Lynch v Burke

• Jurisdiction: Ireland
• Judgment Date: 16 January 1990
• Date: 16 January 1990
• Docket Number: [1986 No.3013P]
• Court: High Court

Lynch v. Burke

Mary Lynch

Plaintiff

and

Moira Burke and Allied Irish Banks p.l.c.

Defendants

[1986 No.3013P]

High Court

Succession - Gift - Joint deposit account - Right of survivorship - Resulting trust - Presumption - Rebuttal - Testamentary purpose - Claim by plaintiff as residuary legatee - Deposits by deceased into joint account in name of deceased and first defendant - Deposit book indorsed as payable to the deceased only or survivor - Deceased retained book until death - Deceased made will bequeathing all her property to plaintiff prior to opening account - Whether intention to benefit first defendant - Whether intention to exclude plaintiff's claim to account - Whether presumption of resulting trust rebutted - Whether deceased stood in loco parentis to first defendant - Whether deceased's purpose was testamentary - Whether invalid testamentary disposition - Wills Act, 1837 (7 Will. 4 & 1 Vict., c.26).

The plaintiff was the executrix and universal legatee of F. McF., deceased. In 1983 a deposit account was opened by the deceased in the joint names of herself and the first defendant, her niece, at a branch of the second defendant. All lodgements were made by the deceased out of her own monies and no withdrawals were made. The deposit book had been indorsed "Payable to Frances McFadden only or survivor" and the book was retained in the deceased's possession until she died. The first defendant had understood when she had signed the form at the bank that if the deceased died she would get the money. The deceased had made her last will two months before opening the joint account with the first defendant bequeathing to the plaintiff all the property she might die possessed of or entitled to.

The plaintiff submitted that the transaction was an attempt to make a postponed gift which was in reality testamentary in character and was therefore invalid.

Held by O'Hanlon J., in giving judgement in favour of the plaintiff, 1, that where money was deposited in a joint account by a deceased there was an equitable presumption of a resulting trust against the survivor in favour of the estate of the deceased in respect of the beneficial interest in the monies remaining on deposit at the time of death.

2. That the deceased had intended when opening the account in joint names that the first defendant would be entitled by right of survivorship to the beneficial interest in any monies standing to the credit of the account at the time of the death of the deceased and the equitable presumption of a resulting trust in favour of the estate of the deceased was thereby rebutted.

3. That the opening of the joint account two months after the deceased had made her last will had been intended to exclude any claim by the plaintiff to monies remaining on deposit in the account at the time of her death as part of the estate of the deceased.

4. That the deceased intended to retain control over the account during her lifetime to the extent that no withdrawals could be made from it save on her own application and consequently the transaction was an invalid gift and an unsuccessful attempt to make a testamentary disposition otherwise than by will.

Owens v. Greene and Freeley v. Greene[1932] I.R. 225 applied. Russell v. Scott (1936) 55 C.L.R. 440 considered.

Quaere: Whether having regard to the strong and uniform current of authority in other jurisdictions disputing the correctness of Owens v. Greene and Freely v. Greene[1932] I.R. 225 the Supreme Court might be disposed to review the correctness of that decision.

Cases mentioned in this report:—

Beecher v. Major (1865) 2 Drew. & Sm. 431; 62 E.R. 684; 6 New Rep. 370; 13 L.T. 54: 13 W.R. 1054.

Diver v. McCrea (1908) 42 I.L.T.R. 249.

Re Figgis Deceased [1969] 1 Ch. 123; [1968] 2 W.L.R. 1173; [1968] 1 All E.R. 999; (1968) 112 S.J. 156.

Marshal v. Crutwell (1875) L.R. 20 Eq. 328; 44 L.J. Ch. 504; 39 J.P. 775.

McEvoy v. Belfast Banking Co. [1935] A.C. 24; [1834] N.I. 67; (1933) 68 I.L.T.R. 3; [1934] All E.R. Rep. 800; (1934) 103 L.J.P.C. 137; 151 L.T. 501; 40 Com. Cas. 1.

O'Flaherty v. Browne [1907] 2 I.R. 416.

Owens v. Greene and Freeley v. Greene [1932] I.R. 225; (1932) 67 I.L.T.R. 161.

Re Pattinson Deceased, Graham v. Pattinson (1885) 1 T.L.R. 216.

Re Reid (1921) 64 D.L.R. 598; 50 O.L.R. 595.

Russell v. Scott (1936) 55 C.L.R. 440; (1936) 36 S.R. N.S.W. 454; 53 N.S.W.W. N. 178

Standing v. Bowring (1885) 31 Ch. D. 282; 55 L.J. Ch. 218; 54 L.T. 191; 34 W.R. 204; 2 T.L.R. 202.

Young v. Sealey [1949] Ch. 278; [1949] 1 All E.R. 92; [1949] L.J.R. 529; (1948) 93 S.J. 58.

Plenary Summons.

By plenary summons issued on the 26th March, 1986, the plaintiff commenced proceedings claiming:—

• (a) an order declaring monies amounting to £42,292.15 on the 10th January, 1989, standing to the credit of a joint deposit account at the branch of the second defendant in Falcarragh in the names of the deceased and the first defendant were the property of the plaintiff as executrix and universal legatee of the deceased.

• (b) an order declaring that the interest (if any) of the first defendant in the said monies was held on trust for the plaintiff as executrix or universal legatee.

• (c) an order directing the second defendant to pay the said monies to the plaintiff as such executrix and universal legatee.

• (d) an order restraining the second defendant from paying the said monies to or to the order of the first defendant.

• (e) an order requiring the defendants and each of them to execute such documents and instruments and to do all such things as might be necessary or requisite to secure the payment of the said monies to the plaintiff as executor and universal legatee.

The first defendant entered an appearance on 30th May, 1986, and the second defendant entered an appearance on the 27th June, 1986. The statement of claim was filed on the 25th August, 1986. On the 16th January, 1989, the High Court (Blayney J.) made an order appointing the plaintiff to represent the estate of the deceased for all purposes of the action pursuant to O. 15, r. 37 of the Rules of the Superior Courts, 1986.

The facts have been summarised in the headnote and are fully set out in the judgement of O'Hanlon J., infra.

The action was heard by the High Court (O'Hanlon J.) on the 10th October, 1989.

Cur adv. vult.

O'Hanlon J.

The plaintiff is executrix and universal legatee of Frances McFadden, deceased, who died on or about the 10th January, 1986, and the first defendant is a niece of the said deceased.

The action concerns the entitlement to monies in a deposit account at the Falcarragh, County Donegal branch of the second defendant which was opened on or about the 28th September, 1983, in the joint names of the said Frances McFadden and the first defendant. A sum of £29,401.72 was lodged to the credit of the said account by Frances McFadden when it was opened and by the addition of further lodgements made from time to time by the said Frances McFadden and accumulated interest, the amount to credit of the account had risen to £42,292.15 by the date of death of the said Frances McFadden. With the addition of further interest which has accrued since the said date, the figure has now risen to a sum of £53,364 and upwards. All lodgements to the account were made by Frances McFadden out of her own monies and no withdrawals were made from it at any time.

The deposit book was indorsed as follows (presumably in accordance with instructions given by Frances McFadden at the time of opening of the said account): "Payable to Frances McFadden only or survivor" - the word "only" being underlined, and the book was retained in her possession until she died. Mrs. Pauline McGarvey of the second defendant bank identified the handwriting on the first page of the deposit book as her own, but could not remember what was said when the account was opened. She confirmed that she must have underlined the word "only" in the indorsement on that page and concluded that she had done so because the instructions as to payment out were so unusual. She gave evidence of other deposit accounts opened by Frances McFadden and the names of other relatives, where the indorsement concerning payment read "either or survivor".Withdrawals had been made by Frances McFadden from these earlier accounts.

All the families concerned in the case originated in the Gweedore area of County Donegal. Frances McFadden emigrated to Scotland on leaving school and worked as a cook in Glasgow for most of her life. She married, but there were no children of the marriage, and after the death of her husband she returned to live in Derrybeg, County Donegal, for a short period before she died.

Una Friel, mother of the first defendant, Moira Burke, was a sister of Frances McFadden. She married and lived on for a time in Donegal, but after the death by drowning of her first husband, Jack Gallagher, she married again, lived for about two years in Falcarragh, and then moved initially to the North of England, and later to Glasgow.

Moira Burke, the first defendant, went to Scotland in 1961 when she was 17, followed three weeks later by her sister, Nuala, and the two sisters lived for about two years with their aunt, Frances McFadden, until their mother and stepfather moved to Glasgow, when the family was re-united. Moira married in 1965, but her marriage broke up in...