Mars Capital Ireland DAC v Hunter

• Jurisdiction: Ireland
• Judge: Mr. Justice Garrett Simons
• Judgment Date: 17 June 2022
• Neutral Citation: [2022] IEHC 353
• Court: High Court
• Docket Number: 2021 No. 168 CA

Between

Mars Capital Ireland DAC (Substituted by Order Dated 12 June 2017)

Plaintiff

and

James Hunter

Defendant

[2022] IEHC 353

2021 No. 168 CA

THE HIGH COURT

CIRCUIT APPEAL

Leave to issue execution – Order for possession – Delay – Defendant appealing from the order granting the plaintiff leave to issue execution in respect of an order for possession – Whether the delay in executing the order for possession had caused prejudice to the defendant

Facts: The defendant, Mr Hunter, appealed to the High Court from the order of the Circuit Court granting Mars Capital Ireland leave to issue execution in respect of an order for possession granted on 11 January 2010. Mars Capital Ireland had not been the original plaintiff in the proceedings, but asserted that it had since taken an assignment of the plaintiff’s interest in the order for possession. Counsel for the defendant directed her submissions to the question of whether the legal test as per Smyth v Tunney [2004] IESC 24 had been met. Attention was drawn, in particular, to the limited actions taken by Irish Nationwide Building Society and Mars Capital Ireland during the initial six year period, and thereafter to the various procedural errors which resulted in four motions having to be issued. Emphasis was also placed on the prejudice said to have been caused to the defendant by the delay.

Held by Simons J that Mars Capital Ireland had met the threshold of establishing a good reason which explained the failure to execute the order for possession to date. Simons J was also satisfied that the delay in executing the order for possession had not caused any prejudice to the defendant. Simons J held that the legal test as per Smyth v Tunney for granting leave to issue execution had therefore been met. Accordingly, Simons J dismissed the appeal against the Circuit Court order of 21 October 2021 and affirmed the order.

Simons J held that, as to costs, the default position under s. 169 of the Legal Services Regulation Act 2015 is that a party who has been “entirely successful” in proceedings is entitled to recover its costs as against the losing party. Simons J held that were the default position to apply, then Mars Capital Ireland would be entitled to the costs, both above and below, as against the defendant.

Appeal dismissed.

Appearances

Rudi Neuman Shanahan for the plaintiff instructed by AB Wolfe & Co.

Elaine Finneran for the defendant instructed by Mahon Sweeney

JUDGMENT of Mr. Justice Garrett Simons delivered on 17 June 2022

INTRODUCTION

1 This matter comes before the High Court by way of an appeal from the Circuit Court. The appeal is against an order granting Mars Capital Ireland leave to issue execution in respect of an order for possession granted on 11 January 2010. Mars Capital Ireland had not been the original plaintiff in the proceedings, but asserts that it has since taken an assignment of the plaintiff's interest in the order for possession.

RULES GOVERNING APPLICATION FOR LEAVE TO EXECUTE

2 Order 36, rule 9 and rule 10 of the Circuit Court Rules provide as follows:

“9. Every decree of the Court, and every judgment in default of appearance or defence, shall be in full force and effect for a period of twelve years from the date thereof, and an execution order based on any such decree or judgment may be issued in the Office within the said period, but not after the expiration of six years from the date of such decree or judgment without leave of the Court. An application for such leave shall be made by motion on notice to the party sought to be made liable.

10. If, at any time during the period of twelve years, any change has taken place, by death, assignment or otherwise, in the parties entitled or liable to execution, the party claiming to be so entitled may apply to the Court on notice for leave to issue execution, and the original decree or judgment may be amended so as to give effect to any order made by the Court on the application.”

3 As can be seen, a judgment or decree shall be in full force and effect for a period of twelve years. However, if a party has not sought an execution order within the first six years of that period, it is necessary to apply to a judge of the Circuit Court for leave to issue an execution order. Such an order cannot, after the lapse of six years, simply be issued in the Circuit Court office without leave. Similarly, if there has been a change in the identity of the party entitled to execute, it is again necessary to apply for leave to issue an execution order.

4 These rules differ from the equivalent provision under the Rules of the Superior Courts in that there is, in effect, an outer time-limit of twelve years. There is no outer time-limit prescribed under Order 42, rule 24 of the Rules of the Superior Courts. Presumably, the inclusion of a twelve-year period in the Circuit Court Rules is intended to coincide with the period prescribed under section 11(6)(a) of the Statute of Limitations 1957, which provides that an action shall not be brought upon a judgment after the expiration of twelve years from the date on which the judgment became enforceable. (This is how the rule appears to be understood by the learned authors of Dowling and Martin, Civil Procedure in the Circuit Court (3rd ed, 2018, Round Hall)).

5 It is open to question whether the issuance of an execution order represents an action brought upon a judgment. Certainly, there is authority to the effect that the renewal of an order of possession is not subject to a twelve-year time-limit. The High Court (Gearty J.) held in Start Mortgages DAC v. Piggott [2020] IEHC 293 that the process by which an order of possession, already obtained, is renewed, is not an action upon a judgment in the sense intended by the Statute of Limitations. (As to the distinction between an order for possession and an order of possession, see Start Mortgages DAC v. Rogers [2021] IEHC 691 (at paragraphs 24 to 29)).

6 It would appear therefore that, on one reading at least, the Circuit Court Rules seek, unilaterally, to align the time-limits governing (i) the procedural right to execute a judgment which has already been obtained, and (ii) the substantive right to sue for and obtain a judgment as prescribed under the Statute of Limitations.

7 On the facts of the present case, the order for possession was made by the Circuit Court on 11 January 2010, i.e. more than twelve years ago. However, it is not necessary for the purpose of determining the present appeal to say anything further in respect of the twelve year period under Order 36 of the Circuit Court Rules. In particular, it is not necessary to consider whether the phrase “ shall be in full force and effect for a period of twelve years” implies that a judgment or decree is spent upon the expiration of that period and cannot thereafter be the subject of a grant of leave to issue execution. This is because both parties are agreed that the twelve year period under Order 36 has been complied with in the present case in circumstances where both the motion seeking leave to issue execution and the subsequent order of the Circuit Court granting leave were made within twelve years of the date of the order for possession. The defendant does not seek to rely on the fact that any order made by the High Court on this appeal will have been made at a remove of more than twelve years from the date of the order for possession. A more detailed consideration of this aspect of Order 36, rules 9 and 10 will have to await a case where it is fully argued.

8 The grant of leave to issue execution is discretionary. Order 36 of the Circuit Court Rules is silent as to the criteria to be considered in the exercise of this discretion. However, there is a well-established body of case law which identifies the criteria governing the equivalent rule under the Rules of the Superior Courts, namely, Order 42, rule 24; and this case law can be applied by analogy to the Circuit Court Rules. The leading judgment remains that of the Supreme Court in Smyth v. Tunney [2004] IESC 24; [2004] 1 I.R. 512. There, the Supreme Court held that it is not necessary to give some unusual, exceptional or very special reasons for obtaining permission to execute following the lapse of six years from the date of the judgment or order, provided that there is some explanation at least for the lapse of time. Even if a good reason is given, the court must consider counterbalancing allegations of prejudice.

9 It should be explained that the fact that there has been an assignment of a judgment does not obviate the necessity to provide an explanation where that judgment has not been executed within the initial six year period. The High Court in Irish Nationwide Building Society v. Heagney [2022] IEHC 12 rejected an argument that the lapse of time since the making of an order for possession is irrelevant in circumstances where there has been a change in the party entitled to execution. Allen J. held as follows (at paragraphs 47 and 48 of the judgment):

“I am satisfied that O. 42, r. 24, properly construed – as the applicant correctly submits it should be – having regard to O. 42, r. 23 means that an application by an assignee of a judgment or order is to be approached on the same basis as an application by or against the party originally entitled or liable to execution. In the case of a change of entitlement or liability within six years of the judgment or order, the applicant need prove no more than that there has been such a change. In the case of an application made upwards of six years from the date of the judgment or order, however, the applicant, in the same way as the party originally entitled, must demonstrate the reason for the delay. If the discretion of the court is so engaged, the court will move on to consider whether it should be exercised in favour of, or against, granting leave.

Again, if I may say...