2013.
19. The net question to be decided is whether the monies became due and owing to the Bank only following demand, or whether they were due on the passing of the date of redemption, being 30th September, 2009.
20. It is argued by the plaintiff that it cannot have been the intention of the parties that the loan agreed to be advanced by facility one was payable in full and without demand some six or seven weeks after the loan was accepted. It is argued that regard be had to the fact that provision was made for monthly repayments, and the plural was used, and the letter of offer expressly provided that the impact of changes in interest rates would not be reflected in any adjustment of the instalments.
21. It is argued also, that a failure to repay on 30th September, 2009 was an “event of default” entitling the Bank to demand payment, and the passing of the date of redemption did not in itself entitle the Bank to commence the proceedings without demand first being made.
22. The second defendant argues that by virtue of Clause 3.1.1 the loans, while they were payable on demand, were to be available as stated in the letter of sanction, i.e. they were available as short term facilities only, to be repaid on or before 30th September, 2009. It is said that on a true construction of this general condition when combined with the special conditions, the Bank could demand payable early on the happening of any of the events identified as an event of default, but absent such, the loans had an identified redemption date, and were repayable without demand on that date.
23. Counsel argues that general condition 4.2 means that the Bank could demand early repayment of a fixed term loan, but that the Bank did not require as matter of contract to make demand at the end of that specified and agreed term. Demand was required to request early repayment, but not payment on the agreed redemption date. It is argued that on a construction of the language of the contract, and using the ordinary canons of construction, that the facilities were repayable on or before 30th September, 2009, or on earlier demand by the Bank on the happening of the fifteen different circumstances expressly provided in clause 4.2 of the general conditions.
Legal principles
24. The matter gives rise to a question of the construction of the general and special conditions of the loan facilities. That the special conditions will prevail where there is any difference between applicable special conditions and the general conditions is not in doubt.
25. The parties are agreed as to the principles to be applied in the interpretation of the contract and both rely on the leading judgment of the Supreme Court in Analog Devices B.V. & Ors. v. Zurich Insurance Company & Anor. [2005] IESC 12, [2005] 1 IR 274, in which the Court adopted the principles set out by Lord Hoffman in Investors Compensation Scheme Ltd. v. West Bromwich Building Society [1998] 1 WLR 896, the relevant elements of which are as follows:
a. The construction of a contract must seek to ascertain the meaning that the document would convey to a reasonable person in the position of the contracting parties.
b. The matrix of fact or background information may be relevant in order to construe the language of the document.
c. Previous negotiations and any declarations of subjective intent are disregarded.
d. The meaning of a document cannot be reduced to an analysis of the meaning of its words taken in isolation, or viewed as a sterile exercise of looking at dictionaries or syntax.
e. A result that flouts basic common or commercial sense must yield to one which does make sense.
26. These principles have been analysed and adopted in a number of cases in the Superior Courts of Ireland, albeit that Fennelly J. in ICDL GCC Foundation FZ-LLC v. European Computer Driving Licence Foundation Limited [2012] IESC 55, [2012] 3 I.R. 327 cautioned against the use of these general principles as a tool of speculation. It is useful to quote the approach he preferred, that of Griffin J. in Rohan Construction Limited & Ors. v. Insurance Corporation of Ireland plc [1988] I.L.R.M. 373:
“It is well settled that in construing the terms of a policy the cardinal rule is that the intention of the parties must prevail, but the intention is to be looked for on the face of the policy, including any documents incorporated therewith, in the words in which the parties have themselves chosen to express their meaning. The court must not speculate as to their intention, apart from their words, but may, if necessary, interpret the words by reference to the surrounding circumstances.”
27. That approach, which I adopt, requires that the court should commence “with an examination of the words used”, and interpret these in accordance with their “natural and ordinary meaning”. Evidence of surrounding circumstances “will not normally be allowed to alter the plain meaning of words”.
28. Another relevant canon of construction is that the court construes the contract in its entirety, as expressed in Marathon Petroleum (Ireland) Limited v. Bord Gáis Éireann [1986] IESC 6 which at p. 11 contains the following dicta of Finlay C.J.:
“… my obligation is to seek in the terms of the entire Agreement evidence of the real intention of the parties and that, if I can find it, that should prevail over the ordinary meaning of the words.”
29. The exercise therefore seems to me to involve the following steps:
a. The court should first look at the ordinary meaning of the relevant words in the contract.
b. The court should interpret the contract as a whole.
c. Ambiguity should be resolved by reference to the surrounding circumstances in order to ascertain the intention of the parties.
Was demand necessary after the passing of the redemption date?
30. The Bank argues that demand was necessary to trigger the accrual of the cause of action. Counsel for the second defendant argues that no demand was required of the borrower, and that the making of a demand was not a condition precedent to a right of action accruing. Both counsel rely on a statement of principle contained in Canny, Limitation of Actions (2010) that:
“If monies are loaned it is a matter of construction of the contract to determine the date from which the limitation period will run. If a time for repayment is stipulated, time will run from that date.” (para. 6.09)
31. Canny goes on to suggest that time can start running the moment a loan is advanced, and that this is:
“… a rule of some antiquity, and although it has been applied in subsequent cases, the decisions all emphasise that one must examine the terms of the agreement to ascertain whether the making of a demand was in fact a condition precedent to a right of action accruing.”
32. I adopt that statement as a correct statement of the law, albeit it cannot determine the question of construction arising in the present case.
33. A similar proposition stated in Donnelly, The Law of Credit and Security (2nd ed., 2015) is also relied on:
“Loan agreements may be expected to make provision for repayment. The way in which a lender may require repayment of a loan depends on the type of loan involved. Overdrafts are generally repayable ‘on demand’ while, in the absence of default, term loan repayments fall due on a specified date or dates, the details of which will be provided in the loan contract. If a date for repayment is set out in the contract, there is no obligation on the lender to make a further demand for repayment. The monies will automatically fall due when the date arrives.” (para. 7-90)
I also accept that this is a correct statement of the law, but again note that it does not answer the question of construction in this case.
34. Counsel for the plaintiff relies on the approach taken by Dunne J. in Start Mortgages Limited & Ors. v. Gunn & Ors. [2011] IEHC 275. Judgment was given in a number of different cases with differing loan conditions. In one of these, the case involving the application against Mr. and Mrs. Clair, it was submitted on behalf of the bank that demand was not necessary, and that accordingly the application for possession came to be considered on the basis that the right of action had accrued before the coming into operation of the Land and Conveyancing Law Reform Act 2009. Because the judgment of Dunne J. was concerned with a different legal question she did not engage in any analysis of the question that arises before me.
35. The Supreme Court considered the nature of a loan contract in Irish Life & Permanent plc v. Dunne [2015] IESC 46, [2015] 2 I.L.R.M. 192. In the course of his judgment, at para. 6.6, Clarke J. identified precisely the question that arises for consideration in the present case, namely whether principal monies “had become due”, and noted that loan documentation can differ such that in some cases the principal monies borrowed become due without demand, and in other cases demand is due before a default can be said to have occurred.
36. With regard to a provision in the mortgage under consideration by him in one of the two cases with which the judgment dealt, the mortgage deed provided that the debt should “become immediately payable to Permanent TSB” if the mortgagee defaulted in the making of two monthly instalments of payment. Clarke J. said that no letter of demand or other action on the part of the lender was needed for the total sum to become due. As he put it at para. 6.9:
“That provision is automatic in its effect.”
37. While that judgment, of course, is one which rests on its facts and the terms of the contract, it shows that the construction of loan documents can lead to a conclusion that monies borrowed under a loan contract can become due without demand, and that a cause of action can thereby be said to have accrued without demand.
38. Counsel for the plaintiff, however, argues that the loan documentation in the present case does not contain any express provision as a result of which it could be said that the loan monies became payable “immediately” upon the happening of a certain event, or in particular on the passing of the redemption date, and that the reasoning of Clarke J. can be distinguished.
39. The word “immediately” was also found in First Southern Bank Limited v. Maher [1990] 2 I.R. 477, relied on by the second defendant, but which the plaintiff argues is readily open to being distinguished. In that case, the terms of a promissory note provided that an event of default occurred if a payment was not made within one month of its due date. Barron J. took the view that while demand could in many cases be necessary to call in a current account or liability under guarantee, no demand was necessary and the money became due and payable once there was default for the period identified, and held that the cause of action had accrued when the monies became “due and payable” and that as the action was not pursued until more than two years after the death of the debtor it was barred by the provisions of s. 9(2) of the Act of 1961.
40. Bank of Ireland v. Stafford [2013] IEHC 546, a judgment of McGovern J. is not, it seems to me, on point as the third defendant there argued that while death was an event triggering default, demand for payment was still required to be made and as that demand was made after the death of the deceased, the claim was not one which was subsisting at the date of his death, or not one that survived against the estate, but rather an action which accrued after death.
41. In the present case both facilities were repayable on demand and at the pleasure of the Bank, but in each case that provision was made expressly “subject to” clearance in full by 30th September, 2009. In my view, the use of the phrase “subject to” as a matter of plain language, and without a need to engage in complex grammatical analysis or analysis of syntax, indicates that the earlier more general provisions are to be constrained, delimited or read to be understood as being dependent upon, or conditional upon, or contingent upon, the express requirement that repayment be made by the date identified. The terms of repayment in their clear and ordinary meaning, and subject to what I say below, must be read as meaning that the intention of the parties was that the monies would be repaid on or before 30th September, 2009.
42. I do not consider that the absence from the express repayment provisions that repayment be made immediately upon the happening of identified events leads to the conclusion that payment was therefore not due on 30th September, 2009. The express words are clear, and identify a date for repayment, and the inclusion of the word “immediately” or of a similar word, could have added nothing to the sense of the clause because the date was identified by day, month, and year. Payment became due on that date without demand, and, to borrow the language of Clarke J in Irish Life & Permanent plc v. Dunne, the right to take action on foot of a failure to pay on the agreed date happened automatically.
The construction might lead to an absurdity?
43. The plaintiff argues that the construction for which the second defendant contends is one that would lead to an absurdity, in that the loans would have been advanced and become repayable within less than three months of drawdown. The letter of loan sanction was made on 14th July, 2009 and accepted on 20th July, 2009.
44. That argument might find favour were one to ignore some of the other elements of the loan sanction. Both loan sanctions were by way of a “continuation of existing loan facility”. It was anticipated, or at least hoped, in the context of each of the facilities that the loan amounts would be either repaid or refinanced. These therefore were short term facilities, and in the case of the second facility not merely by way of continuation of existing loan facilities, but also in the context where interest had been capitalised from the periods between December, 2008 and June, 2009 inclusive, a total of seven months. It is clear in those circumstances that the two sanctions were given in a context where there were already arrears of interest and capital payments, at least in respect of the second loan. There is in the circumstances nothing intrinsically absurd or contrary to good commercial or common sense that persuades me that the facilities could not reasonably be interpreted as being short term, or indeed very short term. On the contrary, I construe both facilities as being short term facilities which were intended to be refinanced or repaid on or before 30th September, 2009.
The provision for instalment payments
45. Counsel for the plaintiff argues that the facilities are not to be interpreted as being repayable within the short timeframe for which the second defendant contends, because provision is made for instalment payments by the express terms of the first sanction, by which monthly reductions (the plural is used) of €5,000 are to apply “in the interim”. In the second facility none such is provided.
46. It is accepted that the monthly payment of €5,000 was not sufficient to meet payment of capital and interest on the loans on an ongoing basis. The special conditions of the first facility were intended as an interim measure, and the existence of such a provision does not make it absurd, the loan facility being one of a short term nature. In that context the fact that provision was made for instalments in respect of one facility only suggests that the instalment was not an important factor in the arrangements, and this is consistent with the express provision for repayment in full on the redemption date. Instalment payments would almost always be found in a long term facility, but would not be required as a matter of commercial sense in a short term facility.
47. I do not consider that the provision for instalments varies or relaxes the agreement that repayment in full be made by the redemption date, and it does not persuade me that demand was necessary before the right of action accrued.
The general conditions – events of default
48. Counsel for the plaintiff identifies general condition 4.2 as being of particular importance. It provides that a term loan may be terminated by the Bank at any time without notice to the borrower on the happening of certain events. It does not provide that demand must be made once the redemption date has passed, but identifies other events of default giving rise to an entitlement of the Bank to seek repayment in full. It does not assist the plaintiff with regard to when and how default occurs when payment is not made on the agreed date.
49. Clause 3.1.1 does provide that loan account facilities are “repayable on demand”. That general proposition is subject to the proviso that “in normal circumstances” the Bank expects that the loan will be available as stated in the letter of sanction. That general condition is further qualified by clause 3.1.2 by which the Bank reserved unto itself the right to demand payment on the happening of an event of default.
50. The provisions of clause 3.1.1 and 3.1.2 are an expression of the general intention of the parties that, while the Bank could demand payment at any time, the Bank would not demand payment early against a compliant borrower. The general conditions further qualify that general proposition by identifying a number of events, the happening of which entitle the Bank to make demand, irrespective of whether an argument could be made that the borrower is otherwise compliant.
51. I read the provisions of clauses 3.1.1 and 3.1.2 as qualifying the nature of the Bank’s entitlement to demand payment at any time, and not as a provision which when properly interpreted means that formal demand is required at any time when a borrower is in default. That approach is consistent with another canon of construction, namely the obligation that the court would look at the relevant words in the context of the entirety of the contract.
Conclusion
52. I cannot accept the argument of the plaintiff that taking the contract as a whole the loan facility was repayable only on demand. I consider in all the circumstances that it was repayable on or before 30th September, 2009, that it was a contract for a fixed term at the end of which the money became repayable in full, either from the resources of the borrowers or by refinance. There was, in those circumstances, no requirement that the Bank demand payment on 30th September, 2009.
53. As a consequence, I consider that the cause of action accrued on 30th September, 2009. The action therefore is one which existed at the date of death of the deceased, Thomas Pollock, who died on 7th November, 2010, and in respect of which the two-year time period provided by s. 9 of the Act of 1961 applies.
54. I consider that the argument that I would consider this contract in the context of the contra proferentem rule is not correct, as the rule is a “last resort” to be used by the court in aid of the construction of an ambiguous clause: ICDL GCC Foundation FZ-LLC v. European Computer Driving Licence Foundation Limited (per O’Donnell J. at para. 166).
55. No ambiguity arises which requires that this principle be called in aid of construction.
Was there an acknowledgment?
56. The plaintiff argues that the estate, through the second defendant, made an acknowledgment and/or an admission against interest. Two relevant affidavits are referred to. One is an affidavit sworn on 10th April, 2014 in the context of the application to remove a caveat, and the other is the Inland Revenue affidavit sworn on 8th November, 2013.
57. Section 58(2)(b) of the Statute of Limitations Act 1957 provides as follows:
“[An acknowledgement under s. 56] shall be made to the person or the agent of the person whose title, right, equity of redemption or claim (as the case may be) is being acknowledged.”
58. I accept the argument of the second defendant that the Inland Revenue affidavit and the affidavit grounding the application to remove the caveat are not, and could not, be characterised as an acknowledgment to the Bank or any agent of the Bank. In that I follow the judgment of the Court of Appeal for England & Wales in Bowring-Hanbury’s Trustee v. Bowring-Hanbury [1943] 1 Ch. 104 which held that the Revenue probate affidavit was not an acknowledgement to the relevant creditor. I also note the judgment of Slade J. in Re Compania De Electricidad De La Provincia de Buenos Aires Ltd. [1980] 1 Ch. 146, where he noted that a written acknowledgement had to be made to a creditor or his agent.
59. Neither affidavit could be said in any sense to have been made to the Bank nor any agent of the Bank, and neither can for that reason be characterised as an acknowledgement in writing of the indebtedness of the estate to the Bank.
60. I was advised at the closing of the submissions that documentation may exist in the form of correspondence on which the Bank might wish to rely, but subject to hearing from counsel with regard to any other argument that an acknowledgement was made such that the running of time is to be differently construed, I answer the preliminary issue in this case as follows.
Decision
61. The cause of action of the Bank against Thomas Pollock, deceased accrued on 30th September, 2009. Mr. Pollock died on 7th November, 2010 and as a result of the provisions of s. 9(2)(b) of the Act of 1961, as amended, the action against the deceased was required to be brought within two years of his death. The action was one which, pursuant to s. 8 of the Act of 1961, did subsist against the deceased and survived against his estate but only for the period of two years provided by s. 9.
62. The action against the second defendant is barred by statute.
Gibbons v Addington
[2017] IEHC 758
JUDGMENT of Mr. Justice Robert Eagar delivered on the 1st day of December, 2017
1. This judgment concerns an appeal against the decision of Judge Linnane dated 18th July, 2017, in which the learned Circuit Court Judge refused the defendant’s application to transfer the proceedings to the Family Court and the Court further ordered that the plaintiff as personal representative of the estate of Vera Hanley (deceased), recover from the defendant possession of the lands and premises situated at 47 Mount Prospect Drive, Clontarf, Co Dublin.
2. Judge Linnane ordered that the execution for possession be stayed for 28 days from the 18th July, 2017.
3. On 28th July, 2017, the Master of the High Court extended the time for appealing the order of Judge Linnane for three weeks from the 28th July, 2017.
4. No formal notice of appeal was lodged, and as a result of two applications by the applicant to this Court, one dated 3rd August, 2017, before O’Hanlon J. where the Court ordered that the motion to stay the order of the Circuit Court pending the appeal was refused and before Meenan J. on the 14th August, 2017, where the court held that the order of O’Hanlon J. stand and the application of the defendant for a priority hearing of the appeal was refused. On 4th August 2017, the defendant applied to the Court of Appeal and as a result of the application before the Court of Appeal, an expedited hearing of this matter was arranged for the High Court on the 13th October, 2017, when this Court heard the appeal.
5. Counsel on behalf of the plaintiff outlined the evidence in relation to the application for ejectment proceedings. He referred to the affidavit of Declan Gibbons and said that the plaintiff Declan Gibbons is the personal representative of Vera Hanley (deceased). She lived at 47 Prospect Drive, Clontarf, Dublin 3 and died on the 28th February, 2014, and he is the sole surviving executor named in the deceased’s last will and testament dated 25th September, 1981. On 26th of January, 2015, the last will of Vera Hanley was proved and registered in the Probate Office and the administration of the estate which devolves under and vested in the personal representative of the deceased was granted by the court to Declan Gibbons, the nephew of the deceased, and the surviving executor named in the will.
6. The will provided that the deceased devised and bequeathed all her property of every nature and description whatsoever and wheresoever situated and disposed of, in equal shares to her niece Maria Gibbons and her nephew Declan Gibbons subject to the right of her sister-in-law Delia Hanley, to reside in 47 Prospect Drive, Clontarf, Dublin 3, free from all rent or outgoings, and the premises to be maintained by Maria Gibbons and Declan Gibbons. In fact, Delia Hanley predeceased Vera Hanley. Mr. Gibbons says that in his capacity as personal representative of the deceased’s estate, he is the person responsible for the premises. He also referred to a memorandum of agreement dated 1st October, 2009, made between the deceased as landlord and Maria Gibbons as tenant. The deceased had demised the premises at 47 Prospect Drive, to her niece Maria Gibbons for a term of one year in consideration of a monthly rent of €1,100. The Court notes at paragraph 3 of the exhibited agreement:-
“(b) That if the tenancy created should continue beyond the dates specified herein, it shall, in the absence of a new agreement, be deemed to be a tenancy determinable by one calendar month’s notice in writing by either party expiring on any gale date;
And
(c) that the Circuit Court shall have jurisdiction to entertain any proceedings in respect of this Contract of Tenancy and that any document in any such proceedings and any document requiring to be served on the landlord or on the tenant may be served on the landlord by sending it by prepaid registered post addressed to him at this last known place of residence and be served on the tenant by delivering to or at or by sending it by prepaid registered post to the demised premises. The term was one year fixed, followed by automatic renewal. Lease commenced on 1st October 2009.”
7. By letter dated 24th October, 2016, the solicitors on behalf of Declan Gibbons as legal personal representative of the deceased wrote to Maria Gibbons, indicating that that the property is now sale agreed and that his client had agreed to a closing date of 5th December, 2016. In the circumstances she would be required to vacate the property on or before this date. A copy of that letter was sent to the defendant who was the husband of Maria Gibbons. Mr. Gibbons said that he had terminated the said agreement and any tenancy created by notice in writing dated 24th October, 2016, and that Maria Gibbons duly quit the premises on 21st December, 2016.
8. The defendant replied to the notice of the 24th October, 2016, following day, to indicate that he did not consent to the sale of the premises. He subsequently wrote to Mr. Gibbons on the 17th of December, 2016, to irrevocably withdraw his previous letter and to give consent to his wife “to do all things necessary as she sees fit pertaining to the premises”. The defendant’s wife, Maria Gibbons, had consented to the sale of the premises but on the 19th of December, 2016, and subsequently on the 21st December, 2016, the defendant withdrew his consent to the sale of the premises.
9. Counsel on behalf of the plaintiff referred to the affidavit of Maria Gibbons the wife of the defendant, who was the tenant of the premises under the agreement. In that affidavit, she said she resided in the premises between 1st October, 2009, and 21st December, 2016, as a tenant of the deceased pursuant to the agreement dated 1st October, 2009. Further, although the tenancy created by that agreement was never formally renewed on 31st September, 2010, or thereafter, she continued to reside in the premises pursuant to its terms. She stated that her brother terminated the tenancy by notice dated 24th October, 2016, and she accepts that her brother is obliged to sell the premises in order to administer their late aunt’s estate. She accepted his notice to quit and agreed to yield up possession of the premises which she duly did on 21st December, 2016. Her husband the defendant refused to leave the premises. He did not execute a lease or tenancy in respect of the premises, was not a tenant of her late aunts, or of her brother and never paid any rent or made any contribution towards their household expenses at any stage since 1st October, 2009. Counsel said that it is a source of distress for her that her husband has refused to yield to repossession of the premises. It appears that the marital relationship between Maria Gibbons and the defendant has now in effect ceased.
10. Counsel on behalf of the plaintiff referred to the points which the defendant made in the course of a series of affidavits. He noted that the defendant made criticisms of judges and the superior court rules.
11. He noted the following issues raised by the defendant before Judge Linnane :-
“(1) that this should have been transferred to the Family Court.
(2) That he had agreed with the deceased that he would maintain the property while he lived there.
(3) That he was entitled to reside rent free in the property.”
12. The Family Home Protection Act 1976 by s. 10 provided that the jurisdiction conferred on a court by this Act may be exercised by the High Court, but that where the rateable value of the land to which the proceeding relates, exceeds €100 or the value of the personal property to which the property relates exceeds €5,000 and the proceedings are brought in the Circuit Court, that the court shall, if a defendant so requires, transfer the proceedings to the High Court, that any order made or acted on in the course of such proceedings before such transfer shall be valid unless discharged or varied by an order of the High Court. Section 10 of the Family Home Protection Act 1976 was amended by s. 48 of the Civil Liability and Courts Act 2004, which is as follows:-
Section 10 of the Act of 1976 is amended by:-
“(a) the substitution, in subs. (4) (inserted by s. 13 of the Act of 1981), of-
(i) “market value” for “rateable valuation”, and
(ii) “€3,000,000” for “£200”.”
(c) the insertion of the following subsection:
“(8) In this section ‘market value’ means, in relation to land, the price that would have been obtained in respect of the unencumbranced fee simple were the land to have been sold on the open market, in the year immediately preceding the bringing of the proceedings concerned, in such manner and subject to such conditions as might reasonably be calculated to have resulted in the vendor obtaining the best price for the land.”
13. It seems clear that the Circuit Court had jurisdiction to deal with any issues relating to the Family Home Protection Act 1976 as amended, having regard to the amendment by the substitution in subsection 4 (inserted by s. 13 as a result of the amendment by s. 48 of the Civil Liability and Courts Act 2004).
14. In respect of the second issue Mr. Addington said he had agreed with the deceased that he would maintain the property whilst he lived there. Counsel on behalf of the plaintiff said that this was not a valid claim and averred that it was a money claim but it did not entitle him to stay in the property, he also suggested that such a claim is time barred. He referred to s. 9 of the Civil Liability Act, 1961 which provides: –
“9 (1) In this section “the relevant period” means the period of limitation prescribed by the Statute of Limitations or any other limitation enactment.
(2) No proceedings shall be maintainable in respect of any cause of action whatsoever which has survived against the estate of a deceased person unless either –
(a) proceedings against him in respect of that cause of action were commenced within the relevant period and were pending at the date of his death,
Or,
(b) proceedings are commenced in respect of that cause of action within the relevant period or within the period of two years after his death, whichever period first expires.”
15. In these circumstances, this section provides that any claim against the estate of Vera Hanley must have been brought within two years of the date of her death.
16. Mr. Addington in this Court presented the argument that it was a family home, he referred to the Universal Declaration of Human Rights and that the plaintiff had failed to address his legitimate claim.
17. The Court asked the defendant what was his legitimate claim and he said that his wife’s aunt Vera Hanley, the deceased, having had a number of falls, had gone into care in June or July, and he was on standby for call out if there was an emergency in the home. He said that she asked him to look after the house for her on a visit, he said when asked by the Court had he seen the contents of the will, he said he had not seen the will until the ejectment papers in the Circuit Court. He suggested that the rental agreement looked fabricated and insisted that this was a family issue. He also suggested that the rental agreement had been cancelled because his wife, Maria Gibbons and the plaintiff had split the rent between themselves.
18. He argued that there were constitutional issues and the Court indicated that he should have taken High Court proceedings to seek to challenge the constitutionality of the legislation. He also argued that the Courts of Justice were closed to the man on the street. He also suggested the following : –
(1) the solicitor on behalf of the plaintiff was negligent,
(2) the family tried to have him locked up,
(3) the rental agreement was a fabrication,
And,
(4) there was no justification for the transfer of ownership to the executor.
19. In response, counsel on behalf of the plaintiff said that all of the acts enjoyed the presumption of constitutionality and that the defendant had not sought to challenge the constitutionality by taking proceedings against the Attorney General and Ireland. He said that there could be no suggestion that the rental agreement was fabricated and there was no evidence adduced by Mr. Addington to say that that is the case.
20. The Court is satisfied that having regard to the affidavit of Declan Gibbons and the exhibits thereto, and the affidavit of Maria Gibbons, that the administration of the estate was vested in the personal representative of the deceased Declan Gibbons, the nephew of the deceased and surviving executor named in the will, further that the personal representative is the person responsible for the premises and that the court notes that pursuant to a letter dated the 24th October, 2016, from the solicitors on behalf of Declan Gibbons, Maria Gibbons indicated that she would comply and duly quit the premises on the 21st December, 2016.
21. The Court is satisfied that any claim against the estate of Vera Hanley must have been brought within two years of the date of her death and no application has been made by the defendant in this regard, the Court also notes the provisions of Section 9 of the Civil Liability Act 1961.
22. In respect of the arguments which were argued before the Court, the Court is satisfied that the lease of agreement dated the 1st October, 2009 made between the deceased as landlord and Maria Gibbons as tenant for a term of one year and continued in circumstances where the plaintiff duly determined that the tenancy would be ended on the 21st December, 2016, does not give rise to any protection under the Family Home Protection Act. It would be difficult to imagine any landlord leasing property to a married couple if the Family Home Protection Act provisions governed such a lease.
23. The Court notes from the defendants documents and affidavits that the manner in which the defendant has pleaded his claim in these proceedings is to advance allegations which have no basis in fact. The Court believes that the proceedings constitute frivolous and vexatious proceedings. Feeney J. in John Rooney v. Ireland & The Attorney General [2012] 2844 P stated that:
“the serious accusations of wrong doing made against members of the High Court, the Supreme Court at paras. 30 to 34 of the statement of claim (in that case) has no statutory basis. These allegations are now made prior to the institution of these proceedings and the judgment sand no order has been made to reopen of the decisions. The allegations have been pleaded and I am satisfied that for the purpose of embarrassing or scandalising the parties involved in amount to an abuse of process (this Courts emphasis).”
24. The Circuit Court Judge was correct in her decision and the Court will make an order for the possession of the property to be given to the plaintiff as personal representative of the deceased. The Court noted that Judge Linnane ordered that the execution for possession be stayed for 28 days from the 18th July, 2017, however the defendant has refused to leave the property and has paid no rent in the meantime and in all the circumstances of the case the Court will not give a stay but requires the defendant to vacate the premises by the 3rd December, 2017.
Doyle v Dunne
[2014] IESC 69
Judgment of Ms. Justice Laffoy delivered on 20th day of November, 2014
The issue
1. The primary issue which the Court has to address on this appeal at this juncture arises from the unfortunate circumstance that the appellant died at a time when her appeal had been part heard by the Court. In consequence, the Court must now determine the status of the appeal and, in particular, whether the Court has any jurisdiction to adjudicate on the appeal having regard to the nature of the appellant’s cause of action and her claim against the respondent. In reaching a determination on the issue it will be necessary to consider in some detail the nature of the appellant’s cause of action and her claim as pleaded, the conduct of the proceedings and their outcome in the High Court and what occurred on the hearing of the appeal, before considering the relevant law and its application to the facts.
The proceedings in the High Court
2. The proceedings in the High Court were initiated by a personal injuries summons which issued on 21st June, 2011. The indorsement of claim, which described the appellant as “a retired lady” who was born on 11th July, 1931, disclosed that the respondent was being sued as “the agreed nominated defendant of the Royal Victoria Eye and Ear Hospital” (the Hospital) in Dublin. The factual basis of the appellant’s claim for personal injuries against the Hospital, as outlined in the indorsement of claim on the summons, was that she entered the Hospital as a patient on 27th January, 2010 and underwent surgery to remove a cataract from her left eye under general anaesthetic on the same day on the advice of the Hospital’s servants or agents. The consequences of the surgery are outlined in the judgment of the High Court (de Valera J.) delivered on 20th December, 2013 as follows:
“Unfortunately, the plaintiff’s surgery was not a success. An uncontrolled pseudomonas infection developed which necessitated surgical evisceration of the plaintiff’s left eye on 3rd February, 2010 in order to avoid causing permanent damage to her right eye. The plaintiff was subsequently fitted with a prosthesis. This had devastating consequences for the plaintiff and [her son, Edward Doyle] gave evidence of the considerable impact it had on her daily life. He told the Court that since surgery his mother is often very depressed . . . Complications also arose which led to the plaintiff having to undergo a dermisfat graft in April 2010 under general anaesthetic and another procedure was required in 2012 after the plaintiff’s eye socket began to bleed.”
3. In the indorsement of claim on the summons and in a notice of further particulars furnished on behalf of the appellant the allegations of negligence and breach of duty against the respondent were particularised comprehensively. In essence, the appellant’s case was that the respondent failed in its duty to obtain informed consent from her to the surgical procedure and to the administration of a general anaesthetic to her. The case advanced on behalf of the appellant was that she underwent the surgery under general anaesthetic without any discussion of the prospects of the success of the surgery, on the basis of which it was contended that she would not have undergone the surgery in the knowledge of the risks associated with it.
4. Apart from the allegations of negligence and breach of duty in the indorsement of claim, it was also alleged that “the said surgery and the said general anaesthesia was performed without the informed, or any, consent of the [appellant] and the [respondent], their servants or agents, thereby trespassed to the person of the [appellant]”.
5. While it was pleaded in the indorsement of claim that the appellant had sustained severe personal injuries and had suffered loss and damage by reason of the alleged wrongdoing of the respondent and that the plaintiff claimed damages for negligence, breach of duty and trespass to the person, no particulars whatsoever of any pecuniary loss or damage she was alleged to have suffered were outlined in the indorsement of claim. This point was raised in a notice for particulars served by the respondent’s solicitors in which they sought confirmation that the appellant was not making any claim for any items of special damage. The response of the appellant’s solicitors was as follows:
“The [appellant] has a medical card. No claim is made in respect of medical expenses to date.”
No claim for special damage was subsequently made on behalf of the appellant and no evidence of special damage was adduced at the hearing in the High Court.
6. In the proceedings as initiated, the appellant sued in her own name. The action came on for hearing in the High Court on 12th December, 2012. On the first day of the trial, the appellant’s son, Edward Doyle (Mr. Doyle), gave evidence, as did an expert medical witness called on behalf of the appellant. The second day of the trial was taken up with further evidence of expert medical witnesses called on behalf of the appellant. On the third day of the trial, 14th December, 2012, the appellant was called to give evidence, but after a short time an issue arose as to her capacity. The trial judge heard submissions on behalf of the appellant and the respondent and then adjourned the hearing until 21st December, 2012. On 21st December, 2012, the trial judge decided that the matter should go ahead on the basis that the appellant was a person of unsound mind not so found. The title of the proceedings was accordingly amended so that the appellant was described as a person of unsound mind not so found suing by her son and next friend, Mr. Doyle. The matter was then adjourned and the hearing was resumed on 26th March, 2013, when two doctors who had attended the appellant in the Hospital testified on behalf of the respondent. The matter was further adjourned to enable the parties to exchange written submissions. Oral submissions were heard in the High Court on 26th June, 2013 and, as has been stated, judgment was delivered on 20th December, 2013.
7. In his judgment, the trial judge addressed the core substantive issues in the proceedings as follows (at para. 12):
“Counsel for both parties made extensive submissions to the Court in relation to the duty owed by a medical practitioner to obtain informed consent. I accept that the minimum requirements for disclosure of information to patients in elective surgery is that set out by the Supreme Court in Walsh v. Family Planning Services [1992] 1 IR 496 and I am satisfied that this threshold has been met in this case. Having made this finding it is not necessary for me to carry out any objective or subjective assessment as to whether or not the plaintiff would have proceeded with the surgery had she been informed of the risks as Kearns J. (as he then was) did in Geoghegan v. Harris [2003] 3 I.R. 536. However, for the sake of completeness, I am satisfied that, on the balance of probabilities the plaintiff would have gone ahead with the surgery.”
On the basis that no liability could be attributed to the respondent and that no negligence had been established, the trial judge dismissed the appellant’s claim. That decision is reflected in the order of the High Court dated 20th December, 2013, which was perfected on 24th January, 2014, in which it was ordered that the plaintiff’s claim be dismissed and costs were awarded in favour of the respondent against the plaintiff.
The appeal
8. In the appellant’s notice of appeal which was filed on 31st January, 2014, the appellant sought to set aside the judgment and order of the High Court made on 20th December, 2013 and further sought that, in lieu thereof, this Court should –
(a) order a new trial on all issues in the High Court, or
(b) enter judgment for the appellant and assess the damages to which the appellant was entitled.
The appellant also sought such further relief as to this Court should seem fit, including the costs of the proceedings in the High Court and the costs of the appeal. The grounds of appeal were set out comprehensively in the notice of appeal.
9. The appeal, having been given priority because the Court had been informed that the appellant was terminally ill, was assigned a hearing date of 3rd June, 2014. On that day the Court had the benefit of written submissions on behalf of the appellant and the respondent and the Court heard oral submissions on behalf of the appellant and oral submissions in response on behalf of the respondent. However, there was not sufficient time to hear counsel for the appellant in reply. Accordingly, the matter was adjourned to a date to be fixed to hear counsel for the appellant in reply. The date fixed for the resumed hearing was 31st July, 2014.
10. In the interim period between the first hearing and the resumed hearing, regrettably, the appellant had died. Her death was unrelated to the personal injuries which were alleged to form the basis of her claim in the proceedings. At the resumed hearing there was before the Court an affidavit sworn by Mr. Doyle on 29th July, 2014 in which he averred that the appellant had died on 11th July, 2014 and exhibited her death certificate. He also exhibited what he averred was a true copy of her last will dated 16th March, 1998, in which she had appointed him the sole executor thereof. Mr. Doyle sought an order pursuant to Order 58, rule 8 of the Rules of the Superior Courts 1986 and pursuant to the Court’s inherent jurisdiction granting leave to him to proceed with the appeal on the resumed hearing thereof as executor of the last will of the appellant. Understandably, the will of the appellant relied on by Mr. Doyle as being her last will and testament had not been admitted to probate and he had not the status of personal representative at that stage. In the circumstances, the Court made no order amending the title to the proceedings but decided to hear the remainder of the appeal on a de bene esse basis.
11. The legal representatives on record for the appellant helpfully had made available to the Court extensive “Points in Reply” in writing on the substantive issues. Moreover, the Court heard oral submissions from counsel for the appellant. The position, accordingly, is that the parties to the appeal have obtained as full a hearing of the appeal as they are entitled to, if the Court still has jurisdiction to adjudicate on the appeal.
12. Anticipating that it might be argued on behalf of the respondent that the appellant’s cause of action and claim did not survive her death, counsel for the appellant furnished outline written submissions to the Court addressing that issue and made oral submissions. The Court also heard from counsel for the respondent on the issue. The Court, having reserved judgment on the issue, is satisfied that it does not require any further submissions from the parties.
The law
13. The survival of causes of action on death is now governed by s. 7, which is in Part II of the Civil Liability Act 1961 (the Act of 1961). Sub-sections (1) and (2) of s. 7, which are relevant for present purposes, provide as follows:
“(1) On the death of a person on or after the date of the passing of this Act all causes of action (other than excepted causes of action) vested in him shall survive for the benefit of his estate.
(2) Where, by virtue of subsection (1) of this section, a cause of action survives for the benefit of the estate of a deceased person, the damages recoverable for the benefit of the estate of that person shall not include exemplary damages, or damages for any pain or suffering or personal injury or for loss or diminution of expectation of life or happiness.”
The expression “excepted causes of action”, which appears in subs. (1), is defined in s. 6 of the Act of 1961, which has been amended most recently by the Defamation Act 2009. The appellant’s cause of action does not come within that definition which, in reality, now only captures an action for seduction. Section 48 of the Succession Act 1965 provides that the personal representatives of a deceased person may sue, and be sued, in respect of all causes of action the benefit of which survive for, or against, the estate of the deceased person. Hence the approach adopted by the Court on 31st July, 2014, as explained earlier in paragraph 10.
14. Sub-section (3) of s. 7 deals with a situation where a cause of action survives by virtue of subs. (1) for the benefit of the estate of a deceased person, and the death of such person has been caused by the circumstances which gave rise to such cause of action. Clearly, subs. (3) has no application to the appellant’s proceedings or this appeal. Similarly, subs. (4), which provides that the rights conferred by s. 7 are in addition to rights conferred on the dependents of deceased persons by Part IV of the Act of 1961, has no application to the appellant’s proceedings or this appeal.
15. The position of the respondent at the resumed hearing was not that the appellant’s cause of action, such as was vested in her at the date of her death, did not survive for the benefit of her estate in accordance with subs. (1) of s. 7. Rather, the position of the respondent was that, having regard to subs. (2), no damages were recoverable for the benefit of the estate of the appellant, because the only damages claimed in the proceedings were excluded from recoverability by virtue of subs. (2), being damages for pain, suffering and personal injury. In particular, it was emphasised on behalf of the respondent that there was no claim for special damages. That was not contradicted on behalf of the appellant.
Doyle v Dunne
[2016] IESC 68
Judgment of Ms. Justice O’Malley delivered the 17th day of November, 2016
Introduction
1. This judgment deals with a preliminary issue as to whether the plaintiff’s cause of action for damages for alleged medical negligence survived her death. Unfortunately, the plaintiff passed away after the High Court hearing, at which she was unsuccessful, but before the conclusion of the hearing of her appeal before the Supreme Court. It is asserted that, by virtue of the relevant common law rules, her cause of action survives for the benefit of the estate notwithstanding the provisions of the Civil Liability Act 1961, as amended. It is also argued that, in any event, the proceedings include a claim for pecuniary loss in respect of care provided to the plaintiff by her son, Mr. Edward Doyle and that this claim survived her death.
Background
2. At all material times the plaintiff lived in her family home with her son and his wife. The evidence was that Mr. Doyle acted as his mother’s fulltime carer and that she had relied on him since suffering from a brain haemorrhage in 1996.
3. On the 27th January, 2010, at the age of seventy-nine years, the plaintiff underwent surgery to remove a cataract from her left eye. Unfortunately the surgery was not a success, and post-operative complications necessitated removal of that eye on the 3rd February, 2010, in order to prevent damage to her right eye. She was fitted with a prosthetic eye. Further complications arose, requiring further interventions later in 2010 and in 2012. Her daily life was affected in that her independence was reduced, she was often depressed and she was reliant on family members for care.
4. The proceedings alleging negligence and breach of duty were initiated by way of personal injury summons issued on the 21st June, 2011. It was not alleged that the operation had been carried out negligently and in essence the plaintiff’s claim was that she had not given informed consent to the surgery and to the administration of a general anaesthetic. It was pleaded that she had been told that the surgery would only involve a 20 minute procedure, under local anaesthetic, as a day patient and that there was no risk attached to it. She would not have consented had she been made aware of the risks associated with the operation. It was alleged that she had signed the consent form in circumstances amounting to duress after she had been given medication and that she could not understand it.
5. No particulars of any financial loss were set out in the summons. A notice for particulars sent by the defendant, dated January 2012, requested confirmation that there was no claim for any items of special damage. In reply, the plaintiff’s solicitor stated that she had a medical card and that no claim was being made in respect of medical expenses.
6. By letter dated 31st October, 2012, and headed “Further Particulars of Injuries”, the plaintiff’s solicitor set out further details of the impact of her injury on her life. It was stated, inter alia, that she no longer cooked for herself. The letter contains the following paragraph upon which emphasis is now placed:
“The Plaintiff’s son has become her main carer. If he has to leave her for long periods, he ensures that a family member is present. Her judgment is poor due to her visual impairment i.e. she misplaces a cup when attempting to place it on a saucer. She spills liquids. She has burned her hands when putting fuel on the fire and also, when using the cooker. Therefore, she is not allowed to use the cooker or handle kettles of boiling water. Each morning the Plaintiff’s eye socket is congealed with blood and yellow matter. Her son has to remove the eye, cleanse the socket, administer eye drops etc. He has to repeat this procedure two to three times per day depending on the level of discharge from the socket. He also administers her medication, cooks her meals and generally looks after her.”
The High Court hearing
7. The matter came on for hearing on the 12th December, 2012. This Court is not, for present purposes, concerned with merits of the case as it ran in the High Court. It is however necessary to refer to certain aspects.
8. The plaintiff herself was not called to give evidence until the third day of the hearing. It quickly became apparent that there was an issue as to her capacity. As an example, she was under the impression that the operation had taken place in Tullamore rather than in Dublin. The trial judge adjourned the hearing until the 21st December, when he directed that the matter should proceed on the basis that she was a person of unsound mind not so found. The title of the proceedings was amended and the plaintiff’s son Mr. Doyle acted as the next friend. The hearing was then adjourned until the 26th March, 2013, when the defendant went into evidence. There was then a further adjournment for written and oral submissions and the hearing concluded on the 26th June, 2013.
9. It is also necessary to refer to a particular aspect of the evidence given by the plaintiff’s son, Mr. Doyle. He described the care he gave in respect of his mother’s prosthetic eye. He took it out twice a day, cleaned it and put it back. He also referred to the fact that it was too dangerous for her to make a cup of tea for herself, and said, in effect, that she had aged ten years as a consequence of what had happened to her.
10. The judgment of the High Court (De Valera J.) was delivered on the 20th December, 2013. It will suffice here to say that the trial judge held on the evidence that the requirements for disclosure of information to patients in elective surgery had been met. Though he sympathised with the plaintiff and with her son, and acknowledged the considerable impact on her life, he held that no liability could be attributed to the hospital. As a result the claim was dismissed.
11. The notice of appeal was lodged on 30th January, 2014, asking this court to set aside the judgment of the High Court and order a new trial on the issues in the High Court, or alternatively to enter judgment for the plaintiff and assess the damages.
12. On the 15th May, 2014, counsel applied in court for an early hearing date. The plaintiff was at that stage terminally ill with advanced pancreatic cancer, and the application for priority was based upon the opinion of her oncologist that she was unlikely to survive for a further two months and might not live that long. The appeal was therefore listed for hearing on the 3rd June, 2014. It was called on by counsel for one day but in the event did not conclude on the hearing date and was adjourned to the 31st July, 2014, for the completion of argument. Unfortunately the plaintiff passed away on the 11th July, 2014. On the date fixed for the resumption of the appeal, the Court was informed of this event.
13. There appears to have been an unfortunate misunderstanding as to what should happen next. The plaintiff’s representatives appear to have understood that the appeal on the substantive issue should continue and that the issue of the consequences of the plaintiff’s death would become relevant only if the Court decided to allow the appeal. The members of the Court appear to have had a different understanding, and on the 24th November, 2014, delivered a judgment in which the appeal was dismissed on the basis that because of the plaintiff’s death, and since (as the court saw it) the claim had been for general damages only, there was nothing by way of remedy or relief left in the claim for the Court to adjudicate upon or remit to the High Court.
14. This judgment was set aside on foot of a motion brought on behalf of the plaintiff, in which it was complained that counsel had been specifically directed not to address the question whether the action survived. It is relevant, for the purposes of the current issue, to note that the case was made in support of the application that, apart from the contention that the claim for general damages survived, there was a claim in respect of care services provided by Edward Doyle.
15. The plaintiff’s solicitor averred that before the High Court hearing he had obtained a report from a nursing consultant dealing with the valuation of those services, and that the paragraph in the letter of updated particulars quoted above came from that report. The nursing consultant valued the care services provided by Mr. Doyle between the 10th February, 2010, and the 25th May, 2012, at €89,902.40.
16. The solicitor deposed that it had been decided by senior counsel and himself not to call the author of the report, because the reality was that Mr. Doyle would continue to provide services to his mother.
“On that basis, the trial judge would make an award in respect of Mr. Doyle’s services necessitated by the injuries in issue as general damages for pecuniary loss. There would thus be a single award of general damages for both pecuniary and non-pecuniary loss.”
17. By order of this Court made on the 20th January, 2015, the judgment of November 2013 was set aside. The question as to the survival of the cause of action was set down to be determined as a preliminary issue, to be heard after the grant of probate was taken out and the proceedings reconstituted. That procedure having been carried out, the preliminary issue now comes before the Court for determination.
Section 7 of the Civil Liability Act, 1961
18. Insofar as is relevant, the section reads as follows:
(1) On the death of a person on or after the date of passing of this Act all causes of action (other than excepted causes of action) vested in him shall survive for the benefit of his estate.
(2) Where, by virtue of subsection (1) of this section, a cause of action survives for the benefit of the estate of a deceased person, the damages recoverable for the benefit of the estate of that person shall not include exemplary damages, or damages for any pain or suffering or personal injury or for loss or diminution of expectation of life or happiness.
19. The “excepted” causes of action are set out in s. 6 and are not relevant here.
Consequences of the appellant’s death – submissions
The claim for general damages – the plaintiff’s submissions
20. On behalf of the appellant it is submitted that s. 7 of the Act is of relevance only where the cause of action would otherwise have abated on a plaintiff’s death by virtue of the common law principle actio personalis moritur cum persona. The contention is that in the instant case the cause of action survives under the relevant common law rules, and not by virtue of s.7(1), that the section therefore has no relevance and that the limitation on the recoverability of damages imposed by s.7(2) does not apply.
21. This submission is based on the proposition that an exception to the common law rule still exists. It is contended that this must be so, since, it is said, the causes of action set out in s.6 are still governed by the rule.
22. It is submitted that at common law, while an action in tort for damages for personal injuries generally abated on the plaintiff’s death, this rule did not apply if the case had been prosecuted to final judgment before the date of death. It is argued that, in this case, the High Court had entered a final judgment in the matter and the plaintiff’s appeal was in the course of being heard when she died. Reliance is placed in this respect on Alford v. Begg (1848) 12 Ir. L.R. 528 and Davoren v. Wootton [1900] 1 I.R. 273.
23. The very short report in Alford v. Begg at the reference cited records the fact that the matter came before the Court of Exchequer for argument on a bill of exceptions. The court was informed that one of the parties had died, and it was submitted that the suit had abated. Pennefather B. is reported as saying:
“I think that there being a verdict, and the hearing of the cause having been delayed by the act of the Court, the suit ought not to abate, unless some authority can be found for it.”
24. Pigot C.B. observed that no authority would be found, i.e. to support the contention that the suit had abated.
25. Reference is also made to Davoren v. Wootton [1900] 1 I.R. 273. In that case the defendants had been found by the court of trial to have fraudulently induced the plaintiff to acquire shares in a company. The court ordered them to pay a certain sum in damages, less the value of the shares, and an inquiry was directed to ascertain that value. The defendants appealed before that inquiry could take place. One of them died after the appeals were opened but before arguments had concluded. It was held by the Court of Appeal that the proceedings could not be continued against the personal representatives of that appellant. The damages were as yet unliquidated and unascertained, and it could not be shown on the facts of the case that the deceased’s estate had benefited from his wrongdoing. In those circumstances the action died with him.
26. The judgments expressly contrast this situation with that of a case where a claim for damages had been converted into a judgment debt. However, counsel argues that the point to be taken from it is that a final judgment in the court of trial prevents abatement.
27. According to counsel, it therefore matters not that the finding in the High Court was against the plaintiff in this case – what is relevant is that a final judgment has been entered. If it were otherwise, and a distinction were to be drawn between successful and unsuccessful plaintiffs after trial at first instance, it is said that an unsuccessful plaintiff’s constitutionally guaranteed right to appeal would be negated. Had the plaintiff succeeded in the High Court, her cause of action would have been translated into a judgment debt. If she had then appealed the adequacy of the award, the judgment debt would have been unaffected by her death. It is argued that she was unsuccessful at trial because of an error by the trial judge. It is therefore claimed that it would be unjust to deprive her of the judgment that she should have obtained and to relieve the defendant of responsibility for his culpable actions.
28. Reference is made to criticisms of the general common law rule in McMahon & Binchy, Law of Torts, (4th ed.). At p. 1483 the authors pose the questions whether, where one of the parties to an existing tort dispute dies, the right to sue or be sued survives for, or against, the estate.
“The common law answer to [that] question was contained in the Latin maxim actio personalis moritur cum persona. Death ended all actions in personal torts. The exact reasons for this rule are rather obscure and the rule is difficult to justify when it is appreciated that contract actions (except in relation to personal contracts) survived for or against the estate of the deceased. It has been suggested that the late development of the tort remedy as an incident to criminal punishment in the old appeal of felony and trespass which followed it meant that, when the deceased died, criminal punishment on his or her person being no longer possible, the criminal action fell and the tort action abated with it.
In any event, whatever its origins and its rationale, some major statutory exceptions were made to the rule, the principal ones being contained in old statutes of 1285 and 1330 (applied to Ireland by Poynings’ Law 1495), and in s 31 of the Debtors’ (Ireland) Act 1840. These enactments provided the personal representatives of the deceased with an action in respect of the trespass to real or personal property of the deceased committed during the deceased’s lifetime. Other more recent exceptions were to be found in s 117 of the Road Traffic Act 1961 (in relation to personal liability for negligent driving), in s 23 of Air Navigation and Transport Act 1936 (in respect of damage caused by aircraft to persons or property) and in s 6 of the Fatal Injuries Act 1956.”
29. Counsel submits that this court should not “extend” a rule of abatement which derived from the view that a tort action was in the nature of a personal “vendetta”.
30. It is further submitted that if the court were to depart from the rule applied in Alford v. Begg injured persons would run the risk that their right to damages could be arbitrarily curtailed as a result of delay in the judicial process. It is argued that there was “indefensible” judicial delay in this case, and that the State would have to be found to be in breach of Article 6 of the European Convention on Human Rights if that delay was found to entail the loss of the plaintiff’s claim for general damages. This complaint is based on the fact that, firstly, the High Court judgment was given nearly a year after the first hearing date, in circumstances where the trial judge knew that the plaintiff was physically and mentally infirm. Secondly, the appeal hearing did not conclude within the two months predicted by the oncologist as being the outermost expected survival time of the appellant.
The claim for general damages – the defendant’s submissions
31. The defendant submits that s.7 of the Act of 1961 replaced the maxim actio personalis moritur cum persona and that there is therefore no legal basis for disapplying s.7(2).
32. Referring to the passage from McMahon & Binchy cited above, the defendant points out that it is immediately followed by a paragraph headed “The Present Law”, which reads as follows:
“The law on this matter was amended and consolidated in the Civil Liability Act 1961 (ss 6 – 10). The general rule now is that all causes of action (other than ‘excepted causes of action’ within the meaning of the 1961 Act) vested in a deceased person or subsisting against him or her, survive for the benefit of, or against, the deceased person’s estate as the case may be…
Where a person dies, however, and a cause of action vested in that person survives for the benefit of his or her estate, the damages recoverable in such an action cannot include damages for purely ‘personal’ loss. Accordingly, exemplary damages, damages for any pain and suffering or personal injury or for loss or diminution of expectation of life or happiness are irrecoverable in any such action.”
33. Quite apart from the legislative provisions, the relevance of Alford v. Begg is disputed on the basis that it was not a personal injuries claim but, as is clear from a report of an earlier ruling in the case at (1847) 10 Ir. Law Rep. 104, concerned a claim in respect of work carried out pursuant to a building contract. Contract claims had never been subject to the general common law rule applicable to personal injuries.
34. The defendant says that no injustice is caused by the exclusion of damages for pain and suffering after the death of a plaintiff. Section 7 is designed, it is argued, to uphold the compensatory nature of damages for personal injuries and not to afford a windfall to the personal representatives in the event of death. It is agreed that if a plaintiff wins in the High Court there will be a judgment debt that the estate can enforce, but in this case there has been no award. Damages for pain and suffering cannot be awarded other than to the person who has undergone that pain and suffering.
35. The defendant points out that the proceedings have been reconstituted for the benefit of the estate. Section 48 of the Succession Act 1965 enables a personal representative to sue, for the benefit of the estate, in respect of causes of action which survive by virtue of s.7 of the Civil Liability Act. In those circumstances reliance cannot be placed on the alleged survival of the common law exception.
The claim for pecuniary loss – the plaintiff’s submissions
36. The plaintiff makes an alternative argument to the effect that if the main action was not saved by the common law rules, there is nonetheless a viable claim in these proceedings for pecuniary loss. While s.7(1) would bar the recovery of damages for pain and suffering, the estate would be entitled to the benefit of damages in respect of the services provided to the plaintiff by her son. An award under this heading would not relate to special damages awarded on foot of expenses actually incurred, and would not require to be specifically pleaded as such. It would, rather, be similar to an award for loss of employment opportunity, to be dealt with by way of a lump sum in general damages. Nonetheless it would be in respect of pecuniary loss and not for any of the matters excluded by s.7(2). The entitlement to damages under this heading ran up to the date of the plaintiff’s death.
37. It is submitted, by reference to the letter providing updated particulars quoted at paragraph 6 above, that this claim was pleaded “in detail”. It is further argued that it was supported by the unchallenged evidence of Mr. Doyle. Counsel says that the focus of any debate in the High Court hearing was on liability. He accepts that a claim in respect of care was not referred to in his opening, but maintains that he had understood that the trial judge would read the pleadings and realise that there was such a claim.
The claim for pecuniary loss – the defendant’s submissions
38. The defendant accepts that it is possible for a plaintiff to maintain a claim in respect of care provided by a family member, and also that where a claim of this nature is made it would survive the death of the plaintiff, but submits that no indication of such a claim was given to either the defendant, in advance of the hearing, or to the High Court. The trial judge was never told that he was being asked to include it in a lump sum award. Counsel points to an exchange recorded on Day 3 of the hearing, in which the trial judge commented, without contradiction, that there had been no evidence of special damage.
39. The defendant says that if he had been aware of such a claim it would have been investigated. Claims in respect of care are normally valued by reference to the cost of nursing care, and in any event some figure must be specified. The opportunity to look into the claim is now gone. It is argued that while it was apparent from Mr. Doyle’s evidence that he had cared for his mother since 1996, he gave no evidence by which the hours of care given by him after the operation in 2010 could be quantified or valued.
40. In respect of the allegation by the plaintiff that there has been judicial delay in both the High Court and the Supreme Court, the defendant says that the adjournments in the case in the High Court were necessitated by the way in which the plaintiff’s case was conducted. Specifically, it is said that the evidence of the plaintiff, not called until the third day of the hearing, made it apparent that she could not have been in a position to give instructions to her legal representatives and required an adjournment for the purpose of considering wardship proceedings. The appeal hearing in this court had to be adjourned because the oral submissions on behalf of the plaintiff took longer than predicted by counsel.
Discussion and conclusions
41. It seems to me that the case made on behalf of the plaintiff depends upon a finding, firstly, that the legislature did not intend, or did not succeed in, sweeping away the rule represented by the maxim actio personalis moritur cum persona, and that some aspect of the exception to that rule survives; and secondly, that if necessary that exception should, as a matter of constitutional fairness, be extended to cover personal injury actions.
42. I find it impossible to accept the contention that vestiges of the common law rule on abatement in tort actions have survived the enactment of s.7 of the Civil Liability Act 1961. The section expressly refers to “all” causes of action other than those specifically excluded. A personal injuries action does not fall into the excluded category. The position therefore is that such an action now survives, by virtue of the section, where it would have abated prior to the legislation.
43. The argument made is that in this particular case the action would have survived in any event because of the fact that there had been a final order in the High Court. I think that this argument is based on a misunderstanding of Alford v. Begg. Quite apart from the fact that it was not a personal injuries action, the point was that a successful plaintiff had an award of damages that could be enforced as a judgment debt, without reference to the original basis for the claim. The wrong done by the defendant had been measured in money terms and the money could be recovered.
44. Where, by contrast, a plaintiff has been unsuccessful at first instance he or she is in fact in a weaker position than a plaintiff whose case has yet to be heard. An appeal from the High Court is not a de novo hearing, and the appellant has to establish error on the part of the trial judge. There is no enforceable judgment in his or her favour. I do not see that this creates an unconstitutional unfairness or discrimination as between plaintiffs. It has been submitted that unfairness arises where the estate could establish that the failure in the High Court was due to an error by the trial judge. By this logic the estate of a plaintiff whose case had not been heard could argue that it would have succeeded had it been heard before the plaintiff’s death. The intention of the Oireachtas is clear in this regard – a claim for general damages for pain and suffering may not be maintained after the death of the person who sought compensation for that pain and suffering. The beneficiaries of the estate cannot complain that they have been unfairly denied compensation for the suffering of another individual.
45. I do not accept that delay within the judicial system has brought about this situation in the instant case. There has been no complaint in relation to pre-trial delay. The initial hearing was within two months of the updated letter for particulars, which presumably marked the point at which the case was ready to go on. By the time of the hearing, it must have been apparent to the plaintiff’s representatives that there was a difficulty in terms of her ability to give evidence, and it is not surprising that when she was eventually called on the third day her evidence was such as to necessitate an adjournment to consider how to proceed. No indication of any problem had been given to the court before that. Nor is it surprising that judgment was ultimately reserved. It is not suggested that any representation was made to the trial judge that the plaintiff’s state of health at that stage was such as to require an expedited judgment.
46. When the application for priority was made in this court the plaintiff was undoubtedly very ill. It was acknowledged that it was an appropriate case for priority and a hearing date was set for three weeks later. It was counsel for the plaintiff who estimated that the matter would take one day. That turned out to be incorrect. The adjourned hearing date was set for the last day of that legal term which, again, was a priority listing. In those circumstances it is unreal to suggest that the court system is somehow to blame for the fact that the matter was not finalised before the plaintiff’s death.
47. As far as the potential claim in respect of the care services provided by Mr. Edward Doyle is concerned, I am forced to conclude that the defendant is entitled to say that it was never properly constituted. Such a claim may be maintained but it must be notified to the defendant and to the court. I do not regard the letter of updated particulars as sufficient in this regard. It is clear that this aspect of the case was never specifically referred to in the High Court.
48. The evidence of Mr. Doyle certainly established that he was caring for his mother and that she required such care. However, given that he had been providing some level of care since her stroke in 1996 it would have been necessary to go into a degree of detail as to the time he spent with her, and how that time had increased after the operation.
49. If counsel thought that the claim had been sufficiently pleaded, and that the trial judge was in error in making the comment that there was no claim for special damages, that was the time to draw it to his attention. An assumption that it would be taken into account in a general award of damages was not a safe way to proceed in a case where liability was very much in issue.
50. In those circumstances I would determine the preliminary issue in favour of the defendant.
16. Counsel for the appellant recognised that the current law, as amended and consolidated in the provisions of the Act of 1961, replaced the common law maxim actio personalis moritur cum persona (a personal action dies with the person), which has been effectively abolished. A useful summary of the application of that maxim is to be found in a footnote (fn. 4) to paragraph 1279 of Volume 103 of the fifth edition of Halsbury’s Laws of England, being the second volume on “Wills and Intestacy”, where it is stated:
“The general result of the application of the common law maxim . . . was that a personal representative could not sue or be sued for a wrong committed against or by the deceased for which unliquidated damages only would be recoverable . . .. The principle was applicable both at law and in equity . . ..”
17. Counsel for the appellant suggested that the effect of the maxim was that a cause of action for tort, which was not prosecuted to judgment before the death of the plaintiff, abated with the death of the plaintiff, with emphasis on the words “not prosecuted to judgment”. Counsel did not explain what was meant by “not prosecuted to judgment” in that context nor did he cite any relevant authority. While not directly applicable to the situation the Court is considering here, there is authority for the proposition that in cases where the maxim applied, proceedings could not be pursued against the personal representative even though the death of the wrongdoer did not take place until after a judgment or order directing an inquiry as to damages. The authority is the decision of the Court of Appeal in Davoren v. Wootton [1900] 1 I.R. 273. In the context of another submission made by counsel for the appellant, it is interesting to note that, following authority by which they were bound, the Lord Justices of the Court of Appeal decided the issue in Davoren v. Wootton on the basis that the judgment at first instance was wanting in completeness because the inquiry as to damages had not taken place before the death of the defendant. As it was put by FitzGibbon L.J. (at p. 282):
“The action had not yet resulted in a final judgment for an ascertained debt.”
18. The submission of counsel for the appellant which prompted the observations in the next preceding paragraph was to the effect that no question of abatement of a cause of action for tort on death arises in the present case because the cause of action was prosecuted to judgment before the death of the plaintiff. It was submitted that once the cause of action was prosecuted to judgment, it merged in the judgment and was extinguished. Counsel referred to that proposition as the doctrine of merger of a cause of action on the judgment, which it was submitted is the foundation of the rule that a plaintiff can sue only once in respect of a cause of action since it has merged and become extinguished in the judgment.
19. The theory of merger or transit in rem judicatam is explained as follows in Delany and McGrath on Civil Procedure in the Superior Courts, third edition, at para. 32 – 57:
“According to this theory, when a judgment as to the existence or non-existence of a cause of action is given, the cause of action is extinguished by that decision such that ‘the very right or cause of action claimed . . . has in the formal proceedings passed into judgment, so that it is merged and is no longer an independent existence’. One consequence of the theory of merger is that where proceedings are brought in respect of a cause of action, the plaintiff must make all claims open to him and the defendant must raise all defences available to him before the judgment operates as a comprehensive declaration of all the rights and duties of the parties arising out of the cause of action. Fragmentation of litigation is thereby prevented because parties and their privies will not be allowed to re-open a case at a later date by making claims which could have been made during the earlier proceedings. This principle is encompassed within the rule in Henderson v. Henderson . . ..”
20. The manner in which counsel for the appellant sought to extend the theory of merger to the situation which has arisen in this case was as follows. It was submitted that the appellant’s cause of action merged in the judgment of the High Court and what is before this Court is that judgment and not the original cause of action. Further, it was submitted that, on appeal, the system of judicature is concerned with correcting a judgment, if error is found. The cause of action has been extinguished in the judgment and to say that it remains is, it was submitted, to attempt an annulment of the judgment which intervened and led to the extinguishment of the cause of action.
21. It is difficult to see any logic in that proposition, particularly when it is considered in the context of s. 7(1) and (2) of the Act of 1961. The appellant was unsuccessful in the High Court and her claim was dismissed. However, by virtue of Article 34.4.3° of the Constitution she had a constitutional right to appeal the decision of the High Court to this Court. She did so, seeking to have the judgment of the High Court set aside. At the time of the appellant’s death, her appeal was part heard and it was clear that the appellant intended to pursue it to conclusion. In those circumstances, it cannot be the case that the appellant’s cause of action had merged in the judgment of the High Court. What this Court was asked by the appellant to do was to set aside the judgment of the High Court and either remit the matter to the High Court for re-hearing or alternatively substitute its own judgment, if that were possible. If the appeal had progressed to conclusion during the lifetime of the appellant it could only have been determined on the basis of the cause of action asserted by the appellant and on the basis that it still existed. If this Court were to allow the appeal and set aside the judgment and either deal with the matter itself or remit it to the High Court, it would be doing so on the basis that the appellant’s cause of action was not extinguished but still existed. In short, the theory of merger, although relevant in a different context as explained in paragraph 19 above, does not come into play in the situation which has arisen in this case.
22. The situation which has arisen in this case is governed by s. 7 of the Act of 1961. By virtue of subs. (1), it is undoubtedly the case that the appellant’s cause of action survived her death for the benefit of her estate. However, subs. (2) of s. 7 precludes the estate of the appellant from recovering damages for any pain or suffering or personal injury. The reality of this case is that the appellant’s claim, as pleaded and as pursued in the High Court, whether founded on alleged negligence, breach of duty or trespass to the person, was in its entirety a claim for unliquidated general damages for pain, suffering and personal injury. There is no other component for remedy or relief in the appellant’s claim, whether for special damages or otherwise. In the circumstances, when regard is had to the s. 7(2) preclusion, there is nothing by way of remedy or relief left in the claim for this Court to adjudicate on or to remit to the High Court.
23. Accordingly, applying s. 7 of the Act of 1961, the Court must dismiss the appeal.
24. Counsel for the appellant submitted that the outcome which flows from the decision which the Court has determined it must make is not a reasonable outcome and that it is entirely arbitrary. It was questioned what justification could be advanced for the rule from which such an outcome ensues, where the accident of death between judgment and final determination of the appeal acts to defeat the right of appeal which inheres in the appellant by virtue of having obtained a judgment of the High Court. On that point, it is pertinent to recall that, as a matter of fact, the judgment of the High Court was that the plaintiff’s claim be dismissed.
25. Counsel for the appellant also submitted that the outcome, in the circumstances of this case, is so grossly unreasonable, punitive and devoid of rational justification as to amount to an arbitrary interference with the alleged previously acquired right of the plaintiff and her estate and it was submitted that it contravenes various provisions of the European Convention on Human Rights, including Article 6.1 and Article 13, and that it also contravenes the European Convention on Human Rights Act 2003, internalising the Convention in domestic law. While the outcome which flows from the decision of this Court may justify a sense of disappointment, even grievance, on the part of the beneficiaries of the appellant’s estate and of her legal advisers, who put considerable effort and skill into prosecuting her claim on her behalf, it is the outcome which ensues from the decision the Court must make, having regard to the provisions of subs. (1) and subs. (2) of s. 7 of the Act of 1961, which are clear and unambiguous and have been in force for over fifty years.
Costs
26. As has been stated at the outset, the order of the High Court included an order awarding the respondent its costs of the proceedings against the appellant. The issue of costs at first instance and on the appeal was not adequately addressed by the parties at the hearing on 31st July, 2014. Accordingly, the matter will be re-listed to deal with the issue of costs.
Cases Trust or Beneficial
Morrison v M’Ferran
High Court of Justice.
Chancery Division.
6 February 1901
[1901] 35 I.L.T.R 81
Porter, M.R.
Porter, M.R.
There are two questions for decision—(1) What did the personal property of the testator consist of, and (2) in what way did he dispose of it? Now, as to the first question—there was £660 stock, and the question as to it is whether the presumption of advancement has been rebutted. The will was made on the 17th August, 1893, and this stock was at that time standing in the joint names of the testator and his wife. It had been converted under a statute from bonds to stock. The first purchase of stock was with a sum of £90, which belonged to the testator, and he invested it in the bonds in the joint names of himself and his wife. The sum of £660 is not specifically mentioned in the will, which from its form must, I think, have been prepared from some sort of a printed form. The question on the will is whether the universal gift of all the testator’s interest to Margaret on trust was one which gave her no beneficial interest, but left her merely a trustee, or whether it gave her a beneficial interest subject to the trusts. The gross value of the estate is £1,008, and in her affidavit, when so valuing it, she included this £660. Now, the document of 18th December, 1899, looks as if it were intended by the testator as an enumeration of what he considered to be his property. The concluding words of that document are, “at my wife’s death she will leave all the principal chattels or monies she may be possessed of to the nearest of my relations which she may consider the most worthy.”
Margaret has given a statement in reference to that in her evidence, and I do not see any ground for distrusting it. She says that when she *82 signed it she had not seen it or read it, as it was folded. I always listen with distrust to a statement by a person who has signed a document that he or she did not know the contents of the document signed. In this case, however, Mr. Cameron, who has not joined in the probate and was examined for the plaintiff, and whom I cannot therefore treat as being her witness, states that when shown to him it was identically as she has described it— i.e., the testator produced it folded, so as to conceal the contents, and, therefore, whether or not this £660 formed portion of the assets of the testator, I cannot say that that document amounts to anything else than a statement by the testator, and as a statement by Margaret it has no value. In the inventory of assets these bonds were included, and that is a formidable fact, and raised a strong primâ facie case, but in my opinion it was conclusively shown that she was mistaken. It was clear that she knew nothing as to her rights.
It is proved that with Mr. Cameron she went to her solicitor, and she objected to these bonds being included, but she was told that it made no difference, as everything went to her. A summons was issued before the Vice-Chancellor to have this question determined, but he held that the question was too serious a one to be decided on summons. There is no estoppel. Parol evidence is always open to rebut the presumption of advancement. It is perfectly settled that a declaration by the person who has made the advancement is wholly inadmissible to defeat his own act. Here there is clear and cogent evidence of advancement, and that he intended it to be such. There is the evidence of a person whom the testator told that the stock was to be for his wife if she survived. The onus is strongly in favour of advancement. The money was put in the joint names of husband and wife, and the law presumes that was an advancement. I am, therefore, of opinion that the stock must be treated as an advancement, and that it does not form part of the assets.
There still remains the question as to the effect of the will on the remaining £330, which, in the event of Margaret M’Ferran being only a trustee, would go as assets, and she would be entitled to one-half, and the remainder would go amongst the next-of-kin, of whom the plaintiff is one. On the other hand, if she takes a beneficial interest there will be nothing to distribute amongst the next-of-kin. She is liable for four of the legacies appearing on the paper of 18th December, 1899, in respect of which she admits her promise to pay. Now it must be remembered that this is the will of a man leaving property to his wife, and if the plaintiff’s contention is right, (1) that the £660 is assets, and (2) that she is a bare trustee under the will, the result would be that nothing whatever would go to the wife. I do not know of any case holding that this equity between husband and wife depends on whether she had any outside property. The fact that he leaves it to his wife and not to both his executors tends to show that he was dealing with her not merely as executrix. Now the words are, “upon trust that she, my wife, Margaret M’Ferran, or the survivors of her, or her heirs, executors or administrators respectfully ( i.e., respectively) of such survivors therein, his or her assidus ( i.e., assigns) shall thereat ( i.e., thereout) in the first place pay my funeral expenses and debts, if any, and in the next place my testamentary expenses and debts, and in the next place do all things I have requested of her at my decease.” I am satisfied on the evidence that he had not requested anything at that time at all. The law on the subject has been very fully discussed. It is stated in Theobald, at p. 432, thus—“But the question is one of construction on the whole will, and where the donee in trust is a wife or relative whom the testator may be supposed to have intended to provide for, and there are other circumstances to assist the construction, the proper conclusion may be that the donee is to take subject only to the partial trusts declared.” That seems to me to be precisely the present case. One can hardly expect to find any case nearer the point than Williams v. Roberts, 27 L. J. Ch. 177, is to the present case. The distinction is clearly shown in Mullen v. Bowman, 1 Coll. 197. I am, therefore, of opinion that it was left to the wife, subject to the trusts expressed in the will, and she then takes beneficially.
UK Cases
Attorney-General v Jones and Bartlett
(1817) 3 Price 368 Court of Chancery (Wood B, Graham B, Thomson CB)
Thomson CB:
‘Now here is first an instrument which purports, by the form of it to be a deed; it bears the name of an indenture, and is made by a person who may be called testator or grantor. For the present, we will call him grantor, while we talk of this instrument. He conveys, for a nominal consideration, to two trustees, who are parties to the deed, in general terms, first, a leasehold estate, of which he is possessed; and, after that. he assigns to them his government stock, which he specifies, and all the dividends which shall be due from it at the time of his death, and in short all his property, whatsoever, emunerating specifically certain things, as plate, linen, furniture, glass and pictures, and all the movable property, which in its nature was fluctuating during his lifetime, and must be so.
He assigns to these two persons all that sort of property which would belong to him at the time of his death, to hold to them upon certain trusts; and those trusts are, that they should be possessed of it ‘for the use, benefit and advantage of William Franklin, for and during the term of his natural life’: leaving him in the possession of the corpus of the gift, or legacy, during his life, with full power of disposing of it. at his will, and pleasure; for it is not till after his death, that any other of the trusts are to arise. It is not in trust for during his life, to receive the dividends merely, but the whole property is his, as long as he lives, implying a power in him to dispose of it. and spend it as he shall think proper; then on his death only, are the other trusts to arise, and then the trustees are to act only on such property as is found ‘all the property he is possessed of at the time of his death’: and then it is to be applied to this lady, in the way mentioned. And he has reserved a power by any deed or writing, to revoke or alter all or any of the trusts limited to the indenture of all that has been assigned. He then makes a will, and I think it is not immaterial, as has been observed, that that will expressly refers to the deed. By that he confirms the deed; he incorporates therefore the deed into the will, or I should rather say, he makes it a part of the testamentary act which he is then executing, and therefore they ought to be taken and construed together, as being of the same effect. The deed has no operation during his life; he remains master of the property till after his death, and then the deed can only take effect in the nature of a will, to be proved by the executors.
It would be very strange to suppose that that should be thought a gift, which leaves it in the power of the donor, whether shall be 50001 or 51 at his death; he may dispose of it or squander it, or do what he pleases. It seems to me, then, that there is no way of dealing with this instrument, but by giving it the effect of a testamentary paper and I should have no difficulty in supposing the Ecclesiastical Court would grant probate of it, and I think they would in granting probate of it, designate the trustees as exeucutors. In fact, the testator has made these very persons his executors, and they have obtained probate of the will; which will does refer in terms, and does confirm, excepting in the gift of a few legacies, the general provisions of the former instrument, which I call testamentary, in favour of this lady. The consequences of this is, as two of my learned brothers concur with me in thinking, that this is to be taken to be a testamentary act, and that the property in question is therefore subject to the legacy duty, and that there ought to be judgment for the Crown.’
Baird v Baird
[1990] 2 WLR 1412; [1990] 2 All ER 300
‘ although a nomination had certain testamentary characteristics, and not least that of being ambulatory,
it took effect as a contractual arrangement and not as a disposition by the deceased. The contributions and interest did not come to the deceased and then pass on from him by force of his will or the nomination: they went directly from the fund to the nominee, and formed no part of the estate of the deceased … Despite certain testamentary characteristics, the nomination takes effect under the trust deed and rules, and the nominee in no way claims through the deceased.’…
‘In what is now the normal case of non-assignable interests such as that in the present case and, a fortiori, where the power of nomination and revocation requires the prior approval of the trustees or of a management committee [there was] no reason to doubt the correctness of Megarry J’s decision in the Danish Bacon Co case.’
Berger, Re
[1989] 2 WLR 147 Court of Appeal (Mustill, Mann UJ and Sir Denys Buckley)
. Sir Denys Buckley:
‘Jarman on Wills … stated that “in a general and comprehensive sense, a will consists of the aggregate
of all the papers through which it is disper¢d”. Sir JP Wilde said in Lemage v Goodban (1865) LR 1 P & D 57 at 62 that a will is the aggregate of a man’s testamentary intentions so far as they are manifested in writing duly executed according to the Wills Act 1837. So, to discover what the deceased’s testamentary intentions were when he died, we must identify whatever duly executed testamentary documents were made by him and were in operation at his death …
Jarman describes a document qualified to be recognised as a will or testamentary instrument in this way:
“A will is an instrument by which a perspn makes a disposition of his property to take effect after his
decease, and which is in its own nature ambulatory and revocable during his life.”
It must be manifest that the instrument is not to operate until the testator dies and is to be revocable meanwhile.
It is, to my mind, perfectly clear that the deceased intended to make certain dispositions of his property
by the 1977 zavah . . . .
… in my judgment, the 1977 zavah has, in at least some respects, the characteristics of a testamentary
instrument. No special ground for excluding the document from probate, such as lack of testamentary capacity, fraud or undue influence is alleged. Consequently, in my judgment, the 1977 zavah should be admitted to probate as part of the deceased’s will, unless it can be established either that it was not executed in accordance with the 1837 Act or that it was written withbut any intention that it should have any operation and effect as a testamentary disposition, that is without animus testandi.
The 1977 zavah consists of two sheets, each of which the deceased signed, and each signature was attested by two witnesses. The trial judge found as a fact that the 1977 zavah was duly executed in accordance with the Act. There is no appeal against that finding. He also found as a fact that the deceased had no positive intention that the zavah should not take effect in English law. The appellant contends that that finding was against the weight of the evidence and inconsistent with another finding of the judge that the deceased saw his English and Hebrew wills as being in separate and parallel streams, one to be enforced in the English courts and one in the rabbinical courts. The appellant contends that the judge ought to have held that the deceased did not intend that the 1977 zavah should have any effect in English law. I emphasise the last three words …
English law does not require a document which is intended to have testamentary effect to assume any
particular form or to be couched in language technically appropriate to its testamentary character. It is, says Jarman, sufficient that the instrument, however irregular in form or artificial in expression, discloses the intention of the maker respecting the posthumous destination of his property. It may be made in any language. If it is made in a foreign language, the court must be furnished with an authenticated translation made by a qualified translator. It is that translation, not the text in the foreign language, which is admitted to probate. It is from the document so admitted to probate together with any other relevant testamentary instruments that an English court will ascertain the testator’s testamentary intentions and determine their
effect and validity.
The 1977 zavah as translated contains the following passage:
“Each of my sons … should know that what I have written in this will is binding on you and additional to what was written in the English language will, and should any clarification be needed, the present will (in the Holy Tongue) [Hebrew] is the definitive one.”
This seems to me to be irreconcilable with any suggestion that that zavah was not intended to have any testamentary force. On the contrary, the deceased’s signature on it was attested by two witnesses which, according to the evidence, would render its provisions judicially enforceable in a rabbinical court.
I would therefore reject any argument to the effect that the 1977 zavah was intended only to have exhortatory or advisory effect but no legal effect under any system of law.
The function in English law of a probate court is to ascertain and determine what testamentary paper or papers is or are to be regarded as constituting the last will of the testator and who is entitled to be constituted his legal personal representative. However many testamentary documents a testator may leave:
“It is the aggregate or the net result that constitutes his will, or, in other words, the expression of his testamentary wishes … In this sense it is inaccurate to speak of a man leaving two wills; he does leave, and can leave, but one will.”
(See Douglas-Menzies v Umphelby (1908) AC 224 at 233.) …
The1977 zavah and the 1977 English will (had it been duly executed) should, in my opinion, have been regarded as mutually incorporated in one testamentary exercise, that is to say as together constituting the deceased’s last will. If that had been the case, the presence in the English will of a revocation clause would not, in my judgment, have occasioned, as has been suggested, a revocation of the 1977 zavah.
For reasons which I hope I have sufficiently explained, I am of the opinion that the 1977 zavah, which unquestionably contains some provisions which seem to relate to matters over which the deceased had no testamentary powers of control, nevertheless equally unquestionably contains provisions which have all the indicia of being testamentary dispositions of property over which he had power to dispose by will. Consequently, in my judgment, the judge was right in holding that the 1977 zavah should be admitted to probate. The operation and effect of such provisions of the 1977 zavah as are capable of having testamentary effect and what that effect should be are matters for the court charged with the duty of controlling the administration of the deceased’s estate.
1be judge’s order pronounced in favour of the force and validity of the 1977 zavah incorporating therein the defectively executed English will dated 9 August 1977. In my opinion he was justified on the facts in treating the English will as incorporated in the zavah by virtue of the reference to the English will contained in the zavah. It is clear on the facts and from the language used in the zavah that the English will was a document which was in existence when the zavah was signed and so was capable of incorporation in the zavah.’
Cleaver(deceased), Re
[1981] 1 WLR 939 Chancery Division (Nourse J)
Nourse J.
‘The foundation of the plaintiffs’ claim is the well-known case of Dufour v Pereira (1769) 1 Dick 419 which was decided by Lord Camden LC in 1769. That case is fully discussed in Hargrave’ s Judicial Arguments (1799) vol 2, pp304 et seq. That was a case where Lord Camden LC relying as it appears only on the terms of a joint will executed by a husband and wife concluded that there had beena prior agreement. There have not been so very many cases on the subject since, but in one of them, Grayv Perpetual Trustee Co Ltd [1928) AC 391 the Privy Council decided in clear terms that the mere simultaneity of the wills and the similarity of their terms are not enough taken by themselves to establish the necessary agreement. I will read what ap)kars to me to be the material passages in the judgment of the Board, which was delivered by Viscount Haldane. The first passage reads, at p399:
“In Dufour v Pereira the conclusion reached was that if there was in point of fact an agreement come to, that the wills should not be revoked after the death of one of the parties without mutual consent, they are binding. That they were mutual wills to the same effect was at least treated as a relevant circumstance, to be taken into account in determining whether there was such an agreement. But the mere simultaneity of the wills and the similarity of their terms do not appear, taken by themselves, to have been looked on as
more than some evidence of an agreement not to revoke. The agreement,’ which does not restrain the legal right to revoke, was the foundation of the right in equity which might emerge, although it was a fact which had in itself to be established by evidence, and in such cases the whole of the evidence must be looked at.”
Their Lordships then proceeded to mention two authorities, the second of which was the decision of Astbury Jin Re Oldham [1925) Ch 75. The judgment of the Privy Council continues, at p400:
”Their Lordships agree with the view taken by Astbury J. The case before them is one in which the evidence of an agreement, apart from that of making the wills in question, is so lacking that they are unable to come to the conclusion that an agreement to contstitute equitable interests has been shown to have been made. As they have already said, the mere fact of making wills mutually is not, at least by the law of England, evidence of such an agreement having been come to. And without such a definite agreement there can no more be a trust in equity than a right to damages at law.”
As to the penultimate sentence of that passage it must, in the light of the earlier passage, to be read as meaning that the mere fact of making mutual wills is not by itself sufficient evidence of such an agreement having been come to.
It is therefore clear that there must be a definite agreement between the makers of the two wills; that this must be established by evidence, that the fact that there are mutual wills to the same effect is a relevant circumstance to be taken into account, although not enough of itself; and that the whole of the evidence must be looked at.
I do not find it necessary to refer to any other English case, but I have derived great assistance from the decision of the High Court of Australia in Birmingham v Renfrew (1937) 57 CLR 666. That was a case where the available extrinsic evidence was held to be sufficient to establish the necessary agreement between two spouses. It is chiefly of interest because both Sir John Latham CJ and more especially Dixon J examined with some care the whole nature of the legal theory on which these and other similar cases proceed. I would like to read three passages from the judgment of Dixon J which state, with all the clarity and learning for which the judgments of that most eminent judge are renowned, what I believe to be a correct analysis of the principles on which a case of enforceable mutual wills depends. The first passage reads, at pp682-683:
“I think the legal result was a contract between husband and wife. The contract bound him, I think, during her lifetime not to revoke his will without notice to her. If she died without altering her will, then he was bound after her death not to revoke his will at all. She was on her part afforded the consideration for his promise by making her will. His obligation not to revoke his will during her life without notice to her is to be implied. For I think the express promise should be understood as meaning that if she died leaving her will unrevoked then he would not revoke his. But the agreement really assumes that neither party will alter his or her will without the knowledge of the other. It has long been established that a contract between persons to make corresponding wills gives rise to equitable obligations when one acts on the faith of such an agreement and dies leaving his will unrevoked so that the other takes property under its dispositions. It operates to impose upon the survivor an obligation regarded as specifically enforceable. It is true that he cannot be compelled to make and leave unrevoked a testamentary document and if he dies leaving a last will containing provisions inconsistent with his agreement it is neverthe-less valid as a testamentary act. But the doctrines of equity attach the obligation to the property. The effect is, I think, that the survivor becomes a constructive trustee and the terms of the trust are those of the will he undertook would be his last will.”
”There is a third element which appears to me to be inherent in the nature of such a contract or agreement, although I do not think it has been expressly considered. The purpose of an arrangement for corresponding wills must often be, as in this case, to enable the survivor during his life to deal as absolute owner with the property passing under the will of the party first dying. That is to say, the object of the transaction is to put the survivor in a position to enjoy for his own benefit the full ownership so that, for instance, he may convert it and expand the proceeds if he chooses. But when he dies he is to bequeath what is left in the manner agreed upon. It is only by the special doctrines of equity that such a floating obligation, suspended, so to speak, during the lifetime of the survivor can descend upon the assets at his death and crystallise into a trust. No doubt gifts and settlements, inter vivos, if calculated to defeat the intention of the compact, could not be made by the survivor and his right of disposition, inter vivos, is therefore, not unqualified.
But, substantially, the purpose of the arrangement will often be to allow full enjoyment for the survivor’s own benefit and advantage upon conditiol.1 that at his death the residue shall pass as arranged.”
Finally, at p690:
“In the Re Oldham Astbury J pointed out, in dealing with the question whether an agreement should be inferred, that in Dufour v Pereira the compact was that the survivor should take a life estate only in the combined property. It was, therefore, easy to fix the corpus with a trust as from the death of the survivor. But I do not see any difficulty in modem equity in attaching to the assets a constructive trust which allowed the survivor to enjoy the property subject to a fiduciary duty which, so to speak, crystallised on his death and disabled him only from voluntary dispositions inter vivos.”
I interject to say that Dixon J was there clearly referring only to voluntary dispositions inter vivos, which are calculated to defeat the intention of the compact. No objection could normally be taken to ordinary gifts of small value. He went on:
“On the contrary, as I have said, it seems rather to provide a reason for the intervention of equity. The objection that the intended beneficiaries could not enforce a contract is met by the fact that a constructive trust arises from the contract and the fact that testamenary dispositions made upon the faith ofit have taken effect. It is the constructive trust and not the contract that they are entitled to enforce.”
I
It is also clear from Birmingham v Renfrew that these cases of mutual wills are only one example of a wider category of cases, for example secret trusts, in which a court of equity will intervene to impose a constructive trust. A helpful and interesting summary of that wider category of cases will be found in the argument of Mr Nugee in Onaway v Norman [1972) Ch 698. The principle of all these cases is that a court of equity will not permit a person to whom property is transferred by way of gift, but on the faith of an agreement or clear understanding that it is to be dealt with in a particular way for the benefit of a third person, to deal with that property inconsistently with that agreement or understanding. If he attempts to do so after having received the benefit of the gift equity will intervene by imposing a constructive trust on the property which is the subject matter of the agreement or understanding. I take that statement of principle, and much else which is of assistance in this case, from the judgment of Slade J In Re Pearson Fund Trusts (1977) (unreported). The statement of principle is at p52 of the official transcript. The judgment of Brightman J in Onaway v Norman is to much the same effect.
I would emphasise that the agreement or understanding would be such as to impose on the donee a legally binding obligation to deal with the property in the particular way and that the other two certainties, namely, those as to the subject matter of the trust and the persons intended to benefit under it, are as essential to this species of trust as they are to any other. In spite of an argument by Mr Keenan, who appears for Mr and Mrs Obie, to the contrary, I find it hard to see how there could be any difficulties about the second or third certainties in a case of mutual will unless it was in the terms of the wills themselves. There, as in this case, the principal difficulty is always whether there was a legally binding obligation or merely what Lord Loughborough LC in Lord Walpole v Lord Oxford (1797) 3 Ves Jun 402 described as an honourable engagement.
Before turning in detail to the evidence which relates to the question whether there was a legally binding obligation on the testatrix in the present case or not, I must return once more to Birmingham v Renfrew. It is clear from that case, if from nowhere else, that an enforceable agreement to dispose of property in pursuance of mutual wills can be established only by clear and satisfactory evidence. That seems to me to be no more than a particular appliction of the general rules that all claims to the property of deceased persons must be scrutinised with very great care. However, that does not mean that there has to be a departure from the ordinary standard of proof required in civil proceedings. I have to be satisfied on the balance of probabilities that the alleged agreement was made, but before I can be satisfied of that I must find clear and satisfactory evidence to that effect.
Re Duddel
[1932] 1 Ch 585
Farwell J:
‘That a power may be given to two or more persons to appoint by deed jointly is of course, unquestionable, and equally a power to appoint by will given to one person creates no difficulty for in such a case, if the power is exercised by will, then on the death of the appointer the will operates as an execution of the power and the property passes accordingly. But in the case of a joint will, on the death of the first of the two joint appointers, the property which is subject to the power does not pass at all, it may be (though I do not decide this) that, if the survivor of the two were to revoke or seek to revoke the joint appointment, the result would be that there would be no effective appointment at all. Moreover, in any case the joint will on the death of the first of the two appointers cannot operate as an exercise of the power so as to pass any property or interest in the property at all. That I think is clear. There would be no divesting of the estate in default of appointment and revesting, as for example would be the case where an appointment is made to take effect at the termination of a life interest, which is still subsisting. In a case of that kind the appointment, although it does not entitle the appointee to immediate possession of the property by reason of the existing life interest, does operate there and then to divest the vested interest in default of appointment, and give the person in whose favour the appointment is made a vested interest. The joint will on the death of the first of the two appointers cannot have any such operation, but nonetheless the document is, in my judgment, rightly admitted to probate as being part of the dispositions which the testator, the first appointer has made of his own property and of the property over which he has a power of appointment. On the death of the second of the appointers, assuming that no attempt has been made by the survivor to revoke the joint will, the joint will will again be admitted to probate, together with any other will that the second appointer has made, as being together the dispositions of that person’s property and of the power of appointment given to tbat person.’
Eccles Provident Industrial Co-operative Society Ltd v Griffiths
Statutory Nomination
[1912] AC 483 House of Lords (Lord Lorebum LC, Lords Atkinson, Shaw and Mersey)
Lord Mersey:
‘The object of s25 is, in my view, to give the poorer members of a society, that is to say those who have not more than £100 to their credit, the power to make provision for the disposal, at their death, of this smalJ sum without the expense being incurred of the making of a will or administering this part of their estate. The nomination can only be made by the members who are within this poorer class, and it is the duty of the secretary of the Society, before he enters the name of the nominee in the Society’s books, to see that there is not more than £100 to the member’s credit. If the exercise of the right to nominate is delayed until the amount of credit is more than £100 the right itself is lost. Once made the nomination takes • effect, not by creating any charge or trust in favour of the nominee as against the nominator as was suggested during the argument (for the nominator can at any moment revoke the nomination) but by giving
to the nominee a right as against the Society, in the event of the death of the member without having revoked the nomination, to require the Society to transfer the property in accordance with the nomination. Until death the property is the property of the member, and all benefits accruing in respect of it during his lifetime are his also.”
Spratt, In the Goods
[1897] P 28 (Sir Francis Jeune P)
The testator, a military officer on active service, wrote a letter to his sister in the following language:
‘If we remain here taking pahs for some time to come the chances are in favour of more of us being killed, and I may not have another opportunity of saying what I wish to be done with any little money I may possess in case of an accident, I wish to make everything I possess over to you. In the first place there is money at … keep this until I ask you for it.’
Sir Francis Jeune P:
… if the will is clearly expressed to take effect only on the happening, or not happening, of any event, cadit quaestio, it is conditional. If the testator says, in effect, that he is led to make his will by reason of the uncertainty of life in general, or for some special reasons, cadit quaestio, it is not conditional. But, if it be not clear whether the words used import a reason for making the will or impress a conditional character on it, the whole language of the document, and also the surrounding circumstances must be considered. In such cases there are two criteria which are especially useful for detennining the problem: first whether the nature of disposition made appears to have relation to the time or circumstances of the contingency; and, secondly, where the contingency is conpected with a period of danger to the testator, whether it is coincident with that period, because if it is, there is ground to suppose that the danger was regarded by the testator as only a reason for making a will but, if it is not it is difficult to see the object of referring to a particular period unless it be to limit the operation of the will … ‘
Synge v Synge
[1894] 1 QB 466 Court of Appeal (Kay Ll)
Contract to make a will
Kay LJ
‘The questions which arise in this case ar-ethese:
1 Was there a binding contract?
2 Was it such a contract as could be enforced in equity, or was there a remedy in damages for breach of it?
3 Has the time arrived at which such a remedy can be asserted?
4 If the remedy be by way of damages, what amo1.1nt of damages should be given? …’
..
Then, what is the remedy where the proposal relates to a defined piece of property? We have no doubt the power of the Court to decree a conveyance of that property after the death of the person makina the proposal against all who claim under him as volunteers. It is argued that the Courts.of Equity cannot compel a man to make a will. But neither can they compel him to make a deed. They, however, can decree the heir or devisee in such a case to convey the land to the widow for life, and under the Trustees Acts
can make a vesting order, or direct that someone shall convey for him if he refuses. And under like circumstances, the Court has power to make a declaration of the lady’s right.
But counsel do not press for such relief, or ask for a declaration to bind the house and land. The relief they ask is damages for breach of contract. It seems to be proved that the grantee of the property under the deeds executed by Sir R Synge took without notice of the letter; they acquired, as we understand, the legal estate by the grant. If there was any valuable consideration moving from them, no relief in the nature of specific performance could be given against them; and it is suggested that the property being partly leasehold, according to the decision in Price v Jenkins (1877) 5 Ch D 619 there was such valuable consideration. It is not necessary to examine this argument, as counsel elect to ask for damages only.
Sir R Synge had all his lifetime to perform this contract; but, in order to perform it, he must in his lifetime make a disposition in favour of Lady Synge. If he died without having done so, he would have broken his contract. The breach would be omitting in his lifetime to make such a disposition. True, it would only take effect at his death; but the breach must take place in his lifetime, and as by the conveyance to his daughters he put it absolutely out of his power to perform this contract, Lady Synge, according to the well-known decisions (Hochester v De La Tour (1885) 2 ECB 678, Frost v Knight (1872) LR Ex 111),
had a right to treat that conveyance as an absolute breach of contract, and to sue at once for damages; and as this Court has both legal and equitable jurisdiction, we are of opinion that such relief should be granted .. .’