O'Rourke v O'Rourke
| Jurisdiction | Ireland |
| Judge | Ms. Justice Bronagh O'Hanlon |
| Judgment Date | 25 October 2018 |
| Neutral Citation | [2018] IEHC 791 |
| Docket Number | [2016 No. 10451 P.] |
| Court | High Court |
| Date | 25 October 2018 |
[2018] IEHC 791
HIGH COURT
O'Hanlon J.
[2016 No. 10451 P.]
Property – Representations – Works – Plaintiff seeking relief – Whether any or any alleged representations made to the plaintiff led him to the belief that the property in question was or would become his property
Facts: The plaintiff, Mr B O’Rourke, applied to the High Court seeking relief primarily as to two issues: (a) whether any or any alleged representations made to the plaintiff led him to the belief that the Furness Hall property, Naas in the County of Kildare was or would become the property of the plaintiff and of his wife, Ms D O'Rourke, formally the first defendant in these proceedings, until she was released from the said proceedings by order of the Court on the 12th May, 2017; (b) whether the plaintiff undertook substantial works on the premises of foot of that belief and those representations. The property in question was held by the second and third defendants, Mr D O’Rourke and Ms P O’Rourke, parents of Ms D O’Rourke, in their capacity as trustees of the Diane O’Rourke Discretionary Trust. The fourth defendant was Ulster Bank DAC, as successor to First Active plc.
Held by O’Hanlon J that the plaintiff had failed to show the Court that there were any representations made to him and if he undertook substantial works on the premises it was not on foot of any alleged representation as clearly the legal position was well established. Looking at all of the evidence and his capacity as a business man with property dealings in the past, O’Hanlon J held that it was inconceivable and simply not credible that the plaintiff was not fully aware of the circumstances in which he was moving into the said property and residing there on foot of his wife’s licence in same. It was only if the plaintiff had managed to establish positively such representations that the Court would then have to deal with the issue of beneficial interest; the plaintiff however insisted in elongating this trial despite being asked on many occasions to stick to what was relevant. The Court also noted that the second and third defendants had absolutely nothing to benefit from defending this case and yet they had made themselves available over a long period of time to ensure that the case was fully defended.
O’Hanlon J held that she would dismiss the plaintiff’s claim.
Claim dismissed.
The judgment was given on 25th October, 2018
The plaintiff seeks relief primarily as to two issues:
(a) Whether any or any alleged representations made to the plaintiff led him to the belief that the Furness Hall property, Naas in the County of Kildare was or would become the property of the plaintiff and of his wife Diane O'Rourke, formally the first named defendant in these proceedings, until she was released from the said proceedings by order of this Court on the 12th May, 2017?
(b) Whether the plaintiff undertook substantial works on the premises of foot of that belief and those representations?
The property in question is known as Furness Hall, Naas in the County of Kildare and is held by the second and third named defendants, parents of Diane O'Rourke, in their capacity as trustees of the Diane O'Rourke Discretionary Trust (‘DORDT’). The fourth named defendant is Ulster Bank DAC, as successor to First Active plc.
It is not in dispute that on the 10th June, 2004, Dermot O'Rourke agreed to purchase Furness Hall in trust for a sum of €3.65 million. He paid a booking deposit of €70,000 and the contract for the sale dated the 9th July, 2004 shows the purchaser as Dermot O'Rourke (in trust).
A draft term sheet was generated by First Active (John Hunt, Head of Commercial Business) for a mortgage dated 13th July, 2004, which indicated that the property was to be acquired by Dermot O'Rourke and his wife Perle O'Rourke as trustees for the benefit of their daughter Diane O'Rourke, and the amount of the facility was to be €2.92 million. What is disputed is whether contemporaneous documentation shows that the use of the trust structure was motivated solely by tax considerations and not, as in accordance with the evidence of Dermot O'Rourke, out of concerns he had about the marriage between his daughter Diane and the plaintiff.
The plaintiff contends that it was clearly intended that Furness Hall would be transferred to Diane O'Rourke after three years and while this is disputed, nonetheless the plaintiff relies on an email of the 13th July, 2004 from Paraic Madigan solicitor of Matheson Ormsby Prentice solicitors to John Hunt of First Active (Core Book 1, p. 46).
The plaintiff asserts, that the wording that ‘the purpose of the proposed transaction is for Mr. O'Rourke to assist his daughter Diane in the purchase of a dwelling in a tax efficient manner and in particular to ensure that she obtained an exemption from Capital Acquisition Tax. The plaintiff relies on correspondence between P. Madigan solicitor as aforementioned, in relation to the second defendant's ‘wish to purchase a house for your daughter Diane’ ‘Diane would then be given a licence to occupy the property on an annual basis and provided that she occupied the property for three years … the property could be appointed out to her in three years free from Capital Acquisition Tax (‘CAT’)’. A further document being an internal one First Active sent on 14th July, 2004 describes the transaction as the second defendant ‘is purchasing the property for his daughter through a discretionary trust as part of his tax planning’. ‘We understand that after three years the trust can be collapsed and the property will pass to D. O'R.'s daughter.’
Reference is made to the statement that ‘the planning behind his arrangement is to enable the beneficiary to receive the appointment of the property without a gift tax liability. In addition, exemptions from stamp duty and capital gains tax … would also be available’.
The plaintiff's case is that the evidence of Diane O'Rourke showed her acceptance that the intent of the whole process was that whatever property was purchased was going to be hers and her husband's in due course and she accepted that the purpose of the transaction was to assist in the purchase of a property in a tax efficient manner. It is asserted in the plaintiff's submissions that the use of the trust mechanism was motivated by tax reasons and not by any concern about the marriage of Brendan O'Rourke and Diane O'Rourke. The evidence of her father, the second defendant, was as follows:-
‘I always intended I would buy a property for her to live in … and after a period of years, the quantum of years is underdetermined – I would be in a position to determine whether in fact I should give the property to her. But in the interim time, until I knew the marriage was going to last – which I wasn't certain about – there would be no question of giving beneficial ownership to anybody’. (Transcript Day 19, p. 31).
In this regard the plaintiff argues that it was always intended to transfer ownership of the property to the beneficiaries of the trust after three years although this is heavily disputed as between the parties.
The plaintiff in this regard relies on the evidence of Diane O'Rourke, his former spouse, who said that her father was buying a house for her and for Brendan O'Rourke, the plaintiff, to live in as opposed to simply buying a house for them.
The reality of this case is that Diane O'Rourke believed she had a licence to live there and set about establishing her home accordingly. The plaintiff makes many references to various alleged statements made by the second defendant and by Diane O'Rourke to the effect that the property was given to them as a gift by Dermot O'Rourke and to both Diane and to Brendan O'Rourke. This is heavily disputed throughout the evidence.
It is of great significance that the plaintiff claimed that he only became aware of the existence of a trust in 2009 because of an insurance claim in relation to the property and that he was told by his own solicitor in that context, that the property was in a trust but he claimed that it did not mean anything to him. By letter dated the 31st August, 2004, Natasha McKenna solicitor had written to Diane O'Rourke, setting out that the property was being purchased under a discretionary settlement and set out that in the event of Dermot or Perle O'Rourke ever being made bankrupt, that the property might be repossessed and she would not have any claim to it and that for all intents and purposes she would not have a claim to the property and that the situation might occur where Dermot and Perle O'Rourke need never transfer the property to her and that any monies spent on the house would be for the benefit of her parents and she would have no claim to same. The letter was summarised setting out that the property was theirs to reside in, that it was not theirs to own and that any money they expended they would not recoup. (Day 23 p. 102).
The plaintiff contends that Diane O'Rourke concealed the reality of this from her husband. Natasha McKenna solicitor indicated that she had not provided legal advice to Brendan O'Rourke (Day 23 p. 103). This solicitor did advise Diane O'Rourke by way of friendly advice suggesting that she and her husband take independent legal advice.
The plaintiff set out a number of complaints concerning the execution of documents at the time of the first mortgage on Furness Hall and in particular regarding his allegation that there was an absence of independent legal advice. The plaintiff however had involvement in a number of property transactions...
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