Ballinrobe Credit Union Ltd v O'Neill
| Jurisdiction | Ireland |
| Judge | Mr. Justice Michael Hanna |
| Judgment Date | 12 February 2016 |
| Neutral Citation | [2016] IEHC 230 |
| Docket Number | [2014 No. 467] |
| Court | High Court |
| Date | 12 February 2016 |
[2016] IEHC 230
HIGH COURT
CIRCUIT COURT APPEAL
WESTERN CIRCUIT COUNTY OF MAYO
Hanna J.
[2014 No. 467]
Banking & Finance – Non-payment of loan – S. 22 (1) (a) of the Courts (Supplemental Provisions) Act 1961 – Appeal to set aside an absolute garnishee order – Acquiescence to jurisdiction – Accrual of debt
Facts: The appellant had filed an appeal against the order of the Circuit Court affirming the order of the County Registrar who made an absolute order of garnishee in favour of the respondent. The appellant contended that the Circuit Court lacked the jurisdiction to make the garnishee order under s. 22 (1) (a) of the Courts (Supplemental Provisions) Act 1961 as the third schedule to which the said s. 22 was applicable did not refer to garnishee orders. The appellant contended that the impugned order of the Circuit Court could not be complied with as the appellant was insolvent. The respondent contended that the Circuit Court had been vested with jurisdiction to grant garnishee orders simpliciter under s. 22 (7) of the 1961 Act.
Mr. Justice Michael Hanna dismissed the appeal. The Court held that the appellant could not raise the issue concerning jurisdiction for the first time before the High Court as it was not the Court of first instance. The Court observed that the appellant should have raised that plea before the Country Registrar or the Circuit Court. The Court held that since the appellant had made an appearance before both forums without making any submission in that regard, the appellant had acquiesced to the jurisdiction by his unequivocal conduct and thus, he was estopped from raising the plea of want of jurisdiction. The Court found that since the concerned Department was obliged to release the grants to the appellant upon fulfilment of the required criteria, the grants became an accruing debt, not being the debt payable at the time of the garnishee application. The Court found that the conduct of the appellant in applying the proceeds of the grants to some other financial institution rather than assigning the grants to the respondent for re-payment of loans would not entitle it to claim relief on the ground of insolvency. The Court held that in order to exercise its discretion to set aside an absolute order of garnishee, the Court had to be satisfied that the judgment debtor was insolvent and that certain financial arrangements had been place with reasonable prospects of success. The Court found that the insolvency of the appellant being at a nascent stage with no such arrangement put forward by the creditors, the appellant was not entitled to that discretionary relief.
The present proceedings are an appeal against the Order of a Circuit Court Judge of 6th March, 2015, which affirmed the order of the County Registrar dated the 8th December, 2014 making absolute the garnishee order dated the 8th September 2014
‘over all debts owing or accruing to the [appellant] herein from the Department of Agriculture, Food and the Marine, to pay to the [respondent] herein all sums due now or in the future to the [appellant] in respect of farming and/or land use related schemes, including but not limited to REPS, AEOS, the Single Payment Scheme, Disadvantaged Areas Scheme or any other state payment relating to agriculture or land ownership in order to reduce the debt due and owning (sic) to the [respondent] until such time as the sum of €191,488.87 together with interest at 8 per cent per annum is satisfied.’
By High Court Summary Summons in proceedings entitled Ballinrobe Credit Union Limited v. Nicola O'Neill (Record No. 2009/2377S) issued on 15th June, 2009, the respondent claimed the sum of €130,324.11 from the appellant in respect of monies loaned to the appellant together with accrued interest. Evidence was adduced that a loan advanced in 2008 to the appellant by the respondent in the sum of €85,000, in addition to an existing balance of €34,415.60, on the basis that grants from the Department of Agriculture, Food and Marine (hereinafter ‘the Department’) would be used to pay the loan. The appellant formally assigned the Department grants to the respondent on 10th February, 2009 for this purpose. Subsequent to this, the appellant informed the respondent that the assignment had been withdrawn.
By order dated 8th December, 2009, the respondent obtained judgment against the appellant in the sum of €130,324.11 and interest thereon at the rate of 8% from 8th December 2009 and costs in the sum of €309.63.
On 8th September 2014, the respondent obtained a conditional order of garnishee from the County Registrar of the Circuit Court, County Mayo addressed to the Department to pay to the respondent all sums due now or in the future to the appellant in respect of farming and/or land use related schemes, including but not limited to REPS, AEOS, the Single Payment Scheme, Disadvantaged Areas Scheme or any other state payment relating to agriculture or land ownership.
The respondent's application for an absolute order of garnishee came before the County Registrar on 8th December, 2014. It was claimed by the appellant that this application was contested. This is disputed by the respondent. The appellant was legally represented at all material times. The County Registrar made absolute the order of garnishee to the respondent.
The appellant appealed the order of the County Registrar to the Circuit Court, wherein the Circuit Court Judge, by order dated 6th March 2015, dismissed the appeal and confirmed the order of the County Registrar of 8th December, 2014.
The appellant submitted that the Circuit Court had no jurisdiction to hear the respondent's application for a garnishee order where the proceedings on foot of which the respondent obtained judgment against the appellant were High Court proceedings. The appellant relied on s. 22(1)(a) and s. 22(7) of the Courts (Supplemental Provisions) Act 1961 (‘the Act of 1961’) to ground this argument. Section 22(1)(a) provides:
‘the Circuit Court shall, concurrently with the High Court, have all the jurisdiction of the High Court to hear and determine any proceedings of the kind mentioned in column (2) of the Third Schedule to this Act at any reference number.’
The appellant contended that the section does not extend to garnishee orders as no reference is made to such in the Third Schedule to the Act of 1961. Section 22(7) of the Act provides:
‘(7) [w]ithout prejudice to any jurisdiction conferred by the previous subsections of this section, the Circuit Court shall have powers of attachment, garnishee and interpleader, and shall have all powers (including the power to appoint a receiver) ancillary to any jurisdiction exercisable by it.’
The appellant argued that the garnishee order was ancillary to the summary proceedings for the debt in the High Court and, thus, the garnishee action ought to have been brought in the High Court.
The appellant contended that the County Registrar had no authority to make an absolute order of garnishee on 8th December, 2014. The appellant asserted that she did not consent to the garnishee application before the County Registrar. Order 18, r. 1 (va) of the Rules of the Circuit Court, as amended by S.I. 312 of 2007, provides that a County Registrar may make ‘[a] conditional order of garnishee and, if the order is consented to or is uncontested, an order of garnishee.’
Order 45, r. 1 of the Rules of the Superior Courts (‘RSC’) provides that the Court may make an order in respect of ‘all debts owing or accruing’ from the garnishee to the judgment debtor. The appellant argued that the terms of the Order are at variance with the law as established in Webb v. Stanton (1883) 11 Q.B.D. 518, as followed in O'Leary v. Buttimer [1953-1954] Ir. Jur. Rep. 15 and Robinson v. McDonnell 3 N.I.J.R. 342 (see also recent Irish authorities Kanwell Developments Ltd. v. Salthill Properties Ltd. (In Receivership) [2008] IEHC 3 and Lynch v. Darlington Properties & Anor. [2011] IEHC 273. The appellant submitted that there must be money due to the judgment debtor from the third party and the debt needs to be payable at the time of the application for the garnishee order or will become payable in future by reason of a present obligation. The appellant submitted that the entitlement to the Department of Agriculture grants does not arise automatically. A farmer is required to make an application in May of each year and the debt only crystallises once the Department determines the entitlement to the grant.
However, I should observe at this juncture that evidence was given by the appellant's husband, Mr. Fergal Morahan, to the effect that an entitlement to the grant arises once there is compliance with the required criteria in advance of the application to the Department. I am satisfied that he dealt with all relevant matters in connection with these grants on his own and the appellant's behalves. This remains the uncontradicted state of the evidence before me.
The appellant also submitted that if the High Court has jurisdiction to deal with this matter, the Court should exercise its discretion by refusing to make the Order absolute as (i) the appellant is insolvent and (ii) a scheme of arrangement has established by the main body of creditors and has a reasonable prospect of succeeding.
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