The High Court ordered George and Pauline O’Donnell and Bank of Ireland, jointly and severally, to pay Mary Bourke €124,000 after finding that a transfer of her savings to the couple should be set aside and that the bank breached a duty to enquire into her capacity.
In a judgment delivered on 5 October 2010, Mr Justice Hedigan found that Bourke, then 77, had been mentally disordered to the point of lacking contractual capacity when she instructed the bank to issue the draft on 6 December 2007. He made that finding on the balance of probabilities, while noting that her capacity could have been different before or after that date.
The couple had accompanied Bourke to the bank. She instructed its manager to give them €124,000, largely made up of proceeds from an insurance policy cashed the previous month. The manager spoke with Bourke privately, advised her to give a smaller amount and recommended independent legal advice. She insisted on proceeding. He said he believed she knew what she wanted and did not know she was living in a nursing home or had recently been ill.
The judge found that Bourke had a long-standing relationship of dependence on the couple, who had helped care for her, held a key to her home and were frequent visitors during her nursing-home stay. She had been seriously ill in the preceding months, with periods of confusion and disorientation. The transfer would have given away most of her assets without any return. The couple did not give evidence at trial. The judge held that the presumption of undue influence was therefore unrebutted and set aside the transaction.
The claim against the bank rested on its contract with Bourke. The judge rejected a general duty on a bank to assess the commercial wisdom of a customer’s instructions, and said the bank had no direct notice of her incapacity. But he found the circumstances of the transaction—an elderly customer proposing to give away nearly all her cash assets for no consideration—raised substantial grounds to doubt her capacity. That required further enquiry. The manager’s private conversation and advice did not resolve those doubts, and the bank breached its duty to enquire.
The court entered judgment for Bourke against all three defendants jointly and severally for €124,000. The judgment does not state a separate award of interest or costs.