High Court: Ex-wife of deceased man retains a legal and beneficial interest in investment property

The High Court has found that a woman who had a joint mortgage with her late ex-husband for an investment property retains a legal and beneficial interest in the property in circumstances where the mortgage was discharged, without her knowledge, with a loan from another bank.

Mr Justice Tony O’Connor said the woman should not be disadvantaged as a result of the transaction which was effected without her consent.


Kay Breen and the deceased were married in 1986 and had two children. The deceased left the family home in 1996, and the relationship remained “cordial”. Although separated, the parties did not divorce until January 2017 when the deceased was very ill. 

In 2000, Kay and the deceased purchased a buy-to-let property in Dundalk with a joint mortgage from AIB. The deceased paid a IR£30,000 deposit, and the parties agreed that the rental income would be used to pay the mortgage. Kay averred that the purchase of this property was “an effort to take account of his responsibilities to [her] and his two children”.

Mortgage with AIB discharged

Mary Breen was in a “committed co-habiting relationship” with the deceased in 2000; the couple had four children and were married in January 2017. 

In 2008, with a loan from Bank of Ireland Mortgage Bank, the deceased and Mary purchased a property in Donegal for €480,000. The total amount of the BOI loan was €750,000 – and approximately €144,000 of that was used to redeem the AIB mortgage on the Dundalk property. As such, BOI had a charge over the Donegal property and the Dundalk property.

Mary averred that she was unaware that Kay and the deceased had jointly purchased the Dundalk property, and Kay averred that she was unaware that the AIB mortgage had been discharged.

In his last will and testament made in January 2017, the deceased bequeathed the Dundalk property to Kay and the Donegal property to Mary.

Liabilities of the estate

The balance due to BOI was €567,834 together with interest. The Donegal property was valued at approximately €300,000, and the Dundalk property was valued at approximately €220,000.

The plaintiff, Gerard O’Malley (executor to the deceased’s estate), submitted that selling both properties could allow him to settle most of the debts of the deceased. Mary agreed to the sale of the Donegal property; however, Kay declined to accept that her interest in the Dundalk property should be available to BOI or the estate. 

The plaintiff accepted that the discharge in 2008, effected without notice to Kay Breen, could not affect whatever interest she had in the Dundalk property in 2008. It was also acknowledged that the estate could not benefit from the discharge in 2008 if it was undertaken to prejudice Kay Breen. “In order to avoid calling witnesses about events in 2008… the plaintiff was willing to accept the worst possible interpretation from the discharge in 2008, which may affect the interest of the estate”.

In his judgment, Mr Justice Tony O’Connor considered whether and how the following should be applied when determining the beneficial ownership of the Dundalk property:

  • The presumption of a resulting trust;
  • The doctrine of advancement;
  • The severance of a joint tenancy;

Presumption of a resulting trust

Mr Justice O’Connor considered Dyer v Dyer (1788) 2 Cox Eq Cas 92, in which it was stated that “the trust of a legal estate … results to the man who advances the purchase money”, and Stanley v Kieran [2011] IESC 19 in which it was stated that there “is a presumption that the provider of funds for the purchase of the property is the beneficial owner”. Mr Justice O’Connor also considered Laskar v Laskar [2008] EWCA Civ 347, which concerned unequal contributions from a mother and her daughter to purchase a council property. In Laskar, the mother exercised her right to buy the property at a discount. It was held that the discount should be attributed to the mother, and, taking into consideration the contribution of each party, the Court found that the daughter had a 33% interest in the property.

Considering whether there was evidence that the deceased intended the property as a gift (so as to rebut the presumption of a resulting trust), Mr Justice O’Connor said he could not determine the intentions of the deceased when the property was purchased in 2000. He said the deceased “unfortunately engaged in a series of untidy transactions relating to the Dundalk property” and there was no evidence that the property was a gift.

Mr Justice O’Connor said Kay held the legal interest to the property, but that she held a portion of the beneficial interest on trust for the deceased’s estate. Finding that Kay did not consent to the 2008 transactions and should not be disadvantaged by such conduct, Mr Justice O’Connor said that it was coincidental that Kay was no longer liable to a mortgage and that she lost the opportunity to have the mortgage repaid from the rent.

The doctrine of advancement

The plaintiff submitted that the doctrine of advancement should not apply in circumstances where the investment property was purchased between an estranged husband and wife.

Mr Justice O’Connor said the doctrine harked “back to a different era” and its application was in need of modernising “to accommodate changes in society and the make-up of family units”.

Declining to apply the doctrine, Mr Justice O’Connor said it was significant that the parties were estranged, that the deceased was co-habiting with Mary and had children with her, and that the property was an investment and not a family home.


Mr Justice O’Connor said the “conversion of a joint tenancy into a tenancy in common by severance may occur by law or in equity”. He said the 2008 transaction resulted in an alienation of the deceased’s interest in the Dundalk property, therefore severing the unity of the interest in the ownership of the property.

Mr Justice O’Connor said the “estate of the deceased and Kay Breen own the beneficial interest in the Dundalk property as tenants in common”.

Proposed orders

Mr Justice O’Connor proposed to make the following orders:

  • Kay has a legal and beneficial interest in the property
  • Kay holds a beneficial interest in the property for the deceased’s estate
  • Kay does not hold her interest in the property subject to the BOI mortgage
  • The 2008 transaction severed any joint tenancy in the property
  • The bequest of the property to Kay is subject to any enforceable mortgage of the interest of the deceased in the property
  • Liberty to apply on notice to all other parties
  • by Róise Connolly for Irish Legal News

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Other judgments by Mr Justice Tony O'Connor