Scally v Rhatigan
| Jurisdiction | Ireland |
| Judge | Ms. Justice Laffoy |
| Judgment Date | 01 October 2012 |
| Neutral Citation | [2012] IEHC 387 |
| Court | High Court |
| Date | 01 October 2012 |
[2012] IEHC 387
THE HIGH COURT
BETWEEN
AND
SCALLY v RHATIGAN 2011 1 IR 639 2011 2 ILRM 116 2010/46/11604 2010 IEHC 475
SCALLY v RHATIGAN UNREP LAFFOY 28.3.2012 2012 IEHC 140
SUCCESSION ACT 1965 S78
VELLA v MORELLI 1968 IR 11
ELLIOTT v STAMP 2008 3 IR 387 2008 2 ILRM 283 2008/22/4840 2008 IESC 10
SUCCESSION ACT 1965 S10(3)
SUCCESSION ACT 1965 S27(4)
RSC O.99
E L O & R TRUSTS, IN RE UNREP 11.9.2008 2008 JRC 150
Y TRUST, IN RE UNREP CLYDE-SMITH 4.8.2011 2011 JRC 155A
BRISTOL & WEST BUILDING SOCIETY v MOTHEW (T/A STAPLEY & CO) 1998 CH 1 1997 2 WLR 436 1996 4 AER 698
MOWBRAY & ORS LEWIN ON TRUSTS 18ED 2008 PARA 13.49
MOWBRAY & ORS LEWIN ON TRUSTS 18ED 2008 PARA 13.50
DELANY EQUITY & THE LAW OF TRUSTS IN IRELAND 5ED 2011 434
MOWBRAY & ORS LEWIN ON TRUSTS 18ED 2008 PARA 21.85
MOWBRAY & ORS LEWIN ON TRUSTS 18ED 2008 PARA 21.64
DELANY EQUITY & THE LAW OF TRUSTS IN IRELAND 5ED 2011 447
BEDDOE, IN RE; DOWNES v COTTAM 1893 1 CH 547 1891-4 AER REP EXT 1697
MILLER & MAXWELL THE PRACTICE OF THE QUEENS BENCH DIVISION (PROBATE) & OF THE COUNTY COURTS IN IRELAND 1900 446
SUCCESSION ACT 1965 S120
Probate law - Costs - Caveat - Challenge to will - Testamentary capacity of testator - Conflict of interest as executor of will - Role of trustee - Whether reasonable grounds for litigation - Whether challenge bona fide - Succession Act, 1965 - Rules of the Superior Courts 1986, Order 99.
Facts Previous judgments had been delivered in the case, [2010] IEHC 475 and [2012] IEHC 140 relating to a dispute over a will. The defendant had entered a caveat in relation to the will and it became necessary for the plaintiff to prove the will. Ultimately it was concluded that the testator did have testamentary capacity when he made the will and, accordingly, admitted the will to probate. In the second module a declaration had been sought that the plaintiff was not an appropriate person to act as an executor of the testator's estate and should be refused a grant of probate. The court had held that the plaintiff's previous professional involvement, as solicitor for the testator before his death, gave rise to a professional conflict which precluded her from acting as executor of the will and appointed a third party to extract the grant of probate. It was the defendant's position that the plaintiff, in a fiduciary capacity, had acted unreasonably in contesting this issue and the costs of the second module should be awarded to her against the plaintiff personally rather than out of the estate of the testator.
Held by Laffoy J in making the following order: Given that the testator was suffering from motor neuron disease when he made the will there were reasonable grounds for the litigation and in putting the plaintiff on proof that the testator had testamentary capacity when he made the will. The defendant had conducted the defence of the first module in a bona fide manner and was entitled to the costs of the first module out of the estate of the testator. The plaintiff should have recognised her conflicted position as executrix and because of that conflict should not have sought to be granted probate of the will. The plaintiff was not entitled to the costs of the second module out of the estate of the testator. However it would not be fair to fix the plaintiff personally with the defendant's costs of the second module. In relation to the second module, there would be no order for costs in favour of the plaintiff and the defendant would be entitled to her costs out of the estate of the testator, such costs to be taxed in default of agreement.
Judgment of Ms. Justice Laffoy delivered on 1st day of October, 2012.
1. This judgment is concerned with the costs of the two modules of these proceedings, which have been decided by the Court, namely:
(a) the first module, in which judgment was given on 21 st December, 2010 (Neutral Citation [2010] IEHC 475), which is now reported at [2011] 1 I.R. 639; and
(b) the second module, in which judgment was delivered on 28 th March, 2012 (Neutral Citation [2012] IEHC 140).
2. The parties have agreed that all claims arising out of the defendant's counterclaim which were not addressed in those judgments should be struck out. The Court was informed that the plaintiff had tendered her resignation as trustee of the will in issue in the proceedings.
3. The will of Brian Rhatigan (the Testator) in issue in these proceedings was made on 9 th May, 2005. The Testator died on 7 th February, 2006. When the proceedings were initiated the plaintiff was the sole surviving executrix of the will, the other executor nominated by the Testator having died in April 2008.
4. The immediate background to these proceedings was that the defendant's solicitors entered a caveat in the Probate Office on 20 th November, 2008. The plaintiff, as the surviving executrix, warned the caveat in the Probate Office on 27 th February, 2009. On 10 th March, 2009 the defendant's solicitors entered an appearance to the warning. In consequence, it became necessary for the plaintiff to prove the will in solemn form of law. These proceedings were initiated by plenary summons which issued on 8 th April, 2009 to achieve that end.
5. The issues which it was agreed between the parties required to be determined by the Court in the first module were:
(a) whether the will was executed in accordance with the formalities required by s. 78 of the Succession Act 1965 (the Act of 1965);
(b) whether the deceased knew and approved of the contents of the will; and
(c) whether, at the time of executing the will, the deceased was of sound disposing mind and had capacity to make a valid will.
In reality, the question of the testamentary capacity of the Testator at the date on which the will was made was the issue which the Court had to determine in the first module. In the judgment given at the conclusion of the first module, despite the evidence adduced by, and the submissions made on behalf of, the defendant, the Court concluded that the Testator did have testamentary capacity when he made the will and, accordingly, admitted the will to probate in solemn form. In other words, the plaintiff was successful in the proceedings. Although unsuccessful, the defendant claims that she is entitled to her costs of the first module out of the estate of the Testator.
6. The entitlement of a party to a probate action who has unsuccessfully challenged the admission of a will to probate was considered by the Supreme Court in In bonis Morelli; Vella v. Morelli [1968] I.R. 11 and more recently by the Supreme Court in Elliott v. Stamp [2008] 3 I.R. 387. As was pointed out by Kearns J. in delivering judgment in Elliott v. Stamp, in numerous cases referred to by Budd J. in the course of his judgment in In bonis Morelli, the position which had been adopted by the Irish courts was that two questions were to be considered with reference to an application for costs of the unsuccessful party to a probate action, namely:
(a) Was there reasonable ground for litigation? and
(b) Was it conducted bona fide?
If the answer to both questions was in the affirmative, then a litigant, even if unsuccessful, could recover his legal costs from the estate. As Kearns J. pointed out, that practice was continued in the Probate Court towards the end of the nineteenth century and continued throughout the twentieth century. The underlying rationale for the "old Irish practice" was explained and the relevant principle was formulated by Budd J. in In bonis Morelli (at p. 34) in the following terms:
"In our country the results arising from the testamentary disposition of property are of fundamental importance to most members of the community and it is vital that the circumstances surrounding the execution of testamentary documents should be open to scrutiny and be above suspicion. Accordingly, it would seem right and proper to me that persons, having real and genuine grounds for believing, or even having genuine suspicions, that a purported will is not valid, should be able to have the circumstances surrounding the execution of that will investigated by the court without being completely deterred from taking that course by reason of a fear that, however genuine their case may be, they will have to bear the burden of what may be heavy costs. It would seem to me that the old Irish practice was a very fair and reasonable one and was such that, if adhered to, would allay the reasonable fears of persons faced with making a decision upon whether a will should be litigated or not. If there be any doubt about its application in modern times, these doubts should be dispelled and the practice should now be reiterated and laid down as a general guiding principle bearing in mind that, as a general rule, before the practice can be operated in any particular case the two questions posed must be answered in the affirmative."
7. In Elliott v. Stamp, Kearns J. stated (at p. 395) that a "special jurisprudence in relation to costs was developed in this jurisdiction for the reasons so eloquently expressed by Budd J." and, if there is to be a departure from that jurisprudence, it requires a "reasoned basis" in a will suit. I see no basis from departing from the special jurisprudence in this case because I am satisfied that both questions which the Court has to consider must be answered in the affirmative in this case when considered from the perspective of the defendant's application for costs of the first module out of the estate.
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