The High Court has ruled that two disclaimers of inheritance by family members were void under the Irish Statute of Fraudulent Conveyances 1634, finding that their necessary or probable effect was to hinder the Motor Insurers Bureau of Ireland in recovering a debt. The court did not make final orders in the proceedings on the day of judgment, instead adjourning them for further submissions on the form of orders.
The dispute arose after Catherine Stanbridge died intestate in 2005. She had been seriously injured in a 1991 road accident while travelling in a car driven by her husband, Austin Stanbridge, and owned by one of her daughters. The car had no valid insurance. The Bureau later settled her personal injury claim for £917,000, and the settlement order approved assignment to the Bureau of the benefit of judgments against her husband and the daughter who owned the car.
Funds paid into court for Catherine’s benefit were worth about €1.064 million at her death and later stood at about €1.16 million. Under intestacy rules, her husband was entitled to two thirds of her estate and her three children to the remaining third equally. Two family members subsequently disclaimed the shares they would otherwise have received. The Bureau argued that the disclaimers were intended to defeat its claim as assignee of the judgments.
Justice Laffoy held that before disclaiming, each person had a benefit or right in the estate that could be forgone. The court found that disclaiming those shares put assets beyond the Bureau’s reach and that the necessary or probable result was to delay, hinder and defeat payment of the debt. Although there was no evidence of the defendants’ actual motives, the court held that fraudulent intent was established as an inference of law from the evidence.
The Bureau also sought, in the alternative, a remedial constructive trust over the disputed shares. The judge said that argument did not arise once the disclaimers were found void and described it as misconceived on the alternative premise that the disclaimers were valid.
The judgment also addressed a stop order obtained in 2005 over funds held in court and a motion seeking payment of the funds to the Bureau. The judge found the stop order had been sought in defunct proceedings and without notice to the husband and daughter whose shares were targeted. The Bureau had an interest through the assigned judgments in seven ninths of the funds, but none in the remaining two ninths. The motion seeking all the funds, including those two ninths, was misconceived.
The court discharged the stop order and dismissed the 2005 motion. It said the estate’s personal representative must administer the estate on the basis that the disclaimers were null and void. The proceedings were adjourned so the parties could consider the judgment; the judge said further submissions would be heard on the form of orders.