B (E) v S (S) & McC (G)

• Jurisdiction: Ireland
• Judge: BARRON J.,Keane J.
• Judgment Date: 10 February 1998
• Neutral Citation: [1998] IESC 68
• Date: 10 February 1998
• Court: Supreme Court
• Docket Number: [1994 No. 139 Sp.; S.C. No. 261 of 1996]

[1998] IESC 68

THE SUPREME COURT

Keane J.,

Lynch J.,

Barron J.

B (E) v. S (S) & McC (G)

In the matter of the estate of L.B.

And in the matter of the Succession Act 1965

And in the matter of an application by E.B.

BETWEEN:

E.B.

Plaintiff/Appellant

and

S.S. & G.McC.

Defendants/Respondents

1 JUDGMENT delivered the 10th day of February 1998by Keane J.

2 The facts in this case are not significantly in dispute and may be shortly stated.

3 The plaintiff's father built up a successful business, called BMB Limited, from what appears to have been a relatively modest foundation. At the date of his death in 1985, he owned 56% of the shares in the company, to which his widow, the plaintiff's mother and the testatrix in this case, then became entitled. There were four children of the marriage, the plaintiff, who at, the date of the trial in the High Court [1995] was aged forty, and his three sisters,SS, GMcC and M who are older then him and who ,at the date of the trial, were in their mid forties.

4 All four children went to secondary school. The plaintiff left at the age of eighteen having achieved two honours in his leaving certificate. He went on to university to study commerce, but dropped out in his first year. He worked at various jobs between 1974 and 1983, initially in his father's business, and during that time also lived in London for a while and in the Netherlands. In 1983, with his father's financial assistance, he returned to university and achieved a BA (Mod), a pass degree, in German and History from Trinity College.

5 The plaintiff developed a major problem with drink and drugs in the mid 1980s. His alcoholism became extremely serious in 1987 and in the years 1991/1993 he received treatment in St. John of God's Hospital, The Rutland Centre and Cluain Mhuire. His evidence at the trial was that, since his discharge from Cluain Mhuire in 1993, he had not taken alcohol or drugs.

6 The plaintiff married in 1988. His wife does not work. They have three children, two girls and a boy, who, at the date of the trial, were aged twelve, ten and eight respectively. They were all attending non fee paying schools. Theylive in a house which was given to him and his sister M by their father and which is worth approximately £120,000.

7 The plaintiff's sisters SS and G McC, who are the defendants in these proceedings, are both married, have families and are comfortably off. So too is his sister M, who is unmarried.

8 In the year 1987 the plaintiff's mother (hereafter "the testatrix") instructed a solicitor, Mr. Michael Halpenny, to draft a will for her. She described the plaintiff to Mr. Halpenny as "happy go lucky", a "ne'er do well" and "still a student at thirty two years of age". At that time, her assets consisted of a house, an apartment, money in the bank and stocks and shares, including, of course, the shares in BMB Limited. Her total assets appear to have been in excess of £1 million. She made it clear to Mr. Halpenny that she wished to treat all her children equally and to make substantial provision for them in her life time. She decided to do this by transferring all her shares in BMB Limited to them. Since the husband of SS already owned 100 shares in the company, this was achieved by transferring 66 shares to SS and 166 shares each to the remaining three children, including the plaintiff. The plaintiff's shares, after payment of gift tax, realised a sum of approximately£275,000.

9 On the 5th October 1988, the testatrix again saw Mr. Halpenny and told him that she wished to make a new will. She had decided to leave the residue of her property, after some relatively small legacies to her children and grandchildren, to a number of charities. She told her solicitor that she was taking this course, because of the ample provision she had already made for each of the children in her life time. Mr. Halpenny suggested to her that "charity begins at home", but she remained adamant and reiterated her view that the plaintiff was "an eternal student".

10 The plaintiff unhappily dissipated the sum of £275,000 within a relatively short time. It had all gone by the year 1992.

11 On 20th March 1992, the testatrix called to Mr. Halpenny again and said that she wished to make a new will. The changes were, however, minor. She was insistent that the charities were still to be the beneficiaries. She also told Mr. Halpenny on that occasion that the plaintiff was an alcoholic and was having marital problems. It is accepted that she was aware of the fact that he had squandered the money he had been given and was in relatively straitened circumstances.

12 The testatrix died on the 9th December 1992. The terms of her will have already been summarised: she gave legacies of £5000 to each of her grandchildren (of whom there were ten at the date of her death) and a nebuliser to the plaintiff. She left the residue of her estate to the following named charities:

13 (a) The Simon Community;

14 (b) The Cancer Research Fund of St. Luke's Hospital, Rathgar;

15 (c) The Society of St. Vincent de Paul;

16 (d) Concern;

17 (e) Goal.

18 The gross value of the estate as shown in the Inland Revenue Affidavit was £335,027.30 while the nett value was £302,499.78.

19 The plaintiff at the time of the trial was unemployed and in receipt of social welfare assistance of approximately £135 per week. He has no savings and no assets, other than the half share in the house to which I have already referred.

20 The present proceedings have been instituted by the plaintiff under S.117 of the Succession Act 1965(hereafter "the 1965 Act"), claiming a declaration thatthetestatrix had failed in her moral duty to make proper provision for the plaintiff in accordance with her means by her will or otherwise, having regard to all the circumstances of the case. He further claimed an order making such provision for the plaintiff as seemed to the High Court to be just. SS and G McC, who had been named as the executrices in the will, were joined as the defendants.

21 At the trial before Lavan J., the plaintiff, Mr. Halpenny and G McC gave evidence. While counsel on behalf of the executrices resisted the claim under s117, it was made clear that they would have no personal objection to provision being made for their brother out of the estate. It would appear that the named charities were also consulted and indicated that they would abide by whatever order the court made.

22 It was agreed in the High Court that the first issue which had to be determined was whether the testatrix had failed in her moral duty to make proper provision for the plaintiff in accordance with her means, whether by her will or otherwise. If that issue was resolved against the plaintiff, it would follow, of course, that the court would not be concerned with the extent of any provision that should be made for him. In a reserved judgment, Lavan J. concluded that the plaintiff had not established that the testatrix had failed in her moral dutytomake proper provision for him and dismissed the claim under s. 117 (1). From that decision, the plaintiff now appeals to this court.

SUBMISSIONS OF THE PARTIES

23 On behalf of the plaintiff, Mr. Finnegan S.C. submitted that, in determining whether the testatrix had failed in her moral duty to make proper provision for the plaintiff, the court had to sit "in the testatrix's chair" on the eve of her death, to use the language of Kenny J. in F.M -v- T.A.M. 106 ILTR 82. While he accepted that subsection (2) was primarily directed towards the extent of the provision that should be made once it had been established that the testatrix had failed in her moral duty, he submitted that its language was also relevant in determining whether the testatrix had so failed. The court was, accordingly, required to consider the first issue from the point of view of "a prudent and just parent", taking into account the position of the child whose provision was in issue and all the circumstances of the case. This was an objective test, he said, and the fact that the testatrix might genuinely have thought that she had made appropriate provision for the plaintiff was not a relevant consideration.

24 Mr. Finnegan submitted that, while it was not disputed that the testatrix had made generous provision for the plaintiff by the transfer of shares in 1987, itwas also clear that she was aware, at the time she made her will in 1992, that all that money had been squandered and that the plaintiff was in ???eletivel, R.K.??? straitened circumstances. She was also aware that his problems were due in significant measure to his alcoholism and drug addiction. Since that situation remained unchanged at the date of her death, Mr. Finnegan urged, a just and prudent parent would have made at least some provision, even of a relatively small nature, for him in her will. The understandable fear that might have been felt by the testatrix that this money would also be dissipated could have been met by vesting the funds in trustees who could advance sums to the plaintiff at their discretion. He submitted that the testatrix having failed so to provide, the High Court could authorise the establishment of such a discretionary trust, citing in support the decision of Costello J., as he then was, in FFHL -v- Bank ofIreland [1978] ILRM 160.

25 Mr. Finnegan submitted that the critical factor in applications under S117 was the need of the applicant child. Where, as here, a need was established beyond any doubt, the only remaining question was as to whether the testatrix had discharged her moral duty to meet that need, having regard to her own means. In this case, he submitted, it was clear that she had not.

26 On behalf of the defendants, Mr. Paul O"Higgins S.C. submitted that S117 (1) did not create a moral duty which rested on parents to make proper provision for their children in accordance with the parent's means: it recognised...