AIlied Irish Bank Plc v King

JurisdictionIreland
CourtCourt of Appeal (Ireland)
JudgeMs Justice Máire Whelan
Judgment Date30 September 2020
Neutral Citation[2020] IECA 261
Date30 September 2020
Docket NumberAppeal No. 2019/267

[2020] IECA 261

THE COURT OF APPEAL

Whelan J.

Haughton J.

Binchy J.

Appeal No. 2019/267

BETWEEN/
ALLIED IRISH BANKS PLC
RESPONDENT
-AND-
MICHAEL KING

AND

DENISE KING
APPELANTS

Motion for discovery – Stay of execution – Summary proceedings – Appellants appealing against an order of the High Court granting the respondent discovery in aid of execution – Whether a stay of execution operated to disentitle the respondent from issuing a motion for discovery in aid of execution

Facts: The appellants, Mr and Ms King, appealed to the Court of Appeal against an order of the High Court (Barrett J) of 31 May 2019 made in the exercise of his discretion granting the respondent, Allied Irish Banks plc (the Bank), discovery in aid of execution pursuant to O. 42, r. 36 of the Rules of the Superior Courts (RSC). The order was sought on foot of a prior judgment obtained by the Bank on 12 July 2018 in summary proceedings against the appellants jointly and severally in the sum of €1,038,867.08 together with costs granted subject to a stay of execution. There was no evidence that the Bank opposed either the granting of the stay or its three-month duration. The Bank did not appeal against the said order. It was due to expire by effluxion of time on or about 12 October 2018. No application was made to the court by the Bank to vary or vacate the stay nor was leave sought of the court during its operation to issue the motion for discovery in aid of execution. The appellants contended that for its duration the stay operated to disentitle the Bank from issuing a motion for discovery in aid of execution pursuant to O. 42, r. 36 RSC.

Held by Whelan J that the terms of the stay required that the status quo be maintained for its duration; prior to its termination the judgment could be entered but otherwise the matter was to be maintained in a holding pattern. Whelan J held that the issuing of the motion by the Bank constituted a significant step; it was inconsistent with the stay and contrary to its clear intent. Whelan J held that, in the absence of an application for leave to issue the motion, its issuance was premature, inconsistent with the terms of the judgment and breached the stay; therefore, the motion ought to be struck out.

Whelan J held that she would allow the appeal and set aside the order of the High Court.

Appeal allowed.

Judgment of Ms Justice Máire Whelan delivered on the 30th day of September 2020
Introduction
1

This is an appeal against an order of The High Court (Barrett J.) of 31 May 2019 made in The exercise of his discretion granting Allied Irish Banks plc (“the Bank”) discovery in aid of execution pursuant To O. 42, r. 36 of The Rules of The Superior Courts (“RSC”).

2

The order was sought on foot of a prior judgment obtained by The Bank on 12 July 2018 in summary proceedings against The appellants jointly and severally in The sum of €1,038.867.08 together with costs granted subject To a stay of execution as follows:-

“AND IT IS ORDERED That execution on foot of The said judgment be stayed for a period of three months from the date hereof.

3

Both sides were represented by solicitor and counsel when the stay was granted. There is no evidence that the Bank opposed either the granting of the stay or its three-month duration. The Bank did not appeal against the said order. It was due to expire by effluxion of time on or about 12 October 2018. No application was made to the court by the Bank to vary or vacate the stay nor was leave sought of the court during its operation to issue the motion for discovery in aid of execution. The appellants contend that for its duration the stay operated to disentitle the Bank from issuing a motion for discovery in aid of execution pursuant to O. 42, r. 36 RSC.

The Bank's notice of motion for discovery in aid of execution
4

The Bank issued the discovery motion on 5 October 2018, about seven days prior to the expiration of the stay of execution. It sought orders directing the appellants to attend court and be orally examined as to their ability to satisfy the judgment debt obtained against them; directing the production of books, memoranda and writings relating to their ability to satisfy the judgment debt; and, to make discovery by way of affidavit of all relevant evidence including in relation to a transfer by the appellants of the lands comprised in Folio 20670F Co. Meath.

5

The grounding affidavit of 1 October 2018 of Peter Kelly affirmed as follows:-

“7. I say that at the date of affirming the Defendants have failed, refused and/or neglected to satisfy the judgment as Ordered or at all.”

High Court judgment
6

The Bank's motion came on for hearing on 29 April 2019 and was fully contested. In his judgment, [2019] IEHC 287, delivered on 3 May 2019, Barrett J. found that the Bank was not entitled to issue its motion before the expiration of the stay but nonetheless granted the Bank's application pursuant to O. 42, r. 36 RSC.

7

The trial judge considered two judgments relied on by the appellants and the Bank. respectively, namely White, Son & Pill v. Stennings [1911] 2 K.B. 418; and, Sucden Financial Ltd. v. Fluxo-Cane Overseas Ltd. [2009] EWHC 3555 (Q.B.).

8

He also considered Finlay Geoghegan J.'s dictum in Allied Irish Banks plc v. O'Reilly [2015] IECA 209 which the Bank contended supported its position:-

“…A person who has obtained a judgment which the judgment debtor leaves unsatisfied appears to me prima facie entitled to orders which may be made pursuant to O. 42, r. 36…” (para. 18)

The trial judge held that, in circumstances where no satisfaction is required for the period of a stay, one cannot be said to have left a judgment debt unsatisfied for its duration.

9

Despite the trial judge's indication that the Bank was not entitled to issue its motion before the expiration of the stay, he concluded at para. 4:-

“… AIB's ‘rush’ to make application came, in truth, but seven days before the expiry of the period of the stay. Additionally, the said period has now long elapsed, and the factual position presenting is akin to that contemplated by Finlay Geoghegan J. in O'Reilly, para. 18, rendering AIB prima facie entitled to (and the court considers that in all the circumstances now presenting it should and will be granted) the order it has come seeking.”

Grounds of Appeal
10

The appellants contended, inter alia, that the trial judge erred in law and in fact by:

i. exercising his discretion to grant the reliefs sought by the Bank notwithstanding that he had found in favour of the appellants regarding the correct interpretation, meaning and effect of the stay;

ii. finding that the Bank was “[a] person who has obtained a judgment which the judgment debtor leaves unsatisfied” ( per Finlay Geoghegan J. in Allied Irish Banks plc v. O'Reilly, para. 18) and prima facie entitled to the reliefs sought, contrary to the principles established in White, Son & Pill v. Stennings which the trial judge had found applied in this jurisdiction concerning the meaning and effect of a stay; and,

iii. rejecting the appellants' argument that the circumstances of the instant case did not indicate a level of complexity which warranted the making of an order of discovery in aid of execution in light of the principles set out by Clarke J. (as he then was) in Moorview Developments Ltd. v. First Active plc [2011] IEHC 117, [2011] 3 I.R. 615 as approved by the Court of Appeal in Allied Irish Banks plc v. O'Reilly.

Submissions of the Appellants
11

The appellants emphasised the definition of “stay” in Black's Law Dictionary (8 th edn., Thomson West, 2004):-

“1. The postponement or halting of a proceeding, judgment, or the like.

2. An order to suspend all or part of a judicial proceeding or a judgment resulting from that proceeding…”

They contended that, in light of that definition, the effect of the stay granted in this case was to suspend, until its expiration, further operation of the proceedings including the judgment granted.

12

The appellants argued that, having regard to the heading of O. 42 RSC and the subheading and plain language of O. 42, r. 36 RSC, the process of discovery in aid of execution is an integral part of the process of execution and. as such, came within the scope of the stay of execution ordered on 12 July 2018.

13

They submitted that the decision in Sucden Financial Ltd. v. Fluxo-Cane Overseas Ltd. did not represent the law in this jurisdiction. They argued that the trial judge had concluded that the decision in White, Son & Pill v. Stennings represents the law in this jurisdiction, noting that the Bank had not cross-appealed that finding and therefore it must stand for the purposes of this appeal.

14

The appellants also argued that the trial judge erred in holding that the Bank was prima facie entitled to the reliefs sought in light of the decision in Allied Irish Banks plc v. O'Reilly and that he erred in finding that the judgment debt was “unsatisfied” in circumstances where he had accepted White, Son & Pill v. Stennings as an authority for the proposition that a judgment debt cannot be “unsatisfied” while a stay of execution operates.

15

They contended that, insofar as the trial judge exercised an equitable jurisdiction to grant the reliefs sought, notwithstanding his finding that the Bank was not entitled to issue its motion when it did, he was in error.

16

The appellants further submitted that, in any case, the instant case is relatively straightforward and, as such, discovery for the purposes of preparing for an oral examination of the debtors was not warranted. They relied on para. 59 of Clarke J.'s (as he then was) decision in Moorview Developments (as approved by the Court of Appeal in Allied Irish Banks plc v. O'Reilly):-

“…A person who does not have significant assets (or at least many types of assets) and a relatively straightforward income, may well be easily required to...

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