About this case:

• Citation:
  [2024] IEHC 426
• Judgment:
  External link
• Court:
  High Court
• Judge:
  Mr Justice Brian Cregan

Delivering judgment for the High Court, Mr Justice Brian Cregan determined that the defendant’s use of his mother’s money for his own ends “show a devious attempt to take advantage of his elderly and infirm mother for his own financial ends… In the circumstances, equity will intervene to right the wrong and to direct that he repay all the money to his mother’s estate.”

Background

The deceased suffered from dementia and was unable to manage her own affairs from 2014 onwards. The defendant, one of her sons, took charge of her care and decision-making in 2014.

His three siblings became concerned about the manner in which he was looking after their mother, including his refusal to allow carers or cleaners to enter her home and his discharge of the deceased from hospital in 2015 against medical advice, and successfully applied to have her made a ward of court. The deceased was subsequently transferred to a nursing home.

In 2016, the nursing home sought an injunction against the defendant restraining his interference with the care of other patients and seeking supervised visitation, as the defendant had been inter alia purporting to help other patients. The defendant breached that order and the nursing home successfully sought orders for his attachment and committal in November 2016.

The deceased died on 19 April 2018, leaving her estate of over €6 million to her four children and appointing the defendant, her son, as her sole executor and trustee of her will. The defendant was bequeathed the deceased’s home and the entire shareholding of the family company, Westwood International Transport Limited.

In 2020, his siblings applied successfully to remove him as executor, with the court giving liberty to the plaintiff solicitor to apply for a grant of administration in the estate of the deceased. A later dispute as to the construction of the deceased’s will resulted in the removal of the defendant as trustee of the will in 2023.

It was subsequently discovered that in 2015, the defendant had opened a joint account with his mother and redirected annual rental income from an industrial unit to that account, from which he withdrew approximately €192,000 for his own use on various occasions in 2015 and 2016.

The plaintiff sought declarations that the defendant unlawfully set up the joint account when his mother was suffering with dementia and unlawfully withdrew monies therefrom, and sought an order directing him to repay €192,000 to the estate. The plaintiff also contended that the deceased acted under the undue influence of the defendant and that his actions were unconscionable.

The High Court

Mr Justice Cregan considered the significant medical evidence supporting the deceased’s dementia diagnosis, commenting that the defendant had wilfully closed his eyes to his mother’s dementia. He noted: “Whilst visiting his mother on a daily basis in the hospital or nursing home and staying for a period of seven or eight hours could be regarded as admirable and indicative of a dutiful and loving son, his behaviour in seeking to assist other patients was clearly unacceptable behaviour by the defendant.”

Turning to the defendant’s withdrawal of monies from his joint account with his mother, the court noted that the defendant had withdrawn increments of €700 therefrom at ATM machines at various locations on a nearly daily basis from April 2015 to April 2016, which he could not account for with vouching documentation.

Having heard his evidence, the Mr Justice Cregan stated: “In my view, Mr. Dermot Horan was not a credible or reliable witness in any way. He denied that his mother suffering from dementia despite the overwhelming medical evidence to the contrary; he denied that she got good care in the hospital or in a nursing home when all of the other evidence was that she was well cared for in both places; he discharged his mother from the hospital against medical advice when she was clearly not in a position to make an informed consent to discharge herself…”

The judge continued that “he opposed the application to have her made a ward of court; his behaviour at the nursing home with his mother and with other patients was such that the nursing home had to apply to the High Court, not once, not twice, but three times to obtain and enforce undertakings and orders to compel him to reduce his visits to the nursing home, to stop interfering with other patients, etc. Moreover his evidence as to how he spent the money was incomplete, uncertain and not credible. In addition, he had absolutely no records of what he spent the money on or vouching documentation.”

Undue influence

Mr Justice Cregan considered the jurisprudence on undue influence, finding it clear that the relationship of parent and child arose in the case before him and that the deceased had placed a significant degree of trust and reliance on the defendant. In the circumstances, the court considered that a presumption of undue influence arose which the defendant had failed to rebut.

The court also determined that the defendant exercised actual undue influence given his mother’s dementia and ill-health, finding that “the operation of the joint account and the withdrawal of funds…were all for Mr. Dermot Horan’s own personal advantage and not for any advantage which might accrue to his mother. There is not a scintilla of evidence that Mrs. Horan acquiesced to the setting up of the joint account, the withdrawals from the said account by Mr. Horan, or to the expenditure on any of the items outlined by Mr. Horan in his evidence.”

Finding that there was no necessity to set up a joint account and that none of the €192,000 withdrawn was spent for the deceased’s benefit, the court decided that the transactions on the account were so improvident as to be set aside.

Unconscionability

Mr Justice Cregan considered that the deceased was at a serious disadvantage to the defendant and that her weakness had been exploited in a morally culpable manner. The judge additionally recognised that the transactions were overreaching and oppressive and that there was impropriety both in the defendant’s conduct and the terms of the transactions themselves.

Finding that the unfairly obtained transactions “shocked the conscience” of the court in line with Alec Lobb (Garages) Ltd v. Total Oil (Great Britain) Ltd [1983] 1 WLR 87, Mr Justice Cregan determined that it was against equity and good conscience for the defendant to retain their benefit.

Consequently, the court concluded that the defendant’s actions constituted an unconscionable misappropriation of funds from the joint account, remarking that the defendant used the account “as a ‘slush fund’ to fund whatever he deemed appropriate”.

The court continued: “He used it to pay his own legal fees in contesting his mother’s application to be made a ward of court; he used it to pay off other legal bills he owed; he used it to buy two digging machines; he used it to employ a security guard to look after the yard which was owned by the company which he would acquire on her death. Mrs. Horan did not receive a single euro of these withdrawals of over €192,000.”

Conclusion

Accordingly, the High Court granted the declarations sought by the plaintiff and ordered the repayment of the funds to the estate.

McNamara v Horgan (No. 2) [2024] IEHC 426