The High Court refused an application to place a €3.2 million personal injury settlement into a proposed discretionary trust, saying it was not satisfied it could make the orders sought at that stage.
In a judgment delivered on 4 May 2005, President of the High Court Finnegan said the plaintiff, Patrick Pierce, was 22 and had sustained a serious head injury in an accident in 1996. The court had approved a settlement of €3.2 million plus costs in July 2004, directing that the money be held in an interest-bearing joint deposit account pending an application to make him a ward of court.
The February 2005 application sought approval for a private trust, the appointment of proposed trustees and the transfer of all or part of the settlement funds into the trust. Medical reports before the court described significant intellectual, communication and motor difficulties. A consultant neurologist had written in July 2004 that Pierce was not capable of handling his own affairs.
The judge said he did not understand the law to allow a next friend to transfer the property of a person who had reached full age. Pierce could enter the trust himself if he had capacity, but the judge said that question could not be determined on this application and belonged in the court’s wardship jurisdiction.
Finnegan also raised concerns about the proposed deed. Its discretionary terms did not require trustees to apply the funds for the beneficiary, and its investment and liability provisions extended beyond those authorised by law, the judgment said. The settlement was irrevocable and allowed the trustees to transfer funds to another irrevocable settlement. The judge said he had concerns about the deed’s suitability given Pierce’s age, life expectancy and capacity.
The court refused the requested relief. Finnegan said he proposed to proceed under section 12 of the Lunacy Regulation (Ireland) Act 1871. Any decision on whether to make a declaration order, whether wardship was appropriate, and how best to provide for Pierce’s maintenance and benefit would be considered in those proceedings. The judgment did not make a wardship declaration or approve the trust.