Motor Insurers Bureau of Ireland v Stanbridge and Others

• Jurisdiction: Ireland
• Judge: Miss Justice Laffoy
• Judgment Date: 08 December 2008
• Neutral Citation: [2008] IEHC 389
• Court: High Court
• Docket Number: [2006 No. 1784 P, 1993 No. 7354 P]
• Date: 08 December 2008

[2008] IEHC 389

THE HIGH COURT

[No. 1784 P/2006]

Motor Insurers Bureau of Ireland v Stanbridge

BETWEEN

THE MOTOR INSURERS BUREAU OF IRELAND

PLAINITFF

AND

PAULA STANBRIDGE, AUSTIN STANBRIDGE, LORRAINE STANBRIDGE AND KEVIN STANBRIDGE

DEFENDANTS

SUCCESSION ACT 1965 S67

RSC O.46 r14

SUCCESSION ACT 1965 S10

SUCCESSION ACT 1965 S13

SUCCESSION ACT 1965 S72A

FAMILY LAW (MISCELLANEOUS PROVISIONS) ACT 1997 S6

SCOTT (DECEASED), IN RE; WIDDOWS v FRIENDS OF THE CLERGY CORP & ORS 1975 2 AER 1033

SUCCESSION ACT 1965 S73

CONVEYANCING ACT (IRELAND) 1634 S10

CAPITAL ACQUISITIONS TAX CONSOLIDATION ACT 2003 S12

CAPITAL ACQUISITIONS TAX ACT 1976

CAPITAL ACQUISITIONS TAX CONSOLIDATION ACT 2003 S12(1)

CAPITAL ACQUISITIONS TAX CONSOLIDATION ACT 2003 S12(2)

CONVEYANCING ACT (IRELAND) 1634 S14

FRAUDULENT CONVEYANCES ACT 1571 (ENGLAND)

MAY THE LAW ON FRAUDULENT & VOLUNTARY CONVEYANCES 3ED 1908 4

GLEESON v FEEHAN 1997 1 ILRM 522

HALSBURY'S LAWS OF ENGLAND 4ED VOL 50 PARA 442

MALLOT v WILSON 1903 2 CH 494

STRATTON'S DEED OF DISCLAIMER, IN RE; STRATTON & ORS v INLAND REVENUE CMRS 1957 2 AER 594

TOWNSON v TICKELL & ANOR 1819 3 B & ALD 31

PARADISE MOTOR CO LTD, IN RE 1968 1 WLR 1125

PARSONS, IN RE; PARSONS v AG 1942 2 AER 496

MORONEY, IN RE 1887 21 LR IR 27

BANKRUPTCY (IRELAND) AMDT ACT 1872 S21(2) (UK)

MCQUILLAN v MAGUIRE 1996 1 ILRM 394

ROSE v GREER & ANOR 1945 IR 503

GLEGG v BROMLEY 1912 3 KB 474

HOLBIRD v ANDERSON & ANOR 1793 5 TR 235

ALTON v HARRISON 1868-69 LR 4 CH APP 622

DELANY EQUITY & THE LAW OF TRUSTS IN IRELAND 4ED 2007 290

RSC O.15 r37

RSC O.46 r15

SUCCESSION

Disclaimer

Avoidance - Fraudulent disclaimer - Judgment previously obtained - Disclaimers of interest in estate executed by defendants - Plaintiff seeking declarations that disclaimers of interest in estate void - Remedial constructive trust sought in alternative - Stop order granted ex parte in original proceedings - Locus standi - Whether disclaimers valid - Whether disclaimers made with intent to delay, hinder or defraud plaintiff - Whether stop order should have been granted ex parte - Re Scott (deceased) [1975] 2 All ER 1033, Gleeson v Feehan [1997] 1 ILRM 522, McQuillan v Maguire [1996] 1 ILRM 394, Holbird v Anderson (1793) 5 TR 235, Alton v Harrison (1869) LR 4 Ch 622, Mallott v Wilson [1903] 2 Ch 494, Re Stratton's Deed of Disclaimer, Stratton v IRC [1957] 2 All ER 594, Townson v Tickell (1819) 3 B & Ald 31, Re Paradise Motor Company Ltd [1968] 1 WLR 1125, Gregg v Bromley [1912] 3 KB 474, Re Parsons; Parsons v AG [1942] 2 All ER 496, In Re Moroney (1887) 21 LR Ir 27 considered; Rose v Greer [1945] IR 503 distinguished - Rules of the Superior Courts 1986 (SI 15/1986), O 46, r 14, O 84, r 23 & O15, r 37 - Succession Act 1965 (No 27), ss 10, 13, 67, 68, 69, 70, 71, 72, 72A & 73 - Conveyancing Act (Ireland) 1634 (10 Chas 1, c 3), ss 10 and 14 - Bankruptcy (Ireland) Amendment Act 1872 (35 &36 Vic, c 58), s 21 - Declarations granted (2006/1784P - Laffoy J - 8/12/2008) [2008] IEHC 389

MIBI v Stanbridge

Facts: The deceased wife of the second defendant suffered serious injuries in a road traffic accident driven by the second defendant without valid insurance. A settlement was made which was her only asset on death. A stop order was obtained that the transfer of the funds in court be stayed pending further order. The second and third defendants executed disclaimers to lose rights to any share in the deceased's estate. The plaintiff sought declarations that the disclaimers purportedly executed by the defendants were done with the intention of delaying, hindering and defeating the claims of the bureau and that the purported disclaimers constituted a fraudulent conveyance, disposition or preference and were void pursuant to s. 10 of the Irish Statute of Fraudulent Conveyances 1634 and/ or alternatively that a remedial constructive trust applied.

Held by Laffoy J. that the act of depriving the creditors of the second defendant and third defendant of recourse to assets which otherwise would have been available brought the disclaimers within s. 10. There was no evidence of the intent of the second defendant and third defendant in executing the disclaimers so that fraud had not been expressly proved as a fact. The result of the defendants disclaiming their share of the estate was to delay, hinder and defeat the payment of the debt due as assignee of the deceased's judgment against them. Thus fraud had been proven. The disclaimers were actions of the type to which s. 10 the Act of 1634 applies and they were done with the intent to defraud the Bureau. The argument based on the concept of redial constructive trust was wholly misconceived.

Reporter: E.F.

1 Miss Justice Laffoy delivered on the 8th day of December, 2008.

Factual Background

2 The following outline of the factual background to these proceedings is based on the facts admitted or proved at the hearing.

3 Catherine Stanbridge (the deceased) was the wife of the second defendant and the mother of the first, third and fourth defendants. She suffered serious multiple injuries in a road traffic accident on 12 ^th April, 1991 while a passenger in a car driven by the second defendant and owned by the third defendant. At the time of the accident there was no valid insurance in place for the car.

4 In 1993 proceedings were initiated entitled "Catherine Stanbridge (a person of unsound mind not so found), suing by her sister and next friend, Olive Barry, plaintiff and Austin Stanbridge, Lorraine Stanbridge and the Motor Insurers Bureau of Ireland, defendants" (Record No. 1993/7354P) (the 1993 proceedings) in which damages were claimed by the deceased for personal injuries against the defendants as a result of the negligence and breach of duty, including breach of statutory duty, of the second defendant and the third defendant. The second defendant and the third defendant did not enter an appearance to the 1993 proceedings. Judgment in default of appearance was given by order of Johnson J., as he then was, on 27 ^th June, 1994, against the second defendant and the third defendant. As is usual, the judgment was for such amount as the court might assess in respect of the deceased's claim for damages and costs, the assessment "to be had before a Judge sitting alone and set down for hearing accordingly".

5 The action was set down and was listed for hearing on 7 ^th November, 2000. The deceased's claim was compromised by the third defendant to the 1993 proceedings, which is the plaintiff in these proceedings and which I will refer to as "the Bureau". By order made on 7 ^th November, 2000, Johnson J., having been told that an application would be made to have the deceased made a ward of court, approved the settlement and ordered that -

"the Plaintiff do recover against the Defendants the sum of £917,000.00 and costs of this action when taxed and ascertained to include the costs of assessment against the first and second Defendants and the costs of the Wardship application".

6 It was further provided in the order as follows:-

"And the Court as a term of the settlement between the Plaintiff and the 3 ^rd named Defendant approves of the assignment to the said third named Defendant of the benefit of the Judgments obtained by the Plaintiff herein as against the First and Second named Defendants on 27 ^th day of June, 1994".

7 The Bureau duly paid the sum of £917,000.00 into court in accordance with the order of 7 ^th November, 2000. Subsequently on 19 ^th September, 2001, the deceased was admitted to wardship. The order of 19 ^th September, 2001, which was made by Butler J., directed that the funds standing to the credit of the 1993 proceedings be carried over to the wardship side to be invested and administered in accordance with the directions of the Registrar of Wards of Court.

8 The deceased died on 9 ^th August, 2005. She died intestate and was survived by her husband, the second defendant, and her three children, the first, third and fourth defendants. On her death, by virtue of the provisions of s. 67 of the Succession Act 1965 (the Act of 1965), the second defendant became entitled to two thirds of her estate and her three children became entitled to the remaining one third equally between them, so that each became entitled to a one ninth share. Letters of administration in the estate of the deceased issued to the first defendant on 13 ^th April, 2006, the second defendant having renounced his right.

9 The only asset of the deceased was the amount standing to her credit in this Court, which, at the date of death, was in the region of €1.064 million. Following the death of the deceased, the solicitor on record in these proceedings for the first and fourth defendants wrote to the Office of Wards of Court by letter dated 16 ^th August, 2005, stating that she acted for the deceased's husband, the second defendant, and her two daughters, the first defendant and the third defendant, and seeking various information, including details of the deceased's assets and liabilities, and asking for a note of the proofs required for "payment out" in the deceased's estate. It was stated that the deceased left no will and the solicitor proposed to take out a grant of administration intestate on behalf of the first defendant.

10 The Bureau learned of the death of the deceased some time prior to 24 ^th August, 2005. Its solicitors, by two letters dated 24 ^th August, 2005, to the solicitors on record for the first and fourth defendants, sought details of the proposed administrators of the estate of the deceased and of the parties entitled to benefit in the estate. The response, which was dated 25 ^th August, 2005, stated that the solicitor was acting on behalf of the first named defendant, one of the daughters of the deceased, and the proposed administratrix...