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You are here: BAILII >> Databases >> High Court of Ireland Decisions >> Cawley & Ors -v- Lillis [2011] IEHC 515 (06 December 2011) URL: http://www.bailii.org/ie/cases/IEHC/2011/H515.html Cite as: [2012] 1 IR 281, [2011] IEHC 515 |
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Judgment Title: Cawley & Ors -v- Lillis Composition of Court: Judgment by: Laffoy J. Status of Judgment: Approved |
Neutral Citation Number: [2011] IEHC 515 THE HIGH COURT 2010 410 SP IN THE MATTER OF THE ESTATE OF CELINE CAWLEY LATE OF ROWAN HILL, WINDGATE ROAD, HOWTH IN THE COUNTY OF DUBLIN DECEASED
AND IN THE MATTER OF QUESTIONS ARISING IN THE COURSE OF THE ADMINISTRATION OF THE SAID ESTATE BETWEEN CHRISTOPHER CAWLEY AND SUSANNA CAWLEY AND BY ORDER GEORGIA LILLIS PLAINTIFFS AND
EAMON LILLIS DEFENDANT Judgment of Miss Justice Laffoy delivered on 6th day of December, 2011. 1. Factual background 1.2 The Deceased died testate, having executed her last will and testament on 7th June, 1993. By her said will the Deceased appointed the defendant to be sole executor thereof. She devised and bequeathed all of her property to the defendant for his own use and benefit absolutely and appointed him sole residuary legatee. However, the Deceased made alternative provision in her will, which was to apply should the defendant predecease her or should he not survive her by thirty days. Should either of those events occur, the Deceased appointed the first and second plaintiffs (the Personal Representatives) to be executors and trustees of her will and she directed that they should hold the whole of her estate upon the trusts set out. 1.3 On 29th January, 2010 the defendant was convicted after a trial by a Judge sitting with a jury at the Central Criminal Court of the manslaughter of the Deceased. On 5th February, 2010 he was sentenced to a period of six years and eleven months imprisonment having been so found guilty, the said sentence to commence on 4th February, 2010. Not having appealed against conviction or sentence, the defendant is currently serving the term of imprisonment. 1.4 The conviction of the defendant for the manslaughter of the Deceased has certain implications in relation to the distribution of the estate of the Deceased by virtue of the application of s. 120 of the Succession Act 1965 (the Act of 1965). Sub-section (1) of s. 120 provides:
1.5 Subsequent to his conviction, the defendant executed a renunciation whereby he expressly renounced his right to probate of the will of the Deceased. On 24th March, 2010 letters of administration with the said will annexed of the estate of the Deceased were granted by the Court to the Personal Representatives, being the persons appointed by the Court pursuant to an order of the Court (O’Neill J.) dated 1st March, 2010 made pursuant to s. 27(4) of the Act of 1965. The defendant acknowledged that he had no entitlement to the assets of the Deceased, that is to say, assets that were held by the Deceased in her sole name. 1.6 The issues raised in these proceedings relate to assets which were not held in the sole name of the Deceased but were held in the joint names of the Deceased and the defendant, which will be referred to collectively as “the joint assets”. In summary those joint assets are the following:
(b) A dwelling house, 32, Tramway Court, Sutton, County Dublin (32, Tramway Court). The title to 32, Tramway Court is an unregistered title and the property was acquired by the Deceased and the defendant as joint tenants in fee simple by virtue of a conveyance dated 25th January, 2002. Sherry Fitzgerald put a value of €220,000 on that property as at 1st November, 2011. Once again, it appears that both sides are ad idem as to the current market value of that property (in the region of €190,000 to €220,000), which is let to tenants. I note that a mortgage raised in connection with the acquisition by the Deceased and the defendant of this property was also discharged before the death of the Deceased. (c) Two bonds in joint names, which appear to have a current value in the region of €45,000. (d) Two joint bank accounts, one with Permanent TSB and the other with Bank of Ireland, which had credit balances aggregating approximately €24,500 at the date of the death of the Deceased, but which appear to have been operated by the defendant after that date. 1.7 What is of significance is that it is common case that the properties Rowan Hill and 32, Tramway Court remained vested in the Deceased and the defendant as joint tenants at the date of the death of the Deceased, not as tenants in common. 1.8 A lot of other factual matters were averred to in the various affidavits filed on the special summons: the affidavits of the second plaintiff sworn on 18th June, 2010 and 16th November, 2010; the affidavits of the defendant sworn on 1st November, 2010 and 20th January, 2011; and the affidavit of the Beneficiary sworn on 28th June, 2011. Conflicts of evidence arise on the affidavits. However, in my view, the facts which I have outlined above are the only facts which are relevant to the determination of the issues which are before the Court and there is no conflict as to those facts. 1.9 Finally, the Court was informed that the Deceased and the defendant jointly owned real property in France, which is the subject of proceedings in that jurisdiction. Those proceedings have no bearing on the issues before the Court. 2. The questions to be determined by the Court
(B) If the answer to question (A) above is in the negative, is the estate, right, title and interest of the surviving joint tenant forfeit? (C) If the answer to question (B) above is in the affirmative, does the interest that is forfeit pass to the estate of the Deceased joint tenant? (D) If the answer to question (A) is in the negative and the answer to question (C) is in the negative, is a severance of the joint tenancy effected in all the circumstances? (E) If the answer to question (D) above is in the affirmative, is it necessary to conduct an inquiry into the contributions made by the joint tenants in relation to the beneficial entitlement of each co-owner? (F) What is the interest of the defendant (if any) in the properties held jointly in all the circumstances?
(b) an order directing all necessary accounts, directions and inquiries; and (c) if necessary, an order directing an inquiry and account in relation to the contributions to the acquisition of the properties owned jointly by the Deceased and the defendant and the funds standing to the credit of the joint accounts (i.e., the joint assets). 2.3 Apropos of question (E) and the necessity or otherwise to direct an inquiry or account in relation to the contributions to the acquisition of the joint assets, my understanding of the position adopted by both sides at the hearing was that, not only was it accepted that Rowan Hill and 32, Tramway Court were held as joint tenants by the Deceased and the defendant at the date of the death of the Deceased, but it was also common case that, in the event of a finding of severance, the estate of the Deceased and the defendant would each become entitled to an undivided moiety of the properties and funds. Accordingly, at this juncture, I do not propose addressing question (E) or the necessity for an account or inquiry as sought in the terms set out at paragraph (c). If my understanding as to the position of the plaintiffs is incorrect, subject to the observations at the end of this judgment, if necessary, I will hear further submissions on this aspect of the matter. However, as it was not alluded to at the hearing, I would remind the parties that the Deceased and the defendant were husband and wife when the properties were acquired and the bonds and the bank accounts were put in place. That being the case, the equitable doctrine of advancement may come into play, although, having regard to the evidence as to the respective financial strengths of the Deceased and the defendant, the caveat issued by Professor Delany in Equity and the Law of Trusts in Ireland (5th Ed.) at p. 172 may be relevant. 3. The respective positions of the parties in outline 3.2 Counsel for the plaintiffs did, however, recognise that there are authorities from other common law jurisdictions under which it has been held that, when the death of one joint tenant was caused by the other joint tenant, the joint tenancy was severed. An alternative approach, which has been adopted in other common law jurisdictions, was to treat the person who caused the death as holding the property on a constructive trust for himself or herself and the estate of the deceased person. It was urged on behalf of the plaintiffs that, if the Court were to find that the estate of the Deceased is not solely entitled to the joint assets, the Court should favour the severance approach rather than the constructive trust approach. Further, it was submitted that, in appropriating the properties and funds to the estate of the Deceased and the defendant, the Court should have regard to the fact that, because of the act of the defendant, the value of Rowan Hill has diminished. However, it was recognised that that argument may be for another day. 3.3 Counsel for the defendant did not contest the fundamental public policy principle that a person should not benefit from his own crime. However, he departed from the thrust of the case which had been made in the affidavits filed on behalf of the defendant, which was that the defendant became solely beneficially entitled to the joint assets and that the estate of the Deceased had acquired no interest in them. In effect, for the first time, at the hearing it was conceded on behalf of the defendant that he was not solely beneficially entitled to the joint assets. That concession was made late in the day, notwithstanding that a proposal was made on behalf of the plaintiffs in an open letter dated 17th May, 2011 to the defendant’s solicitors that, notwithstanding their belief that there was legal argument to the effect that in all the circumstances the estate of the Deceased should be entitled to one hundred per cent of the joint assets, in an effort to resolve the matter, the plaintiffs would agree to the question raised on the special summons being answered on the basis that there was a severance of the joint tenancy. Accordingly, the position adopted on behalf of the defendant at the hearing was that the joint tenancy terminated on the death of the Deceased caused by the defendant’s wrong, in consequence of which either –
(b) the joint tenancy in the joint assets has been severed, so that the estate of the Deceased is entitled to one half share thereof and the defendant is entitled to the other one half share. 3.4 On the issue of whether the Court should adopt the severance approach or the constructive trust approach, counsel for the defendant submitted that it would be more convenient if the share of the estate was arrogated to the estate, so that the Personal Representatives may administer it. However, he stressed that the defendant is entitled to an undivided moiety or half share of the joint assets. He also submitted that to make an adjustment on the basis of the alleged diminution in value of Rowan Hill would constitute a penalty on the defendant, and he made the point that, in any event, property valuations fluctuate from day to day. 4. The issues
(b) whether – (i) severance occurred on the death of the Deceased, so that the estate of the Deceased and the defendant are equally entitled to the joint assets, or, (ii) alternatively, the joint assets have accrued to the defendant solely but, as to a moiety thereof, are held by him on a constructive trust for the estate of the Deceased. 5. The law: general observations 5.2 Counsel for the plaintiffs also pointed out that there is an obiter dictum in the judgment of the Supreme Court delivered by Finnegan J., with whom the other two Judges of the Supreme Court agreed, in Mahon v. Lawlor [2010] IESC 58 to the effect that a joint tenancy is severed “by homicide”, referring to Megarry & Wade on The Law of Real Property (4th Ed.) and Challis on Law of Real Property (3rd Ed.). 5.3 The Court has been referred to authorities from other common law jurisdictions which are germane to the issue the Court has to decide, namely, from the United Kingdom, Canada and New Zealand. 6. United Kingdom authorities
6.2 As the editors of Megarry point out in the same paragraph, the Court in the United Kingdom now has a statutory power, under the Forfeiture Act 1982 (the Act of 1982), to modify the application of the forfeiture rule in cases where a person has unlawfully killed another, save where he or she has been convicted of murder. The Court may do so only if it is satisfied that, having regard to the conduct of the offender and of the deceased and to such other circumstances as may appear material to it, the justice of the case so requires. In the exercise of the statutory power, the Court may hold that the right of survivorship applies, notwithstanding that one joint tenant killed another. As I have recorded, counsel for the defendant acknowledged that he could not urge the Court that the right of survivorship applies in this case. However, in considering recent English authorities referred to below, it is necessary to keep those statutory provisions in mind. 6.3 The decision of the Chancery Division of the English High Court in Re K. Deceased [1985] 1 Ch. 85 post-dated the Act of 1982. The only passage from the judgment of Vinelott J. which I consider to be of assistance for present purposes is the following passage (at p. 100):
6.4 The passage from the judgment of Vinelott J. quoted above was approved by Mummery L.J. in the Court of Appeal of England and Wales in Dunbar v. Plant [1998] Ch 412. In his judgment, Mummery L.J., in the context of considering the ownership of a house and other assets jointly owned by the deceased and the defendant, Ms. Plant, in circumstances where it had been found that Ms. Plant had criminally aided and abetted the suicide of the deceased, who was her fiancée, stated (at p. 418):
7.1 The headnote in the report of the judgment of the Ontario High Court in Schobelt v. Barber 60 D.L.R. (2d) 519, which dates from 1966 and was referred to in the passage of the judgment of Vinelott J. quoted at para. 6.3 above, summarises the effect of the judgment as follows:
7.2 In addressing the question he posed as to what was the destination of the rights in the real estate, Moorhouse J. distinguished between changes of ownership of property held on joint tenancy and of other forms of property as a consequence of a death, stating (at p. 522):
(2) The jus accrescendi could be held to be inoperative because of the crime, in which event the survivor would take nothing. As regards that option, Moorhouse J. stated: “To give effect to this view would in my opinion be imposing a further penalty on the survivor who has been sentenced for the crime of which he has already been convicted. It would be a return to the principle of forfeiture which has been abolished by the Criminal Code . . . .” (3) The full interest might vest in the survivor and then it might be held that the victim can be deemed to have died after the wrongdoer. As I understand how this option would operate, it would mean that the wrongdoer would take a life interest in the whole property and on his death the entire property would pass to the estate of the victim. As regards that option, Moorhouse J. stated: “In my respectful opinion this solution could only be accomplished by much legislation. That is something which in my opinion is beyond the function of the Court.” (4) The Court might apply the normal rule, namely, that the full interest accrues to the survivor, but with the Court impressing it with a trust and declaring that the survivor holds an interest, meaning, as I understand it, an undivided share, as constructive trustee for the victim’s heirs or devisees. Moorhouse J. stated that, in view of the claim made in the case before him, i.e., to an undivided half, that option more closely met the demands of justice on the facts than any other avenue open to him.”
8. New Zealand authority 8.2 Having referred to various authorities, including Cleaver v. Mutual Reserve Fund Life Association (referred to at para. 3.1 above), Hardie Boys J. stated (at p. 585):
But what happens to his own co-extensive and co-existing right? I see force in the argument that, forfeiture and escheat having been abolished, for as long as he himself lived his crime would not deprive him of that right; it was a right in law which he enjoyed prior to the crime and, whilst he cannot enlarge that interest and promote his survivorship to beneficial ownership of the whole estate by murdering his joint tenant, there is nothing in the authorities which I have read which deprives him of the whole of what he already has. If, however, one stopped there, it would be ignoring the fact that his crime has got rid of the joint tenant who throughout his natural lifetime had a co-existing and co-extensive right the same as his own. He has indeed enlarged his rights during his lifetime to the extent of having removed the joint tenant whose interest was equal with his own.” 8.3 The manner in which Hardie Boys J. gave effect to that option was more complex than one would have anticipated. He answered the question whether Ante Grbic was entitled to succeed as surviving joint tenant to any property held by himself and his late wife as joint tenants as follows (at p. 588):
8.4 Some observations made by Hardie Boys J. earlier in his judgment in relation to the technical issue of the passing of title are of relevance. He referred to an earlier decision of an Australian Court, Re Thorp and the Real Property Act 1900 [1962] NSWR 889, in which Scott’s propositions and the necessity of finding some means of giving effect to the rule laid down in the Cleaver case had been discussed. In that case, Jacobs J., having pointed out that forfeiture and escheat had been abolished in Australia, stated that the legal title had to pass to the surviving joint tenant and what the Court was concerned with was whether a trust should be engrafted on the legal title. Hardie Boys J. (at p. 587) quoted the following observations of Jacobs J.:
8.5 Finally, I think it is worth recording that Hardie Boys J. considered that his judgment had the same effect as the judgment of Moorhouse J. in Schobelt v. Barber, and the judgment of Street J. in Rasmanis v. Jurewitsch referred to at para. 6.1 above. He quoted the effect of the decision of Street J. from the headnote of the report as follows (at p. 588):
9. Conclusions on the current ownership of the joint assets 9.2 The Deceased died before the coming into operation of the Land and Conveyancing Law Reform Act 2009 (the Act of 2009), which came into operation on 1st December, 2009. Accordingly, the devolution of the legal title to the properties at Rowan Hill and 32, Tramway Court on the death of the Deceased falls to be determined in accordance with the common law principles applicable at the date of her death. In my view, applying those principles, on the death of the Deceased the legal estate in those properties accrued to the defendant solely by right of survivorship. In particular, having regard to the relevant common law principles, in my view, it is not possible to conclude that the legal estate in the joint tenancy was automatically severed on the death of the Deceased. While those conclusions resolve the question in relation to the devolution of the legal title, the crucial questions which have to be determined are whether, on the death of the Deceased, the legal title to those properties became impressed with a constructive trust and, if it did, what are the terms of the trust. 9.3 As I have stated at para. 3.3 above, the defendant conceded at the hearing that on the death of the Deceased he did not become solely beneficially entitled to the joint assets. Rather he acknowledged that the joint assets are beneficially owned in equal shares by the defendant and the estate of the Deceased. In making that concession, the defendant, through his counsel, properly, if belatedly, acknowledged that the law, as a matter of public policy, will not permit him to obtain a benefit or enforce a right resulting from the crime he committed against the Deceased. That concession also narrowed the issues which the Court has to determine. 9.4 The issue which remains for the determination of the Court is whether, as was contended by counsel for the plaintiffs, public policy considerations necessitate that the estate of the Deceased should become solely beneficially entitled to the joint assets to the exclusion of the defendant. In addressing that issue, it seems to me that the proper approach is to identify the nature of the interest which each of the joint tenants enjoyed in the properties at Rowan Hill and 32, Tramway Court immediately prior to the death of the Deceased. They had concurrent rights to possession in those properties and each had the hope of his or her interest being enlarged into sole ownership by the operation of the jus accrescendi, if he or she survived the other. Under the law in force at the time, each had power to prevent the jus accrescendi ultimately applying by unilaterally severing the joint tenancy at any time prior to the death of the first of the joint tenants to die. It is true that, if the Court were to hold that the defendant now has a beneficial interest to the extent of one-half share in those properties, his entitlement to a specific share therein will have been accelerated by reason of the death of his co-owner. However, the reality of the situation is that, prior to the coming into force of ss. 30 (which voids unilateral severance of a joint tenancy) and 31 of the Act of 2009, during their joint lives either the defendant or the Deceased could have achieved the same result by taking steps to unilaterally sever the joint tenancy. It is also true that, if the tragic events of 15th December, 2008 had not occurred, the Deceased might have survived the defendant and become solely legally and beneficially entitled to those properties. However, as Hardie Boys J. stated in Re Pechar (at p. 587), referring to the third edition of Megarry & Wade, “any joint tenancy involves a chance and the chance is an ‘all or nothing chance’”. It follows that at the material time, that is to say, immediately before the death of the Deceased, there were a number of possibilities as to the ultimate destination of the joint assets, which would have turned on a number of imponderables, for example, whether one or other of the joint tenants would sever the joint tenancy and which of the joint tenants would die first. In my view, it is not possible to form a view, even as a matter of probability, as to where the ownership of those properties would have ultimately vested, if those tragic events had not occurred. 9.5 Accordingly, if the Court were to hold that on the date of the death of the Deceased the joint assets accrued to the defendant solely and were held by him on a constructive trust for himself and the estate of the Deceased in equal shares, that outcome, viewed objectively at that time, could not be regarded as conferring a benefit on the defendant as a result of the crime he committed. On the other hand, if the Court were to hold that the defendant on that day held, and continues to hold, the entire interest in the joint assets on trust for the estate of the Deceased solely, the Court would effectively be interfering with the defendant’s existing rights in the joint assets. In the absence of legislation empowering the Court to so interfere with the defendant’s existing rights at the date of the Deceased’s death, in my view, the Court has no power or jurisdiction to do so. In particular, I do not consider that it would be proper to determine, by analogy to s. 120(5), that the ownership of the joint assets following the death of the Deceased should be determined on the basis that the defendant should be deemed to have pre-deceased the Deceased. Section 120 deals with the distribution of property owned by the deceased person, not with the distribution of property in which an unworthy potential successor has rights. Whether legislation, which would have the effect which counsel for the plaintiffs urged the Court to bring about in relation to the joint assets would be justified having regard to social justice and the exigencies of the common good so as to be able to withstand attack on the grounds of repugnancy to the Constitution, is not a matter on which it would be appropriate for the Court to express a view. However, I am satisfied that, in the absence of legislation conferring express power on the Court to interfere with the defendant’s existing rights to the joint assets, the Court has no such power or jurisdiction. 9.6 Accordingly, the answer to the questions raised at para. 4.1 above are as follows:
(b) while severance did not occur on the death of the Deceased, the joint assets have accrued to the defendant solely but as to one half share thereof they are held by him on a constructive trust for the estate of the Deceased. 10. Consequential considerations 10.2 There can be no doubt that the optimum solution would be for agreement to be reached between the plaintiffs and the defendant as to the mode of division of the joint assets between them to satisfy their respective shares therein and for the defendant, as trustee, to transfer (by conveyance or otherwise) the assets to be appropriated to the estate of the Deceased in satisfaction of the share to which the estate is entitled, or, alternatively, to participate in the realisation of the assets and a division of the proceeds of sale thereof, if that is the agreed solution. That would enable the Personal Representatives to complete the administration of the estate of the Deceased. Adopting that approach would avoid further litigation of these proceedings and the legal and other costs which litigation would entail. However, if agreement cannot be reached between the parties, then the plaintiffs will have to give consideration to seeking relief in these proceedings under s. 31 of the Act of 2009. The Personal Representatives and the defendant being co-owners in equity of the joint assets, as regards Rowan Hill and 32, Tramway Court, it is open to the Court, on the application of the Personal Representatives, to make orders granting various reliefs under s. 31, including an order for partition of land amongst co-owners, an order for the sale of land and distribution of the proceeds of sale, or such other order relating to land as appears to the Court to be just and equitable in the circumstances of the case. Further, as regards the legal estate, in the event of lack of co-operation by the defendant qua trustee, it would be open to the Court to make a vesting declaration pursuant to s. 26 of the Trustee Act 1893. 10.3 Prima facie, the defendant must account to the plaintiffs for his dealing with the joint assets since the death of the Deceased, for example, for the rent which he received out of No. 32, Tramway Court. Again, the optimum solution would be for the plaintiffs and the defendant to reach agreement in relation to such accounting and, as appropriate, to factor in the result in the division of the joint assets. However, if agreement cannot be achieved, this aspect of the proceedings will have to be dealt with either by the Court or referred to the office of the Examiner of the High Court to conduct necessary inquiries and accounts. If either process is necessary, the final resolution of the issues between the parties will be delayed and further costs will accrue. 10.4 I propose adjourning the proceedings for a sufficient period to allow the parties to attempt to reach agreement in relation to the outstanding matters. 11. Legislation
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