Court of Appeal finds fraud by defendants using false death certificate, dismissing appeal on bona fide purchaser grounds.

THE COURT OF APPEAL

Neutral Citation Number: [2018] IECA 118

Record No. 2014/367

Hogan J.

Whelan J.

Gilligan J.

BETWEEN/

MAUREEN MOORE AND, BY ORDER OF THE COURT, PEGGY SARSFIELD, REPRESENTATIVES OF MAUREEN MOORE

Appellant/

Plaintiff

-AND-

JOHN MOORE, MARIA MOORE AND NADINE CHETTY

Respondent/

Defendant

JUDGMENT of Mr Justice Paul Gilligan delivered on the 26th day of April, 2018

1. The issue before the Court involves an appeal by the plaintiff/appellant against the judgment of the trial judge as delivered herein

on 12th October, 2010. In essence, the appellant’s principal ground of appeal is that the trial judge erred in law and on the facts in

holding that use by the first and second named defendants/respondents of a death certificate attributed to their stepmother to

enable them to claim title to the property 100 Mount Tallant Avenue, Harold’s Cross in the city of Dublin, was simply a mistake rather

than a fraud and the appellant seeks an order from this Court setting aside the trial judge’s finding in this regard and in its place

granting a declaration that the first named and second named respondents sold the property the subject matter to the proceedings

by means of deceit, fraud, conversion and/or unjust enrichment. Further, the appellant seeks an order to the effect that the learned

trial judge erred in law and on the facts in finding that the third named defendant was a bona fide purchaser without notice or that

she had acquired any valid title or interest therein, that further the learned trial judge erred in law and on the facts in awarding the

third named defendant’s costs against the plaintiff.

2. In a reserved judgment delivered on 10th December, 2010 the trial judge sets out the background as he found it in the following

terms:-

“The plaintiff was born on 29th February, 1939 and died on 16th October, 2010, after the hearing of the action. Her family

were from Drogheda.

On the 14th May, 1960, the plaintiff married Eamon Russell and the parties resided for some time in the United Kingdom.

The first and second named defendants believed that a decree of divorce was granted on the 22nd July, 1968 in England.

The plaintiff maintains that the marriage was dissolved on the 23rd October, 1968 and that some years later on the 19th

June, 1981, a church nullity was granted.

In any event the plaintiff had, in the meantime, returned to Ireland and commenced employment around 1970 with John

Gabriel Moore, who was then a widower with two children. The plaintiff married Mr. Moore in 1971, when those children

were aged four and two respectively.

The plaintiff and Mr. Moore ultimately lived in 100 Mount Tallant Ave., Harold’s Cross, which was purchased with the aid of

a mortgage from the Educational Building Society (“EBS”), in the joint names of the plaintiff and Mr. Moore. The EBS loan

was for £4,800 and, it would appear, that the premises were bought for a sum of some £6,000. Title thereto is registered

in Folio 30984L of the Register of Leaseholders where the parties were registered as co-owners on the 20th February,

1978.

Unhappy differences arose between the parties and on the 2nd July, 1982, the plaintiff says that, due to the violence of

Mr. Moore, she was forced to leave the premises. At no stage did she receive any maintenance. She applied for and was

granted a Deserted Wife’s Allowance of which she was in receipt until 1988, when she moved to Antwerp. The plaintiff

continued to reside in Antwerp until 2002. She suffered two severe illnesses from cancer and ultimately returned to

Drogheda where she resided with her mother at 5 Laburnum Square, North Road, Drogheda, from 2002 until the date of

her death on 16th October, 2010.

Mr. Moore continued residing at 100 Mount Tallant Ave, until the date of his death on the 5th January, 1996. He died

intestate and was described as a widower on his death certificate. The first and second named defendants were then

aged approximately 29 and 27 years respectively. The Grant of Letters of administration issued to the first and second

named defendants on the 24th May, 2002, over six years after their father’s death. Meanwhile, the Inland Revenue

affidavit sworn by the first and second named defendants on the 12th March, 2001, described Mr. Moore as a widower.

The net value of his estate was given at £56,841. The value of the Mount Tallant premises was given as £60,000 subject

to a loan in favour of the EBS of £4,313. The only other asset was monies in National Irish Bank of £2,400.

By letter dated the 25th November, 1983, four months after leaving 100 Mount Tallant Avenue and over twelve years

before Mr. Moore’s death, the plaintiff’s solicitor wrote to Mr. Moore in connection with her interest in the property. That

letter stated that their client was then anxious to realise her share in the property and sought suggestions as to how this

might be achieved. No reply was received to that letter.

Following the death of Mr. Moore, the defendants, and in particular the first named defendant continued to reside in and

occupy the premises.

The first named defendant gave evidence of having made enquiries about the whereabouts of the plaintiff. Those

enquiries included writing a letter to the plaintiff’s original family home in Drogheda. Subsequently a death certificate of a

Maureen Moore, aged 57 years, who died on the 21st January, 1995, was obtained.

In May 2001, the first and second named defendants made an application to the Land Registry in respect of the lands

comprised in the relevant Folio in order to have the entries thereon reflect what they said was the fact that the

deceased was the sole owner of the property on the date of his death on the 5th January, 1996. The affidavit was sworn

by the first and second named defendants and contained the following averment:

“We say that the said Maureen Moore died on the 21st January, 1995, thus severing the joint tenancy. We beg to

refer to the death certificate of the said Maureen Moore upon which we have signed our name prior to the swearing

thereof.”

Five months after the grant of letters of administration was issued, the first and second named defendants agreed to sell

100 Mount Tallant Avenue. Pursuant to a contract for sale by transfer for value dated the 23rd October, 2002, the

premises were transferred to the third named defendant and she became the registered owner on that date.”

3. The plenary summons as issued on 22nd November, 2007 sought a declaration that upon the death of John Moore, deceased, the

appellant was entitled to register herself as full owner of the property at 100 Mount Tallant Avenue, Harold’s Cross in the city of

Dublin and she also sought a declaration that the first and second named respondents had wrongfully converted the title deeds to the

property to their own use and benefit for the purported sale of the property to the third named respondent and further that good title

did not pass to the third named respondent and that the first and second named respondents were unjustly enriched by the purported

sale of the property and held the proceeds of the property on trust for the appellant.

4. The first and second named respondents contended that if the appellant is the lawful widow of the deceased which was not

admitted, in or about the summer of 1981 she left and abandoned the premises and discontinued possession thereof and continued to

be out of occupation and possession for upwards of 12 years. It is alleged that the appellant’s husband was in sole and exclusive

beneficial occupation and possession for upwards of 12 years with no acknowledgment made by him in respect of the appellant’s title

to the premises and that pursuant to the Statute of Limitations 1957 the appellants’ title was extinguished. The first and second

named respondents further denied that at the time of the death of the deceased the appellant was a joint owner of the premises.

5. Subsequently, by an amended reply on 10th February, 2009, the appellant pleaded that the first and second named respondents

obtained a death certificate which they knew or ought to have known was not the death certificate of the appellant. Relying on

same, the first and second named respondents sought to amend the register so as to reflect a false position whereby the said John

Moore was shown as at the date of his death to have been the sole person beneficially entitled to the said premises, thus enabling

them as the personal representatives to deal with the property, dispose of the same to the third named respondent notwithstanding

the interest of the appellant.

6. This led to an amended defence on 26th May, 2010, whereby the first and second named respondents denied that they knew or

ought to have known that the copy death certificate was not that of the appellant, and further denied that they were guilty of any

fraudulent act or that they fraudulently relied upon the death certificate or were guilty of deceit or fraud in the conversion of the

property and in any event that the title of the appellant had become statute barred.

7. In essence, what occurred and what was found as a fact by the trial judge was that on the death of their father, the first and

second named respondents sought out a death certificate in respect of their stepmother, the appellant herein, and found a death

certificate relating to a Maureen Moore of 24 Woodleigh Park, Kilmacud, Dublin 14 who was described as female, married, aged 57

years on her last birthday before her death and was by way of occupation a secretary. It is alleged that the first and second named

respondents relied on this death certificate for the purpose of showing by way of title to the premises that their stepmother who

jointly owned the premises with their father had predeceased their father and thus their father was the sole owner at the date of his

death and the property passed to the first and second named respondents who proceeded to register title and sold the property to

the third named respondent who was a purchaser on the open market for full value.

8. The first and second named respondents’ case was that they at all times sincerely believed that the death certificate which they

relied on and which related to a Maureen Moore was genuinely that of their stepmother because she was described as married and at

57 years was approximately the age of their stepmother and was described as a secretary and in the course of her lifetime the

appellant had worked as a secretary.

9. It was accepted by the trial judge that the first and second named respondents had made some enquiries on their father’s death to

ascertain the whereabouts of their stepmother but their enquiries yielded no return in that regard. The actual background situation

was that the appellant had been living abroad for many years but returned in or about 2002 and proceeded to reside with her mother

at her family home at 5 Laburnum Square, North Road, Drogheda, Co. Louth. It also transpired that in fact the appellant had come

home to Drogheda at or about the time of the sale of the property on the open market and the evidence further revealed that it was

not until some years later that the appellant rang her brother in law to be advised that her husband was at that stage deceased and

that the property had been sold. A significant fact of evidence was that the first and second named respondents, on obtaining the

death certificate in February, 2000 made no further effort to either ascertain the whereabouts of the appellant, their stepmother, or

to verify in any way that the death certificate relied on for the sale of the property did in fact relate to their stepmother.

10. Furthermore, before the trial judge was a statutory declaration by the second named respondent in respect of the Family Home

Protection Act 1976, the Family Law Act 1981, the Judicial Separation and Family Law Reform Act 1989, the Family Law Act 1995, and

the Family Law (Divorce) Act 1996. In the declaration the second named respondent averred that in relation to the property 100

Mount Tallant Avenue the property was a family home within the meaning of that term in the Family Home Protection Act 1976 as

amended by the Family Law Act 1995 and that no married couple had ordinarily resided therein since the death of John Moore and

Maureen Moore deceased the registered owners of the property apart from her brother John Moore and his spouse Sylvia Moore. The

second named defendant then referred to copies of the death certificates of John Moore and Maureen Moore deceased pinned

together and attached to the declaration.

11. The judgment of the trial judge rejected the first and second named respondents’ arguments in respect of the various defences as

raised including the Statute of Limitations. A central feature of the judgment was the conclusion on the evidence that the first and

second named respondents had not fraudulently relied on the death certificate of Maureen Moore, wrongly claiming an entitlement to

the property known as 100 Mount Tallant Avenue, Harold’s Cross in the city of Dublin but that in fact they made a mistake and the

trial judge came to the conclusion that the appellant was entitled to damages as against the first and second named respondents but

declined to make an order pursuant to s. 31 of the Registration of Title Act 1964 rectifying the register to reflect the appellant’s

interest in the property, finding that the third named respondent was a bona fide purchaser without notice and that she had acquired

a valid title to the property and inter alia he directed that the appellant herein should pay the third named respondent’s costs of the

proceedings.

12. Subsequently, Laffoy J. heard the action for damages and awarded the appellant the sum of €253,947.00 by way of damages as

against the first and second named respondents.

13. It was apparent on the evidence as adduced before the trial judge that neither the first nor second named respondents had the

necessary funds to meet any award of damages or costs as made against them.

14. Mr Dwyer SC, on the appellant’s behalf, relies on the statement by Lord Herschell at p. 374 of the judgment of the House of Lords

in Derry v. Peak (1889) 14 App. Cas. 337 as follows:-

“First, in order to sustain an action of deceit, there must be proof of fraud, and nothing short of that will suffice.

Secondly, fraud is proved when it is shewn that a false representation has been made (1) knowingly, or (2) without belief

in its truth, or (3) recklessly, careless whether it be true or false. Although I have treated the second and third as

distinct cases, I think the third is but an instance of the second, for one who makes a statement under such

circumstances can have no real belief in the truth of what he states. To prevent a false statement being fraudulent,

there must, I think, always be an honest belief in its truth. And this probably covers the whole ground, for one who

knowingly alleges that which is false, has obviously no such honest belief. Thirdly, if fraud be proved, the motive of the

person guilty of it is immaterial. It matters not that there was no intention to cheat or injure the person to whom the

statement was made.”

15. This test was approved in Superwood v. Sun Alliance & London Insurance plc. [1995] 3 IR 303.

16. Mr Dwyer also referred to the judgment of Finlay Geoghegan J. in McAleenan v. AIG Europe Ltd. [2010] IEHC 128 wherein the

plaintiff had signed a proposal form for professional indemnity which stated that she was a principal of the relevant law firm when in

fact she was an employee. The trial judge found that while the plaintiff had no intent to deceive the defendant as to her status in

the firm, she was guilty of fraud. Finlay Geoghegan J. stated as follows:-

“123. However, in accordance with the principles set out above, neither of the above findings precludes a finding of fraud

in the making of the false statement if the untrue statement was made “recklessly”, in the sense that the term was used

in Derry v. Peek, i.e. careless as to whether the statement be true or false. It is clear that “careless” for this purpose is

not the same as when used in relation to the tort of negligence. The carelessness must be something greater to

constitute recklessness for the purposes of fraud. As pointed out by Lord Herschell in the extract from his speech referred

to above, a statement may be considered as made recklessly where the circumstances are such that the Court considers

the maker can have no real belief in the truth of what he states. It appears to require an objective consideration by the

Court as to whether the circumstances in which the plaintiff signed the Proposal Form (and, by doing so, made the

representations or statements contained therein) were so careless as to whether the statements were true or false that

the Court must conclude that she could have had no real belief in the truth of the statements contained in the Proposal

Form.

124. I have concluded that the plaintiff’s own evidence in relation to how she signed the Proposal Form inescapably leads

to a finding that the statements contained in the Proposal Form in relation to her status in the practice of Michael Lynn &

Co. were made recklessly, in the sense that they were made carelessly as to whether they were true or false.”

17. Mr Dwyer emphasised that the evidence revealed that shortly after the first and second named respondents’ father’s death P.C.

Moore Solicitors advised the first named respondent of the relevance of the fact that the house was held by way of a joint tenancy.

At that time P.C. Moore on the first named respondent’s instructions wrote a letter to Vincent Hoey & Co. Solicitors, who had

represented the appellant previously when she left her husband in 1982, seeking the appellant’s address. There was also evidence

that the first and second named respondents wrote to a number of institutions. None of these efforts revealed any result.

18. In respect of the judgment of the trial judge, Mr. Dwyer submits that he conflated the aspect of fraud and concealment in relying

on what he considered to be the classic statement on the meaning of fraud as attributed to Lord Evershed M.R. in Kitchen v. Royal

Airforce Association [1958] 1 WLR 563 and the trial judge’s further references to concealment and as to whether there had been a

fraud or concealment leading eventually to his conclusion that there was no evidence of concealment but there was clearly a mistake

as to the identity of Maureen Moore who died the year before the first and second named respondents’ father.

19. Mr Dwyer contends that the trial judge’s analysis and application of the issue of fraud in the particular circumstances that arose

and on the basis of the evidence adduced was flawed and that the correct test to be applied was the that as set out in Derry v.

Peek as to whether or not the first and second named respondents acted recklessly, careless as to whether the death certificate

they relied on be true or false and that it was incorrect in law to come to a conclusion that there was no fraud because the cause of

action had not been concealed from the appellant. Concealment was an essential issue in the Kitchen case as the cause of action

had been concealed from the appellant by her solicitor. Mr Dwyer contends that the relevance of the Kitchen case in the context of

these proceedings is difficult to understand.

20. Furthermore Mr Dwyer relies heavily on the fact that having located the death certificate of a Maureen Moore who lived at 24

Woodleigh Park in Kilmacud the respondents took absolutely no steps to determine whether the woman for whom they had the death

certificate was the same person as their stepmother.

21. Mr Dwyer contends that the first and second named respondents could have compared the ages of Maureen Moore on the

marriage certificate of their father and the age of the deceased on the death certificate. Further, they could have called to the

premises in Kilmacud to make enquiries whether the deceased was the same Maureen Moore as their stepmother since it is only 20

minutes from where they live. The first and second named respondents did not look up the telephone directory and make a call to Mr

Moore who was in the telephone book at the same address, nor did they write to the address.

22. In respect of the third named respondent Mr Dwyer contends that the solicitor for the third named respondent should have

ascertained from the Family Home Protection Act declaration and the content of the death certificate as provided that at the date of

her death Maureen Moore was not residing at 100 Mount Tallant Avenue, but was instead residing at 24 Woodleigh Park, Kilmacud,

and if this aspect had been considered it would have revealed the truth of the situation. In essence, Mr Dwyer contends that the

third named respondent, her servants or agents did not carry out sufficient enquiry and had they done so they would have been on

notice of the fraud. In that context, Mr Dwyer contends that the learned trial judge erred in determining that the plaintiff would be

liable for the third named defendant’s costs and that it is not clear from the judgment as delivered that the basis was for the trial

judge’s decision in this regard.

23. Mr O’Dwyer contends that no party to the proceedings pleaded mistake and in this regard places reliance on the judgment of

Laffoy J. in the Supreme Court in Reynolds v. Blanchfield [2016] 2 I.R. 268.

24. Mr Brady SC, on behalf of the first and second named respondents contends that the appellant pleaded their case in the High

Court against the first and second named respondents in fraud but not mistake and the trial judge found that there was no fraud on

the part of these respondents but found against them in mistake.

25. Mr Brady submits that the appellant relies primarily on the decision of Finlay Geoghegan J. in McAleenan v. AIG Europe Ltd [2013]

3 IR 202 and sets out at length the finding of the trial judge and distinguishes the case, referring in particular to the fact that Finlay

Geoghegan J. concluded that the defendant had discharged the onus of establishing that it was entitled to repudiate the policy

against the plaintiff pursuant to the terms at clause 4(j)(a) of the policy by reason of the material misstatement of her status in the

practice of the particular firm of solicitors on the proposal form which was made recklessly in the sense of carelessness as to whether

it be true or false and hence not innocent and not free of fraudulent intent. Mr Brady contends that an insurance company

repudiating a policy for fraud is a very different type of case to the facts of this particular case.

26. Mr Brady relies on the judgments of the High Court as per Finlay Geoghegan J. in Keegan Quarries Ltd v. McGuinness [2011] IEHC

432, Shanley J. in Forshall & Fine Arts Collection Limited v. Walsh [1997] IEHC 100 and Gilligan J. in Carey v. Independent Newspapers

Ireland Limited [2004] 3 IR 52.

27. Reliance is placed on the dicta of Finlay Geoghegan J. in Keegan wherein she stated:-

“The onus is and remains on a plaintiff to prove the defendant's dishonesty, that is, his lack of honest belief in the truth

of the statement. It is not for a defendant to prove his honest belief. The standard of proof is the civil one; the proof

must be on the balance of probabilities.”

28. Considerable reliance is placed by Mr. Brady on the actual evidence adduced before the trial judge and the extent of the

involvement of the first and second named respondents, their apparent genuine belief that the content of the death certificate

matched their stepmother’s position and that they were totally convinced that the Maureen Moore in the death certificate was their

stepmother and, in particular, the fact that in 1996 the first and second named respondents caused a letter to be written to Vincent

Hoey Solicitors by P.C. Moore Solicitors seeking an address for the appellant and furthermore the letters to the nursing homes.

29. Reliance was placed on the judgment of the Supreme Court in Hay v. O’Grady [1992] 1 IR 210 and the conclusion that there was

no fraud on the part of the first and second named respondents as held by the trial judge and while the trial judge held in favour of

the appellant on the grounds of mistake, there was never any plea of mistake and Mr Brady emphasises that mistake was never

actually argued before the trial judge.

30. Mr Brady makes the observation that the appellant appears to be endeavouring to obtain a remedy pursuant to s. 120 of the

Registration of Title Act 1964 as amended from a party namely the Land Registry, who are not a party to the action in the High Court

or to this appeal and are not even referred to in the notice of appeal and that this submission is made without prejudice to the

contention that s. 120 of the Registration of Title Act 1964 has no application in the current circumstances.

31. Mr Molloy SC, on behalf of the third named respondent, contends that Ms Chetty was a valid purchaser for full consideration in

the open market with no notice and that it was unnecessary to join her as a party to the proceedings and in particular to this appeal.

32. I am satisfied that the trial judge fell into error in the approach he took to the law pertaining to the facts as adduced before him,

which were not disputed. The issue of mistake was neither pleaded or argued before him and there was no issue as regards fraud

interlinked in some way with concealment. The legal position that arises is correctly set out within the judgment of Lord Herschell in

Derry v. Peek. In the particular circumstances of this case, the issue is as to whether the first and second named respondents

behaved recklessly and in a careless fashion in relying on the death certificate of Maureen Moore. The trial judge appears to have

taken the view that the efforts as made by the first and second named respondents to trace the whereabouts of their stepmother

after the death of their father may have been adequate but the accepted evidence is that on obtaining the death certificate in

February, 2000 no effort whatsoever was made to try to ascertain whether or not the death certificate related to the first and

second named respondents’ stepmother when any number of avenues were open to them, any of which would have revealed that the

death certificate did not relate to their stepmother. The first and second named respondents both took the view as indicated to the

Court that they genuinely believed that the death certificate related to their stepmother. But the reality of the situation has to be

that in the civil sense of fraud in the particular circumstances they behaved recklessly and in a careless fashion as to whether the

death certificate they relied on was truly that of their stepmother against a background where they proposed to rely on the

certificate for the purpose of regularising the title to the property which they went on to sell in October, 2002 for the sum of

€253,947.00.

33. Insofar as the trial judge relied on the dicta in Kitchen v. Royal Airforce Association and the issue of concealment, he fell into

error. He relied on the classic statement of fraud as attributed to Lord Evershed M.R. in the context of s. 26 (b) of the Limitation Act

1939 dealing exclusively with the issue of concealment.

34. The trial judge specifically raises the issue as to whether there had been a fraud or concealment and if there was a concealment,

what was concealed from whom, and as to whether there was a special relationship between the respondents and the appellant. The

trial judge stated that the fraud alleged had to be examined in terms of two letters in 1996 from the first and second named

respondents’ solicitors to Vincent Hoey solicitor and P.C. Moore solicitor seeking the address of the appellant when in fact the letter

was from P.C. Moore Solicitor on behalf of the first and second named respondents to Vincent Hoey and Co., the solicitors who

previously acted on the appellant’s behalf, and a letter to two nursing homes to whom the first and second named respondents made

enquiries, which yielded no response.

35. The trial judge did not seek to explain or rationalise that there was no fraud within the meaning of the test as laid down in Derry

v. Peek, but was satisfied that the above actions were sufficient to conclude that the first and second named respondents had not

acted fraudulently particularly against the background where they carried out no inquiry as to whether the death certificate was that

of the appellant.

36. The approach taken by the trial judge does not consider the consequences of the decision by the first and second named

respondents that the death certificate was that of their stepmother when it was in fact not, having regard to the significant benefit

to the first and second named respondents from such a mistake and whether such would constitute fraud. Insofar as fraud is

considered by the trial judge I am satisfied that he erred in law in his finding in relation to fraud pursuant to s.71 of the Statute of

Limitations and the issue of concealment.

37. In my view, following the rationale as expounded in Derry v. Peek, there was no alternative but for the trial judge to come to a

conclusion in the particular factual circumstances as found that the first and second named respondents committed fraud in the civil

meaning of that term by behaving recklessly careless as to whether or not the death certificate relied on pertained to their

stepmother, the appellant, and I so find.

38. Accordingly, I would set aside the order of the trial judge as regards the finding as made against the first and second named

respondents and in substitution thereof I grant a declaration that the first and second defendants sold the property 100 Mount

Tallant Avenue, Harold’s Cross, in the city of Dublin to the third named respondent by means of fraud. In the light of this finding as

the third named respondent purchased the property without being on notice, on the open market for full value the appellant’s appeal

from the Order of the trial judge in this regard will stand dismissed. I see no reason to disagree with the trial judge’s order that the

plaintiff/appellant pay the third named defendant’s costs of the proceedings in the High Court and I would dismiss the appeal of the

plaintiff/appellant in this regard. However, having regard to the finding of fraud as found herein against the first and second named

defendants/respondents I am satisfied that the plaintiff/appellant is entitled to a full indemnity in respect of such costs from the first

and second named defendants/respondents.