O'Malley, Law Society of Ireland v O'Malley

• Jurisdiction: Ireland
• Judgment Date: 01 January 1999
• Date: 01 January 1999
• Docket Number: [S.C. No. 127 of 1997]
• Court: Supreme Court

Law Society of Ireland v. O'Malley

In the matter of Anthony O'Malley, a solicitor and in the matter of the Solicitor Acts 1954 to 1960

Law Society of Ireland

Applicant

and

Anthony O'Malley

Respondent

[S.C. No. 127 of 1997]

Supreme Court

Equity - Equitable assignment - Nature of equitable assignment - Choses in action - Garnishee order - Valuable consideration - Whether possible to assign future chose in action - Whether assignment attached and interest passed.

In June, 1996, the respondent, as plaintiff, settled a personal injuries claim from which he received £20,000. Prior to the settlement, he had instructed his solicitor to write to the claimant's solicitor and undertake to lodge the net proceeds of the action when settlement took place.

The applicant, who was a judgment creditor of the respondent, became aware of the settlement two weeks later and obtained a conditional order of garnishee against the settlement sum. The conditional order was made absolute in the High Court (Johnson J.), and the respondent appealed this decision to the Supreme Court.

The respondent argued that letters written to the claimant by his solicitor constituted a valid equitable assignment of the debt due to him, to the claimant, giving priority to the claimant over the applicant as a judgment creditor.

On appeal by the respondent it was

Held by the Supreme Court (Barrington, Lynch and Barron JJ.) in dismissing the appeal, 1, that it was impossible, even in equity, to assign a chose in action which was not yet in existence: only when the property came into existence could the assignment attach and the interest pass.

Holt v. Heatherfield Trust Limited & Anor. [1942] 1 All E.R. 404;Glegg v. Bromley[1912] 3 K.B. 474 followed.

2. That an assignment which purported to assign a future debt operated only as a contract to assign and that it remained a purely equitable assignment which would be enforceable like any other contract, only if given for value.

Holt v. Heatherfield Trust Limited & Anor. [1942] 1 All E.R. 404 followed.

3. That the mere existence of an antecedent debt did not constitute valuable consideration but forbearance to sue did. However, an equitable assignment of an existing debt did not need valuable consideration.

Holt v. Heatherfield Trust Limited & Anor. [1942] 1 All E.R. 404;Glegg v. Bromley[1912] 3 K.B. 474 followed.

4. That, the letters written to the claimant were not sufficiently specific to constitute either a legal or equitable assignment of the debt due to the respondent.

Holt v. Heatherfield Trust Limited & Anor. [1942] 1 All E.R. 404;Fitzpatrick v. D.A.F. Sales Ltd.[1988] I.R. 464;Byrne v. Allied Irish Banks[1978] I.R. 446 considered.

Cases mentioned in this report:-

Brice v. Bannister [1878] 3 Q.B.D. 569.

Byrne v. Allied Irish Banks [1978] I.R. 446.

Coonan v. O'Connor [1903] 1 I.R. 449.

Earle (G. & T.) Ltd. v. Hemsworth Rural District Council (1928) 140 L.T. 69.

Fitzpatrick v. D.A.F. Sales Ltd. [1988] I.R. 464.

Glegg v. Bromley [1912] 3 K.B. 474.

Holt v. Heatherfield Trust Limited & Anor. [1942] 1 All E.R. 404.

Appeal from the High Court.

The facts have been summarised in the headnote and are set out in the judgments of Lynch and Barron JJ., infra.

The notice of appeal dated the 20th June, 1997, was lodged appealing the ex-tempore judgment of the High Court (Johnson J.) given on the 14th October, 1996, making the conditional order of garnishee, absolute. The matter was heard before the Supreme Court (Barrington, Lynch and Barron JJ.) on the 12th June, 1998.

Cur. adv. vult.

Barrington J. 27th July, 1998

I have read the judgments to be delivered by Lynch and Barron JJ. and I agree with them.

Lynch J.

This is an appeal by the above respondent from an order of the High Court (Johnson J.) made on the 14th October, 1996, whereby it was ordered that the sum of £13,931 paid into court on behalf of one Patrick Joyce and his insurers the General Accident Fire and Life Assurance Corporation plc. ("the garnishee") be withdrawn from deposit with any accrued interest thereon and that the sum of £11,756.28 be paid out to the applicant and that the balance of the said withdrawal be paid to Egan Daughter & Co., Solicitors, Castlebar.

The facts

On the 18th December, 1989, the applicant obtained judgment against the respondent in a High Court matter entitled 1989 No. 25 SA as first above mentioned for costs which were subsequently taxed and certified by a taxing master of the High Court by a certificate dated the 18th February, 1993, in the sum of £3,120.49. On the 4th March, 1991, the applicant obtained a further judgment against the respondent in an action entitled 1991 No. 5 SA as secondly mentioned above for costs which were subsequently taxed and certified by a taxing master of the High Court by a certificate dated the 27th March, 1992, in the sum of £8,635.79.

The two sums taxed and certified as aforesaid total £11,756.28 in respect of which the respondent has made no payments and the said sum accordingly remains wholly unsatisfied. In Circuit Court proceedings in the Western Circuit County of Mayo entitled "Anthony O'Malley v. Patrick Joyce Record No. 79/1996" arising out of a road traffic accident in which the respondent suffered personal injuries, loss and damage, the respondent accepted an offer of settlement of his action against the said Patrick Joyce for the sum of £20,000 and costs on the 25th June, 1996.

By letter dated the 19th June, 1996, the respondent wrote to his solicitors Messrs. Egan Daughter & Co. of Church Street, Castlebar, County Mayo as follows:-

"Re O'Malley v. Joyce

Settlement Talks Galway High Court

Dear Aidan,

Further to my visit to your office of the 17th instant Maureen and I request you to furnish a letter of undertaking to my wife's family solicitor in Galway namely Laurence O'Connor, solicitor, of O'Connor & Co., Upper Salthill, Galway.

Our instructions are an irrevocable authorisation to lodge the net proceeds of above case after deduction of your fees and the usual deductions from the cheque from the...