The Doctrine of Satisfaction PDF

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The Doctrine of Satisfaction Definition  Satisfaction is the donation of a thing with the intention that it should be taken in whole or part extinguishment of some prior claim. Satisfaction is an equitable doctrine and is an illustration of the Maxim that “Equity imputes an intention to fulfil an obligation.” The idea behind the Doctrine of Satisfaction is that if a person owes money, or is under some other form of obligation, to another person and subsequently gives a benefit to that person, the law presumes that the giving of the benefit was intended to satisfy the debt or obligation in question and was not by way of additional bounty. Where the Doctrine of Satisfaction applies, the act performed is of a different nature to that which it had been agreed should be carried out. Cases in which the Doctrine may operate are usually grouped into the following four groups; 1. 2. 3. 4.

Satisfaction of Debts by Legacies Satisfaction of Portion Debts by Legacies Satisfaction (or ademption) of Legacies by Portions Satisfaction of Legacies by Legacies.

Satisfaction of Debts by Legacies: These are scenarios where a testator leaves a legacy to a creditor and the question arises as to whether the creditor can claim both the legacy and the debt. The Situation is obviously straightforward if the legacy is expressed to be in reduction of the debt. Even if there is no such stipulation, equity presumes that if a debtor leaves a legacy in his will to his creditor of a sum which equals or exceeds the amount of the debt without making any mention of it, the legacy should be treated as being satisfaction of the debt. The general principle in this area was set out in Talbot V Duke of Shrewsbury (1714). Remember that this is only a presumption and therefore, the Doctrine will not apply where there is an indication of a contrary intention. The following are common circumstances where the presumption will be rebutted: 1. Where the will contains a direction to pay the Testator’s debts (Re: Manners (1949)). 2. The Time and Nature of the DebtTime  The Debt must have existed before the making of the will (Cranmer’s Case (1701)). Nature  Does not apply to a continuous running account where the debt would have been uncertain at the time of drawing up of the will (Buckley V Buckley (1888)). Where the parties were involved in ongoing business dealings- “The reason is that the testator could not have presumed to know how the account would stand at his death and therefore he is not deemed to have intended the legacy in satisfaction of it without express words.”

3. If the legacy is less than the amount owed (Coates V. Coates (1898)) versus (Ellard V. Phelan (1914)) where an employer owed small amounts to employees and left large amounts to them in his will, this large amount was in satisfaction of the small amounts. 4. Where the legacy is of an uncertain amount. Satisfaction of Portion Debts by Legacies: The Presumption in favour of the satisfaction of portion debts by legacies is an aspect of the principle that “Equity leans against double portions”. A Portion Debt occurs where a Father/ Person standing in Loco Parentis agrees to make a contribution to one of his Children intended to be a permanent provision for the Child. Where the Father incurs such an obligation and subsequently makes provision for the Child in his will, there is a presumption that the portion debt is intended to be satisfied by the testamentary provision. Traditionally this does not apply where it is a Mother agreeing to make a contribution to one of her Children, which is intended to be a permanent provision for the Child (RE: Ashton (1897)), although it is unlikely that the courts in this Jurisdiction would agree with this gender anomaly. Where the presumption does arise, the Child is required to elect between Taking the Benefit that their Father had agreed to give them or Taking the Benefit under the Will. This is known as “Election in Equity”. In contrast the rule as to the satisfaction of debts by legacies, where the amount of the legacy is less than the amount of the portion debt, it will be regarded as satisfying the portion debt pro tanto (As Far as it Can Go) (Hickey V O’Dwyer (2006)). This area of the Law of Satisfaction is preserved in Law by Section 63(9) of the Succession Act 1965. Satisfaction of Legacies By Portions and the Doctrine of Ademption: Where a Legacy is followed by a portion, the legacy will be addeemed by the portion. Therefore, where there is a gift in a will for an expressed object and afterwards a donation by the Testator is made in his lifetime for the same object, the Law presumes that he did not intend that both should take effect. There are two points to consider here; 1. The Ademption of a Legacy and a subsequent portion where the parties are Father and Child or Loco Parentis. Barry V. Harding (1844) is a classic example of this. An absolute gift in a will to a child would be addeemed by a portion of the same amount subsequently given on her marriage. This is known as the Presumption against Double Portions. 2. Ademption of a Legacy for a specific purpose by a subsequent gift made during the Donee’s lifetime for the same purpose. In the Case of Griffith V Bourke (1887) a Legacy was given to a Parish Priest for the purpose of erecting a new chapel. It was held that this legacy was addeemed by the gift of a like sum for the same purpose to the Archbishop of the Diocese by the Testator during his lifetime.

Satisfaction of Legacies by Legacies: Where the same Person is given a Legacy of the same amount twice over in the same will, the second Legacy is Prima Facie treated as merely a repetition of what has already been given and the Legatee will not be entitled to be paid twice over (Garth V. Meyrick (1799))....