Court of Appeal: Farmer’s son entitled to promised farmland but not €150,000 legacy

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However, Mr Justice Michael Peart varied the order of the High Court, holding that the deceased’s son was not entitled to the bequest of €150,000 which was clearly intended to be instead of inheriting the farm.

The Court of Appeal also varied the costs order, by requiring that only 75 per cent of the son’s costs should be paid out of the estate, since much of the 21-day trial had been occupied by failed arguments of undue influence and duress.

Background

In 2005, Michael Hoare (now deceased) executed a Will in which, inter alia, he devised his farm of lands to William Naylor, his son.

Just over one year later, in 2006, he executed another Will, revoking the first Will, and inter alia leaving these lands instead to Jean Maher, his daughter, but making a bequest to Mr Naylor of the sum of €150,000.

Following a 21-day trial, the High Court rejected Mr Naylor’s claims of duress and undue influence, but upheld the claim made by Mr Naylor on the basis of promissory estoppel, and concluded that in order to satisfy Mr Naylor’s equity he should be awarded the entire of the lands.

The result therefore was that the 2006 Will was upheld, save in respect of the devise of these lands to Ms Maher, thereby leaving in place the pecuniary legacy of €150,000 to Mr Naylor.

Grounds of Appeal

Ms Maher did not appeal against the finding of promissory estoppel but submitted that the trial judge erred in finding that this should be satisfied by entitlement to the farm. Ms Maher submitted that this was disproportionate to Mr Naylor’s reliance on the deceased’s promises.

Ms Maher submitted that the sum of €150,000 bequeathed to Mr Naylor was roughly the amount of the detriment suffered by Mr Naylor as a result of moving back to the farm from Dublin where he had been gainfully employed and the value of the services rendered by him, and that this should be seen as a sufficient satisfaction of his equity.

Justice Peart said it was reasonable to presume that this legacy of €150,000 to Mr Naylor was intended to make up for the fact that the lands were being left instead to Ms Maher

In accordance with the principles in Veolia Water UK plc. v. Fingal County Council (No.2) 2 I.R. 81; Ms Maher also contested the award of the entirety of Mr Naylor’s costs to be paid out of the estate, submitting that a significant portion of the lengthy hearing in the High Court was taken up with issues of duress and undue influence on which Mr Naylor lost.

Discussion

Agreeing with the High Court judgment, Justice Peart was satisfied that Mr Naylor was entitled to the lands on the basis of the promises made to him, and his reliance upon those promises when acting to his detriment.

In this regard, Justice Peart emphasised that the representations made to Mr Naylor by the deceased that he would get these lands, and the reliance which Mr Naylor placed upon them, amounted to a contract which ought to be fulfilled. As such, the deceased should be kept to his contract - ‘pacta sunt servanda’. Justice Peart that the satisfaction of Mr Naylor’s equity by receiving a transfer of the lands attended to this, and did not offend good conscience.

In relation to upholding the bequest to Mr Naylor of €150,000 under the 2006 Will, Jusitce Peart said that he disagreed with the trial judge’s findings here. This bequest was clearly made in substitution of bequeathing the promised lands, which Justice Peart said amounted to a contract – however it was never a part of that contract that Mr Naylor would receive an additional €150,000.

The present case called for the application of the maxim that he who seeks equity must do equity, and considering Spence v. Crawford 3 All E.R. 271; Justice Peart said that the remedy “must be moulded in accordance with what the exigencies of the particular case” require.

Considering Cheese v. Thomas 1 W.L.R. 129 and O’Sullivan v. Management Agency and Music Ltd. Q.B. 428, a court should have the power to make an allowance to a fiduciary, as otherwise “….A hard and fast rule that the beneficiary alone can demand the whole profit without an allowance for the work without which it could not have been created is unduly severe….”.

In these circumstances, Justice Peart was satisfied that justice required that Mr Naylor should receive a transfer of the entire lands, but conditioned on his executing a disclaimer of so much of the bequest of €150,000 left to him under the 2006 Will as he would stand to receive.

Costs

The trial judge awarded Mr Naylor the entire of his costs of the proceedings to be paid out of the estate, notwithstanding the time taken up with the failed issues of duress and undue influence.

Ms Maher submitted that under Veolia principles the trial judge ought to have awarded Mr Naylor only a portion of his costs.

Justice Peart accepted that it was reasonable for Mr Naylor to have raised undue influence, and stated that if re Morelli deceased: Vella v. Morelli IR 11 was strictly applied there would be no question but that Mr Naylor should be awarded all of his costs out of the estate.

However, Justice Peart said that in this unusual case, Vella v. Morelli should be tempered by Veolia.

As such, Justice Peart said that some allowance should be made for the fact that significant time was occupied by the failed claim of undue influence.

Conclusion

Dismissing the appeal, Justice Peart affirmed the order of the High Court but varied it by requiring Mr Naylor to execute a disclaimer in respect of so much of the bequest of €150,000 as he would otherwise receive, as a condition of receiving a transfer of the entire lands. Justice Peart also held that the costs order should be substituted for an order for 75 per cent of the High Court costs in favour of Mr Naylor.