High Court of Ireland Decisions

 


HC 160/04

THE HIGH COURT

2001 No. 15855p

IN THE MATTER OF THE ESTATE OF JOHN DOYLE SENIOR DECEASED LATE OF TREES, BRENNANSTOWN ROAD, CABINTEELY IN THE COUNTY OF DUBLIN

AND IN THE MATTER OF THE ESTATE OF JOHN DOYLE JUNIOR DECEASED LATE OF BENOI, BRENNANSTOWN ROAD, CABINTEELY IN THE COUNTY OF DUBLIN

BETWEEN

CATHERINE (OTHERWISE KATHLEEN) RYAN and IMELDA QUINN (A PERSON OF UNSOUND MIND NOT SO FOUND BY INQUISITION) SUING BY HER DAUGHTER AND NEXT FRIEND JACQUELINE) and BERNADETTE FEEHAN and FIONUALA COLLINS

Plaintiffs

and

MARIE DOYLE and JOHN LAVERY and RAYMOND GILMARTIN

PRACTISING UNDER THE STYLE AND TITLE OF LAVERY KIRBY GILMARTIN

Defendants

JUDGMENT of Mr Justice Kelly delivered on the 23^rd day of April, 2004.

The Application

The first defendant seeks an order striking out the plaintiffs' claim pursuant to the inherent jurisdiction of the court on the grounds of prejudice resulting from inordinate and inexcusable delay in the institution and/or prosecution of the proceedings by the plaintiffs.

The second defendant seeks a similar order.

The third defendant sought an order that the plaintiffs' claim against him be dismissed on the grounds that it is bound to fail. It was accepted that he was entitled to succeed on this application and during the course of the hearing an order was made striking him out of the proceedings.

Background

These proceedings began by the issue of a plenary summons on the 25^th October, 2001. A statement of claim was delivered on the same day. The first defendant delivered a defence and counterclaim on the 18^th July, 2002. The defence of the second defendant was delivered on the 27^th September, 2002.

All of the plaintiffs are sisters of each other and of the late John Doyle Junior (Junior). The plaintiffs and Junior are all children of the late John Doyle Senior (Senior).

The first defendant is the widow and sole Executrix of Junior. She extracted a Grant of Probate on the 5^th October, 2001 and is sued in her capacity as executrix of Junior's estate. Senior died on the 15^th December, 1985 having made his last will on the 19^th October of that year. The first, second and third plaintiffs extracted a Grant of Probate in respect of Senior's will on the 21^st August, 1986.

At the time of Senior's death he owned a substantial number of shares in a company called John Doyle and Co. (Horticultural Specialists) Limited (the company). The company had established and operated a nursery at Brennanstown Road in Cabinteely. It was incorporated in September, 1963 and the business was effectively run by Senior for many years.

Senior bequeathed his estate including the shareholding in the company to all of his children equally.

On the 24^th October, 1986 the plaintiffs entered into a Deed of Arrangement whereby they, together with another daughter of Senior, one Hilary Hennessy, disclaimed their interest under the will of Senior together with their interest in the residue of his estate and any share of the estate which they might have been entitled to on intestacy in consideration of the payment of the sum of £12,260 to each of them.

By a further deed of the 28^th April, 1987 the daughters of Senior appointed and confirmed to Junior the lands which formed part of the estate of Senior together with 1,831 shares in the company. The effect of these post mortem arrangements was to confer on Junior almost the entire legal and beneficial interest in the company and the residue of Senior's estate.

The first part of the plaintiffs' claim seeks a declaration that the agreements of October, 1986 and April, 1987 are void because they were allegedly procured under duress and undue influence or in the alternative constituted an improvident transaction or unconscionable bargain. An order is sought setting aside these transactions.

The second part of the plaintiffs' claim is that there was a collateral agreement concluded at or about the time that the transactions in suit were made and executed between Junior and the plaintiffs the terms of which were that in consideration for the plaintiffs executing the relevant documents, the plaintiffs and each of them would remain entitled to receive an equal division of the proceeds of sale and/or rezoning and/or redevelopment and/revaluation of the lands which formed part of the estate of Senior.

The third part of the plaintiffs' claim is an alternative one. In the event that the court refuses the reliefs sought against the first defendant there is a claim in negligence and breach of contract made against the second defendant. He is a solicitor who was at all relevant times a sole practitioner. The plaintiffs assert that he was negligent and in breach of duty and breach of contract towards them in respect of the advice given or not given as the case might be concerning the transactions and arrangements made between the plaintiffs and Junior subsequent to the death of Senior. A full defence has been delivered to this claim and it is asserted by the second defendant that at no time did he act on behalf of the plaintiffs in respect of the agreements in question nor was he asked to.

Each of the defendants now asks that the court exercise its inherent jurisdiction and strike out these proceedings. It is argued that the plaintiffs are now seeking to litigate arrangements and agreements entered into by them in 1986 and 1987 and are therefore guilty of both inordinate and inexcusable delay which has given rise to actual prejudice being suffered by the defendants in attempting to defend the case, most particularly by reference to the fact that Junior who was pivotal to the arrangements in suit is now dead.

Lengthy affidavits were sworn in respect of these motions. There is a good deal of conflict as to fact on those affidavits. It is not possible for the court to resolve those conflicts at this juncture.

I propose to try and identify the salient facts which are not in dispute.

The Undisputed Facts

Junior worked in the nursery business from his teenage years. As Senior's health began to fail Junior took increasing responsibility for the management and operation of the business.

Senior died on the 15^th December, 1985. Junior had an expectation that the nursery business would be left to him. Shortly before his death Senior executed his will bequeathing his estate, including his shareholding in the company, to all of his children equally.

Junior was aggrieved at this because he had worked in the business for about twenty years and had been largely responsible for its operation for a substantial part of that time.

Junior appears to have considered emigrating and disposing of his shareholding to his sister Hilary. Hilary has sworn an affidavit in these proceedings but apart from that is not privy to them. She had no means of funding the purchase of Junior's shares. She appears to have acted as a sort of broker by suggesting to the other sisters that they should consider offering their interest in the nursery company to Junior.

It was in this context that the deeds of the 24^th October, 1986 and the 28^th April, 1987 were executed. One solicitor, namely the second named defendant, acted in the matter.

Junior ran the business until his untimely death at fifty years of age on the 20^th May, 2001.

The plaintiffs were paid what they were entitled to under the terms of the deeds and it is alleged substantially in excess of that sum. These payments came from Junior.

No legal proceedings were ever brought to challenge Senior's will nor were any proceedings instituted during the lifetime of Junior to contest the deeds in suit.

Issues

If this case is permitted to go to trial it is clear that the court is going to have to make a determination of whether or not the deeds in suit were procured under duress and undue influence exercised by Junior. The essence of the plaintiffs' case is that Junior wrongfully procured the execution by them of the disclaimers and deeds which are now sought to be impugned.

As an alternative to that claim they allege the existence of a collateral oral agreement concluded at or about the time that the deeds were executed. There is also an assertion that the primary transaction involving the execution of the deeds was improvident. Payments in excess of what is provided for in the written instruments appear to have been made, with such payments emanating from Junior in favour of his siblings.

There is on the affidavit evidence very considerable conflict and quite clearly much bitterness. Little is to be achieved by rehearsing any of this matter in this judgment since I am not in a position to adjudicate on where as a matter of probability the truth lies on the basis of affidavit evidence.

It is sufficient to record that the plaintiffs' affidavits are replete with allegations that Junior was domineering, bullying and intimidating and thereby procured the execution of the deeds in question. If that indeed was the case it is perhaps a little surprising that the plaintiffs not merely did not bring any proceedings during Junior's lifetime but apparently accepted assurances from him that he would honour the alleged collateral agreement and treat them fairly and properly. However, that is the case which they make and which they say explains the failure to bring proceedings until after Junior's death when they realised that he had not looked after them properly in accordance with the collateral agreement. The allegation of bullying and intimidation is one made against Junior only and not against the first named defendant. She denies that he was a man of that disposition and that is a view supported to the limited extent that she can from her own knowledge, by Hilary Hennessy.

The Legal Principles Applicable

This is an application to have these proceedings struck out because of delay on the part of the plaintiffs in circumstances where such delay has resulted in prejudice being suffered by the defendants to such an extent that there is a real and serious risk of an unfair trial.

The first defendant accepts that the test to be applied on this application is that prescribed by the Supreme Court in Primor plc v Stokes Kennedy Crowley [1996] 2 I.R. 459. Although that case dealt with post commencement delay in proceedings it is accepted by the first defendant that it should apply here even though the bulk of the delay is pre commencement of proceedings.

It has been suggested that a different test applies to pre commencement delay, an issue to which I alluded in Kelly v O'Leary [2001] 2 I.R. 526. The test in such a case it was said was that to be gleaned from the decisions of the Supreme Court in O'Domhnaill v Merrick [1984] I.R. 151 and Toal v Duignan (No. 1) [1991] I.L.R.M. 135. The test prescribed in those cases is a wider one based on general principles of fairness regardless of whether the delay is excusable or not. As the first defendant accepts the burden of the more stringent test contained in Primor I will apply it in respect of that defendant. The second defendant does not accept that the Primor test applies.

In Primor the Supreme Court set forth the principles upon which this undoubted inherent jurisdiction ought to be exercised. A party seeking a dismissal of proceedings by reason of delay has to demonstrate that such delay was both inordinate and inexcusable. Even where delay can be so categorised the court must nonetheless exercise a judgment on whether, in its discretion, on the facts, the balance of justice is in favour of or against the case proceeding to trial.

In considering this obligation the court is entitled to take into consideration and have regard to the following - (1) the implied constitutional principles of basic fairness of procedures, (2) whether the delay and consequent prejudice in the special facts of the case are such as to make it unfair to the defendant to allow the action to proceed and to make it just to strike out the plaintiffs' action, (3) any delay on the part of the defendant - because litigation is a two party operation, the conduct of both parties should be looked at, (4) whether any delay or conduct of the defendant amounts to acquiescence on the part of the defendant in the plaintiffs' delay, (5) the fact that conduct by the defendant which induces the plaintiff to incur further expense in pursuing the action does not, in law, constitute an absolute bar preventing the defendant from obtaining a striking out order but is a relevant factor to be taken into account by the judge in exercising his discretion whether or not to strike out the claim, the weight to be attached to such conduct depending upon all the circumstances of the particular case, (6) whether the delay gives rise to a substantial risk that it is not possible to have a fair trial or is likely to cause or have caused serious prejudice to the defendant, (7) the fact that the prejudice of the defendant referred to in (6) may arise in many ways and be other than that merely caused by the delay, including damage to a defendant's reputation and business.

Those principles were subsequently reiterated by the Supreme Court in Anglo Irish Beef Processors v Montgomery [2002] 3 IR 510.

Inordinate Delay

These proceedings were commenced in October, 2001. That was fifteen years after the execution of the deeds of October, 1986 and fourteen and a half years after the execution by some of the plaintiffs of the subsequent agreement of 28^th April, 1987. Throughout that time it was open to the plaintiffs to bring proceedings but they did not do so. In my opinion the delay in commencing these proceedings was on any view inordinate.

Inexcusability

A number of reasons are advanced by way of excuse for the non-commencement of proceedings much earlier than they were and certainly during the lifetime of Junior.

In the principal grounding affidavit sworn by Catherine Ryan an attempt is made to excuse delay on the basis that it was not until the death of Junior that the plaintiffs' cause of complaint arose, because it was only then that they realised that he had not honoured the terms of the collateral agreement.

That excuse has however to be seen in the light of the fact that the principal relief which is sought in the proceedings is not by reference to the collateral agreement but rather an assertion that the execution of the deeds in 1986 and 1987 was wrongly procured largely as a result of threats and bullying on the part of Junior. There is really no excuse proffered as to why proceedings seeking reliefs in respect of that conduct were not commenced save by reference to the alleged expectation that the collateral agreement would be honoured. There is of course an inherent contradiction in this line of argument because reliance upon a belief that Junior would act fairly and properly appears to be totally inconsistent with the complaints made by the plaintiffs concerning his conduct. Catherine Ryan says that at the time they executed the documents and for the remainder of his life Junior was very domineering, bullying and intimidating. He is also alleged to have been evasive. Why would one hold off instituting proceedings seeking to set aside the deeds by reference to a belief that a man of such character would honour his obligations?

The excuse is also inconsistent with the fact that the advice of Senior Counsel was sought by the plaintiffs in the year 2000 as to what is described as the meaning and effect of the documents. That was at a time when Junior's death was not anticipated. The deponent was quite within her rights in claiming privilege in respect of that advice but what can be said about it is that no proceedings were instituted on foot of it and what is more to the point it raises the issue as to why such advice was not sought and obtained years beforehand.

A further excuse has been alluded to by reference to the health of the second and fourth plaintiffs. The position of the fourth plaintiff can be dealt with quite easily. There is no allegation that she is or was incapable of managing her affairs or is subject to any disability between the time of execution of the deeds and the commencement of these proceedings. She received treatment for depression in 1984 and again between April, 1986 and January, 1988. There is no evidence of any subsequent treatment save that she continues to take anti-depressant medication. I do not consider that any of that could constitute an excuse for not commencing the proceedings timeously.

It is asserted that the second named plaintiff is a person of unsound mind. The present proceedings have been instituted in her name suing by her next friend. I assume that it was her next friend who made the decision to institute these proceedings on her behalf. Such a decision could have been made at any time from 1987 onwards. If therefore she is a person under a disability being a person of unsound mind, in my view on the basis of the evidence before me that does not provide an excuse for not commencing the proceedings before 2001. Nothing has been heard from the next friend by whom she sues in this regard.

Having regard to the foregoing I am not satisfied that any of the excuses which have been proffered by way of explanation for the commencement of the proceedings as late as 2001 are valid and I therefore conclude that the delay in instituting the proceedings is both inordinate and inexcusable.

That of course is not an end of the matter, I must now go on to the third part of the Primor test namely the exercise of my discretion having regard to the facts.

Exercise of Discretion

Criticism has been made of delay which has occurred subsequent to the institution of the proceedings. The plaintiffs allege delay on the part of the defendants in delivering their defences and of further delay in bringing the present motion. Whilst there is some justification for these criticisms the delay involved is minor by comparison with the delay in the institution of proceedings. Furthermore there is no specific prejudice suffered by such minor delay apart from not getting the case into a list for trial.

The real delay with which I am concerned is that which occurred prior to proceedings being commenced. The real prejudice with which I am concerned is that which confronts the first defendant by reason of the death of Junior.

In attempting to stand over the validity of the agreements of October, 1986 and April, 1987 the first defendant has to do so without having available to her the evidence of Junior against whom the serious allegation of duress and undue influence and general improper and bullying conduct are made. She is likewise deprived of his evidence in attempting to deal with the collateral agreement allegedly made. The plaintiffs contend that this was an oral agreement made between them and Junior. How can any realistic forensic examination of that arrangement be carried out seventeen or eighteen years after the event and in the absence of Junior?

Insofar as the allegation of improvidence in the original transactions was concerned it is quite clear that there was a substantial sum of money agreed to be paid which was in fact paid to each of the plaintiffs. There are allegations that over and above that further sums were paid to them by Junior. But the fact and amount of such sums appears to be in dispute and the one person who could give evidence for the defence in respect of that element of the case is Junior. How can the first defendant demonstrate that the transaction was not improvident in the absence of evidence from him?

It appears likely that the first defendant will have available to her the evidence of Hilary Hennessy who quite clearly does not view matters in anything like the same light as the plaintiffs. Useful and all as her evidence might be it does not appear to me to be a substitute for the evidence which Junior could give had he been alive. Having regard to the views expressed by the Supreme Court in Anglo Irish Beef Processors Limited v. Montgomery it appears to me that I have to ask myself whether the absence of Junior gives rise to a substantial risk of an unfair trial. In my view that question has to be answered in the affirmative.

The plaintiffs contend that by reason of the relationship between them and Junior this is a case in which there is a legal presumption of undue influence. They further argue that if that is so no evidence of Junior would be required because that presumption would have to be rebutted by showing that the parties who yielded up their rights had independent advice. Even if such a presumption does exist it does not appear to me that it could be said that a fair trial could be had of the issues which arise on the pleadings here in the absence of Junior.

I am quite satisfied that if Junior were alive he would have been the principal witness for the defence. If the proceedings had been commenced in a timely fashion he would have been available to deal with them.

Despite the assertion made by the plaintiffs I do not accept that this case can be equated with one made under section 117 of the Succession Act, 1965. There a specific remedy and proceeding was created by the legislature which by its very nature has to be heard after the death of a deceased. Whilst there may be some similarity between the type of allegations that the court frequently has to deal with in such cases and a number of the contentions here it does appear to me that the two cases nor the legal principles applicable are analogous.

In these circumstances I am of the view that because of the inordinate and inexcusable delay in commencing these proceedings very substantial prejudice has been suffered by the first defendant in attempting to defend them. To allow the action to proceed to trial would be to put justice to the hazard and accordingly I propose to exercise my discretion by striking out the plaintiffs' claims against the first defendant. I now proceed to consider the position of the second defendant.

The Second Defendant

This defendant says that the court ought not to apply the Primor test as against him since it is applicable only to post-commencement delays. Instead the court ought to approach the matter on the basis of the two decisions of the Supreme Court which I have already alluded to namely O'Domhnaill and Merrick and Toal v Duignan. Particular emphasis is placed on the latter case. This defendant contends that the Primor approach to delay involving a consideration of blameworthiness for delay it is not a feature of the Toal v Duignan test. The only matter with which the court is concerned is the existence of a clear and patent unfairness in asking a defendant to defend a case after a very long lapse of time.

This defendant may very well be correct in this assertion but it does not appear to me that it makes very much difference in the circumstances of the present case. The finding of inordinate delay in the institution of the proceedings and the lack of any excuse for so doing which I have already made insofar as the case against the first defendant is concerned is equally applicable as against the second defendant. It follows that regardless of which test I apply I am, insofar as this defendant is concerned, obliged to consider whether there is a real and serious risk of an unfair trial being had because of the prejudice which has been caused to this defendant by delay.

It is important to consider the basis of the case which is made against this defendant. First, it is quite clear from the statement of claim that the case against him arises only in the event of the court refusing the reliefs which are sought against the first defendant. The claim is an alternative claim. It is to the effect that any loss or damage or injury suffered by the plaintiffs was caused by his negligence, breach of duty and breach of contract.

The claim against the first defendant is two-fold. The first concerns the alleged coercion by Junior resulting in the plaintiffs entering into the agreements whereby they waived their entitlements to their father's estate for what they say is inadequate consideration. Secondly, there is the allegation of the collateral oral agreement which was not honoured.

This second claim which is made against the first defendant forms no part of the case against the second defendant.

The essence of the case which is made against the second defendant is that he failed to advise the plaintiffs in respect of the agreement which they entered into with Junior. It is said that he was obliged to advise them to obtain independent legal advice and having failed to do so they, through the bullying of their brother, entered into an improvident transaction. This caused loss to them.

The second defendant says that he at no time acted on behalf of the plaintiffs in respect of the agreement nor was he asked to. He acted on behalf of the estate of Senior who had been a client of his prior to his death. He acted for the executrices to implement the agreement and took his instructions principally from the first plaintiff. Following Senior's death he was contacted by her who asked him to act in the estate. He did so. In February, 1986 he received instructions that there had been a discussion between family members and the company's accountants on foot of which they had agreed to the issue of bonus shares in the family company. He received instructions to draft the formal agreement to give effect to that decision and he did so. He sent copies of the draft agreement to Hilary Hennessy and to each of the second and third plaintiffs in the early part of 1986. The bonus share scheme had been agreed between the family and the accountants. No advice was sought from him regarding that agreement and he was never consulted as to why that scheme should not proceed. Towards the end of August, 1986 he was informed that the plaintiffs and Hilary Hennessy would instead disclaim their interest under the will in the family company. His instructions were limited to drafting the relevant paperwork and the obtaining of tax advice from accountants, which he did. On the 24^th October, 1986 he attended Catherine Ryan, Imelda Quinn and Bernadette Feehan where the waivers were executed.

The administration of the estate was carried out between February, 1986 and April, 1987 when the administration accounts were finalised. Throughout the administration he dealt primarily with the first plaintiff but also with Junior and met the other two executrices Bernadette Feehan and Imelda Quinn. Hilary Hennessy instructed her own solicitor. During all of this time he never received any indication that there was any difficulty between family members. No suggestion was made then or later that Junior had exercised any undue influence of any nature over the plaintiffs in respect of the agreement entered into. Subsequently over the years from 1987 onwards he acted on behalf of both Bernadette Feehan and Imelda Quinn in respect of personal business. He also acted on behalf of the family company and dealt with Catherine Ryan in that regard. Until shortly before the present proceedings were initiated he was never advised that any of the plaintiffs had any complaint about the manner in which they were treated by Junior.

In these circumstances is there a real risk of an unfair trial insofar as this second defendant is concerned? In my view that question must be answered in the affirmative.

I come to that conclusion not merely because it would appear to be unjust to allow an alternative claim to proceed against him when the substantive and primary claim against the first defendant is being struck out because of a real risk of unfairness but also because actual prejudice is caused to this defendant in his attempt to defend himself. That prejudice arises directly from the death of Junior. Crucial to the plaintiffs' complaints is that they suffered loss as a result of being permitted through the alleged negligence of the second defendant to enter into a transaction in respect of which inadequate consideration was paid. But it was Junior who provided and paid such consideration and it is alleged that sums in excess of what was contained in the actual agreement were paid. The second defendant cannot introduce evidence of such consideration actually paid to the plaintiffs because of the death of Junior. The first defendant avers that she is aware that the actual consideration paid by Junior exceeded significantly the consideration recited in the deed of arrangement. That view is confirmed by the evidence of Hilary Hennessy to the effect that she received £40,000. It is also supported by her averment that the arrangements which were made by the family after Senior's death involved payments from Junior to her sisters and such were greater than the amounts stated in the relevant deeds and disclaimers. The effective evidence of this from the defence point of view would be from Junior. In his absence the second defendant cannot deal with the matter in an adequate fashion.

I am satisfied that given the lapse of time between the events complained of and the prejudice to this defendant arising principally from the death of Junior and thus his unavailability to give evidence a substantial risk to the ability to have a fair trial has been established. The second defendant cannot effectively defend himself on the principal issue which is whether the arrangements that were entered into were financially disadvantageous to the plaintiffs. He is also prejudiced by damage to his reputation and professional standing. He is being asked to defend this action at this remove in time without the presence of the one witness who could give evidence pertinent to the principal issue. That issue is the allegation by the plaintiffs that they received inadequate money for their disclaimers where it appears that sums in excess of that stipulated in the documents were allegedly paid to them from Junior who is not in a position to give evidence in that regard.

Conclusion

In my view the first and second defendants are entitled to the orders which they seek. The plaintiffs' claim will be struck out.