Gerard Harrahill v John Kane
| Jurisdiction | Ireland |
| Judge | Mr. Justice Barr |
| Judgment Date | 16 March 2022 |
| Neutral Citation | [2022] IEHC 156 |
| Court | High Court |
| Docket Number | [Record No. 2009/325R] |
and
[2022] IEHC 156
[Record No. 2009/325R]
THE HIGH COURT
Appointment of receiver – Property – O. 45, r. 9 of the Rules of the Superior Courts – Plaintiff seeking an order for the appointment of a receiver by way of equitable execution – Whether the funds for the purchase of the property came from entities owned or controlled by the defendant
Facts: The plaintiff, Mr Harrahill, the Collector General of the Revenue Commissioners, on 3rd July, 2009, obtained judgment against the defendant, Mr Kane, for €4,941,997.52 and costs. That judgment remained partially unsatisfied. The notice party, Mrs Kane, the wife of the defendant, was the registered owner of a property that was formally a public house known as “The Bent Elbow”, Stradone, Co. Cavan, as comprised in folio 3048F, County Cavan (the property). The plaintiff applied to the High Court seeking an order pursuant to O. 45, r. 9 of the Rules of the Superior Courts for the appointment of a receiver by way of equitable execution over the property on the basis that the purchase price for the property was paid by the defendant, making him the beneficial owner of the property. The notice party maintained that the property was purchased by her from her own funds for the sum of €42,000 on or about 15th November, 2015. In a number of affidavits, she set out varying accounts as to how she came to have the necessary funds to complete the purchase of the property. The plaintiff submitted that none of the purported sources of funding put forward by the notice party were adequate to provide the purchase price for the property. The plaintiff led evidence tending to show that the purchase price came from funds owned or controlled by the defendant. The central question for the court to decide on the application was whether the plaintiff had established in evidence that, on the balance of probabilities, the funds for the purchase of the property came from entities owned or controlled by the defendant, rather than from funds provided by the notice party.
Held by Barr J that the notice party did not provide the funds that were used to purchase the property from her own resources. The court was satisfied that the true beneficial owner of the property was in fact the defendant. The court accepted the evidence given by Mr Magee on behalf of the plaintiff in relation to the probable sources for the funds that were used to purchase the property. In that regard, the court accepted the averments made by Mr Magee at paras. 17-20 of his affidavit sworn on 4th April, 2019, as further elaborated upon in his affidavit sworn on 11th September, 2019 at paras. 50-55. The court was satisfied that on the balance of probabilities, the defendant was the beneficial owner of the property.
Barr J held that, in the absence of knowing to what extent the judgment remained unsatisfied, and what amount may be obtained on a sale of the property, the court could not proceed to appoint a receiver by way of equitable execution, because in coming to a determination as to whether it was just or convenient to appoint a receiver, it must have regard to those matters, on which it had no evidence. Barr J held that the plaintiff would have three weeks to furnish an affidavit setting out the up-to-date position in relation to the steps taken to satisfy the judgment and the amounts recovered on foot thereof, together with evidence on the other matters of which the court must be satisfied under O. 45, r. 9. Barr J held that the affidavit must be served on the notice party and that the notice party would have three weeks thereafter, to furnish any response that she wished to make. Barr J held that her affidavit must be served on the plaintiff and filed in the Central Office of the High Court for the attention of the court. Barr J held that when those steps had been taken, the court would make its final determination and order in the matter.
Judgment approved.
JUDGMENT of Mr. Justice Barr delivered electronically on the 16th day of March, 2022.
The plaintiff is the Collector General of the Revenue Commissioners. On 3rd July, 2009, the plaintiff obtained judgment against the defendant for €4,941,997.52 and costs. That judgment remains partially unsatisfied.
The notice party is the wife of the defendant. She is the registered owner of a property that was formally a public house known as “The Bent Elbow”, Stradone, Co. Cavan, as comprised in folio 3048F, County Cavan (hereinafter ‘the property’).
In this application, the plaintiff seeks an order pursuant to O.45, r.9 of the Rules of the Superior Courts for the appointment of a receiver by way of equitable execution over the property on the basis that the purchase price for the property was paid by the defendant, making him the beneficial owner of the property.
The notice party maintains that the property was purchased by her from her own funds for the sum of €42,000 on or about 15th November, 2015. In a number of affidavits, she has set out varying accounts as to how she came to have the necessary funds to complete the purchase of the property.
The plaintiff submits that none of the purported sources of funding put forward by the notice party, were adequate to provide the purchase price for the property. The plaintiff has led evidence tending to show that the purchase price came from funds owned or controlled by the defendant.
The central question for the court to decide on this application is whether the plaintiff has established in evidence that, on the balance of probabilities, the funds for the purchase of the property came from entities owned or controlled by the defendant, rather than from funds provided by the notice party.
By summary summons issued on 3rd April, 2009, the plaintiff claimed that the defendant owed the sum of €4,941,997.52 in respect of unpaid VAT and interest thereon, in respect of the sales of motor vehicles, including farm vehicles, for the period 2001–2008. On 3rd July, 2009, the plaintiff obtained judgment from the High Court against the defendant for that sum, plus costs.
By a contract for sale dated 12th October, 2015, between Phelim McCabe as vendor, and the notice party as purchaser, the notice party agreed to purchase the property for the sum of €42,000. The closing date for the sale was stated to be four weeks from date of the contract for sale.
On 22nd February, 2016, the notice party was registered as full owner of the lands comprised in folio 3048F, County Cavan.
Prior to entering into the contract for sale, a planning application had been lodged by Michael Fitzpatrick Architects Limited on 15th June, 2015, seeking permission to change the use of the premises from a public house to a motor garage. That application was refused by Cavan County Council on 21st August, 2015. An appeal was lodged on behalf of the applicant for the planning permission. That appeal was successful, by virtue of a decision of An Bord Pleanála made on 29th January, 2016, which directed that planning permission should be granted. An inspection of the property carried out by Revenue officials on 21st December, 2017, revealed that the property was vacant, but that works had been carried out in the form of the erection of an office extension, together with the installation of perimeter fencing and floodlighting.
In an earlier application brought by the plaintiff to enforce his judgment against the defendant, the notice party claimed to be the sole beneficial owner of two properties at Cartron, Granard, County Longford. She claimed that the deposits which had been paid on the two properties in 2005, in the sums of €19,000 and €30,000 respectively, together with the cost of construction of a large new residence on the lands in 2007 and 2008, had all been funded from her own resources. In the course of those enforcement proceedings, the notice party was cross-examined before the President of the High Court on 12th May, 2017. He ruled that both deposits and the costs of construction of the new residence had all been funded by the defendant. He ruled that the notice party had not demonstrated that she had any beneficial interest in the properties.
In a letter dated 5th December, 2017, the solicitor then acting for the defendant, asserted that the notice party had purchased the property at Stradone, County Cavan, the subject matter of this application, “using her existing savings”. However, no bank statements or other documentation had been provided to substantiate that assertion.
On 13th April, 2018, the plaintiff registered a judgment mortgage in respect of the judgment obtained on 3rd July, 2009 against the defendant's beneficial interest in the property comprised in folio 3048F, County Cavan.
On 11th April, 2019, the plaintiff issued the present notice of motion seeking the appointment of a receiver by way of equitable execution over the property. The notice party was subsequently joined as a notice party to the application. The defendant did not take any steps to defend the application. In total, the plaintiff has filed three affidavits in support of the application. The notice party has filed two affidavits setting out how she maintains that the property was bought by her with her own funds.
The notice party was represented in this application by Michael Finucane Solicitors until 29th June, 2021, when, on his motion, he was given liberty to come off record on behalf of the notice party. Thereafter, she contested the application as a lay litigant.
The easiest way to summarise the evidence that was put before the court on this application, is to begin by setting out in broad terms the case made by the plaintiff; followed by the notice party's assertions as to how she came to fund the...
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