Warren Buffet (the lesser known Dublin solicitor), passed away recently. Warren made a will in recent weeks.

He appointed his old friends, Steve and Roger, as executors to his estate. They have now attended at your offices to seek your advices on the following matter: Warren had been feeling very ill in recent months and, indeed, had been bed-ridden throughout the summer. During this time, his neighbour and close friend, Helen, attended on him every day and kept him company. Accordingly, Warren felt very close to her in recent weeks and placed a considerable degree of trust in her. He decided to seek medical attention as his health was continuing to deteriorate. He was very frightened of his potential prognosis. Therefore, he gave Helen the keys to his safety deposit box containing the title deeds to his home. He told her that she was his best friend and he trusted her completely. However, he retained a spare key to the safety deposit box. When Warren attended at the hospital, the doctor informed him that he had a latent form of Ebola and that there was nothing that could be done. Warren got very upset and suffered a heart-attack which killed him. In his will, Warren devised his home to his friend, Kim. Steve and Roger seek your advice with regards to the ownership of Warrens former home.

The issue which arises from this question relates to the validity or otherwise of gifts which Warren may have made. This purported gift may have been made dehors or outside of the will as a donatio mortis causa ("DMC"); a gift of property made in contemplation of death. A DMC is a gift given by the donor while living but which only takes legal effect if the donor dies. As such it is neither entirely inter vivos nor testamentary. A DMC constitutes an exception to the equitable maxim that "equity will not perfect an imperfect gift" in that, where a validly constituted DMC exists, the personal representatives of the deceased will be obliged under equity to do what is necessary to complete the gift1. The origins of donationes mortis causa can be traced back to Roman law with the conditions for a valid DMC to be found in the Institutes of Justinian2. The requirements which must be fulfilled in order for a gift to qualify as a DMC have survived essentially unaltered from 529 A.D. They are threefold3: 1. the gift must have been made in contemplation of death; 2. the gift must have been conditional on death; and 3. the property must be delivered to the donee.

1 2

Re Beaumont 1902 1 CH889 at 892. Abdy and Walker, The Institutes of Justinian (Cambridge University Press, 1876)Part II Tit. 7 119: A gift mortis causa is one made in expectation of death; when a person gives upon condition that if any fatality happen to him, the receiver shall keep the article; but that if the donor should survive, or if he should change his mind, or if the donee should die first, then the donor shall have it back again. 3 Per Barr J in Bentham v Potterton[1998] IEHC84.

The onus of establishing that Warren made a valid DMC in her favour will fall on Helen. In order to determine whether or not Helen can establish this and whether Steve and Roger as executors are required to complete the transfer of the house to her, we need to examine the circumstances of this particular case under each of the headings. 1. The gift must have been made in contemplation of death;

It will not be sufficient to show that Warren made the gift in the ordinary awareness of inevitable death. There must be something more, such as the donor having been diagnosed with a serious illness or his imminent embarkation on a hazardous journey4. It can be seen from Bentham v. Potterton5 that the donor herself must be aware that she is suffering from a serious illness, though death need not be an inevitable outcome. Indeed, some authorities suggest that if death is inevitable as a result of the illness then that can operate to invalidate a DMC6. From the facts we know that Warren had been feeling very ill in recent months even to the extent of being bedridden. We know he was aware that his health was deteriorating and that he was very frightened of the possible prognosis. Barr J's comment in Bentham: 'At the relevant time the donor was of great age and was terminally ill. However, I have substantial doubt as to whether she appreciated her situation7' shows that the donor must have subjective awareness of his or her condition. It seems clear on the facts that Warren had an appreciation that he was seriously ill. He had been ill enough to have been confined to bed over the summer and his health was getting worse rather than better. It also appears that he was not quick to go to a doctor but after a period of a few months recognised that he would have to. In the lead up to his appointment, he feared the worst and was described as very frightened. In the event, this fear was entirely justified. Warren was diagnosed with a latent form of Ebola, an untreatable haemorrhagic disease which causes near inevitable and very painful death. His upset and shock at the diagnosis brought on a fatal heart attack but Wilkes v.Allington8 asserts that the actual cause of death is irrelevant. In Wilkes, death by reason of double pneumonia rather than, as anticipated, cancer did not invalidate a DMC. 2. The gift must have been conditional on death

There must have been a clear intention to give and the gift has to be on condition that the donor dies. In Staniland v. Willott the donor gave shares which were transferred into the name of the donee. The donor did

4
5

Re Craven's Estate [1937] 3 All ER 33. Bentham v. Potterton [1998] IEHC 84. 6 Lord Advocate v M'Court (1893), 20 R (Ct of Sess) 488. 7 Bentham v Potterton [1998] IEHC84. 8 Wilkes v. Allington [1931] 2 Ch. 104.

not die, and on his recovery looked for the shares to be returned. The court decided that the donee held the shares on trust for the donor. The intention to give is a matter for the court to decide on the particular circumstances of the case and the court may infer an intention as it did in Gardner v. Parker9. Here a bond was given in contemplation of death and the intention of the donor that it should be held as a gift only in case of his death was inferred as an implied condition. Warren has not made explicit his intention to confer a gift on Helen. Unlike Hewitts words in Sen v. Headley where he said The house is yours, Margaret. You have the keys or Lillingstons words in Re Lillingston10 I am going to give you all my jewellery. I am giving you my key to the safe deposit at Harrods and when I am gone you can go and get the jewellery, Warren appears not to have uttered like words exhibiting an intention to make a gift. Undoubtedly, he has expressed his complete trust in Helen and has described her as his best friend but this stops short of an intention that she should have his house in the event of his death. While words to clarify Warrens intention would have been useful, the lack of clarity will, in itself, not prevent a court from finding the intention to make a valid DMC if the surrounding circumstances support this conclusion. Thus, Allingtons words to his nieces: I have brought this down for you; put it away constituted a valid DMC when taken in conjunction with his writing on the envelope he gave them and the fact that he possessed a safe. The court inferred from these circumstances that Allington had not merely given the documents to his nieces for safe-keeping. Warrens situation can be distinguished from Senv. Headley and Re Lillingston by virtue of there being no express intention to confer a gift on Helen. It can also be distinguished from Wilkes v. Allington on the basis that there appear, on the facts given, to be no surrounding circumstances to support an inference of intention to make a gift to her. 3. The property must be delivered to the donee.

Traditionally, the subject matter of a DMC was usually a chattel and physical delivery of it to the donee was required. Over time, however, the courts have had to consider other types of gifts such as bank accounts11, shares12, bonds13 and mortgage deeds14. The generally applied test was set out by Evershed MR in Birch v.

Gardner v. Parker [1818] 3 Madd 184. Re Lillingston [1954] 2 All ER 184. 11 Hearty v. Coleman [1953-54] IrJur Rep 73. 12 Moore v. Moore (1974) LR 18 Eq 474. 13 Snellgrove v. Baily (1744) 3 Atk. 213. 14 Wilkes v. Allington [1931] 2 Ch. 104.
10

Treasury Solicitor15. Delivery, he said, must be made of the essential indicia or evidence of title. Nourse LJ in Sen v. Headley put the position thus: there must be a delivery of the subject matter of the gift, or the essential indicia of title thereto, which amounts to a parting with dominion and not mere physical possession over the subject matter of the gift. The donor must go beyond parting with physical possession. He must, in effect, put it beyond his power between the date of the DMC and the date of death to alter the subject matter of the gift or substitute other property for it.16 The courts have been willing to accept that constructive delivery has been effected where the means of access to a receptacle was given by the donor to the donee. Thus, in Re Lillingston, Mrs.Pembury as donee was entitled not only to the jewellery physically handed to her by Ms. Lillingston on her death bed but also to the further jewellery contained in a locked trunk to which she had been given the only key as well as other jewellery held in a safe deposit box at Harrods which was unlocked by a key from the trunk. It does appear certain, however, that where the donor retains a key the court will find no constructive intention to part with dominion. In Re Johnson17 the testatrix retained a key and it was found that she had an intention not to part with dominion over the box. Similarly, in Mulroy18, the act of the donor in returning the key to a lock-box to his waistcoat pocket resulted in a majority finding against there being a valid DMC notwithstanding the donors clear words of intention to confer a benefit on the donee. Warren, by retaining a spare key to the safety deposit box, did not confer dominion to Helen. He remained in a position to deal with the title deeds at any time between the purported DMC and his death and delivery cannot be said to have occurred. A final matter arises for brief consideration and this is the validity of transferring title to land by way of a DMC. We have earlier noted the observation of Nourse LJ that donationes mortis causa may be immune to both the Statute of Frauds and the Succession Act. Courts have historically been hesitant to allow what is, effectively, parol evidence to override both statutes. The issue is put beyond doubt, however, by the decision in Sen v. Headley19:

15 16 17 18

Birch v. Treasury Solicitor[1951] Ch 298, 311. Re Craven's Estate [1937] 3 All ER 33.

Re Johnson (1905), 92 LT 357, 25 Digest 553, 379. Mulroy, Deceased; McAndrew v Mulroy [1924] 58 I.L.T.R 113: 19 Sen v. Headley [1991] All ER 636.

Let it be agreed that the doctrine is anomalous. Anomalies do not justify anomalous exceptions to make a distinction in the case of land would be to make just such an exception. A donatio mortis causa of land is neither more nor less anomalous than any other. The fact, then, that the safety deposit box contained title deeds will not in itself be a barrier to Helen claiming that Warren made a DMC in her favour. As we have seen however, a number of requirements have to be fulfilled. Warren certainly knew that he was ill though it is arguably not established that he thought he might die. His upset, to the point of suffering a fatal heart attack on hearing that he carried an untreatable condition may well indicate that that he thought he would recover from his illness. Even if we leave that aside and accept that he had a subjective awareness of his deteriorating health and was contemplating death, it is far from clear that he made any gift to Helen. There seems to have been nothing more expressed than an expression of trust, confidence and friendship and Helen will find it difficult to establish an intention on Warrens part to give her his house. Two additional points arise for consideration in this regard. Though he had been ill, there is no indication that Warrens mind had been affected. Therefore, it was open to him at any stage to have completed a new will or to have made a codicil to his recently created will if he wished to leave Helen the house. Secondly, as a solicitor by occupation he would have been more aware than most of how to ensure his intentions were carried out after his death. In addition to the barrier of establishing that Warren made a gift conditional on his death, Helen will also have to show that he yielded dominion over the deeds to her. Warrens retention of a key to the safety deposit box will make that extremely difficult. Steve and Roger, as executors, should proceed to arrange the transfer of the house in accordance with the terms of the will viz. to Kim.

Bibliography

Books

Abdy and Walker, The Institutes of Justinian (Cambridge University Press, 1876). Delaney, Equity and the Law of Trusts in Ireland (Round Hall, 2011 5th Ed.) Martin; Hanbury and Martin: Modern Equity (Sweet & Maxwell 18th Ed. 2009.

Articles Hewitt, Donatio Mortis Causa of One's Own CheckThe American Law Register and Review, Vol. 45, No. 4, Volume 36 New Series (Apr., 1897), pp. 246-252. Hughes, The Exception is the Rule: Donatio Mortis Causa (2007) 14 (1) CLP 8.