It could be you?

Lotto panel via the Lotto website.Be careful what you wish for. Many of us hope to win the national lottery; but for the members of a Mayo lotto syndicate, winning the €1,577,578 jackpot on 6 January 2001 did not bring the kind of positive changes they would have wished for. Four members collected the winnings; but a fifth man claimed that, although he was in arrears, he was still a member of the syndicate and thus entitled to a one-fifth share of the winnings. The matter was not resolved amicably, and it went to court.

In the High Court, Horan v O’Reilly [2004] IEHC 425 (3 December 2004), Clarke J held that the manager of the syndicate, Mr O’Brien, had always tolerated the plaintiff’s arrears and had always allowed him to make them up, and that when the winning ticket was drawn the plaintiff was not in arrears to any greater extent than the custom and practice that had been allowed to develop, so that he remained a member of the syndicate and was entitled to a one-fifth share in the winnings. It was a December judgment, and a happy Christmas for the plaintiff.

On appeal to the Supreme Court, in Horan v O’Reilly [2008] IESC 65 (15 December 2008), Fennelly J (Geoghegan and Finnegan JJ concurring) reversed. He held (at para 33) that the

… only real question in this case is whether the parties agreed to vary their original agreement to the intent that Mr Horan would remain in the syndicate and entitled to a proportionate share in any winnings even though in arrear in payment for an indefinite period, and that Mr O’Brien would continue to purchase tickets on his behalf in the absence of some notice of termination.

And he concluded (at para 36) that this

… authority in practical matters vested in Mr O’Brien could not extend to varying the terms of the contract. The variation, in order to affect the right of the four appellants to share the winnings, would have to have been agreed by them. There is no evidence that it was. A variation would have needed to place an obligation on Mr O’Brien to purchase tickets on behalf of Mr Horan, even though he had not paid. It is clear that no such agreement was made. At most, then it would have to be implied. I am satisfied that it would not be obvious to any innocent bystander that such an obligation was imposed on Mr O’Brien on behalf of the other syndicate members. Can it be said that Mr O’Brien was under a legal obligation to Mr Horan to continue to purchase tickets for him? I do not think so.

He therefore allowed the appeal and dismissed the claim. It is another December judgment, but this time it will a far less happy Christmas for the plaintiff/respondent. Although the case provoked some media reaction (Irish Independent | Irish Times here and here | Mayo Advertiser | RTÉ | Sunday Times), there is little of legal consequence to it. It largely turned on its – admittedly colourful – facts.

However, such cases can raise questions of whether the parties did in fact intend to create legal relations when they formed the syndicate, or whether the non-commercial nature of the relationship meant that they did not intend that it would be governed by anything so formal as a contract. And even if the parties here had intended the matter to be governed by a contract, this case could have raised the question of whether the plaintiff had done sufficient to make the alleged variation enforceable (the point was faintly raised by the defendants/appellants, but not taken by Fennelly J).

Moreover, there is the curiosity here of Fennelly J’s reference to an “innocent bystander”, which must surely be a slip of the pen for the “officious bystander” (Shirlaw v Southern Foundries (1926) Ltd [1939] 2 KB 206, 227; Ultraframe (UK) Ltd v Tailored Roofing Systems Ltd [2004] EWCA Civ 585 (14 May 2004)) which has so animated the Court in recent years (see, eg, Sweeney v Duggan [1997] 2 IR 531; Carna Foods v Eagle Star Insurance Co [1997] 2 IR 193; Fagan v General Accident Fire and Life Assurance Corporation [1998] IESC 27 (14 October 1998); Dakota Packaging v AHP Manufacturing [2005] 2 IR 54, [2004] IESC 102 (15 December 2004)). This judgment doesn’t add anything to Irish law on this topic, but it does demonstrate yet again that the Irish courts are taking an unsophisticated (one test fits all) approach to the implication of terms into contracts.

In the end, the moral of the story is for syndicates to sort important matters out in advance: in this respect, the Irish and UK lotteries have useful help and advice. This really is one area where a pre-nuptial – well, pre-gambling – contract is an excellent idea.

Add a Comment

Your email address will not be published. Required fields are marked *