13. Smithfield properties.
At the time of his father's death the Patient owned 2 properties at Smithfield - first, freehold premises comprising Nos 62-65 Smithfield Square which he acquired by a conveyance dated 14 February 1961, and second, premises comprising Nos 66-69 Smithfield Square and Nos 1-11 Francis Street which he acquired by an Assignment dated 1 December 1958. In the lifetime of Mr Andrews senior an arrangement had been made whereby the family company, Andrews and Company (Belfast) Limited - (the Company), enjoyed the use of both properties in connection with its motor business subject to an annual rent then established of £1,500. I am not aware of any formal lease or letting agreement confirming the interest then enjoyed by the Company nor do I know when the rent was originally fixed at the figure of £1,500 per annum. There is no doubt that the Patient's father made a thoughtful and far-sighted decision in placing both properties in the name of the Patient during his own lifetime. [My father's only problem was that he was not thoughtful enough nor far-sighted enough to have envisaged my brother having to be put into care and ultimately into your sick custody, Mr. Hall.] When the freehold premises were acquired Mr Andrews senior erected a substantial motor showroom on the site with offices above which represented a key feature of the Company's operation and, incidentally, provided a substantial security for the Patient's rental income.
During the years immediately following the death of Mr Andrews senior consideration was given by the directors of the Company to the possible purchase from the Patient of both properties. I have confirmed that in or about August 1974 Mr Wright of Tughan & co prepared 2 contracts for the sale of the 2 properties which he sent to Messrs James Boston & Sullivan. Messrs Desmond McConnell, Martin & Co had written to the Company on 23 July 1974 indicating that the Patient would accept the sum of £35,000 for the sale of his interests in both properties. Mr Wright informed me that when Messrs Desmond McConnell, Martin & Co wrote to the Company in July of that year they did so upon instructions given by Mr Gilpin with his (Mr Wright's) knowledge. I have established that Miss Sullivan, acting for the Company, replied to Mr Wright (Tughan & Co) by letter dated 8 August 1974 returning the 2 contracts signed by Mr W J Andrews on behalf of the Company, as purchasers, together with a cheque for £5,000 by way of deposit. It appears that neither of these contracts was accepted by or on behalf of the Patient notwithstanding a number of persistent enquiries addressed to Mr Wright by Miss Sullivan during the next 6 months. I have been unable to establish why 2 offers from a willing purchaser accompanied by a substantial deposit payment were not accepted promptly - having regard to the fact that the initiative to effect the sales appears to have been taken originally by those professing to act on behalf of the vendor - the Patient. In any event the deposit payment of £5,000 was lodged by Messrs Tughan & Co (apparently on behalf of the Patient) in the Investment Bank of Ireland Limited on 25 September 1974 where it remained accumulating interest until that deposit account was closed on 4 August 1975. Mr Wright eventually replied to Miss Sullivan by letter dated 29 August 1975 when he confirmed that the sales would not proceed. With that letter he returned the deposit payment together with the accumulated interest which had accrued on the deposit account mentioned above - amounting to £429.75. [Incidentally a misleading reference to this payment and the interest which accumulated on the deposit account appears in paragraph H on page 4 of Mr Drennan's first report. Although the sum of £5,000 was received by Mr Wright and invested by him with the Investment Bank of Ireland Limited in the name of the Patient he clearly treated it as a sum held on account of a prospective purchaser but did not proceed to complete either transaction.]
Whatever view may be taken of the management of the Patient's Smithfield properties before the summer of 1974 (ie whether it could be said that £1,500 represented a fair rent for the use of the property up to that time) there can be no doubt that after the recommendation made by Messrs Desmond McConnell, Martin & Co in July 1974 those responsible for the Patient's interests should have been concerned to obtain a much better income for him - whether or not the properties were to be sold. In the event, although the prospective sales to the Company were abandoned in August 1975, efforts to negotiate new leases in respect of the Company's occupation of the showroom premises and the adjoining yard did not commence until 20 January 1976 when Mr Wright sent Miss Sullivan a draft lease for approval. The substantial terms of 2 leases (the first in respect of the freehold premises reserving a yearly rent of £3,000 with 7 year rent reviews and the second, intended to be a long sub-lease, reserving a rent of £600 per annum) were agreed in an exchange of letters dated 12 and 24 February 1976. At that point, notwithstanding a number of reminders addressed to Messrs James Boston & Sullivan during the next year, no leases were ever executed and, significantly, no payments of the newly-negotiated rents were made by the Company. Mr Wright does not appear to have taken any effective step to conclude the negotiations for granting new leases or for securing a realistic income from the valuable properties owned by his client.
At this stage it appears that Mr Wright would have been aware of discussions taking place between Mr Gilpin and Mr W J Andrews which were directed towards the possible sale of the latter's shares (and those of his wife and son) in the Company. There are conflicting accounts as to whether Mr Andrews was keen to sell or Mr Gilpin was keen to purchase the shareholding in the Company but at all events Mr Wright was retained to act on behalf of Mr Gilpin and his purchasing company, Neville Johnston (Garages) Limited in the prospective takeover. It appears that in July or early August 1977 Mr W J Andrews received direct from Mr Wright a draft Agreement for the sale of his shares (and those of his immediate family) in the Company to Neville Johnston (Garages) Limited upon terms drawn up by Mr Wright. [Was it not blatantly obvious to you, Mr. Hall, that Mr. Gilpin was a man driven to cause the sell-off of all the property owned by the Andrews family. Not only that, but a sell-off at prices which were substantially below the market value of those properties and therefore at prices which could be used, on the re-sale of those properties, to make substantial profits.]In the Fourth Schedule of that draft Agreement reference was made (prospectively) to 2 Agreements "dated the day of August 1977" between [the Patient] and [the Company] whereby the Company "has agreed to purchase" [the Patient's 2 properties at Smithfield]. Mr Wright has acknowledged to me that an integral feature of the negotiations for the purchase of shares in the Company was to be the preliminary acquisition by the Company of a marketable title to both the properties owned by the Patient. Although the takeover Agreement had been prepared and sent to Mr W J Andrews I have established that the 2 Agreements for the sale of the Patient's 2 properties to the Company were not prepared at that time.
At the same time as some legal formalities were proceeding Messrs Desmond McConnell, Martin & Co furnished a valuation of the Patient's 2 Smithfield properties to Mr W J Andrews by letter dated 6 July 1977, in which they advised that the freehold premises were then worth approximately £30,000 and the adjoining leasehold site, approximately £5.000. A separate approach was made by Mr Wright, acting on behalf of the Patient, to Messrs Brian Morton & Co whose valuation dated 25 August 1977 suggested that the market value of the entire premises, subject to the existing leases, was £31,000 and that the rack rental value of the premises was £6,500. It appears that Mr Gilpin was directly involved in obtaining the second valuation, from Messrs Morton & Co, and he received a copy of their letter dated 25 August 1977. Mr W J Andrews, his wife and son completed the Agreement for the sale of their shares in the Company (which comprised the entire shareholding of 7,500 Ordinary Shares issued at that date) on 30 September 1977 and at a meeting with Mr Gilpin in the offices of Tughan & Co all the other formalities of the takeover were completed before Mr Andrews received a payment of £192,000 as provided in the Agreement. No Contracts for the sale of the Patient's 2 properties had been prepared up to that date nor were they available for signature at the time of the takeover. I am informed that it was understood between the parties to the takeover Agreement that the company (under new management) would proceed to purchase the Patient's properties as a related feature of the acquisition of the Company's assets - upon the clear understanding that a sum of £35.000 would be paid to the Patient over and above the sum already paid to Mr W J Andrews and his family. [You must have known, Mr. Hall, that the reason these two properties were not sold was because solicitor Gwen Sullivan wrote to my brother Billy (W.J. Andrews) telling him that these two properties could not be sold because my brother Freddie's incapacity meant that he did not have the legal ability to authorise the sales. Of course you conveniently ignored this fact for your own selfish ends.]
It may be unnecessary for me to suggest that at this stage Mr Wright's professional standing in relation to his client's (the Patient's) interest invites the most critical scrutiny. [That is like telling Winston Churchill that Adolf Hitler was considering the training of boy scouts.] He was already aware of the Patient's manifest incapacity. His efforts to protect the Patient's interests (in relation to the Smithfield properties) over the preceding 3 years may be judged from the preceding paragraphs. Although he had been acting for the Patient during the preceding 4 years and had already completed 2 substantial sales of property on his behalf Mr Wright was also engaged to act in the Smithfield transaction on behalf of Mr Gilpin (or one of his companies) in circumstances where the latter's interests were diametrically opposed to those of the Patient. In the course of a long interview with Mr Wright, at which both Mr Burgess and Mr F D Tughan were present, I established that a payment of £35,000 was made over by Mr Gilpin to the Northern Ireland Industrial Bank Limited in accordance with the "understanding" reached between the parties to the takeover on 30 September 1977. I have confirmed with the Northern Ireland Industrial Bank Limited that an account was opened with them early in October 1977 under the title "Mr Charles Gilpin and Mr Bertie Wright as trustees for Mr Fred Andrews" and that the payment of £35.000 was lodged to credit of that account on 14 October 1977. During my discussion with Mr Wright he could not recall precisely when he had proceeded to prepare 2 Contracts for the sale of the Patient's Smithfield properties. Mr Burgess had discovered 2 such documents (on the morning of the meeting which I had arranged with him and Mr Wright - 17 November 1983) but although the documents each bore the signature of the Patient neither was dated, neither was signed by or on behalf of a proposed purchase, no deposit payment was identified, no completion date was given and neither of the signatures of the Patient was witnessed. In addition Mr Burgess had discovered 2 incomplete engrossments of an Assignment (intended to relate to the sale of the leasehold property) and also an engrossment of a Conveyance of the freehold property which, although it bore the signature of the Patient, was not witnessed, not dated, not stamped and not registered. During my discussion with Mr Wright it was clear that apart from his failure to complete the conveyancing formalities relating to the 2 sales which he professed to have negotiated on behalf of the Patient he had also known of Mr Drennan's concern to obtain accurate information in respect of the Patient's affairs upon which he (Mr Drennan) was required to report to the Court. I had inspected the note of a preliminary meeting with Mr Wright at which both Mr Drennan and Mr Doherty were present in February 1979 when Mr Wright had said that the Smithfield properties had been sold "to Mr Billy Andrews - about 3 years before". Mr Wright acknowledged that the information which he had originally given to Mr Drennan, in relation to the Smithfield properties, was false and misleading and that he (Mr Wright) had failed to take any step since February 1979 to declare the true position either to Mr Drennan, to Mr Rankin or to the partners in Tughan & Co - with whom he continued to serve as an assistant solicitor until August 1981. I have been fully advised by Mr Kerr as to the implications of the failure of Messrs Tughan & Co to protect the Patient's interests. At this point it is sufficient for me to record that in Mr Kerr's view "it is beyond dispute that Mr Wright failed to discharge his duties as a solicitor to the Patient". I therefore recommend that appropriate proceedings be instituted against Messrs Tughan & Co and Mr Herbert Wright to recover compensation for identifiable loss suffered by the Patient - including interest and costs about which I make further comments at paragraph below.