Cost of legal dispute between siblings over Dublin family home reduces inheritance

A lengthy dispute between siblings concerning the sale of their Dublin family home has incurred substantial legal costs for their late father’s estate, with the effect of reducing their inheritance.

John O’Sullivan died in February 2016 and the main asset in his estate was the family home in Glasnevin, which he left to his five children to be divided equally among them, Ms Justice Eileen Roberts noted.

Efforts by Brian O’Sullivan, as executor of his father’s estate, to sell the property and divide the proceeds encountered difficulties, she said.

The executor incurred €106,000 legal costs in defending proceedings initiated in 2017 by his brothers Sean and Brendan and his sister Ann Marie Meehan aimed at having their respective interests in the property vested in them.

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Another sister, Susan, had died some six months after her father. Her widower, the personal representative of her estate, was a notice party to the proceedings and took a neutral position.

Under a December 2017 settlement, the parties were to become co-owners of the Glasnevin property, which would be sold with the net sale proceeds divided between them.

The siblings and notice party were registered, by agreement, as tenants in common in equal shares of the property under a deed dated June 2018, which was “an unusual step” as the administration of the estate had not concluded, the judge said.

Beneficiaries would normally have no property vested in them until it was certain all liabilities of the estate had been discharged or there were sufficient other assets for that to happen, she said.

Terms of settlement of the 2017 proceedings were made an order of court in February 2019, which provided, inter alia, for a future sale of the house and costs of those proceedings to be paid out of the estate.

In May 2019, an offer of €460,000 was made for the Glasnevin house but Brian O’Sullivan claimed his three siblings refused at that time to allow him to conclude a sale and distribute the estate as their father had directed.

He claimed his siblings argued they were co-owners of three-fifths of the property and had a right to buy out the two-fifths held by him and the notice party for €184,000 – two fifths of €460,000.

That would be a clear breach of the court order and render the estate insolvent in light of its legal costs obligations, he claimed.

Following correspondence, Brian O’Sullivan argued he had no choice but to initiate an action, as executor, against his siblings in July 2022.

This sought to have the property sold for no less than €485,000 in the name of all the co-owners and the net proceeds to be applied in the administration of the estate in compliance with the earlier settlement.

An agreement was ultimately reached with the defendant siblings, including for sale of the house, but they opposed costs of the executor’s proceedings being paid out of the estate.

Sean O’Sullivan, on behalf of the defendants, attributed delay in responding to the executor’s solicitors to a breakdown in the relationship between the defendants and their former solicitor.

He claimed, inter alia, the executor’s proceedings were wholly unnecessary. The defendants accepted legal fees were due but maintained costs of the executor’s proceedings should not come out of the estate.

In her judgment dealing only with the costs of the executor’s proceedings, Ms Justice Roberts said a “sensible solution” had now been agreed by the defendants but had only recently been proposed.

She disagreed Brian O’Sullivan’s refusal to accept the proposal to buy out two-fifths of the property was “wholly unreasonable”. She believed he, as executor, had no choice but to issue the proceedings to compel the sale of the property on the open market, thereby allowing all the sale proceeds to come into the estate and be available for the discharge of liabilities.

She did not accept the defendants’ contention it was always intended they would each separately pay a contribution towards the costs of the estate out of their own retained resources.

While there may be some argument whether the executor’s proceedings were the most appropriate or cost-effective way of advancing matters, the issuing of a special summons was an appropriate step for the executor to take in all the circumstances, she said.

Whatever route was taken by the executor, there would have been legal costs, but no additional legal costs would have been necessary had the defendants allowed the property be sold on the open market in line with the earlier settlement, she said.

The costs of these proceedings should be costs in the administration of the estate, she ruled.