McNamara v McCann
| Jurisdiction | Ireland |
| Judge | Mr. Justice Binchy |
| Judgment Date | 21 July 2016 |
| Neutral Citation | [2016] IEHC 443 |
| Docket Number | [2015 No. 55 CA] |
| Court | High Court |
| Date | 21 July 2016 |
DUBLIN CIRCUIT
COUNTY OF THE CITY OF DUBLIN
AND
AND
[2016] IEHC 443
Binchy J.
[2015 No. 55 CA]
THE HIGH COURT
Property & Conveyancing – S. 74(3) of the Land and Conveyancing Law Reform Act, 2009 – Debt due – Denudation from the property – Void conveyance of property – Fraudulent intent.
Facts: Following an order of the Circuit Court made in favour of the plaintiff under S. 74(3) of the Act of 2009 holding that the property conveyed by the first named defendant and the second named defendant to the second named defendant would be void, the first named defendant filed an appeal against the said order of the Circuit Court. The first named defendant argued that the property had been purchased from the funds provided by the second named defendant and after the realisation that the property should have been in the sole name of the second named defendant and to rectify the error, the defendants conveyed the property jointly owned by them to the sole name of the second named defendant. The plaintiff claimed that the property had been conveyed to the second named defendant by the first named defendant fraudulently to avoid debt due by the first named defendant to the plaintiff.
Mr. Justice Binchy dismissed the appeal of the first named defendant and confirmed the order of the Circuit Court. The Court held that the plaintiff would be entitled to a declaration that the deed of conveyance would be void and an order be made that the order should be set aside under s. 74 of the 2009 Act. The Court, in line with the decision of Re Moroney [1887] 21 LRIR 27, observed that the probability of intent of the guarantor denuding himself from the property by conveyance had been probably to delay, defeat or defraud the creditors and such an act would be considered fraudulent within the law. The Court observed that the decision to convey the property into the sole name of the second named defendant had been motivated by the idea to avoid the debts.
This is an appeal from an order of the Circuit Court dated 12th March, 2015 whereby Linnane J. made a declaration in favour of the plaintiff pursuant to s. 74(3) of the Land and Conveyancing Law Reform Act 2009. By way of conveyance dated 5th November, 2010 the first named defendant and the second named defendant did convey to the second named defendant:
‘ALL THAT AND THOSE that part of the lands of Shankill containing three acres statute measure or thereabouts together with the dwelling house erected thereon known as Kilmurray House, Falls Road, Shankill, in the Barony of Rathdown and County of Dublin, which said premises are more particularly delineated on the map endorsed on a certain indenture of lease dated 9th September, 1947 and made between Charles Spottiswoode Weir and others of the one part and William J. Rooney of the other part and thereon edged red.’
It is argued on behalf of the plaintiff that the said conveyance is void by reason of it having been made with the intention of defrauding the plaintiff, a creditor of the first named defendant and that the plaintiff was prejudiced by the said conveyance. On the same day the Circuit Court found the said conveyance to be void and made a further order setting aside same.
The background to these proceedings is that on 15th May, 2012, the plaintiff obtained judgment in default of defence in the Central Office of the High Court in the sum of €411,845.22, as against the first named defendant. Thereafter, the first named defendant sought to dispute the judgment and issued a motion pursuant to Order 13 rule 11 of the Rules of the Superior Courts seeking, inter alia, an order setting aside the judgment obtained by the plaintiff. This Court, O'Neill J., refused the reliefs sought by the said motion. That decision was upheld by the Court of Appeal in a decision delivered on 22nd October, 2015.
The background to the judgment obtained by the plaintiff against the first named defendant is that the plaintiff is a solicitor practising under the style of Murphy McNamara Solicitors, and he had provided very extensive legal services to companies owned by the first named defendant, in connection both with conveyancing contracts and litigation in which those companies were involved. In 2008, a very significant transaction in which those companies were involved ran into difficulty. The plaintiff gave evidence before this Court that those difficulties were of a kind that caused him to fear reputational damage to his firm and he and his partners decided to cease acting on behalf of the companies, which were owned and controlled by the first named defendant. The plaintiff gave evidence that he met with the first named defendant to discuss this and that the first named defendant urged the plaintiff to continue acting on his behalf and, importantly, that the first named defendant assured the plaintiff that he personally would indemnify the plaintiff and his firm in respect of any legal costs due to the plaintiff's firm by any of the companies on whose behalf the plaintiff had acted. According to the plaintiff, this was in July, 2008. The plaintiff acknowledged however that he did not request the first named defendant to complete an indemnity in writing, nor did he write to the first named defendant or keep any written attendance note of this promise of indemnity. He said he did not do so because he trusted the first named defendant having worked on his behalf since the mid 1990s, and because he had at all times enjoyed a very good working relationship with the first named defendant. Having discussed the matter with his partners, the first named defendant agreed to continue providing services to the companies of the plaintiff on the basis that such an indemnity in respect of fees would be provided.
The plaintiff said in evidence that the two year period following July, 2008 was his busiest period acting on behalf of the plaintiff and his companies. There were 28 litigation cases involved and a solicitor was specifically assigned to the affairs of the first named defendant and his companies.
The companies went into liquidation in May, 2010. On 9th August, 2010 the plaintiff wrote to the first named defendant in relation to fees. In this letter, he referred to efforts that he had made to contact the plaintiff by telephone to discuss the same and also to text messages that he had sent the first named defendant, as well as to a meeting that they had had together in Cashel, Co. Tipperary, when they discussed the issue of fees. In this letter the plaintiff referred to the personal assurances given by the first named defendant in relation to discharge of fees.
The plaintiff sent a further letter to the first named defendant on 17th August, 2010 referring to ‘ specific personal assurances with regard to fees’. He stated that:
‘under no circumstances would we have continued to work to any extent where those personal assurances not forthcoming (sic). In fact on the last occasion that such personal assurances were forthcoming was at our meeting in Cashel when you were to follow up the proposal.’
This letter concluded by stating that unless adequate proposals to discharge fees were forthcoming, then the plaintiff would have to institute proceedings against the first named defendant for recovery of the same.
A further letter was sent to the first named defendant on 18th August, 2010, apparently in response to a fax sent by the first named defendant to the plaintiff. In this letter the plaintiff stated:
‘It is completely clear that you are attempting to renege fully on the continual assertion furnished by you in relation to all works completed by this office on your behalf.
You are aware that over the years you continually confirmed your assurances in this respect, such assurances were furnished more particularly in later years when it was clear that there were major difficulties with the recovery of any fees following the difficulties that Cork Corporation had with your workmanship. You requested that we would maintain the same level of commitment to you since that dreadful meeting with Cork Corporation in 2008, to suggest otherwise by you now is completely wrong (sic) and purely for the purposes of trying to reduce or evade your personal exposure.
I have met now with my partners in this office and I am afraid that your recent correspondence has left us with no option but to immediately institute legal proceedings against you for recovery of all sums due and owing by you personally to this firm.
Unless we hear from you with a satisfactory response immediately we will have no option but to have these proceedings issued and served on you personally.’
Further correspondence ensued between the parties in relation to payment of the fees. While the first named defendant did send the plaintiff an email on behalf of Lance Properties, one of the companies concerned, acknowledging a liability to the plaintiff in the sum of €200,000, no payment was forthcoming and this email did not commit the plaintiff personally to payment of any of the fees.
Eventually, the plaintiff issued proceedings on 30th May, 2011. An appearance was entered on 19th July, 2011. The plaintiff delivered a statement of claim on 9th August, 2011 and, following...
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