Barbara Hyland (plaintiff) v Ireland, the Attorney General, Michael J. Lucas, Paul Butler and Brendan Hyland (defendants).

Real Property - Administration of estates - Contract of sale of premises to company never executed by deceased - Whether premises formed part of deceased's estate - Nature of deceased's interest in the premises at date of death.

The Supreme Court (The Chief Justice Mr Justice Hamilton, Mr Justice O'Flaherty and Mr Justice Lynch); judgment delivered 22 October 1998.

In circumstances where a deceased person had contracted to sell property to a company which he controlled, and that contract had never been executed but the deceased had never sought to repudiate it, the company was the beneficial owner of the premises and it formed no part of the deceased's estate.

The Supreme Court so held in finding that no additional evidence had been adduced by the plaintiff in the Supreme Court which justified interference with the findings of fact of the High Court and in dismissing the appeal.

The plaintiff appeared in person. George Brady SC and Iris White BL for the fourth and fifth defendants.

Mr Justice Lynch said that the claim against the first and second defendants had previously been struck out for failure to disclose a cause of action. This was an appeal by the plaintiff against an order of the High Court dismissing her claim against the remaining three defendants for damages for breach of contract, breach of trust, negligence, misconduct and misrepresentation.

The plaintiff was the estranged wife of Thomas Hyland, who had died on 7 March 1977. In his will, Mr Hyland had appointed the fourth and fifth defendants as his executors and had bequeathed to them all of his property to be held on trust for his daughter, who was the only child of his marriage to the plaintiff. The fourth and fifth defendants had conceded that the plaintiff was entitled to a one-third legal right share. In 1978, the plaintiff had brought administration proceedings in the High Court and those proceedings were now complete.

In 1987, these proceedings were commenced and after a hearing in the High Court in 1988, the High Court dismissed the plaintiff's claim. The plaintiff served a notice of appeal dated 28 September 1988 and in June 1998 the plaintiff brought a motion to admit further evidence. In this hearing, the court acceded to the application to admit further evidence and the substantive appeal from the order of the High Court dated 2 August 1988 was heard.

The most substantial issue in the appeal related to the ownership of the premises in Bray at which a company called Bardiknit Ltd carried on business. The plaintiff and the deceased were both shareholders and directors in this company. The premises were originally purchased by the deceased in 1963 for £1,700. In 1967, he agreed to sell them to the company for the same amount. The contract was never closed, but since there was never any attempt by the deceased to repudiate it in the years before his death, and since the deceased had joined with the company in a mortgage over the property in 1967 so as to secure advances to the company, it had to be presumed that the beneficial interest in the premises vested in the company. The plaintiff alleged that there were internal irregularities. However it was clear on the authority of Ulster Investment Bank Ltd v Euro Estates Ltd and Drumkill Ltd [1982] ILRM 57 that the bank obtained good title pursuant to the mortgage, irrespective of such irregularities. It was therefore clear that the defendants were correct in not including the premises as belonging to the deceased's estate in the schedule of his assets. This was the finding of the trial judge and no evidence had been adduced to justify interfering with that finding.

For some years before his death, the deceased had run the company as a sole trader and without any consultation with the plaintiff. He consulted a Mr Finn as a third director, but the plaintiff claimed that he had never been validly appointed. Mr Justice Lynch said that the reality was that the plaintiff had acquiesced in the way in which the company had been run for some years and perhaps more than ten years before the death of her husband. On his death, it was discovered that the company was in financial trouble and the executors appeared to have negotiated satisfactory terms with the bank in relation to the debts of the company which had been guaranteed by the deceased. The High Court had found that the defendants had acted in all respects honestly and properly in dealing with an estate which was in a confused and difficult state following the sudden and unexpected death of the deceased. No evidence had been brought to justify interfering with that finding.

The plaintiff alleged that the defendants had not accounted properly for certain moneys and alleged that there was a discrepancy of over £25,000. However, this was due to her inclusion of the factory premises as an asset of the deceased. This should not have been included, since the deceased had at most a bare legal estate at the date of death.

Mr Justice Lynch said that the appeal was dismissed since none of the findings of fact made by the High Court after five days of oral evidence had been shaken by the further evidence adduced by the plaintiff in this court.

Solicitors: Charles B. W. Boyle & Co (Dublin) for the fourth and fifth defendants.