Property transfers rendered void as attempt to protect land from being given to plaintiff in sexual abuse case
The Court of Appeal has upheld a judgment which found two property transfers from Mr Michael Quigley to his wife to be void, due to them being fraudulent attempts to protect the properties from being used to satisfy any judgment that might result from the plaintiff Dana Doherty’s allegations of sexual abuse.
The defendant had appealed the judgment, arguing that under s.10 of Conveyancing Act (Ireland) 1634 (10 Chas. 1 sess. 2 c.3), the plaintiff could only seek to set aside a transfer on the basis that it was void under s.10, would have to already be a creditor, not just someone such as the plaintiff, who may become a creditor in the future.
The two property transfers had been made in 1998 and 2000, without consideration other than “natural love and affection”.
The trial judge found that by 1991 the defendant was aware that the plaintiff was making claims that she had been sexually abused by him, as she had made her first complaint to the Gardaí, immediately following which the first defendant was interviewed by them.
The trial judge also found that in 1999 the defendant had been charged with 24 counts of indecent assault, and that by divesting himself of all his property he had deprived the plaintiff of the property in respect of any award or compensation she would have been granted in the future.
Delivering the appeal judgment, Mr Justice Peart noted that there is no doubt that at the date of the transfers, the plaintiff had not yet become an actual creditor, she had commenced no proceedings claiming damages, or even signalled her intention to do so.
The proceedings commenced in 2007, and in 2011 Ryan J awarded the plaintiff €400,000, and the costs of the proceedings in favour of the plaintiff.
The appeal rested on whether the plaintiff had to be an actual creditor at the date of the transfer in order to avail of s.10 of the 1624 Act.
At trial, the judge had noted the cases of Barling v. Bishopp (1865) 29 Beav. 417 and Smith v. Tatton (1879) 6 L.R. Ir. 32, which both found that the statute did not exclude future creditors.
She also relied on MIBI v. Stanbridge 2 I.R. 78, which demonstrated that the onus lay upon the plaintiff to prove fraudulent intent, which could be shown through express fraudulent intent, or by way of an inference to be drawn from the circumstances.
She found that “the natural and probable consequence of the transfers, looked at from an objective viewpoint, was in all the circumstances to delay or defeat the plaintiff as a creditor, so that a reasonable inference of an intention to defraud the plaintiff could be drawn”.
Counsel for the defendants argued in the appeal that there were no concrete facts to suggest fraud, or that the plaintiff could be considered a creditor.
Mr Justice Peart found that a finding that the natural and probable consequence of the two transfers of property by the first defendant was to delay or hinder his creditors is sufficient to fulfil the second limb of the test for a finding of fraudulent intent.
Such principles had been applied by Palles C.B. in In Re Moroney, a bankrupt 21 L.R.Ir. 27, by Costello P. in McQuillen v. Maguire 1 ILRM 394, by Laffoy J. in MIBI v. Stanbridge, and by Finlay Geoghegan J. in Keegan Quarries Limited v. McGuinness IEHC 453.
Therefore, he found that the trial judge had applied the correct test.
He found that the plaintiff’s complaints clearly suggested that the defendant might be subjected to a claim in damages, and that the circumstances allowed an inference of fraud to be made.
The trial judge’s conclusion that the plaintiff was a creditor under s.10 of the 1634 Act was correct, as such a finding was amply supported by authority, and was correct on the facts as found by the trial judge.
Concluding, he held that “Where it has been found, in my view correctly, that the transfers in question have been made for no consideration, and a claim for damages by the plaintiff in the future by reason of tortious acts already committed was possible on the facts as found, the inference was correctly drawn as a matter of law that the first defendant intended that the property being transferred both in 1998 and in 2000 should be placed beyond recourse of the plaintiff as a future creditor should she be successful in her damages claim in the future.”
He found that it was relevant to note that no evidence had been given by the defendant of any other means available to him to meet a future award to the plaintiff, and that his excuses for the transfer had been rejected by the trial judge, with no other explanations being offered.
As a result, the appeal was dismissed.