The High Court has ruled that a solicitor appointed as executor of Brian Rhatigan’s estate could not administer it because her previous professional work created conflicts between the interests of estate beneficiaries and people connected with assets outside the estate.
In a judgment delivered on 28 March 2012, Miss Justice Laffoy declined to grant probate to Sharon Scally, the sole surviving executrix named in Mr Rhatigan’s will. The court found “serious special circumstances” and said an independent professional should be appointed under section 27(4) of the Succession Act 1965.
The ruling followed a second module of proceedings focused mainly on the defendant Odilla Rhatigan’s request for a declaration that Ms Scally was not an appropriate person to act as executor. The court had earlier determined, by consent, that the will was properly executed, Mr Rhatigan knew and approved its contents, and he had testamentary capacity. The other named executor had died in 2008.
The judge identified three transactions that could place Ms Scally in a position of irreconcilable duties. Her firm acted for Unit 33 in the sale of Chantilly, the Rathmichael home where Mr Rhatigan lived and worked. The court said questions could arise about funds used to discharge a mortgage on the property and the destination of sale proceeds. The property was sold for €3.5 million and later resold for €5 million.
Her firm also acted for TAM in the sale of Kildare Enterprise Centre, which closed in 2006. The court found a potential conflict over whether the proceeds should be brought into the estate on the basis that Mr Rhatigan was its beneficial owner. The defendant’s evidence included a surveyor’s estimate that the property was worth between €16 million and €20 million; the judge said that evidence alone did not establish that it had been sold at an undervalue.
The third issue concerned the discharge of a mortgage over the defendant’s family home, Bri-Odi. The court said questions about the source and beneficial ownership of the repayment funds could create competing claims between estate and non-estate beneficiaries. It did not find that the defendant had an entitlement to repayment from any particular source.
The judge said Ms Scally’s past work for Mr Rhatigan and companies connected with the Golden Promise Trust went beyond the three examples. In the court’s view, she could not make full disclosure for the estate without potentially breaching confidentiality duties to former clients.
The court did not appoint an administrator at this stage. It proposed adjourning briefly to allow the parties to agree on a suitable, willing independent person, ideally an accountant with no relevant prior professional connection. Once a candidate’s suitability is established, the court proposed making an order granting administration with the will annexed.
Other claims remain unresolved. The court said it could not determine the defendant’s claims under section 121 of the Succession Act or that Mr Rhatigan held half his estate in trust for her because the estate was not properly represented. The question of trusteeship of the residuary estate was also adjourned.