Fitzhenry v Murphy

• Jurisdiction: Ireland
• Judge: Ms. Justice Eileen Roberts
• Judgment Date: 27 July 2023
• Neutral Citation: [2023] IEHC 468
• Court: High Court
• Docket Number: 2016 No. 3750P

Between

Nicholas Fitzhenry

Plaintiff

and

James Murphy

Defendant

[2023] IEHC 468

2016 No. 3750P

THE HIGH COURT

JUDGMENT of Ms. Justice Eileen Roberts delivered on 27 July 2023

Table of contents

Introduction	1
The factual matters not in controversy	4
The legal principles relevant to establishing an unconscionable bargain/improvident transaction	8
The evidence adduced at the trial by the plaintiff and his witnesses	12
The evidence adduced at the trial by the defendant and his witnesses	21
The solicitors' conveyancing file	34
The evidence of the expert conveyancing solicitors	37
Analysis	40
The orders to be made	48

Introduction

1 . Farming in Ireland is dominated by and built on the tradition of intergenerational family farms. In 2020, of approximately 140,000 farm holdings in Ireland, family farms (operated as family-based enterprises) made up over 96% of those holdings. 1 Intergenerational family farm transfer is an essential aspect of the maintenance and survival of these farms as they

pass from one generation to the next. This case concerns the intergenerational transfer of one such family farm by the plaintiff to his nephew, the defendant

2 . In these proceedings the plaintiff seeks to set aside the deed of transfer he entered into with the defendant on 5 December 2012 (the “ Transfer”) on the grounds that the Transfer is an unconscionable bargain and/or is an improvident transaction. The plaintiff issued these proceedings on 27 April 2016. On 28 April 2016 he applied to register a lis pendens on the lands the subject of the Transfer (the “ Transferred Lands”), which was registered on 3 May 2016 and remains in place. The plaintiff seeks declarations and ancillary orders that he is the full legal and beneficial owner in fee simple of the Transferred Lands and that the defendant be directed to vacate the Transferred Lands and be permanently restrained from trespassing on the Transferred Lands. He also seeks a declaration that the defendant holds on trust for the plaintiff all livestock, machinery, feed and silage which was transferred by the plaintiff to the defendant as well as all income, single farm payments and other monies which the defendant received following the Transfer. Finally, he seeks damages against the defendant for trespass, nuisance, conversion and/or detinue and unjust enrichment. A full defence was filed by the defendant to this claim and the defendant counterclaims for a declaration that he is entitled to the entire beneficial interest in the Transferred Lands and all livestock, machinery, feed and silage transferred to him by the plaintiff. The defendant also seeks to restrain the plaintiff from interfering with the defendant's use and occupation of the Transferred Lands and seeks damages against the plaintiff for nuisance, slander of title and unlawful interference in business relations (although a claim for special damages was not pursued at the hearing).

3 . It is readily apparent that the net issue before this court is whether, in all the circumstances, the Transfer should be set aside by this court as an unconscionable bargain and/or an improvident transaction.

4 . The trial of this matter commenced on 2 May 2023 and ran over a period of six days with the submissions on evidence being heard on 12 May 2023. In total, 12 witnesses gave evidence including two expert witnesses – both independent conveyancing solicitors. The material evidence tendered by witnesses, including the parties themselves, will be addressed in detail in this judgment. There were three parties who had tendered witness statements but who did not give evidence at the trial. There was no agreement that the witness statements of two of those parties be admitted into evidence and accordingly I have not considered those witness statements in determining this matter. By agreement of the parties, the court considered the property valuations of WFC Properties Ltd dated 14 April 2023 tendered on behalf of the plaintiff, although the author Mr Harrington did not give oral evidence.

5 . It is worth highlighting that there is no claim in these proceedings of duress or undue influence (actual or presumed). Neither is there any claim of fraud or deceit nor any plea that the plaintiff lacked mental capacity to enter into legal transactions. Rather, the plaintiff's claim is that he was under a material disadvantage relative to the defendant and that the defendant took inequitable and unconscionable advantage of the plaintiff in the matter of the Transfer, particularly in relation to the plaintiff's anxiety to be relieved of the burden of full time responsibility for the Fitzhenry family farming enterprise. It is pleaded that the Transfer was manifestly improvident on its face and/or manifestly disadvantageous on its face to the plaintiff. 2 It is accepted that the Transfer did not comprise the entirety of the plaintiff's land holding and it is not suggested that the plaintiff was left impoverished as a result of the Transfer. It is also pleaded that the defendant did not honour the representations he made and/or the assurances he had given to the plaintiff as to how the defendant would deal with the lands and with the plaintiff if the plaintiff transferred the farm to the defendant.

6 . Another aspect of this dispute which is worth highlighting at this point is that the plaintiff is also engaged in litigation with the solicitors who were instructed in relation to the Transfer. The solicitor who dealt with the matter in that firm has, by coincidence, the same name as the defendant. A different firm of solicitors are on record for the plaintiff in those legal proceedings which are ongoing. The court did not have sight of the pleadings in those proceedings. The court had the benefit of the solicitors' conveyancing file but the solicitor who advised in relation to the Transfer not did give evidence at the trial. This was less than ideal in circumstances where much of the plaintiff's claim revolves around the allegedly inadequate legal advice he received in relation to the Transfer. The conveyancing file contained attendance notes and other documentation which was commented upon by independent expert conveyancing solicitors and in respect of which the parties suggested differing interpretations or conclusions to the court. Ultimately, I have had to draw some conclusions on this material based on the conveyancing file itself and the evidence tendered by the parties. There is however no substitute for the far more reliable evidence that would usually be obtainable from the author of a document, and I am conscious that the question of the negligence or otherwise of the solicitor concerned is not a matter before this court in these proceedings. In those circumstances, this court must be careful regarding inferences it draws in the absence of evidence from the solicitor concerned.

7 . It is also worth noting that there was a significant time gap of over ten years between the date of the Transfer and the date of the trial. One of the main reasons is that these proceedings did not issue until 2016, almost four years following the Transfer. The plaintiff is now 86 years old. All the evidence tendered by the factual witnesses addressed matters arising some considerable time ago and there was in most cases little documentation to substantiate or assist their recollections. What documentation was available on the solicitors' conveyancing file was subject to the constraints outlined above. In addition, this is a family dispute which brings its own challenges in terms of testimony and relationships. A number of the witnesses, or proposed witnesses, were family members or neighbours who knew the parties and would, I believe, have preferred not to be involved in these proceedings. Despite those challenges, the court notes and commends the respectful attitude displayed by the witnesses and the parties towards each other at the trial.

8 . Because the parties did not engage a stenographer for the trial (also less than ideal from the court's perspective), there is no transcript of the evidence. I have therefore, where relevant, identified key evidence by reference to the timing of the exchanges in court, footnoted by reference to the digital audio recording (“ DAR”) of the court hearing.

The factual matters not in controversy

9 . The following matters are not in controversy. It is useful to outline them in some detail as they form an important backdrop to the relationship between the parties and the circumstances of the Transfer. This judgment will later focus on the factual matters that are disputed and I will consider them in some detail by reference to the evidence adduced at the trial and the relevant legal principles. The matters which are agreed are as follows:

• — The plaintiff is a farmer. At the date of the Transfer he was 75 years old. The plaintiff is a lifelong bachelor who has lived on his own on the Fitzhenry family farm for all of his adult life. He has no dependents.

• — The plaintiff is one of nine siblings (two of whom died in infancy). The plaintiff is the third eldest of those nine siblings. Of the seven siblings who survived, four are still alive.

• — The plaintiff attended national school but did not attend secondary school. He left school when he was 12 years old to work on the family farm. The plaintiff has no further formal education beyond national school and did not sit any State examinations. There is a dispute regarding the level of the plaintiff's literacy and numeracy and his ability to understand documentation, which I will deal with later.

• — A number of the plaintiff's siblings live locally to the plaintiff (including the defendant's family). Other siblings live or lived abroad. The plaintiff has a large extended family. He has 20 nephews and nieces...