by Jeremy Erwin , Michael Kelly January-09-2020 in Banking & Financial Services, Litigation & Dispute Resolution, Insolvency & Restructuring

The recent Supreme Court decision in ACC Loan Management v Mark Rickard and Gerard Rickard has confirmed that a judgment creditor may apply to court to appoint a receiver by way of equitable execution over future entitlements due to a judgment debtor, such as the EU Basic Payment Scheme (“BPS”).

In this case, ACC obtained judgment in the High Court against the Defendants in February 2011. ACC formed the view that even following the sale of the secured assets there would be a significant shortfall on the debt due. On that basis, ACC applied to appoint a receiver over the Single Farm Payment (“SFP”) entitlements (worth approximately €170,000 per annum) of the First Named Defendant, Mr Mark Rickard (“Mr Rickard”). An order appointing a receiver by way of equitable execution was granted by the High Court on 4 October 2011 and was varied by the High Court on 13 July 2015 after the SFP was replaced by the BPS.

Traditionally in this jurisdiction, a receiver by way of equitable execution could only be appointed in cases where a debtor enjoys an equitable interest (such as a bequest under a will) in an asset which cannot be reached by the usual enforcement options and the creditor had a vested or contingent interest in the property. Therefore, where a judgement debtor owns an asset a judgment creditor would enforce against the property itself rather than any equitable interest the judgment debtor might also hold. This principle was set in National Irish Bank Limited v Graham1. In that judgment Mr Justice Ronan Keane focused heavily on the interpretation of the Judicature Act 1877 (the “1887 Act”).

The 2015 Order was appealed by Mr Rickard to the Court of Appeal which based on a 21st century interpretation of Section 28(8) of the 1877 Act and persuasive English authorities formed the view that the Courts are not precluded from appointing a receiver by way of equitable execution even where what is sought to be executed against is a legal interest (such as ownership) in property of a judgment debtor.

Mr Rickard appealed that decision to the Supreme Court. In his appeal he argued, inter alia, that the interpretation of the law as set out in the Graham decision should be adopted and that the appointment of a receiver by way of equitable execution over the BPS should be excluded as a matter of policy.

Section 28(8) sets out the Court’s power to appoint receivers and grant injunctions. It states that the Court shall have the power to appoint a receiver where it is “just or convenient that such an order should be made”.

The Supreme Court upheld the ruling of the Court of Appeal and held that the appointment of a receiver was warranted and justifiable where Mr Rickard had made no complaint about the effect of the prior appointment (in 2011) on his finances (his appeal was based on legal principles only and in respect of the 2015 Order). The Court made clear that what will be deemed just or convenient will be a matter for the Court to determine on the facts of each case and that an appointment of a receiver by equitable execution should not be overly onerous on the judgment debtor.

This case is particularly relevant to judgment creditors who may have formed the view that enforcing a fixed charge over agricultural land is not economically viable, and provides legal certainty to an alternative avenue to pursue judgment debts in this jurisdiction. That avenue will only be granted by a court where they are satisfied that it is just to do so.

Hayes solicitors has significant experience in all aspects of the enforcement of judgments. Should you have any queries in relation to the appointment of receivers by equitable execution or enforcement generally please contact Jeremy Erwin jerwin@hayes-solicitors.ie or Michael Kelly mjkelly@hayes-solicitors.ie.


1 [1994 1IR 2015]

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