ACC Loan Management Ltd v Rickard

• Jurisdiction: Ireland
• Judge: Ms. Justice Finlay Geoghegan,Mr. Justice Hedigan
• Judgment Date: 31 July 2017
• Neutral Citation: [2017] IECA 245
• Court: Court of Appeal (Ireland)
• Docket Number: Neutral Citation Number: [2017] IECA 245
• Date: 31 July 2017

[2017] IECA 245

THE COURT OF APPEAL

Finlay Geoghegan J.

Hedigan J.

Finlay Geoghegan J.

Irvine J.

Hedigan J.

Neutral Citation Number: [2017] IECA 245

Appeal No. 2015/466

BETWEEN

ACC LOAN MANAGEMENT LIMITED

PLAINTIFF/RESPONDENT

-AND-

MARK RICKARD

and

GERARD RICKARD

DEFENDANTS/APPELLANT

Jurisdiction – Appointment of receiver – Basic payment scheme – Appellant seeking to appeal against High Court order – Whether a receiver can be appointed to receive future sums to which the appellant may become entitled pursuant to a basic payment scheme

Facts: The first defendant/appellant, Mr M Rickard, appealed to the Court of Appeal against the judgment and order of McGovern J of the 13th July, 2015. That order provided for a variation of the order of the High Court made by Kelly J on the 4th October, 2011, appointing Ms Riordan as receiver by way of equitable execution over the payments to be made by the Department of Agriculture, Fisheries and Food in respect of the appellant under the single farm payment scheme (SFPS). It was varied so as to provide that the same receiver be appointed over such payments as may be received in respect of the basic payment scheme (BPS). This second scheme was introduced to replace the first. In the original proceedings grounding those orders, the plaintiff/respondent, ACC Loan Management Ltd, issued a summary summons on the 1st December, 2011. Judgment was granted in the Commercial Court on the 25th February, 2011, against the appellant and the second defendant, Mr G Rickard, in the sum of €1,064,747.66. An ex parte application was brought on the 4th October, 2011, to have the above receiver appointed by way of equitable execution. This was granted. It was an absolute order with the appellant given liberty to apply, on 48 hours notice to the respondent and the Court, to have it varied. He did not do so. The respondent issued the motion to vary the order on the 12th June, 2015. The payment scheme operated so that the appellant was entitled to apply each year. The appellant submitted that the application was in reality for more than just a variation of the original order because there was a fundamental change in the nature of the payment. The amendment sought required a new application. He submitted that the decision of Peart J, relied upon by the trial judge, in O'Connell v An Bord Pleanala [2007] IEHC 79 was wrongly decided and that the Court should follow the authorities followed by Hogan J in Flanagan v Crosby [2014] 1 IR 576, namely National Irish Bank Ltd v Graham [1994] 1 IR 215 and Honniball v Cunningham [2006] IEHC 326. It was submitted that the correct approach was that receivers appointed by way of equitable execution can only be appointed over equitable interests and not legal interests. He submitted also that the appellant's entitlement to a payment only arises when the department assesses the annual application and decides that he qualifies for the payment. It was submitted that even if the judgment in O'Connell is correct, there were two issues in that case which made appointment inappropriate: first, there was no attempt to use the Enforcement of Court Orders Acts to satisfy the debt, and second, it was held that receivers cannot be appointed over salaries, earnings or wages necessary to live. The appellant submitted that payments under the BPS amounted to supplementary income.

Held by Finlay Geoghegan J that the High Court had jurisdiction to appoint the receiver over payments to which the appellant may become entitled pursuant to the BPS and that the order made was an appropriate exercise of discretion on the facts.

Finlay Geoghegan J held that the appeal would be dismissed.

Appeal dismissed.

JUDGMENT delivered on the 31st day of July 2017 by Ms. Justice Finlay Geoghegan

1 This appeal raises important questions in relation to the jurisdiction of the High Court pursuant to s. 28(8) of the Supreme Court of Judicature (Ireland) Act 1877 and s. 8(2) of the Courts (Supplemental Provisions) Act 1961 to appoint a receiver by way of equitable execution over property of a judgment debtor. Orders 50, r.6 and 45, r. 9 of the Rules of the Superior Courts apply to the exercise of the jurisdiction.

2 The factual background is that the plaintiff obtained judgment against the defendants on 25th February, 2011 in the sum of €1,064,747.66. The defendants are brothers and farm certain lands in County Meath.

3 The judgment remained unsatisfied in October, 2011 and on 4th October, 2011 the High Court (Kelly J. as he then was) made an order pursuant to O. 45, r. 9 of the Rules of the Superior Courts that Ms Riordan, Solicitor, be appointed as receiver by way of equitable execution (without salary or security) in respect of 'such payments as are due to be received by the First Named Defendant [Mark Rickard] from the Department of Agriculture, Fisheries and Food under the Single Payment Scheme as will satisfy the plaintiff's said judgment and costs ...'

4 That order was made ex parte with liberty to the first named defendant ('the appellant') to apply to vary or discharge. No such application appears to have been made.

5 Thereafter the Department of Agriculture was notified and by June, 2015 a sum of €525,877.40 was received by the receiver from the Department pursuant to the said order.

6 By letter of 25th March, 2015 the Department notified the plaintiff's solicitor that the Single Farm Payment Scheme had ceased on 31st December, 2014 and had been replaced by the 'Basic Payment Scheme'. The letter stated that as a result 'the Department will not have a sound legal basis to transfer funds owed by a debtor to your client/s. In the circumstances, you should check with your client/s as you may wish to consider a court application for a revised Garnishee Order.'

7 Thereafter a motion was brought by the plaintiff seeking an order of the High Court varying the order made on 4th October, 2011 so as to provide that the receiver 'will be appointed over such payments as may be received in respect of the Basic Payment Scheme'. The application was brought on notice to the appellant. It was grounded on an affidavit of Damien Walsh, a case manager of the plaintiff, to which he exhibited the "Helpsheet/Terms & Conditions for the 2015 EU Basic Payment Scheme (BPS)/GREENING Payment and Other 2015 Area-Based Schemes" issued by the Department. He also deposed that there remained outstanding a sum of €820,686.44 due by the appellants to the plaintiff on the 2011 judgment.

8 The application was opposed on behalf of the first named defendant, the appellant. The appellant swore a short affidavit which contains, in part, legal argument and disputes the entitlement to the orders sought. He deposes inter alia that:

'The monies due to me previously under the Farm Payment Scheme and now under the Basic Payment Scheme are payments from the European Commission for the support of farm incomes and production throughout the European Union. As such they are in the nature of or akin to emoluments or earnings and ought not to be the subject of an Order appointing a Receiver by way of Equitable Execution.'

9 By order of 13th July, 2015 the High Court (McGovern J.) made an order that the order of 4th October, 2011 'be varied to provide that the Receiver will be appointed over such payments as may be received in respect of the Basic Payment Scheme'.

10 A short agreed note of the reasons given by the trial judge was furnished to this Court. It indicates that the trial judge took the view that the facts had not altered from the time of the original order, save that the appellant did not contest the original application. He considered that there was only a change to the nomenclature of the Scheme and the reasons pursuant to which Kelly J. made the order had not changed. He also referred to the divergence of opinion of judges and indicated that he accepted the line of reasoning of Peart J. in O'Connell. This Court has no note of the reasons for which Kelly J. made the original order (which is not under appeal).

Appeal

11 The order of the High Court under appeal is expressed to be a variation of the 2011 order. Counsel for the appellant submits that it was in substance a new order. The terms of the scheme exhibited on behalf of the plaintiff states that the Basic Payment Scheme (BPS) 'is being introduced in 2015 as part of the new measures in the reform of the Common Agricultural Policy. The Basic Payment Scheme has replaced the Single Payment Scheme (SPS). All entitlements held under SPS expired on 31 December 2014. A new set of entitlements will be allocated in 2015 to those eligible for an allocation under the BPS.'

12 I am satisfied that the Court must consider the order of the High Court of the 13th July, 2015 as in substance a standalone order to appoint a receiver by way of equitable execution over such payments as may be received (or receivable by the appellant) in respect of the Basic Payment Scheme.

13 Counsel for the appellant relied in submission on two distinct lines of argument to contend that the High Court judge was in error in making the order.

14 First he submitted that the High Court judge was in error in relying upon the judgment of Peart J. in O'Connell v. An Bord Pleanála [2007] IEHC 79 and that he ought to have done as Hogan J. did in Flanagan v. Crosby [2014] 1 IR 576 and follow the High Court decisions in National Irish Bank v. Graham [1994] 1 IR 215 and Honniball v. Cunningham [2010] 2 IR 1, to the effect that receivers by way of equitable execution may only be appointed over equitable interests and not legal interests in property.

15 Second he submitted that a receiver may not be appointed over future salaries, earnings or wages, and that the BPS payment is a payment of this nature. He also submitted that even if the BPS payments were not in the nature of salaries, earnings or...