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McArdle v. O'Donohoe [1999] IEHC 176 (8th June, 1999)
THE
HIGH COURT
1997
No. 13426P
IN
THE MATTER OF THE O'DONOHOE SETTLEMENT CREATED BY DEED OF SETTLEMENT DATED THE
29TH OF AUGUST 1997 MADE BETWEEN PATRICK O'DONOHOE OF 91 ARDOYNE HOUSE,
BALLSBRIDGE IN THE CITY OF DUBLIN (HEREIN AFTER REFERRED TO AS "THE SETTLOR")
OF THE ONE PART AND DENIS A McARDLE OF 30 UPPER FITZWILLIAM STREET IN THE CITY
OF DUBLIN AND SAMUEL JACKSON OF AVALON, SEAFIELD AVENUE IN THE CITY OF DUBLIN
(HEREIN AFTER REFERRED TO AS "THE TRUSTEES") OF THE OTHER PART
BETWEEN
DENIS
A McARDLE AND SAMUEL JACKSON
PLAINTIFFS
AND
PATRICK
O'DONOHOE
DEFENDANT
JUDGMENT
of Mr. Justice Diarmuid B. O'Donovan delivered on the 8th day of June 1999.
1. By
Deed of Settlement dated the 27th day of August, 1997 and made between the
Settlor of the one part and the Trustees of the other part which was expressed
to be in fulfilment of the Settlor's desire to have provisions made for his
daughter, Jesse, her children, the children's respective spouses and issue, as
thereinafter contained and the Settlor himself, after reciting that the Settlor
had paid to the Trustees the sum of £100.00 and may thereafter pay or
transfer or cause to be paid or transferred into the names of or otherwise
placed under the control of the Trustees or any other Trustee or Trustees for
the time being of the settlement the sum of £200,000.00 together with such
further sums of money or securities or other property to the intent that the
same might be held on the trusts thereof, it was declared that the Trustees
would stand possessed of the trust fund upon trust that the Trustees may at
their absolute discretion either allow the same or any part or parts thereof to
remain as actually invested or uninvested or may at any time or times sell,
call in or convert into money the same or any part or parts thereof and shall
at their absolute discretion allow to remain uninvested or invest or lay out
the monies produced thereby and any other monies which may be received by the
Trustees in respect of the trust fund in the name or under the legal control of
the Trustees in or upon any of the investments or property (including freehold
or leasehold land) hereinafter authorised with power at their absolute
discretion to vary and transpose investments or property for or into other
investments of any nature hereby authorised.
2. In
the said Deed of Settlement, the words
"trust
fund"
are interpreted as:-
(1)
the
sum of £100.00 paid to the Trustees by the Settlor and
(2)
all
monies, investments and property (including freehold or leasehold property)
paid
or transferred to the Trustees or otherwise vested in the Trustees and accepted
by the Trustees as additions to the trust fund
,
(3)
all
monies applied for and
received
by the Trustees either by way of subscription, contribution, loans or grants or
otherwise, or from any private or public persons either by gift or will or
otherwise from any institution, public authority, semi-State or State body or
any society or organisation whatsoever,
(4)
all
accumulations of income (if any) and
(5) the
monies, investments and property (including freehold or leasehold land) from
time to time representing the assets referred to in this section.
3. In
the said Deed of Settlement, the words "the beneficiaries" are interpreted as
meaning the following persons:-
(1)
the
Settlor's daughter, Jesse and
(2)
her
children, Rebecca and Kate, their respective spouses and children and
(3)
the
Settlor and
(4)
such
other persons as are added to the class of beneficiaries in exercise of the
powers contained in this Deed.
4. At
the hearing of these proceedings, I heard evidence from the Second Named
Plaintiff, Samuel Jackson, from Mr. Daniel A. Healy, a Chartered Accountant,
from Mr. Shay Cribbin, an Insurance Broker, from Mrs. Noeleen Kelly, of the
Technical Servicing Department of the Norwich Union Insurance Company and from
Mr. Peter Dineen, an Assistant Solicitor with Messrs. Good & Murray Smith
& Co., Solicitors, Nassau House, 40/43 Nassau Street, Dublin 2. I was also
referred to three Affidavits dated respectively the 16th of December 1998, the
9th of February 1999 and the 24th of February 1999, sworn by the First Named
Plaintiff, Mr. Denis A. McArdle and to three Affidavits dated respectively the
14th of January 1999, the 8th of February 1999 and the 19th of March 1999 sworn
by the Defendant, Patrick O'Donohoe and, in the circumstance that I was advised
by Counsel for the parties that neither Mr. McArdle nor Mr. O'Donohoe were
medically fit to attend Court for the purpose of giving evidence at the hearing
of these proceedings and in particular for the purpose of being cross-examined
with regard to the contents of those Affidavits, it was indicated that I would
be entitled to have regard to the contents thereof in the course of my
deliberations.
5. In
the light of the evidence which I heard and of the contents of the several
Affidavits sworn by Mr. McArdle and by Mr. Jackson, I have come to the
following conclusions with regard to the facts of this case, namely;
(A) That,
on the 21st of August 1997, following the death of his second wife, Frances, in
the month of July 1997, the Settlor, who was then eighty-six years of age,
called to the offices of Mr. McArdle and discussed with him the possibility of
creating a trust to provide for his adopted daughter, Jesse and his
grandchildren, Rebecca and Kate.
(B) That,
at the aforesaid meeting with Mr. McArdle, the Settlor specifically drew Mr.
McArdle's attention to the fact that the Norwich Union Insurance Company were
advertising a bond which gave a return of 10% per annum and that he proposed to
invest the sum of £200,000.00 in that bond which would be included in the
trust fund which he contemplated and that he requested that Mr. McArdle and the
Second Named Plaintiff, Samuel Jackson, would act as Trustees of the
settlement. Furthermore, the Settlor indicated to Mr. McArdle at that meeting
that his natural son, Patrick O'Donohoe, had already been well provided for by
him.
(C) That,
on the 29th of August 1993, the Settlor executed the Deed of Trust hereinbefore
referred to and that, by a Will of even date, he devised and bequeathed all his
property to the settlement created by the Trust Deed.
(D) That,
prior to the execution of the said Deed of Settlement of the 29th of August
1997, at the behest of the Second Named Plaintiff, Samuel Jackson, the Settlor
had received advice from a Mr. Daniel A. Healy, a Chartered Accountant, with
regard to the liability for gift and inheritance tax in respect of property
gifted or willed to his adopted daughter, Jesse, and her children and the
implications in that regard should the Settlor create the trust which he
contemplated. Mr. Healy advised that, should the Settlor survive the execution
of a Deed of Trust by two years, a considerable reduction in tax liability on
property passing to the Settlor's adopted daughter, Jesse, and her children
would be achieved. Moreover, when giving that advice, Mr. Healy was led to
believe by the Settlor; firstly, that a sum of £200,000.00 was to be
invested in a Norwich Union bond which was to form part of the trust fund and,
secondly, that the Settlor's natural son, Patrick O'Donohoe, had already been
well provided for and, accordingly, was not to be included as a beneficiary
under the trust. Furthermore, having regard to the Settlor's age, he was to be
named as a beneficiary in the Trust Deed so that, in the event that a need
arose with regard to the Settlor himself, provision could be made for such a
need. In this regard, while the Settlor avers that he did not intend to
establish a trust which would take effect during his lifetime, I am persuaded
by the evidence of Mr. Healy that that was not so. In the circumstance that
Mr. Healy advised the Settlor that, to be tax effective, it was necessary that
the Deed of Settlement create an immediate gift in favour of the Trustees; as I
believe that he did, I am satisfied that the Settlor did appreciate that the
trust which he was creating would take effect during his lifetime and that it
was irrevocable.
(E) That,
at the time that he executed the said Deed of Settlement, the Settlor had
accumulated savings of approximately £300,000.00 and that, it was out of
those savings, that a sum of £200,000.00 was to be invested in the Norwich
Union bond hereinbefore referred to. Moreover, the Settlor then had an annual
income of approximately £24,000.00 and no liabilities and it was
anticipated that the Settlor could survive on that income without recourse to
his savings; particularly, as it was the belief of both the Settlor, himself,
and of the Second Named Plaintiff, Samuel Jackson, that investment in the
Norwich Union bond hereinbefore referred to and its inclusion in the trust fund
would provide the Settlor with an additional income of £20,000.00 per annum.
(F) Pursuant
to the Settlor's instructions in that behalf, the Second Named Plaintiff,
Samuel Jackson, applied to the Norwich Union Insurance Company through the
agency of Mr. Shay Cribbin, an Insurance Broker, for an appropriate bond and
gave to Mr. Cribbin a bank draft for £200,000.00 which he, with the
authority of the Settlor, had obtained from the Settlor's account in the Bank
of Ireland. However, at no time, did Samuel Jackson indicate to either the
Norwich Union Insurance Company or to Mr. Cribbin that it was intended that the
said bond would form part of a trust fund and, accordingly, the bond issued to
Mr. Cribbin in the name of the Settlor and was given by Mr. Cribbin to Mr.
Jackson for safekeeping whereas, had it been indicated to the Norwich Union
Insurance Company that it was intended that the bond would form part of a trust
fund, the bond would have issued in the name the of the Trustees of that fund
and would have been held by the insurance company until a Deed of Settlement
was produced to them by the Trustees.
(G) The
aforesaid application to the Norwich Union Insurance Company for the said bond
was made prior to the execution of the said Deed of Settlement and at a time
when the insurance company had indicated that availability of the bond would
shortly cease. Accordingly, because the Settlor had indicated to him that he
was anxious to invest in that bond and that the investment would form part of
the trust fund, Mr. Samuel Jackson decided to proceed with the application for
the bond in the name of the Settlor to the intent that, when it issued, it
would be vested in the trust fund. In fact, that never happened and the bond
remains in the name of the Settlor.
(H) By
two wills respectively dated the 9th day of April 1998 and the 4th day of June
1998 the Settlor (inter alia) confirmed that he had made ample provision for
his son, Patrick O'Donohoe, during his lifetime and gave, devised and
bequeathed his property to the settlement created by him by the Trust Deed
dated the 29th of August 1997.
(I) When
the decision to invest the said bond was made, it was the belief of both the
Settlor and of Mr. Samuel Jackson that, when invested in the trust fund, the
bond would produce an income for the Settlor of £20,000.00 per annum which
would be his only interest in the bond. However, when, on the first
anniversary of the issue of the bond, Mr. Jackson applied to the Norwich Union
Insurance Company for the annual interest which he believed was payable on the
bond, he learnt to his surprise and annoyance that the bond was intended to be
a long term investment with no provision for the payment of annual interest but
that there was the right of encashment subject to a penalty. Mr. Jackson
challenged the insurance company's interpretation of the provisions of the bond
with regard to the payment of interest but to no avail save that, in the light
of his insistence that, when applying for the bond, both he and the Settlor had
been had to believe that it provided for the payment of an annual interest at
10%, the insurance company reduced the penalty for early encashment by 1% and
the bond was cashed to the extent of £20,000.00 payable to the Settlor
together with the early encashment penalty levied by the insurance company.
(J) That,
in or about the month of September 1998, at the behest of the Settlor, the
Norwich Union Insurance Company agreed that the Settlor would be paid an income
from the said bond at a rate of £3,000.00 per quarter, payable on the
currency date of the bond; the first payment of such income being made on the
28th day of November 1998.
(K) That,
on the 28th day of October 1998, the Settlor called to the offices of Mr.
McArdle and indicated that he wished to change his Will but that Mr. McArdle
declined to make a fresh Will for him on the grounds that he (Mr. McArdle) did
not consider that the Settlor was then mentally in a fit state to do so.
(L) That,
on or about the 30th day of November 1998, the Settlor, through the agency of
Mr. Cribbin, withdrew a sum of £35,000.00 from the said bond in part
surrender thereof which said sum was paid by the Norwich Union Insurance
Company by way of a cheque made payable to the Settlor and sent to Mr. Cribbin
on his behalf. In that regard, I am satisfied that, while, when he
subsequently learnt of that payment in or about the 5th of December 1998, Mr.
McArdle expressed concern that the funds represented by the said bond were
being dissipated and advised Mr. Jackson to attempt to have the said cheque
stopped or sent directly to Mr. Jackson, himself, Mr. McArdle did not protest
that such a payment was in breach of the provisions of the said Deed of
Settlement of the 27th of August 1997. Moreover, I am persuaded by the
evidence of Mr. Cribbin that, it was he (Mr. Cribbin) who arranged for the
payment of the said sum of £35,000.00 and that he did so at the request of
Mr. Jackson; the application therefore having been signed by both the Settlor
and Mr. Jackson and that, furthermore, after he (Mr. Cribbin) had received the
cheque for £35,000.00 from the Norwich Union Insurance Company he received
a request from a Mr. Jackson to hold it. In this regard, I am also persuaded
by the evidence of Mr. Jackson that he had been requested by the Settlor to
secure the payment of the said sum of £35,000.00 so that he (the Settlor)
might make a gift thereof to his housekeeper, Ms Helen Johnson and that he (Mr.
Jackson) complied with that request without protesting that the said sum was
part of the trust fund created by the said Deed of Settlement of the 29th of
August 1997 and accordingly no longer the property of the Settlor.
(M) That,
by letter dated the 2nd day of December, 1998, addressed to him by Messrs. Good
& Murray Smith & Company, Solicitors, and enclosing an appropriate
authority signed by the Settlor, whom Messrs. Good & Murray Smith &
Company described as their client Mr. McArdle was requested to release all
deeds and documents which he held for the Settlor to the bearer of that letter.
(N) That,
on the 3rd of December 1998, the Settlor's son, Patrick O'Donohoe, attended at
the offices of Mr. McArdle and delivered to him a letter purportedly signed by
the Settlor instructing Mr. McArdle to dissolve the trust created by the said
Deed of Settlement of the 29th of August 1997.
(O) That,
by Order of the High Court dated the 23rd day of March 1999, it was ordered
that the Defendant (the Settlor), or anyone purporting to act on his behalf, be
restrained until after the trial of this Action from removing or otherwise
dealing with the monies the subject matter of these proceedings so as to
preclude the vesting of same in the Plaintiffs (the Trustees).
(P) In
addition to the foregoing, I am satisfied that , notwithstanding the recital in
that behalf in the said Deed of Settlement of the 29th day of August 1997, no
sum of £100.00 was ever paid by the Settlor to the Trustees and neither
was any other monies, securities or other properties ever paid to or
transferred into the name of the Trustees by the Settlor with a direction that
the same be vested in the trust fund created by the said Deed of Settlement.
Indeed, I am satisfied that the Trustees did not even open an account in any
financial institution in the name of the trust created by the said Deed of
Settlement.
6. The
issue that I have to decide in this case is whether the sum of £200,000.00
invested in the said Norwich Union Bond (Number U7000456T) constitutes part of
the trust fund as defined in the Deed of Settlement of the 29th of August, 1997
or whether the said sum is the personal property of the Defendant.
7. In
the light of my conclusions on the facts of this case, I am satisfied that, at
the time that he executed the said Deed of Settlement of the 28th of August
1997, it was the intention of the Settlor, that the £200,000 which he had
invested in the said Norwich Union Bond was to be included in the trust fund
created by the said deed and, as I have already indicated, I am equally
satisfied that, by virtue of the advice with regard to the tax implications of
the creation of that trust which he had received from a Mr Healy, the Settlor
also appreciated that the trust thereby created was to take effect during his
lifetime and that it was irrevocable. I might add that, despite his
protestations in that regard, I am also satisfied that, after he had executed
the said Deed of Settlement, the Settlor was provided with a copy thereof
although I accept that it may well be that, as he maintains, he did not read
it. I am also satisfied that the said bond was never transferred into the
names of the trustees; either to the intent that it was to be included in the
trust fund created by the said Deed of Settlement, or at all and that neither
did the Trustees ever receive from the Settlor any monies or property
(including the sum of £100 which is expressed in the said Deed of
Settlement to have been paid by the Settlor to the Trustees) with a direction
that such monies or property be invested in the said trust fund. Indeed, as I
have also already indicated, I am satisfied that Trustees did not even open an
account in any financial institution to which monies received by them on behalf
of the trust fund might be invested. Moreover, although I accept that when, in
November 1998, Mr McArdle learned that the Settlor had withdrawn a sum of
£35,000 from the said bond, he expressed reservations about that fact,
those reservations were not based on any argument that those monies formed part
of the trust fund created by the said Deed of Settlement and were not,
therefore, available to the Settlor and, far from protesting that the Settlor
was not entitled to withdraw those monies because they formed part of the trust
fund
created
by the said Deed of Settlement of the 27th of August 1997 Mr Jackson
acquiesced in the withdrawal of those monies, in that, he actually signed the
application therefor which was submitted to the Norwich Union Insurance
Company. In this regard, while, as I have already indicated, I have no doubt
but that, when he executed the Deed of Settlement of the 27th of August 1997,
it was the Settlor's intention that the said bond would be included in the
trust fund thereby created although he understood that he would continue to be
entitled to receive annual interest thereon, I am persuaded by the events which
occurred during the months of October, November and December 1998 which are
hereinbefore referred to that, in or about that time, the Settlor changed his
mind and decided that he wanted to have access to the monies represented by
that bond and I think it probable that, notwithstanding his execution of the
said Deed of Settlement, he believed that, by reason of the fact that the said
Bond had never been transferred into the names of the Trustees but remained in
his name, he was entitled to draw on those monies. Whether or not that
decision and that belief was influenced by a third party; in particular, by
the Settlor's natural son Patrick O'Donohoe which, apparently appears to be the
suspicion, is, in my view, a moot point and is not relevant to the issue which
I have to decide in this case although I accept that, at the time that he
executed the said Deed of Settlement, the Settlor was adamant that his son,
Patrick O'Donohoe, had already been well provided for and, accordingly, was not
to be included as a beneficiary under the trust created by that deed; an
assertion which he repeated in the Will which he made on the same date and in
the subsequent Wills which he made on the 9th day of April 1998 and the 4th day
of June 1998. I might add that it does not appear to me that there was any
consideration for the creation of the trust given by the beneficiaries therein
named and, in that regard, even though the Settlor, himself, is named as a
beneficiary under the Trust and even had he paid the sum of £100 to the
trustees which is stated in the Deed of Settlement as having being paid to them
(which, as I have already indicated, I do not believe that he did) I am not
persuaded that such payment would amount to valuable consideration. However,
for the purpose of deciding the issue which I have to decide in this case, it
is not, I think, necessary to decide that question.
8. On
behalf of the Plaintiffs, Ms Egan submitted:-
1. That,
even allowing that the Settlor never paid to the Trustees the sum of £100
which is expressed in the said Deed of Trust to have been paid to them by him
by virtue of his execution of the said Deed of Trust, he surrendered rights and
fettered his ability to deal with property which amounted to valuable
consideration. Accordingly, she submitted that, as the Settlor, himself, is a
beneficiary named in the Deed of Trust and even though the trust created by the
deed may be incomplete, the Court should enforce it and in that event, the
beneficiaries under the trust who are volunteers will be able to enforce their
rights under the Deed. In support of that proposition, Ms Egan referred to
Volume 48 of the Fourth Edition of Halsbury's Laws of England at paragraph 561
and to paragraph 8.09 on page 97 of Equity and the Law of Trusts in the
Republic of Ireland by Mr Justice Ronan Keane.
2. In
the circumstance that the said Deed of Settlement of the 27th day of August
1997 does not require particular words of limitation, all that is necessary to
completely constitute the trust thereby created was that the settlor should
hand over monies to the Trustees which he did when he gave to Mr Jackson the
necessary authority to enable him to withdraw the sum of £200,000 from his
bank account for the purpose of investing it in the said Norwich Union Bond
which, in turn, was to be vested in the trust fund created by the said deed.
Accordingly, the maxim
"omnia
praesumunter rite ac solemnieter esse acta"
applies, in that, the Settlor had done everything in his power to complete the
trust created by the said Deed and it is clear that he, himself, recognised
that fact when, in a letter dated the 3rd day of December 1998 addressed to Mr
McArdle he said:
'I hereby instruct you to dissolve the Trust known as the 'O'Donohoe
Settlement'".
9. Moreover,
the Bond purchased by Mr Jackson out of the monies provided by the Settlor was
retained by Mr Jackson in his capacity as one of the Trustees named in the Deed
of Settlement. In support of that proposition, Ms Egan referred to paragraph
8.07 on page 95 of Equity and the Law of Trusts in the Republic of Ireland by
Mr Justice Keane.
10. On
behalf of the Defendant, Mr Brady submitted:-
1. That
the burden of proving that the sum of £200,000 invested by the said
Settlor in the said Norwich Union Bond constitutes part of the trust fund
created by the Deed of Settlement dated the 27th of August 1997 rested with the
Trustees and that they must establish that fact on the balance of probability.
To that end, the Trustees must prove that the Settlor had divested himself of
the legal and equitable estate in the bond and had no longer any control or
direct personal interest in the bond or the proceeds of any encashment thereof
or any income generated thereby and that the mere proof of an intention to vest
the bond in the Trustees of the settlement created by the said Deed of the 29th
of August 1997 does not, ipso facto, establish the fact that the legal title
had been so vested. In that regard, Mr Brady pointed to the fact that, apart
from the sum of £100 which is expressed in the said Deed of Trust to have
been paid by the Settlor to the Trustees, the Deed recites that the "Settlor
may
hereafter
pay
or
transfer
............into the names of or otherwise placed under the
control
of the Trustees ........the sum of £200,000...........to the intent that
the same may be held upon the trust thereof" and further provides that the
trust funds shall include "all monies investments, and property (including
freehold or leasehold land)
paid
or transferred
to the Trustees or
otherwise
vested
in the Trustees and
accepted
by the Trustees as additions to the trust fund' whereas the fact of the matter
is that the Settlor never exercised the option of paying or transferring the
said sum of £200,000 into the names or under the control of the Trustees
and neither of the Trustees ever accepted the said sum of £200,000 as
additions to the trust fund" in the sense that they never opened an account in
the name of the trust to which those monies, or the bond which was purchased
therewith, could be lodged. On the contrary, although the Settlor provided the
sum of £200,000 with which the said bond was purchased, the bond issued in
the name of the Settlor and remains in his name and the Trustees, by
implication, recognise that the said bond was never vested in them, in that, in
a Notice of Motion dated the 16th day of December 1998 issued in these
proceedings on behalf of the Trustees an Order is sought requiring the Settlor
to take all steps as are necessary to ensure that the said trust fund is vested
in the Trustees. Moreover, neither the insurance broker, Mr Shay Cribben, who
was instrumental in purchasing the said bond, or the Norwich Union Insurance
Company were ever told that the bond was to be held in trust nor did the
Settlor ever execute a Declaration of Trust in respect thereof. Indeed, in
November 1998, it was the Settlor, rather than the Trustees, who made the
decision to withdraw the sum of £35,000 from the said Bond through
encashment and although, subsequently, the Trustees expressed reservations with
regard to that withdrawal it was not on the grounds that the Settlor was not
entitled to withdraw it. In support of these propositions, Mr Brady referred
to the law of Trusts and Equitable Obligations by Robert A Pierse and John
Stevens at page 555, a judgment of the High Court given in the case of
In
the Matter of the Estate of William Henry Wilson Deceased; Ion Grove-White and
Gerard Edward Grove-White v John Hugh Wilson and Others
(1933) IR 4 at page 729, a judgment of the Court of Appeal in Chancery given in
a case of
Milroy
v Lord
(1861 - 73 A.E.R. Rep. at page 783) and the 1977 edition of Equity and the Law
of Trusts in Ireland by Hilary Delany at page 100".
11. In
my view, the trust created by the said Deed of Settlement of the 27th of August
1997 was not completely constituted, in that, the Settlor never effectively
transferred any monies or any property which might be included in the "Trust
Fund" as defined in the said Deed to the Trustees. While, as I have
indicated, I am satisfied that, at the time that he executed the said Deed of
Settlement, it was the intention of the Settlor that the sum of £100
therein expressed to have been paid by him to the Trustees would be paid to
them for inclusion in the trust fund and that the Norwich Union Bond which had
been purchased out of monies provided by him would equally, be included in the
said Trust Fund, I am satisfied that, in fact, the said sum of £100 was
never paid to the Trustees and neither did the Settlor ever effectively
transfer his title to the said Bond to the said Trustees. In this regard, the
mere fact that, following its purchase, one of the Trustees, Mr Jackson
retained possession of the bond does not, in my view, have the effect of
transferring title in it to the Trustees. Accordingly, as I have indicated, I
do not consider that the trust created by the said Deed of Settlement was
completely constituted and, as I understand the legal principles in that
regard, a Court of Equity may not compel the completion of an incompletely
constituted trust in the absence of valuable consideration; c/f Volume 48 of
the 4th Edition of Halsbury's Laws of England at paragraph 561. In this
regard, Ms Egan has submitted that, whether or not the Settlor paid to the
Trustees the sum of £100 which is expressed to have been paid to them by
the said Deed of Settlement of the 27th of August 1997, by his execution of
that Deed, in which he, himself, is named as a beneficiary, he has surrendered
rights and fettered his ability to deal with property which amounts to valuable
consideration. I do not think that this is so. Consideration in the context
of an incompletely constituted trust means the conferring of some benefit by
the Settlor or the undergoing of some detriment by the beneficiary (c/f
paragraph 8.09 of Equity and the Law of Trusts in the Republic of Ireland by Mr
Justice Ronan Keane) and it seems to me that the failure of the Settlor to
transfer any monies or property to the names of the Trustees, as was his
intention at the time that he executed the said Deed of Settlement and as was
provided for therein, negatives the existence of a trust fund whereby the trust
thereby created was incompletely constituted and there was no consideration
therefore. In particular, in the absence of a trust fund, the Settlor
surrendered no rights and had not fettered his ability to deal with his
property. In this regard,. while I accept the validity of Ms Egan's
proposition that, at the behest of a beneficiary, who is not a volunteer, the
Court may enforce an incomplete trust so that the trust becomes completely
constituted and that, in that event, a volunteer beneficiary will be able to
enforce his or her rights under the incompletely constituted trust, the fact of
the matter in this case is that none of the beneficiaries named in the said
Deed of Settlement of the 27th of August 1997 have sought to enforce the trust
thereby created and the only beneficiary by whom it is suggested that valuable
consideration was given for the creation of the trust; namely, the Settlor,
specifically does not seek to enforce it. That being so, and given, that, in
any event, it is my opinion that there was, in fact, no consideration given
for the creation of the trust, I am not satisfied to compel its completion.
12. Arising
from the foregoing, while as I have indicated, I am satisfied, that, when he
executed the said Deed of Settlement of the 27th of August 1997 it was the
Settlor's intention to vest the said Bond in the Trustees, he never, in fact,
gave effect to that intention, in that, he took no steps whatsoever to have the
title to the bond which was in his name transferred into the names of the
Trustees and, in that regard, I would adopt the statement of Mr Justice Johnson
given in the course of his judgment in the case of
In
the Matter of the Estate of William Henry Wilson, deceased
,
hereinbefore referred to in which he said (c/f page 39 of the Report of the
Judgment):-
"A
gift is a gift and, of course if a donor, while expressing an intention to give
something and taking certain steps in the direction of giving it, has not gone
the whole way, the expectant donee has no equity to compel the completion of
the gift. This is good sense and good law".
13. Moreover,
by virtue of the decision of the Court of Appeal in Chancery given in a case of
Milroy
v Llyod
(1861-73 A.E.R. Rep.) it would appear that, if it is the intention to create a
trust by transfer of property then, in the absence of a stated intention by the
Settlor to constitute himself a trustee of the trust property and in the
absence of an effective transfer of the trust property to the trustees, equity
will not construe the ineffective transfer as a declaration of trust by the
Settlor. In my view, there was never an effective transfer of the title to the
Norwich Union Bond to the Trustees and neither did the Settlor ever express an
intention to constitute himself a Trustee of the settlement created by the Deed
of the 27th of August 1997.
14. In
conclusion, I reject the submission that the
maxim
"omnia
praesumunter rite solemnieter essa acta"
has
any application in this case. While it may well be that, when he executed the
Deed of Settlement of the 27th day of August 1997, the Settlor intended that
the Norwich Union Bond would be included in the Trust Fund as defined in that
Deed, in fact, the Deed did not require that the said Bond or, indeed, any
particular monies or property be transferred to the Trustees for inclusion in
the trust fund but rather gave the Settlor an option to pay or transfer sum of
£200,000 together with further sums of money or securities or other
property to the Trustees to the intent that the same be held upon the trusts
thereby created whereas I am satisfied that the Settlor never, in fact,
exercised that option.
15. Having
regard to the foregoing, it is my opinion that the sum of £200,000
invested by the Settlor in Norwich Union Bond No. U7000456G does not constitute
part of the Trust Fund as defined by the said Deed of Settlement but remains
the personal property of the Defendant.
© 1999 Irish High Court
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