Lynch v Burke

• Jurisdiction: Ireland
• Judge: O'Flaherty J.
• Judgment Date: 01 January 1996
• Neutral Citation: [1995] IESC 2
• Docket Number: (81/86–90),[S.C. Nos. 81 and 86 of 1990]
• Court: Supreme Court
• Date: 01 January 1996

[1995] IESC 2

THE SUPREME COURT

Hamilton C.J.

O'Flaherty J.

Egan J.

Blayney J.

Denham J.

(81/86–90)

LYNCH v. BURKE

BETWEEN

MARY LYNCH

Plaintiff/Respondent

AND

MOIRA BURKE AND ALLIED IRISH BANKS PLC

Defendant/Appellant

Citations:

LYNCH V BURKE 1990 1 IR 1

OWENS V GREENE 1932 IR 225

FREELEY V GREENE 1932 IR 225

GASON V RICH 19 LR (IRL) 391

O'FLAHERTY V BROWNE 1907 2 IR 416

MCEVOY V BELFAST BANKING CO 1935 AC 24

RUSSELL V SCOTT 1936 55 CLR 440

STANDING V BOWRING 1886 LR CH D 282

SUCCESSION ACT 1965 PART VIII

HAY V O'GRADY 1992 1 IR 210

RYANS CAR HIRE V AG 1965 IR 642

MOGUL OF IRELAND V TIPPERARY (NR) CC 1976 IR 260

FINUCANE V MCMAHON 1990 1 IR 165

Synopsis:

BANKER

Deposit

Terms - Joint names - Depositor - Death - Rights of survivor - Moneys payable to donor only or survivor - Donor retained control during her lifetime - Donee survived donor - Donee acquired vested right subject to survivorship - Absence of purported testamentary disposition by donor - Trusts not created to defeat intention of donors - (81,86/90 - Supreme Court - 7/11/95)

|Lynch v. Burke|

GIFT

Money

Bank - Deposit - Receipt - Terms - Joint names of donor and donee - Moneys payable to donor only or survivor - Donor retained control during her lifetime - Donee survived donor - Donee acquired vested right subject to survivorship - Absence of purported testamentary disposition by donor - Trusts not created to defeat intention of donors - (81,86/90 - Supreme Court - 7/11/95)

|Lynch v. Burke|

PERSONAL PROPERTY

Gift

Money - Deposit receipt - Joint names - Aunt and niece - Donee party to contract with bank - Moneys payable to donor "only or survivor" - Donor retained control during her lifetime - Donee survived testatrix - Donee acquired vested right subject to survivorship - Absence of purported testamentary disposition by donor - Trusts not created to defeat intention of donors - Succession Act, 1965, s. 76 - (81,86/90 - Supreme Court - 7/11/95)

|Lynch v. Burke|

TRUSTS

Creation

Necessity - Absence - Gift - Moneys - Bank deposit in joint names of donor and donee - Rights of survivor - Moneys payable to donor "only or survivor" - Donor retained control during her lifetime - Donee survived donor - Donee acquired vested right subject to survivorship - Absence of purported testamentary disposition by donor - Trusts not created to defeat intention of donors - (81,86/90 - Supreme Court - 7/11/95)1995 2 I.R. 159 1996 1 ILRM 114

|Lynch v. Burke|

1 7th day of November, 1995 by O'Flaherty J.

O'Flaherty J.

2 This is an appeal brought by Moira Burke from the judgment and order of the High Court (O'Hanlon J.) of the 16th January, 1990, [1990] 1 I.R. 1,granting the plaintiff declarations in her favour in respect of monies held on a deposit account with AIB Bank plc in the joint names of Frances McFadden, deceased, and her niece, the first named defendant Moira Burke.

3 Frances McFadden, a widow, died on the 10th January, 1986. She had made her last will on the 20th July, 1983, whereby she gave all the property of which she died possessed of or entitled to to her sister, Mary Lynch, the plaintiff; as well she appointed her sole executrix.

4 Moira Burke had a sad life. She lost her father when young. Her mother re-married. She migrated to Glasgow in 1971 when she was 17 and stayed for about two years with her aunt, Frances McFadden. She married in 1975 but the marriage broke up in 1976. After the marriage break-up, the husband ceased to make maintenance payments after some short time and, during these hard times, it appears that Frances McFadden had been generous to her..

5 In September, 1983 Frances McFadden (who at that time had returned to live in County Donegal) visited Moira Burke in Glasgow and told her that she wanted to put her name into a joint account with a bank in Falcarragh, Co. Donegal. On the 28th September, 1983, a deposit account was opened with the Falcarragh branch of the AIB Bank in the joint names of Frances McFadden and Moira Burke. A sum of £29,401.72 was lodged to the credit of the account by Frances McFadden and, thereafter, there were further lodgments made from time to time by Frances McFadden. At the date of trial the amount standing to the credit of the account was £53,364. At the hearing of the appeal we were told that the amount had now risen to about £65,000, including accumulated interest.

6 The deposit book was endorsed by the bank official as follows: "Payable to Frances McFadden only or survivor". The word "only" was underlined. Moira Burke's address in Glasgow was inserted beneath Frances McFadden's name though, as already stated, Mrs. McFadden lived in Co. Donegal at this time.

7 The learned trial judge said that he was satisfied that Frances McFadden, when opening the account in the joint names, intended that her niece, Moira Burke, should be entitled to the beneficial interest in any monies standing to the credit of the account on Frances McFadden's death, should she pre-decease her niece. He was further satisfied that Frances McFadden intended to retain control over the account during her lifetime to the extent that no withdrawals could be made from it save only on her application.

8 The judge also attached some significance to the fact that Frances McFadden, two months before she opened the joint deposit account, had made her last will and he was of the opinion that the opening of the joint deposit account was intended to exclude any claim by the plaintiff to those monies remaining on deposit in the account at the time of her death.

9 Notwithstanding these findings, the judge felt constrained on the authority of the decision of the then Supreme Court in Owens .v. Greene and Freeley .v. Greene [1932] IR 225 to hold that Moira Burke was not entitled by survivorship to these monies.

10 The question for resolution on this appeal is whether that result can be upheld as one that is justified in law or equity?

11 The first inquiry to make is to find out the legal effect of the opening of the deposit account in the joint names. Thereby, the bank undoubtedly became a debtor to Frances McFadden in the amount lodged. The bank and Frances McFadden contracted that only Frances McFadden could make withdrawals from the account but that on her death Moira Burke would be entitled to the monies standing to the credit of the account on that date. By her presence (she had journeyed especially from Glasgow to Falcarragh for the occasion, at Mrs. McFadden's request) and signature it is manifest that Moira Burke was a party to this contract from the outset. It is agreed on all sides that if the bank had paid over the monies then in the account to Moira Burke on Frances McFadden's death it could incur no liability to the estate of the deceased. However, it is contended for the plaintiff that in that situation Moira Burke would have to account to the estate for the monies so received. The monies on deposit with the bank represent a debt or chose in action. Since Frances McFadden and Moira Burke contracted jointly with the bank it would seem right that the bank should be liable to both - in accordance with the terms of the contract. There was sufficient mutuality of interest between Frances McFadden and Moira Burke to justify this assessment of the legal situation.

12 Mr. McCann's essential submission before us is to leave aside any question of contract and instead submit that what we are concerned with is that this chose in action or debt could not be gifted to Moira Burke except by a declaration of trust, a completed gift or by will.

13 He says that there has been no declaration of trust and he says that what we have here is an imperfect or incomplete transaction. Equity, it has been said, will not come to the aid of a volunteer to perfect an imperfect gift.

14 In this regard, we do well to recall something that Barry L.J. said in the case of Gason .v. Rich 19 L.R. (Ireland) 391 at 402, a case relied upon as one which, together with O'Flaherty .v. Browne [1907] 2 I.R. 416, is said to provide a basis for the decision in Owens .v. Greene -

"This question as to what does, or does not, constitute a complete voluntary gift of property so as to be supported in a Court of Equity has been the subject of discussion over and over again almost for a century, and the decisions upon it are very numerous, and not very easy to reconcile with each other, and it is difficult to extract any principle from them. It is impossible not to feel that legal ingenuity is far oftener exercised in defeating the...