A DEAL IS A DEAL!

September 18, 2017

In the recent case of Bernadette Heaney as Executrix of the Estate of Grace McEvoy (Deceased) -v- Michelle McCartney and Jacqueline McEvoy [2017] NICh6, the Court made it clear that, save in very exceptional circumstances, a compromise agreement entered into by parties to litigation will be upheld by the Court.

The Plaintiff Executrix brought proceedings against the adult grandchild and child of the Deceased seeking an order for possession of the Deceased’s house in Newry, where the Defendants both resided.

The Deceased executed a Will dated 1 January 2015, witnessed by the Executrix and Paul Tiernan. The Deceased’s property was to be divided equally amongst her 12 children and in particular, her house was to be sold and the net proceeds divided equally.

On 26 January 2016, the Defendants issued proceedings of their own pursuant to the Inheritance (Provision for Family and Dependants) (NI) Order 1979. The Defendants then sacked their solicitors and appointed new solicitors. On 26 September 2016 the parties reached agreement that the Inheritance Order claim should be stayed on terms which were set out in the Schedule to the Court Order, or in other words a Tomlin Order. The terms provided for the withdrawal of the Inheritance Order claim, with the costs of the Executrix to be paid by the Estate. The Defendants also compromised the possession proceedings by agreeing to vacate the house. Each of the Defendants signed these terms, as did the Plaintiff.

However, contrary to the terms of settlement, the Defendants did not vacate the property. The Defendants indicated that they were now determined to defend the possession proceedings, despite their earlier agreement not to do so. The Defendants then proceeded to dismiss their second legal team. The Defendants also reported the Solicitors and Counsel to the Law Society and the Bar of Northern Ireland claiming, inter alia, that they were forced to sign the compromise agreement by Counsel. They further alleged that the legal team was bribed and that they had conspired with the other side. Further, they alleged that the Plaintiff’s Solicitors and both witnesses conspired with other siblings to create a fraudulent Will.

The Judge described these allegations as “wild and scurrilous” and commented that it was regrettable that they had been made in open Court. He believed that the allegations were either baseless, or irrelevant. The Court found that the Defendants had also made a number of bizarre claims about the technical defects allegedly present in the Will, such as the assertion that the Deceased did not write the Will herself.

There was no dispute that the Defendants signed the terms of settlement that resulted in the Tomlin Order. They were of age and had legal advice. Therefore, the Court found that they were bound by their signatures whether they bothered to read the terms or not: see L’Estrange v Graucob [1934] 2 KB 394. Quoting Lord Romilly MR in the case of Plumley v. Horrell [1869] 20 LT 473, the Judge emphasised that “compromise means that the question is not to be tried over again. That is the first meaning of compromise.” If the Defendants wished to set aside the Tomlin Order, then they must either commence new proceedings to have the agreement set aside, or seek leave to appeal to the Court of Appeal out of time. No such proceedings to set aside the Order had been instituted and the Judge considered any Appeal to be without merit.

The Judge further emphasised that the finality of a compromise agreement can also apply to matters which could previously have been brought forward and litigated. Thus, issues such as testamentary capacity could have been raised by the Defendants in the Inheritance Order claim, or the possession proceedings but they were not. Quoting Sir James Wigram VC in the case of Henderson v. Henderson [1849] 3 Hare 100 “the plea of res judicata applies, except in special cases, not only to the points upon which the Court was actually required by the parties to form an opinion and pronounce a Judgment, but to every point which properly belonged to the subject of the litigation and which the parties exercising reasonable due diligence, might have brought forward at the time”. Furthermore, pursuant to the House of Lords decision in Johnson v. Gore Wood & Co. (A Firm) [2002] 2 AC1 Lord Bingham emphasised that there was a public interest that there should be “finality in litigation” and that “a party should not be twice vexed in the same matter”.

His Lordship held that, leaving aside the terms agreed between the parties, he also saw no basis upon which the Defendants could defend the possession proceedings. The Plaintiff Executrix was entitled to possession of the house and to sell it as the Deceased directed in her Will. The Judge also highlighted that it was important to bear in mind what happened should the Defendants succeed in any claim to set aside the Will. There was no prior Will of the Deceased. The Estate would therefore be administered in accordance with the laws of intestacy whereby the same outcome would be achieved as under the present Will i.e. each of the siblings would receive a 1/12th share and the house would have to be sold to ensure that each is paid their due share. Therefore, it didn’t matter whether or not the Will was set aside!

The Judge held that both Defendants seemed unable to understand that they were receiving preferential treatment and that by remaining in the house, rent-free, a great injustice was being visited upon their siblings.

The High Court has again made it clear that parties who enter into a compromise agreement cannot easily resile from it and are bound by it, no matter whether, upon reflection, they come to regret striking the deal.

This article has been produced for general information purposes and further advice should be sought from a professional advisor.