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URL: http://www.bailii.org/ie/cases/IEHC/2012/H140.html
Cite as: 15 ITELR 184, [2012] 2 IR 286, [2012] IEHC 140
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Judgment Title: Scally -v- Rhatigan Neutral Citation: [2012] IEHC 140 High Court Record Number: 2009 3286 P Date of Delivery: 28/03/2012 Court: High Court Composition of Court: Judgment by: Mary Laffoy J. Status of Judgment: Approved |
Neutral Citation Number [2012] IEHC 140 THE HIGH COURT [2009 No. 3286P] IN THE MATTER OF THE ESTATE OF BRIAN RHATIGAN DECEASED, LATE OF "CHANTILLY", BALLYBRIDE ROAD, RATHMICHAEL IN THE COUNTY OF DUBLIN BETWEEN SHARON SCALLY PLAINTIFF AND
ODILLA RHATIGAN DEFENDANT Judgment of Miss Justice Laffoy delivered on 28th day of March, 2012. 1. The issues/pleading
(b) that the Testator knew and approved of the contents of the Will; and (c) that at the time of executing the Will the Testator was of sound disposing mind and had capacity to make a valid will. 1.3 The basis on which it was asserted that the plaintiff is not an appropriate person to act as executor of the Testator's estate, as pleaded in the counterclaim, was, in part, as follows:
(b) that the plaintiff, by reason of her personal involvement in the affairs of the Testator prior to his death and, in particular, having acted on behalf of the Testator in his personal capacity and for and on behalf of the companies in which the Testator had an interest and which are connected with the Golden Promise Trust, has a conflict of interest in acting as executor of the estate of the Testator and is not an appropriate person to carry out the necessary inquiries for and on behalf of the Testator's estate. 1.5 I have emphasised the distinct bases on which it was pleaded that the plaintiff is not an appropriate person to act as executor of the Testator's estate because, while the issues as set out in the Master's order of 5th May, 2010, which was made with the consent of the parties, raise questions as to whether the plaintiff has failed to carry out proper inquiries into the extent of, or has failed to take reasonable or sufficient steps to recover, the assets of the Testator, or has been guilty of gross, inordinate and inexcusable delay in the administration of the Testator's estate, the focus of the evidence adduced on behalf of the defendant at the hearing of the second module of the proceedings was on the plaintiff being unsuitable to fulfil the role of executor because, it was contended, she is conflicted in her professional capacity. Accordingly, it is that contention which will be primarily addressed in this judgment. 1.6. In the reply and defence to counterclaim delivered by the plaintiff, issue was joined with all of the assertions made by the defendant in her defence. As regards the elements of the counterclaim which are now being addressed, it was admitted that the plaintiff was instructed in respect of property transactions by the Testator, in his stated capacity as project manager engaged by York and in his personal capacity, and also in respect of property transactions concluded by, inter alia, York, TAM and Unit 33, although it was stated that it was not known whether she acted in respect of all such property transactions carried out in Ireland. Further, it was admitted that the plaintiff acted for the Testator in his personal capacity during his lifetime and that she acted for companies with whom the Testator had an association, although it was not admitted that he had an "interest" in the said companies. However, it was denied that the plaintiff had any conflict of interest by reason of the foregoing or otherwise in acting as executrix of the Testator and it was denied that the circumstances pleaded in the counterclaim disclosed any such conflict of interest. As regards the allegations that the plaintiff failed to carry out the necessary inquiries and failed to take the necessary steps to recover the Testator's assets, it was admitted that the plaintiff had not completed her inquiries into the extent of the Testator's assets, by reason, inter alia, of the fact that they had been interrupted or hampered by the institution of these proceedings. It was denied that she had failed to carry out such inquiries as might reasonably have been expected. 2. The law 2.2 The powers of the High Court in relation to granting probate are governed by ss. 26 and 27 of the Act of 1965. Section 26(1) confers power on the High Court to grant probate to one or more executors of a deceased person, and the grant may be limited in any way the Court thinks fit. Section 27(4) provides that where by reason of any special circumstances it appears to the High Court to be necessary or expedient to do so, the Court may order that administration be granted to such person as it thinks fit. Section 10 (3) of the Act of 1965 provides:
2.4 One of the grounds which had been relied on by the plaintiff in Dunne v. Heffernan was that the defendant was "in a position of fundamental conflict of interest as executrix of the estate having regard to her position as a shareholder in, and director of Dunnes Holding Company ... and as a beneficiary of the trust". In relation to that ground, Lynch J. stated that he found it difficult to discern any conflict of interest. Later he summarised the position as follows (at p. 447):
In the present case the main problem lies in the failure of the trustees to execute agreements with the users of the trust. There is also the further problem that some of the trustees are too closely identified with the interests of some of those users to be regarded as being capable of being truly impartial in any decision making process involving the trustees. None of these faults have resulted from any deliberate or conscious conduct or misconduct on the part of the trustees. Nevertheless where a conflict of interest arises it is doubtful that a continuation by such persons in office could be remedied. . . . The welfare of the beneficiaries is being affected by the present situation. There is a conflict of interest which I have identified and it would be difficult to reorganise with such conflict on the part of some of the trustees continuing to exist. It is accordingly appropriate that such persons should step down. It will however serve no purpose if they step down, but at the same time no other reorganisation takes place." 2.7 It is commented in Delany in Equity and the Law of Trusts in Ireland (5th Ed.) at p. 436 that the judgment of Barron J. is useful in that it confirms that the overriding principle to which the Court must have regard in exercising its power to remove trustees is the welfare of the beneficiaries, although it is implicit in the comment in footnote 38 on the same page that the approach adopted by the Supreme Court in Dunne v. Heffernan in relation to the removal of an executor is a stricter approach. Be that as it may, the feature which distinguishes this case from the authorities to which I have referred is that the basis upon which it is alleged that the plaintiff is conflicted in this case is that she is conflicted in her professional capacity, rather than in any personal capacity or because of any personal interest. 2.8 Of the authorities on which counsel for the defendant has relied, which address a conflict of interest in a professional capacity, that which I have found most helpful is the decision of the House of Lords in Hilton v. Barker Booth [2005] 1 All ER 651. What is interesting and instructive about that case is the manner in which the House of Lords applied the principles laid down in Moody v. Cox [1917] 2 Ch. 71. However, in order to understand those principles, it is necessary to explain the factual background to the earlier decision. The plaintiff, Moody, had contracted to purchase from Cox and Hatt, who were trustees, a portion of the trust property. Hatt was a solicitor and Cox was his managing clerk. Throughout the transaction, Hatt acted (through Cox) as solicitor for both vendors and purchaser. The purchaser was allowed to rescind because the evidence of Cox was that he knew that the price the client, Moody, was paying for the property was a good deal more than the value that had been placed on the property for probate purposes and that he, Cox, had not told the client, Moody, the amount of the probate valuation, on the basis that his duty to the vendors precluded him from so doing. 2.9 That evidence of Cox lead to the passage from the judgment of Scrutton L.J. which was quoted by Lord Scott in Hilton v. Barker Booth. Scrutton L.J., having summarised the evidence of Cox to the effect that he told Moody that the property was worth the purchase price, although he knew that it was not because he had been advised that it was worth a good deal less, and that he knew the value had depreciated since the probate valuation, but did not tell Cox the amount of the probate valuation, stated (at p. 91):
3.1 As stated at para. 10 of the 2010 Judgment, on the basis of the evidence adduced in the first module of these proceedings, I considered that it was reasonable to draw the following inferences:
(b) that he also had an interest in the assets of the trust known as the Dolphin Trust, which appeared to have been set up in Guernsey in 1984. 3.2 For the purposes of determining whether the evidence has shown that the plaintiff, in her professional capacity, would have conflicting duties, if a grant of probate of the Will was issued to her, the crucial task of the Court is to analyse and assess her professional position vis á-vis two categories of beneficiaries of the Testator's bounty. Those categories are:
(b) the beneficiaries of assets settled, in the sense that he was the arbiter of their ultimate destination, by the Testator, directly or indirectly, which do no fall within his estate, to which I will refer as "non-estate assets". 3.3 The controversy between the defendant and the plaintiff commenced within six months of the death of the Testator. Although she had been de facto separated from the Testator for approximately eight years at the date of his death, there was no formal separation agreement in place between the defendant and the Testator, nor had any family law proceedings been initiated. As is set out in paragraph 15 of the 2010 Judgment, the Testator, having devised and bequeathed all his estate to his executors upon trust for sale, directed them, after payment and discharge of his funeral and testamentary expenses and debts, to "satisfy or provide for the satisfaction of the statutory right" of the defendant under the provisions of the Act of 1965. In other words, the defendant was to be the beneficiary of one-third share of the net estate of the Testator. The controversy between the defendant and the plaintiff was triggered by a letter dated 20th July, 2006 from the defendant to the plaintiff. That letter was a long, complicated letter. It is acknowledged that the defendant had the assistance of a solicitor in composing it. 3.4 In the letter of 20th July 2006, the defendant raised a large number of issues. However, I only propose adverting to some of them and to the plaintiff's response, by letter dated 21st August 2006 from Amorys, in relation to those issues, as a preliminary to setting out what the evidence discloses as to the manner in which those issues were dealt with after the death of the Testator and the plaintiff's involvement in dealing with them. Before concentrating on those issues, however, it is appropriate to record a number of exchanges which give a clear impression of how the plaintiff envisaged her professional role at the time. First, the defendant, who contended that she was a director of York, sought up to date accounts and books and records of that company. The response of the plaintiff, through the medium of Amorys, was that, whilst she acted for York, she had no power in her capacity as company solicitor to provide the defendant with any accounts, books or records of the company. Secondly, the defendant contended that there seemed to be "a substantial conflict of interest" and that the plaintiff appeared to be taking instructions from the Testator's partner, Ms. Kiely. The response of the plaintiff was that there was absolutely no foundation for the assertion that there was a conflict of interest and she denied that there was in fact any conflict of interest and, for the avoidance of doubt, she stated that she was not "taking instructions from" Ms. Kiely either then nor had she been at any time. That statement has to be considered in the light of the evidence at the hearing of the second module of the proceedings in relation to the sale of "Chantilly". 3.5 Apart from the plaintiff’s involvement in the sale of "Chantilly", the issues raised by the defendant which I propose considering in the context of the alleged professional conflict are:
(b) the discharge of a mortgage on the defendant's family home known as "Bri-Odi", Cabinteely in County Dublin. 3.7 Due to the efforts of MOP on her behalf, by virtue of a deed of appointment dated 15th July, 2009 made between Credit Suisse Trust Ltd., the trustee of the settlement dated 14th May, 1984 under which the so-called Dolphin Trust was created, and the defendant, the trustee appointed the Trust Fund, as defined in that settlement, to the defendant irrevocably and absolutely. The evidence established that after discharge of tax liability and the legal costs, which arose in various jurisdictions, the balance of the Trust Fund was, according to the defendant, split between her children and herself. In consequence, the defendant became solely and absolutely beneficially entitled to a very substantial sum of money. That may have tax implications for the estate of the Testator, which, in due course, may have to be addressed by his personal representative. However, I mention this aspect of the matter at this juncture because of the documentation which MOP received in February 2010 in connection with the distribution of the assets of the Dolphin Trust, which, apparently, was finalised in February 2010. MOP received files relevant to the assets of the Dolphin Trust from the entity in the Isle of Man which had been administering the assets. Among the files was what MOP described as "a partially executed copy of the Golden Promise Trust". While this document did not resolve the issue as to the identity of the settler of the Golden Promise Trust, it clearly was, and is, of significance. It was furnished by MOP to the plaintiff with their letter of 28th April, 2010. The plaintiff has complained about the delay in furnishing this document, suggesting that it was a tactical move on the part of the defendant and was intended to undermine her position as executrix. In my view, the evidence does not bear out that allegation. 3.8 The reality of these proceedings is that they reflect a major contest between the defendant, as one of the principal beneficiaries of the very limited estate assets, on the one hand, and the beneficiaries of what appear to be very substantial non-estate assets, on the other hand. Such a contest is inevitably going to be played out in an acrimonious fashion. So it has been and so it continues in this case, in relation to the multiplicity of issues which have arisen between the defendant and the plaintiff in relation to assets over which the Testator may or may not have had ultimate control. The three issues which I have chosen from the issues which have arisen between the defendant and the plaintiff and between MOP and Amorys in assessing whether the plaintiff is professionally conflicted are issues which relate to matters in which the plaintiff has been professionally involved, through the medium of Amorys, since the death of the Testator. The firm Amorys have acted for the plaintiff in the prosecution of these proceedings. 4. "Chantilly" 4.2 The contract for sale of "Chantilly" by Unit 33, as vendor, with the "Chantilly Trust", which was described by the plaintiff as "a Charles Haccius scheme", as purchaser, was prepared by Amorys on instructions received in August 2005, that is to say, some three months after the Will was executed. There was some delay, because the registration of the title to the property had to be completed. The plaintiff’s evidence was that she received instructions that the property was going to be sold in November 2005 but the contract was not signed or exchanged until after the death of the Testator in February 2006. As I understand it, the "Chantilly Trust" was not a legal entity and the purchasers from Unit 33 were John Kiely, the father of Ms. Kiely, and his partner, Veronica Lloyd, as trustees. The contract provided for a two year closing date. The purchase price was €3.5m. After the death of the Testator, "Chantilly" was sold on by the trustees of the "Chantilly Trust" to an independent sub-purchaser for €5m. Amorys acted for Unit 33 in the sale to "Chantilly Trust". The trustees of the "Chantilly Trust" were represented by a different firm of solicitors in the sub-sale. Both transactions were closed in June 2006, whereupon Unit 33, a company known by the plaintiff to be part of the Golden Promise Trust network, received the consideration of €3.5m less capital gains tax and legal and other costs. The evidence which is recorded in the 2010 Judgment (at para. 50) was that €3.3m was available for distribution to Unit 33. Amorys paid the money received by Unit 33 into its bank account in this jurisdiction. Obviously, the trustees of the "Chantilly Trust" received the balance of the purchase price payable by the sub-purchaser, that is to say, €1.5m, subject, of course, to whatever capital gains tax and legal and other costs were payable out of it. 4.3 At the hearing of the first module of these proceedings, as I recorded in the 2010 Judgment (at para. 50), when it was put to her in a cross-examination that Ms. Kiely was the ultimate beneficiary of the proceeds of the sale of "Chantilly", the plaintiffs response was that she could not say that. However, her evidence on the hearing of the second module of the proceedings was that she understood that Ms. Kiely got the benefit of some or maybe all of the sale proceeds of "Chantilly". Apparently, Unit 33 has since been dissolved. 4.4 I think it is reasonable to infer that the motivation behind the procurement of the release of the mortgage on "Chantilly" and the setting up of the "Chantilly Trust" and the putting in place of the contract between Unit 33 and the trustees of the "Chantilly Trust" was to put in place a fund, of which, in due course, Ms. Kiely would become the sole beneficial owner. Moreover, I think it is reasonable to infer that the "driver" of that project was the Testator during his life. Given that Ms. Kiely was a young mother with two very young children, who was inevitably going to lose her partner in the short term, one can understand why those steps were taken. However, the issue for the Court is whether the plaintiff’s role, as solicitor for Unit 33 in the sale, which was completed after the Testator's death, was in conflict with her role as executor of the Will, and as trustee of the Testator's estate. 4.5 That issue leads to an issue raised on the defendant's counterclaim to which reference has not been made previously. One of the reliefs claimed on the counterclaim is a declaration pursuant to s. 121 of the Act of 1965 that-
(b) its effective transfer by the contract for sale to the trustees of the "Chantilly Trust", and (c) the sale on by way of sub-sale, 5. Kildare Enterprise Centre
5.2 In any event, Amorys acted for TAM in the sale of the Kildare Enterprise Centre, which is what is relevant for present purposes. The evidence of the plaintiff was that agreement in principle in relation to the sale had been reached before the Testator's death. However, she did not get instructions to prepare the contract for sale until after the Testator's death, around June 2006, and the contract was signed in June 2006. She received her instructions from York via Mr. O'Sullivan. The plaintiff testified that, in the context of the defendant's letter of 20th July, 2006, she was "concerned" in relation to the sale by TAM. She took advice from a senior counsel, who is not involved in these proceedings, as to whether, in the circumstances, where she was acting for TAM in the sale, her position was any more difficult in view of the fact that she was the executrix of the Testator. Her evidence was that the advice she got was that she had acted for TAM for many years, that company seemed to be the owner of the property, and that she had no alternative but to go ahead and follow the instructions of her client and, if she did not, her client could change solicitors. The sale by TAM closed in late November or early December 2006. The plaintiff’s position was that, if there was any question of her not wanting to act, Mr. Tom Keane, the Cypriot lawyer, whom she described as the owner of TAM, "would have been in like a shot". The plaintiff’s evidence was that she was not getting instructions from Mr. Keane; she was taking her instructions from York, which was managing TAM. The net proceeds of the sale by TAM, which amounted to €5.7m, were lodged by Amorys to an account in the name of TAM in this jurisdiction. Amorys also accounted to the Revenue Commissioners for capital gains tax in the sum of €1.25m in connection with the transaction. While the evidence is somewhat unclear on this point, as I understand it, the full purchase price was €10m and the sum of €3.05m, being the difference between that figure and €6.95m (€5.7m plus €1.25m) was used to discharge a mortgage on the Kildare Enterprise Centre in favour of Irish Nationwide Building Society. 5.3 The plaintiff’s evidence was that, when TAM acquired the Kildare Enterprise Centre, circa. 2000, from Irish Nationwide Building Society (INBS) which, apparently, had repossessed it on foot of a mortgage given by a company controlled by the Testator, she was aware that TAM was owned by Golden Promise Holding Ltd., a Cyprus company, which, as I have recorded earlier, is the trustee of the Golden Promise Trust. 5.4 It was submitted on behalf of the defendant that the Kildare Enterprise Centre seems to have been sold with unseemly haste by Mr. O'Sullivan, acting for York, for a sum that was well below its true market value. The defendant adduced evidence of Mr. Rory Lavelle, a chartered surveyor, who estimated the market value of the Kildare Enterprise Centre as being somewhere between €16m and €20m in 2006. That evidence alone does not lead me to the conclusion that the property was sold by TAM at an undervalue in 2006. In any event, it is not pleaded by the defendant in the counterclaim that the Kildare Enterprise Centre was sold at an undervalue. 5.5 However, I do think that the plaintiff, in being sufficiently concerned to take advice in relation to her position, as the solicitor acting for TAM in the sale of the Kildare Enterprise Centre, as giving rise to a potential conflict with her role as executrix of the Testator was being wholly realistic, because there was an issue of a potential conflict. Not only did the defendant, in the letter of 20th July, 2006, raise the issue of the closing of the sale of the Kildare Enterprise Centre, as I have already indicated, but she also made the point that a schedule of assets prepared by the plaintiff on 30th March, 2006, which she had received, only contained "a small portion" of the Testator's estate and she asserted that the Testator was "the beneficial owner and/or controller of various other substantial Companies, trusts and assets". The plaintiff's response to that was that she needed "full details, instructions and information" from the defendant. She pointed out that the schedule in question was only a "rough guesstimate" and did not constitute the final position on the Testator's estate or indeed the extent of his assets. 5.6 I have come to the conclusion that the evidence shows that there was, and is, a conflict between the interest of the ultimate beneficial owners of the assets of TAM, being non-estate assets, and the beneficial owners of the estate assets in accordance with the terms of the Will. That conflict has the same ramifications as the conflict in relation to the monies used to procure the discharge of the mortgage on "Chantilly" and the disbursement of the proceeds of the sale of that property, in that, by acting as solicitor for TAM in the sale of the Kildare Enterprise Centre, the plaintiff has put herself in the position of being potentially conflicted in acting as personal representative of the Testator and as trustee of the Will. 6. Discharge of the mortgage on "Bri-Odi"
6.3 After MOP communicated to Amorys that they had been instructed by the defendant in relation to the estate of the Testator, Amorys wrote directly to the defendant by letter dated 27th July, 2007. One of the matters dealt with in that letter was the mortgage on "Bri-Odi". In this regard, Amorys stated:
6.4 Thereafter, there was a considerable amount of correspondence backwards and forwards between MOP and Amorys in relation to the discharge of the mortgage on "Bri-Odi". Eventually, when the plaintiff submitted the Inland Revenue Affidavit dated 30th October, 2008, to the Revenue Commissioners, which was qualified by the contents of the letter dated 30th October, 2008 referred to earlier, the mortgage on "Bri-Odi" was dealt with as follows in the letter:
6.6 Normally there is no conflict of interest in an individual being both a beneficiary and a creditor of the estate of a deceased person, as frequently happens. As regards the discharge of the mortgage on "Bri-Odi", however, unlike the normal situation, there could be an issue of the entitlement of the defendant to have the loan from INBS repaid by a third party, whether out of estate assets or out of non-estate assets. Having said that, I am not finding, and I am not even suggesting, that such an issue arises. I merely want to emphasise that the real difficulty created by the discharge of the mortgage on "Bri-Odi" relates to identifying the source of the funds used to discharge it and the beneficial ownership of those funds after the Testator's death. Any question as to whether liability for the discharge of the mortgage on "Bri-Odi" attached to the estate assets or to the non-estate assets, gives rise to a conflict between the beneficiaries of the estate assets, on the one hand, and the beneficiaries of the non-estate assets, whoever they may be, and it would appear on the evidence that the defendant is not one of them, on the other hand. The fact that she was the solicitor for the Testator from 1986 until his death and acted on the Testator's instructions for companies incorporated outside this jurisdiction, for example, TAM and Unit 33, which companies are acknowledged as being subsidiaries of the Cypriot company, Golden Promise Holding Ltd., which is the trustee of the Golden Promise Trust, it seems to me that the plaintiff must inevitably be drawn into the conflict which such question may ignite, if she remains as executor of the Will and as trustee of his estate of the Testator. In relation to the discharge of the loan secured on "Bri-Odi" the potential for conflict is compounded because Amorys acted both for the Testator and the defendant in connection with the creation of the mortgage in favour of INBS and such independent evidence as the defendant obtained in connection with that transaction was obtained from an assistant solicitor in that firm. 7. Conclusions on the conflict issue
(b) As regards the plaintiffs involvement as solicitor for TAM in the sale of the Kildare Enterprise Centre, I find that such involvement must inevitably give rise to a professional conflict if the plaintiff becomes the personal representative of the Testator, the kernel of the conflict being whether the net proceeds of the sale should be brought into the estate on the basis that the Testator, albeit through TAM, was the beneficial owner of the Kildare Enterprise Centre. (c) As to the circumstances of the discharge of the mortgage on "Bri-Odi", with monies apparently provided by TAM, for which she acted as solicitor both prior to and after the death of the Testator, I find that her involvement must inevitably give rise to a professional conflict if she becomes the personal representative of the Testator, because the beneficial owners of TAM may have a claim against the estate of the Testator for recovery of the sum of €465,000 of its monies used in discharge of the defendant's indebtedness to INBS. 7.2 Apart from the foregoing examples, probably the most persistent and, I think it is fair to say, the most exasperating from the perspective of the defendant and her legal advisers, complaint made against the plaintiff alleging that she is conflicted has arisen from her non-acceptance of the fact that the Testator was the settlor, and the 36 sole person in control of the assets, of the Golden Promise Trust. They contend that the refusal of the plaintiff to acknowledge that the Testator was the source of control of that trust regulated in Cyprus, notwithstanding her involvement in the execution by the Testator of the "letter of wishes" in relation to the Golden Promise Trust after the execution of the Will on 19th May, 2005 as outlined in para. 52 of the 2010 Judgment, underlines her inability to act independently as executrix of the estate of the Testator. The position adopted by the plaintiff at the hearing of the second module was that there is no doubt that the Testator had "a very close connection" with the Golden Promise Trust and she accepted that there is probably a strong possibility that he will turn out legally to have been the settlor thereof. She also stated that it was of no particular or personal interest to her if he was the settlor, although it is a matter of concern for the estate. 7.3 However, I think that misses the point. It is her past professional involvement as solicitor for the Testator and for the multiplicity of corporate vehicles in which the assets of the Golden Promise Trust were vested which gives rise to the professional conflict, coupled with the justified opposition of the defendant, as a major beneficiary of the estate assets, which, in my view, precludes the plaintiff from acting as executor of the Will. That involvement goes way beyond the three examples I have addressed in detail in this judgment. While one can understand that the plaintiff would like to fulfil the task which the Testator reposed in her, I am of the view that it would be impossible for her to steer a non-conflicted passage between the beneficiaries of the estate assets, on the one hand, and the interest of the beneficiaries of the non-estate assets, on the other hand, so as to take all of the steps in the administration, including the protection of the assets, of the estate of the Testator and of the trusts created by the Will that require to be taken by the personal representative. 7.4 If a grant of probate of the Will issued to the plaintiff she would not only be conflicted as to her professional duties as a solicitor, but she would have a conflict of interest. As personal representative, she would hold the assets of the Testator as trustee for the persons by law entitled thereto by virtue of s. 10(3) of the Act of 1965 quoted earlier. In that fiduciary capacity she would be inevitably faced, as regards a myriad of issues, with making a choice between the beneficiaries of the estate assets, on the one hand, and the beneficiaries of the non-estate assets, on the other hand, which, in my view, would amount to what Millett L.J. in Bristol and West BS v. Mathew referred to as a breach of "the actual conflict rule". As Millett L. J. stated, although obiter, (at p. 712), the fiduciary must prove that he made full disclosure of all material facts. The plaintiff, as personal representative of the Testator, would have to make full disclosure of all material facts in relation to the non-estate assets to and for the benefit of the beneficiaries of the estate assets. Having regard to her past professional involvement, it is possible to conclude on the basis of a probative standard that goes way beyond the standard which the defendant has to meet, that the plaintiff could not make full disclosure without breaching her duty of confidentiality to clients for whom she has acted in the past. The Court cannot allow that situation to arise. 7.5 I have no doubt that the conflicted position of the testatrix amounts to "serious special circumstances" in the sense intended by Lynch J. in Dunne v. Heffernan and that the welfare of the beneficiaries of the estate assets would not be protected by the estate of the Testator being administered by her. In the circumstances, I consider that it would be inappropriate to grant probate of the Will to the plaintiff. Therefore, it will be necessary for the court, pursuant to its power under s. 27(4), to appoint some person other than the plaintiff to administer the estate of the Testator. 8. Appointment of Administrator 8.2 Therefore, I have come to the conclusion that the administrator should be a professional person who is wholly independent of the beneficiaries of the estate assets and of the beneficiaries of the non-estate assets. Given the complex issues which are likely to arise in the administration of the estate and, in particular, the fact that the Revenue investigation is ongoing, I have come to the conclusion that the ideal situation would be that the personal representative is an accountant by profession. I do not, however; consider that it would be appropriate to appoint a person who has had any previous professional relationship with either the defendant or her children or a connection with a firm which had such relationship. I propose to adjourn the proceedings for a short period in the hope that the parties can reach agreement on the choice of a suitable person, who is willing to act. 8.3 When an appropriate administrator has been identified, and evidence as to his or her suitability to act as administrator is put before the court, I propose making an order under s. 27(4) of the Act of 1965 granting that person administration of the Testator's estate with the Will annexed. 9. Other Issues 9.2 The defendant's evidence was that after the death of their son, Brian Rhatigan, Junior, who died in April 2003, the defendant and the Testator met in her daughter's house and the plaintiff was also there. The defendant described the purpose of the meeting as being for her "to sign probate of my son's estate". I think the reality is that she was signing a renunciation of her entitlement to a grant of administration intestate. In any event, her evidence was that she asked the Testator why she should sign the document and what he was going to do for her. Her evidence was that his response was that she knew she was going to get "half of everything". The defendant testified that she remembered jokingly saying "Is that half of Europe or half of a slice of cake", at which the Testator winked at her. Her evidence was that the event occurred at a time after the Testator had become ill, but while he could still speak and while they were on friendly terms. Although the defendant stated that the plaintiff was present on that occasion, what is alleged to have happened was not put to the plaintiff. Moreover, the factual case made in the counterclaim on the basis of which it was pleaded that the Testator was constituted a trustee of one half of his estate for the benefit of the defendant was entirely different to the factual basis of the defendant's evidence on the issue. 9.3 While there was some level of ambiguity, the defendant's evidence, as I understand it, was that the occasion about which she testified was the only time when there was a discussion between the defendant and the Testator about how he intended dealing with his affairs. In particular, I consider that there was no evidence to support the argument made by counsel for the defendant in their submissions that agreement was reached between the Testator and the defendant in 1998, at the time of their separation, that she was entitled to half of his assets. Moreover, there is no basis on which one could conclude that, if it occurred, that the exchange outlined in the preceding paragraph gave rise to a trust or an equitable estoppel of the type recognised by the Supreme Court in Doran v. Thompson [1978] I.R. 223. Moreover, as I understand the evidence, the defendant did not act to her detriment as result of what transpired on that occasion. She received her share of the estate of her deceased son and merely renounced her right to a grant of administration. I mention this aspect of the evidence for the purpose of emphasizing that neither the facts pleaded in support of the contention that a trust exists in respect of one half of the Testator's estate for the defendant, nor the evidence given by the defendant in support of that claim, has informed the conclusion I have reached that the plaintiff is professionally conflicted to an extent that she cannot act as executor of the estate of the Testator. 9.4 Further, in the interests of clarity, I would record that the issue which appears on the order of the Master, which was made by consent of the parties, as to whether the defendant's claim to being the beneficiary of half of the estate is barred by operation of s. 9 of the Civil Liability Act 1961, was not addressed at all at the hearing of the second module. 9.5 In the light of the findings made as to her conflicted position, obviously, the plaintiff should resign as trustee of the Will. However, it would be premature at this stage to consider whether it is necessary to appoint trustees of the residuary estate, until the extent of the residuary estate is ascertained. Indeed, the position adopted by the parties was that the court should concentrate on the executorship. Therefore, I propose adjourning the issue of the trusteeship of the Testator's residuary estate for further consideration later, if necessary.
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