High Court of Ireland Decisions

1. The plaintiff is the sole surviving executor named in the last will and testament of Michael Cahill Senior (the deceased) made on the 23rd October, 1969 who died on 20th March, 1996 without having revoked or altered the will. The other executor appointed by the deceased predeceased him and was not replaced. The plaintiff applied for and obtained probate of the deceased’s will on 22nd January, 1998 and pursuant thereto entered into the administration of the estate.

2. The first defendant (the widow) is the widow of the deceased. The second defendant is a nephew of the testator. The deceased was a farmer and the owner of substantial holdings of registered land. He died without issue. By his last will the deceased devised all of his property to his widow and his brother, Martin Cahill, as joint tenants for life with remainder to trustees in trust for his nephew, the second defendant. Martin Cahill, the deceased’s brother, died on 16th March, 1998.

3. In course of administration of the deceased’s estate certain facts have come to light relating to the ownership of part of the lands comprised in the estate which have caused the plaintiff as administrator to seek directions from the Court, thus giving rise to this action. The matters raised by him include -

4. The facts which have posed the foregoing questions are deposed to by Mr. Joseph O’Hara who was the deceased’s solicitor at all material times and are summarised as follows:-

5. In or about the month of January, 1994 Mr. Michael Cahill, the testator since deceased, and his wife, the first defendant, called upon Mr. O’Hara and he obtained instructions from Mr. Cahill that he wished to alter the will which he had made on 23rd October, 1969. He informed his solicitor that he no longer wished to benefit his nephew Michael Cahill Junior, the second defendant, and that he wished to leave all of his property to his wife, the first defendant. There is no doubt that the testator had at that time changed his mind regarding the disposition of his property and had decided that his entire estate should be inherited by his wife absolutely on his death without any remainder provision and that this should be achieved by way of a new or revised will. However, Mr. O’Hara foresaw a likely disadvantage for the testator’s wife if his revised testamentary intention was achieved in the way intended by him. The difficulty was that a 2% probate tax had been created by the Finance Act, 1993 which the solicitor believed would be payable by the widow on the value of the estate inherited by her. At that time there were no exemptions in respect of such tax. In the light of this Mr. O’Hara advised his client, the testator, that he could achieve the same result without liability for probate tax by transferring his lands into the joint names of himself and his wife, the effect of which would be that the property would then pass to his wife, as sole owner if she survived him. The testator agreed to that course of action. Mr. O’Hara had also ascertained that all of the other assets of his client and his wife were in their joint names. A Deed of Transfer dated 14th January, 1994 was duly drawn up by Mr. O’Hara to give effect to the revised instructions which he had received. The deed provided that lands comprised in Folio 46909 of the Register County of Galway were transferred from the sole ownership of Michael Cahill into the joint names of the latter and his wife, Nellie Cahill. The deed was duly executed and at that time the joint owners and their solicitor believed that it included all of the lands then owned by Michael Cahill. In fact in drawing the deed the solicitor had made an error. He was not then aware that as noted thereon Folio 46909 had been prior to the date of execution of the deed closed to Folio GY043846F of the Register County of Galway (the second folio) of which Mr. O’Hara had no knowledge at that time. The second folio comprised 17 entries of which Nos. 6 to 9 were the lands transferred from Folio 46909. The end result was that through the inadvertence of the solicitor and unknown to the testator and his wife the lands comprised in entries 1 to 5 and 10 to 17 in the second folio were not included in the Deed of Transfer contrary to the express intentions of the testator. No new will was made and the end result was that having regard to the terms of the original will and of the Deed of Transfer per se the lands which had not been transferred into the joint names of the deceased and his wife would on his death pass to her for life with remainder to the second defendant, Michael Cahill Junior, but subject to the widow’s legal right share under the Succession Act, 1965 to one half of the lands concerned, should she elect to make such a claim. Mr. O’Hara has deposed that he does not believe that that would accord with the stated intention of the deceased, which was that his nephew, Michael Cahill Junior, would not benefit from the estate and that his wife would be the sole beneficiary.

6. The nett issue which I must address is whether in the light of Mr. O’Hara’s inadvertence regarding the folios in question which resulted in a failure to carry out his client’s instructions to include all his lands in the Deed of Transfer made in January, 1994, a constructive trust arises comprising the lands which were not transferred into joint ownership as intended by the testator. This raises the question as to whether in the circumstances under review it is established that a ‘New Model’ constructive trust as Mr. Justice Keane described it in “Equity and the Law of Trusts in Ireland” has been established and, if so, whether such a trust has a place in Irish law.

7. The concept of ‘New Model’ constructive trusts is explained by Keane J (as he then was) in the following passages from his learned work at pp. 196/7

8. I adopt with respect the foregoing assessment of ‘New Model’ constructive trusts by Keane J.

9. It seems to me that the kernel of the question I have to determine is whether the evidence establishes a clear, positive intention on the part of the testator that his wife should inherit all of his property on his death; that he took appropriate steps to bring that about and that he could not reasonably have known that through his solicitor’s error the Deed of Transfer, which he and his wife duly executed, did not include all of his lands and that his stated intention to benefit his wife exclusively on his death was defeated in part. In the light of Mr. O’Hara’s and the first defendant’s affidavits, the accuracy of which is not in dispute it is established that the testator expressed such an intention to his solicitor in clear terms and that he had good reason for believing that the Deed of Transfer did in fact achieve his intention that his wife would acquire absolutely as surviving joint owner all of his lands on his death as Mr. O’Hara had advised. In my view it is irrelevant that the second defendant was neither aware of or had any responsibility for the error which was made. The essential element is that the testator changed his mind regarding the disposition of his estate after death and that he took appropriate steps to give effect to his revised intention. That having been established, it follows that in the words of Lord Denning, ‘justice and good conscience' requires that the second defendant should not be allowed to inherit the testator’s property or any part of it on the death of his widow and that his interest in remainder under the will should be deemed to be a constructive trust in favour of the widow. In my opinion a ‘New Model’ constructive trust of that nature the purpose of which is to prevent unjust enrichment is an equitable concept which deserves recognition in Irish law. In that regard I note also that it accords with the following observations of Costello J (as he then was) in HKN Invest OY and Anor. -v- Incotrade PVT Limited (In liquidation) and Ors . [1993] 3 IR 152 at 162.

10. And in that context that the learned judge referred with apparent approval to the judgment of Lord Denning MR in Hussey -v- Palmer supra .

11. In the light of my findings the answers to the questions posed in paragraph 1 of the plaintiff’s claims are:-

12. I direct that the second named defendant shall execute such assurance as may be necessary to vest in the first defendant all of the lands comprised in Folio GY043846 of the Register County of Galway.