Significant Irish Judgment On Discovery In Aid Of Examination

Author:Mr Brian Clarke, John Breslin and Eugene McCormick
Profession:Maples and Calder
 
FREE EXCERPT

At this stage of Ireland's economic cycle, in many cases obtaining a court judgment against a debtor does not necessarily ensure payment. If the judgment debtor fails to pay, there are several procedures available to a judgment creditor to attach the judgment debtor's assets and income so as to obtain payment (a process broadly termed 'execution'). In order to make such an application, the judgment creditor must of course have some knowledge of and information about the particular asset or income. In order to build its knowledge, a judgment creditor can apply to have the judgment debtor summoned to court and questioned on oath as to "whether any and what debts are owing to the debtor, and whether the debtor has any and what other property or any means of satisfying the judgment" (an "examination order"). This is obviously a useful weapon in the armoury of a judgment creditor.

The Irish Court of Appeal has confirmed that a judgment creditor can seek disclosure of documents relating to a judgment debtor's assets and income in advance of such an examination, termed 'an order for discovery in aid of examination'. The advance disclosure permits the judgment creditor to prepare for and conduct the examination of the judgment debtor efficiently. The Court of Appeal also clarified the test that applies in granting an examination order, and by extension an order for discovery in aid of examination, as against a judgment debtor. Finally, the Court of Appeal approved a particular order seeking the disclosure of details of individual asset transfers above a threshold within the last five years (the "look back order").

The judgment will be of interest to financial institutions and other large creditors who hold unsatisfied judgments against uncooperative debtors.

Facts

Allied Irish Banks plc ("AIB") obtained a judgment against the businessman Tony O'Reilly. To assist it identify assets or income from which to obtain repayment, AIB sought an examination order in respect of Mr O'Reilly, and sought a sworn Statement of Affairs together with supporting documents relating to Mr O'Reilly's assets, including the look back order, in advance of the date set for the examination. At the hearing in the Irish High Court, AIB did not proceed with the application for an examination order due to Mr O'Reilly's...

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