ACTIONS BY CREDITORS
Section 9 Civil Liability Act 1961 provides that:
No proceedings shall be maintainable in respect of any cause of action whatsoever which has survived against the estate of a deceased person unless either:
(a) proceedings against him in respect of that cause of action were commenced within the relevant period and were pending at the date of his death, or
(b) proceedings are commenced in respect of that cause of action within the relevant period or within the period of two years after his death, whichever period first expires.
Therefore, if proceedings are not in being at the deceased’s date of death, a creditor has two years from the date of death in which to initiate proceedings.
If the deceased had borrowings, it is commonplace for the personal representative to sit back and hope that the two-year limitation period to expire. In such instances so it may be necessary for the creditor to bring an application pursuant to section 27(4) of the Succession Act 1965, seeking liberty for an administrator ad litem to extract a limited grant in order to constitute a defendant for the purposes of the proceedings that the creditor intends to issue as against the estate.
Subsection (4) is of paramount importance and provides that:
Where by reason of any special circumstances it appears to the High Court (or, in a case within the jurisdiction of the Circuit Court, that Court) to be necessary or expedient to do so, the Court may order that administration be granted to such person as it thinks fit.
Applications pursuant to this section are commonplace and the court has the power to grant administration (with or without will annexed) of the estate of a deceased person, and a grant may be limited in any way the court thinks fit. The court also has the authority to revoke, cancel or recall any grant of administration.
A grant of administration ad litem will state on its face that it is limited for the purpose of defending named proceedings and may also recite further limitations depending on what is contained in the court order.
It should be noted that typically, an order is made granting liberty to the applicant to apply for and extract a grant of representation to the estate of a deceased and that the order itself is not the final step in the matter. An application together with the perfected order of the court must then be made to the Probate Office and the applicant will only be formally appointed as the legal personal representative of the estate of the deceased once the grant issues forth from the Probate Office.
If at some later stage, the person or persons entitled to the full grant, may seek to substitute themselves in the creditor’s proceedings, once the grant issues to them. The application to substitute is made by way of motion on notice and it appears that the administrator ad litem does not have any legal grounds upon which to oppose such an application.
The two-year time period cannot be postponed in the event of infancy or disability. In Moynihan v Greensmyth O’Higgins C.J. was of the opinion that:
“When it was decided to provide generally for the survival of causes of action, a general limitation period of two years was provided in s. 9, sub-s. 2(b), of the Civil Liability Act, 1961……Bearing in mind the State’s duty to others, in particular those who represent the estate of the deceased, and the beneficiaries, some reasonable limitation on actions against the estate was obviously required. . The danger of stale claims [is] very real and could constitute a serious threat to the rights of beneficiaries of the estate of the deceased.”
Notice to Creditors
Personal representatives can use the protection afforded by section 49 of the Succession Act 1965 if they have given notice as is required by the section and were not aware of any claim as against the estate. Section 49 provides:
(1) Where the personal representatives have given such notices to creditors and others to send in their claims against the estate of the deceased as, in the opinion of the court in which the personal representatives are sought to be charged, would have been given by the court in an administration suit, the personal representatives shall, at the expiration of the time named in the said notices, or the last of them, for sending in such claims, be at liberty to distribute the assets of the deceased, or any part thereof, amongst the parties entitled thereto, having regard to the claims of which the personal representatives have then notice.
(2) The personal representatives shall not be liable to any person for the assets or any part thereof so distributed unless at the time of such distribution they had notice of that person’s claim.
(3) Nothing in this section shall prejudice the right of any creditor or claimant to follow any such assets into the hands of any person who may have received them.
Although the section is silent as to the form of the notice, it is usual that two advertisements are placed, one in a national newspaper and one in a newspaper local to the deceased’s place of death, with a one-week interval between them. If unusual circumstances arise, the personal representative may wish to seek the direction of the court in relation to such notices.
The executors’ year does not prevent a creditor from issuing proceedings as against the estate.
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