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Priority given to deceased’s creditors ahead of family or beneficiaries

By: James Cross BL

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High Court refuses to prevent the transfer, by the Irish administrator, of assets from the deceased’s estate to the principal administration in England, on the grounds that: such an order would be an incorrect use of the Court’s discretion and would not be in keeping with the core principle of Irish succession law that priority is given to a deceased’s creditors ahead of his family or beneficiaries; and the effect of the order sought would have been to facilitate a form of legal arbitrage and forum shopping, whereby the testator and his beneficiaries preserve wealth in their family to the detriment of creditors by taking advantage of the differences in the legal protection for creditors in disparate jurisdictions.

Probate – whether an Irish court should prevent the transfer of the assets of the ancillary administration of a deceased’s estate (in Ireland) to the principal administration of his estate (in England), where he had lived and worked - order is being sought on the grounds that the creditors of the deceased who are based in England would be statute barred under Irish law if the court permits the Irish assets to be administered in Ireland, but those creditors are not statute barred under English law from claiming against those assets if the estate is administered in England - the effect of the order sought would be to facilitate a form of legal arbitrage and forum shopping, whereby the testator and his beneficiaries preserve wealth in their family to the detriment of creditors by taking advantage of the differences in the legal protection for creditors in disparate jurisdictions - effect of the court order would be to prefer the beneficiaries of the deceased’s estate over the creditors of his estate - effect of the order sought would be to facilitate a form of legal arbitrage and forum shopping, whereby the testator and his beneficiaries preserve wealth in their family to the detriment of creditors by taking advantage of the differences in the legal protection for creditors in disparate jurisdictions – factual background – applicable law – conflicts of law – English caselaw - no evidence provided to this Court regarding the relevant provisions of English law - clear that if there were no difference in limitation periods between Ireland and England, there would be no reason for the eldest child of the deceased and his separated wife, who both live in England, to seek to have the administration of their father’s/separated husband’s estate administered in Ireland - why do two English residents want estate of J domiciled in UK administered in Ireland? - application of fairness/equitable principles – a form of legal arbitrage arises if English precedent is followed - why the Court will not exercise its discretion to prevent the transfer of the Irish assets - incorrect use of its discretion – had the deceased not executed an Irish will, his Irish assets would be available to his English creditors without any of the issues raised in this case regarding limitation of actions – if the Court’s discretion was used in the manner sought by the Applicants, it would effectively mean that creditors of a deceased could be precluded from recovery from his whole estate by the simple expedient of the testator executing one will in his country of domicile (England) and a second will in a different country (Ireland) which had lesser protection for his creditors – Court does not believe this would be an equitable exercise of its discretion or that it would be in keeping with the core principle of Irish succession law that priority is given to a deceased’s creditors ahead of his family or beneficiaries - if the position were reversed and it was Irish creditors v. beneficiaries in England - where it is appropriate for a court to exercise its discretion - Court refuses to prevent the transfer, by the Irish administrator, of assets from the deceased’s estate to the principal administration in England –

Note: This is intended to be a fair and accurate report of a decision made public by a court of law. Any errors should be notified to the editor and will be dealt with accordingly.

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