E. and F. v G. and H

• Jurisdiction: Ireland
• Judge: Ms Justice Máire Whelan
• Judgment Date: 13 April 2021
• Neutral Citation: [2021] IECA 108
• Date: 13 April 2021
• Docket Number: Court of Appeal Record No. 2020/129
• Court: Court of Appeal (Ireland)

In the Matter of the Powers of Attorney Act 1996, and in the Matter of an Instrument Creating an Enduring Power of Attorney Executed by a Donor on the 6th Day of August 2008

Between:

E. and F.

Applicants / Respondents

and

G. and H.

Respondents / Appellants

[2021] IECA 108

Edwards J.

Whelan J.

Ní Raifeartaigh J.

Court of Appeal Record No. 2020/129

THE COURT OF APPEAL

Costs – Discretion – Order 99, RSC 1986 – Appellants appealing against an order directing them to pay 6/7ths of the respondents’ costs – Whether costs should follow the event

Facts: The appellants, by notice of appeal dated 5 June 2020, appealed to the Court of Appeal against an order made by the High Court (Humphreys J) on 12 May 2020 directing the appellants to pay 6/7ths of the respondents’ costs. The substantive part of the order registered an enduring power of attorney (EPA) created by the mother of all the parties to the application, pursuant to the Powers of Attorney Act 1996 and made directions pursuant to the 1996 Act in relation to the performance of the attorneys’ powers. No appeal had been brought against the substantive part of the order. The appellants contended that the trial judge erred in fact and in law in: (i) determining that the costs of the proceedings should be approached on the basis of the general rule that costs follow the event; (ii) determining that, by virtue of s. 169 of the Legal Services Regulation Act 2015, the courts’ previous recognition that the general rule was not appropriate in certain types of cases had been superseded and courts should not recognise any new categories of action to which special rules in relation to costs should apply; (iii) determining that, as a matter of principle, special rules in relation to costs should not apply where an objection is raised in relation to the suitability of attorneys seeking registration of an EPA under the 1996 Act; (iv) determining that the objections raised by the appellants were not reasonable and bona fide; (v) concluding that the “Calderbank” letter (Calderbank v Calderbank [1975] 3 W.L.R. 586) militated in favour of an award of costs in favour of the respondents; and, (vi) determining that the appellants ought to have raised their concerns by way of an application for directions rather than by way of a challenge to the registration of the EPA and that the court could have disposed of any such application within one hour as opposed to the approximately seven hours which the hearing in fact took.

Held by Whelan J that the trial judge was well within the bounds of his discretion in choosing one-seventh of the costs as the appropriate fraction representing the time the hearing would have taken if the appellants had confined themselves to the issue of directions; he clearly identified his reasoning and the basis on which he exercised his discretion pursuant to O. 99, r. 2(1) of the Rules of the Superior Courts (recast) and the 2015 Act.

Whelan J held that the appeal would be dismissed. In her view the proper allocation of costs in respect of the appeal should be that the appellants pay one half of the respondents’ costs in respect of the appeal when same are ascertained.

Appeal dismissed.

UNAPPROVED

REDACTED

Judgment of Ms Justice Máire Whelan delivered on the 13th day of April 2021

Introduction

1 . This is an appeal against an order made by the High Court (Humphreys J.) on 12 May 2020 directing the appellants to pay 6/7ths of the respondents' costs. The substantive part of the order registered an enduring power of attorney (“ EPA”) created by the mother of all the parties to the application (hereinafter “the donor”), pursuant to the Powers of Attorney Act 1996 (“the 1996 Act”) and made directions pursuant to the 1996 Act in relation to the performance of the attorneys' powers. No appeal has been brought against the substantive part of the order.

Background

2 . On 6 August 2008 the donor executed an instrument creating an EPA and appointing two of her five children, the respondents E. and F., to act as her attorneys should she thereafter become mentally incapacitated. Her other three children, G., H. (the appellants) and D. were notice parties to the execution of the instrument.

3 . In or around 2010 the donor began displaying signs of Alzheimer's dementia. She continued to live independently, in close proximity to her son, the first respondent, E., until she suffered a stroke in March 2012, following which she went to reside with E. and his wife. She has resided in a nursing home since May 2019.

Application to register enduring power of attorney

4 . Following a deterioration in the donor's mental condition, on 17 May 2019 E. and F. issued a notice of intention to apply to register the EPA pursuant to the 1996 Act.

5 . On 16 July 2019 G. issued a notice of objection to registration on the grounds that E. and F. were each unsuitable to be the donor's attorneys. Thereafter a similar notice of objection was issued by H. on 30 July 2019.

6 . G., in an affidavit sworn on 17 July 2019, disputed the suitability of E. to act as attorney on the basis that he had deprived the donor of access to assets that “should at all times have been preserved and rendered available for her benefit and welfare”. He outlined that in 2017 E. sold shares in Glanbia owned by the donor and applied the proceeds thereof to developing two apartments on a property beneficially owned by E. (hereinafter “the Farmhouse”) over which the donor had a life interest. G. expressed his doubts as to the donor's capacity as of 2016/2017 to understand the nature and purpose of the transaction for investment in renovating the Farmhouse and he asserted that the donor was not independently advised in relation to the matter. G. sought an order refusing the application to register and a further order to recover the benefit of the equivalent value of the shares that were encashed by E. for the donor.

7 . G. objected to the suitability of the second respondent, his sister, F., to act as attorney on the basis that she was not resident within the State and may have been too distant from the 2016 share sale transaction to detect it and not aware of the surrounding events.

8 . In an affidavit of 30 July 2019, H., supporting opposition to registration on grounds of unsuitability of both attorneys, deposed as to his surprise over lack of consultation with him about the donor's move to a nursing home in May 2019 in circumstances where he and his wife provided regular care to her and were willing to accommodate her in their home and become her primary carers. He asserted in para. 4 that the decision to sell her Glanbia shares and invest the proceeds in renovating the Farmhouse to provide respite accommodation for her was “a poor decision” in light of her subsequent move to a nursing home. He believed that E. should account to the donor for the share sale proceeds expended on the redevelopment in circumstances where same could provide for the donor's ongoing care. He asserted that the donor could not and did not authorise the sale of the shares.

9 . By notice of motion dated 22 October 2019, the respondents applied to the High Court for, inter alia, an order pursuant to s. 10 of the 1996 Act registering the EPA. The application was grounded on the affidavits of the respondents, of 14 August 2019 and 15 August 2019, respectively, and their solicitor of 22 October 2019.

10 . In his replying affidavit of 14 August 2019, E. responded to the appellants' criticisms of the sale of the Glanbia shares and investment of the proceeds in developing the Farmhouse. He explained in paras. 4 and 5 that he and the donor inherited the Farmhouse from his late father. In January 2000 the donor transferred her interest in the property to him, reserving to herself an exclusive right of residence in the house. He also deposed that he had refused a previous offer by the donor to transfer her Glanbia shares to him in 2000.

11 . E. further deposed that prior to the sale he consulted with each of his siblings, save G. whom, he averred, had not shown much interest in the donor's care. He averred that he expended €50,000 of his own money in the development of the Farmhouse into two apartments; one of which was intended for use as a respite location for the donor, the other to be rented to provide a stream of revenue for her living and care expenses. He averred that all income from the property was used for the donor's expenses and same continued after she moved to the nursing home. He and his wife kept a clear record of the donor's financial interests.

12 . In her affidavit of 15 August 2019, the second respondent, F., confirmed that she had supported E.'s decision at the time regarding the sale of their mother's Glanbia shares and the investment of the proceeds to provide a respite location for her.

Invitation to mediation

13 . On 4 November 2019 the application came before the President of the High Court. He encouraged the parties to consider resolving the issues by way of mediation rather than proceeding to a full plenary hearing. Both the appellants and the respondents expressed a willingness to partake in mediation.

14 . By letter dated 12 November 2019, solicitors for the respondents wrote to G. and H. seeking to progress mediation. G. introduced a precondition which rendered a mediation process substantially futile.

Open proposal to resolve

15 . The appellants' solicitors in open correspondence dated 22 January 2020 advised that their clients were prepared to meet for discussions “to see if an acceptable solution can be found within the family”. The minimum terms on which their clients would meet were as follows:

“1. That [E.] withdraws as a nominee for appointment as his mother's Attorney to be replaced by either [H.] or [G.], with [F.] continuing as Joint Attorney.

2. That the value of Glanbia shares be recovered to your mother's...