Start Mortgages Ltd v Christopher Doheny and Another

JurisdictionIreland
JudgeMs. Justice Donnelly
Judgment Date19 December 2014
Neutral Citation[2014] IEHC 656
CourtHigh Court
Date19 December 2014

[2014] IEHC 656

THE HIGH COURT

[No. 547 S/2011]
Start Mortgages Ltd v Doheny
START MORTGAGES LIMITED
PLAINTIFF

AND

CHRISTOPHER DOHENY AND DOROTHY DOHENY
DEFENDANTS

O'CONNELL v BORD PLEANALA UNREP PEART 19.2.2007 2007/48/10159 2007 IEHC 79

RSC O.45 r9

GLANVILLE THE ENFORCEMENT OF JUDGMENTS 1999 PARA 16.12

NATIONAL IRISH BANK LTD v GRAHAM 1994 1 IR 215 1994/5/1506

HONNIBALL v CUNNINGHAM 2010 2 IR 1 2006/29/6197 2006 IEHC 326

KEANE EQUITY AND THE LAW OF TRUSTS IN THE REPUBLIC OF IRELAND 2ED 2011

WATERSIDE MANAGEMENT CO LTD v KELLY UNREP KEARNS 11.4.2013 2013/53/14948 2013 IEHC 143

FLANAGAN & PRENDEVILLE v CROSBY & ORS UNREP HOGAN 7.2.2014 2014 IEHC 59

SUPREME COURT OF JUDICATURE ACT (IRELAND) 1877 S28(8)

LAW SOCIETY OF IRELAND v O'MALLEY 1999 1 IR 162 1998 2 ILRM 531 1998/23/9015

GLEGG v BROMLEY 1912 3 KB 474 1911-13 AER REP 1138 106 LT 825

SOINCO SACI v NOVOKUZNETSK ALUMINIUM PLANT 1998 QB 406 1997 3 AER 523 1998 2 WLR 334 1997 2 LLOYDS REP 330

R (P) v C (K) (LEGAL PERSONAL REPRESENTATIVE OF C (M) (DECEASED)) UNREP BAKER 11.3.2014 2014 IEHC 126

G (A) v RESIDENTIAL INSTITUTIONS REDRESS BOARD 2012/16/4476 2012 IEHC 492

HOLMES v MILLAGE 1893 1 QB 551 68 LT 205 9 TLR 331

Appointment of Receiver – Application to make an order absolute – Jurisdiction of the court

Facts: A High Court judge made a conditional order to appoint a receiver by way of equitable execution over any settlement proceeds or award of damages made to the defendant. The plaintiff in this case applied to make that order absolute. The plaintiff had obtained an order for judgment by consent against both defendants. This judgment remained outstanding in its entirety.

Held by Donnelly J: The court was bound by Supreme Court case law that determined the scope of the jurisdiction to appoint a receiver by way of equitable execution. The court found that it did not have jurisdiction to appoint a receiver by way of equitable execution over future debts that may have become payable to the judgment debtor. The court refused the relief sought in the notice of motion.

Introduction
1

1. On the 10 th of February, 2014, Peart J. made a conditional order appointing David Lane as receiver by way of equitable execution over any settlement proceeds or award of damages made to the defendant, from High Court proceedings bearing Record Number 2013/458P, limited to the amount of €158,017.03. This is an application to make that order absolute.

2

2. The background to this application is that on the 8 th of February, 2012, the plaintiff obtained an order for judgment by consent against both defendants in the sum of €158,017.03 plus costs measured at €2,000.00. This judgment remains outstanding in its entirety save for €200.00 paid by the second defendant during a period of attempted negotiations. The plaintiff has secured this judgment against land that belongs to the first named defendant only. The plaintiff has not taken any steps to secure a judgment against the second named defendant as there are no available assets in her name. While she is a registered joint owner of a certain property, there is already in existence a first legal charge registered over same in favour of the plaintiff.

3

3. The plaintiff has become aware that the second defendant has issued personal injury proceedings against Persian Restaurants trading as McDonald's Restaurant. These proceedings were recently transferred from the Circuit Court to the High Court.

4

4. No notice of trial has been served in those proceedings but the plaintiff is concerned that the parties may well decide to settle the action. Alternatively, the plaintiff submits that if the matter does come before the court, it could give rise to an award of damages made in favour of the second defendant.

5

5. The plaintiff claims an entitlement to an equitable interest in the proceeds of any settlement or award that the second defendant may be awarded. The plaintiff says that David Lane has agreed to act as receiver. The estimated cost of the receiver would be in the region of €500.00 plus VAT. Mr. Lane has sworn an affidavit indicating a willingness to act as receiver. He confirmed that he will act in the best interests of both the plaintiff creditor and the second defendant in administering the proceeds to satisfy the debt due and owing to the plaintiff with any surplus being returned to the second defendant.

The issues
6

6. The plaintiff relies upon O'Connell v. An Bord Pleanala [2007] IEHC 79 to show that there is jurisdiction for the court to appoint a receiver by way of equitable execution in these circumstances. The plaintiff submits that under 0. 45, r.9 of the Rules of the Superior Courts, it is just or convenient that such appointments be made having regard to the amount of the debt claimed by the defendant, to the amount which may probably be obtained by the receiver and to the probable costs of his appointment.

7

7. No affidavit was sworn by or on behalf of the second defendant. Counsel for the second defendant states that she does not represent the defendant in the personal injuries action, but submits, in any event, that it is for the plaintiff to show the details of the proceedings.

8

8. Counsel for the second defendant's main submission is that, despite the O'Connell decision, the law is by no means settled as to whether a power to appoint a receiver over a claim for future damages for personal injuries exists. Counsel relies upon Glanville, The Enforcement of Judgments (Round Hall, 1999) at para, 16.12. She submits that here, there is no property either legal or equitable, there is nothing capable of assignment and that this could be a fruitless appointment as there is no real knowledge of what may be ascertained. She notes that Glanville refers to examples of property not covered, e.g. future payments and unliquidated damages (although noting the reference to unreported judgments).

9

9. Counsel opened the O'Connell case. She notes the distinction made by the learned trial judge regarding earnings and wages necessary for an applicant to live. In O'Connell, the High Court said that the fund at issue was in the nature of a debt due for payment in the future. She notes that the order made by the court excluded the costs of the continuing personal injuries action. She says that there were two cases which preceded O'Connell which were not opened to the Court. She makes reference to the National Irish Bank Ltd v. Graham [1994] 1 IR 215 and Honniball v. Cunningham [2010] 2 IR 1. She submits that the Supreme Court in National Irish Bank v. Graham stated that the remedy only applied to a debtor's equitable interest in property.

10

10. In Graham, the Supreme Court refused to grant an order appointing a receiver by equitable execution in respect of a herd of cattle. The Supreme Court said that the plaintiff bank could execute its judgment in the ordinary way by the seizure of the herd. The relevant passage of the Supreme Court judgment includes the following sentence: "[i]t is clear that the jurisdiction to appoint such a receiver is confined to cases in which a debtor enjoys an equitable interest in property which cannot be reached by legal process." She says that the principles and in particular the second aspect thereof, i.e. "which cannot be reached by legal process", was further explored in Honniball, a case not opened to the court in O'Connell. She submits that Laffoy J., with reference to Graham, stated " [t]he principle is that the equitable remedy is only available where the judgment debtor has only an equitable interest in property against which the judgment creditor seeks recourse".

11

11. Counsel also relies upon Keane, Equity and the Law of Trusts in the Republic of Ireland (2nd edn, Bloomsbury Professional, 2011) in which the learned author states with respect to the decision in O'Connell that "[s]ince there was no property of any sort to which the judgment debtor was entitled, either immediately or in the future, it is difficult to understand over what equitable interest in property the execution process could attach."

12

12. Counsel for the second defendant also draws the attention of the court to the case of the Waterside Management Company Limited v. Kelly [2013] IEHC 143. The President of the High Court noted that a prima facie divergence was evident between the conceptual approaches taken to the exercise of the court's jurisdiction to appoint a receiver by way of equitable execution in the authorities cited to him. In that case however, he was of the view that it was not a suitable case in which to appoint a receiver and he did not find it necessary to distinguish between them.

13

13. My attention was also drawn to the decision of Hogan J. in Flanagan v. Crosby [2014] IEHC 59. That case concerned future emoluments to a county councillor. Hogan J. also made comments about the decision in O'Connell and the decision in National Irish Bank Ltd. v. Graham. He noted that O'Connell was concerned with future payment of an unliquidated sum which was contingent on uncertain events and the High Court had stressed that regular future payments by way of salary or emolument represented a different category of cases. Hogan J. felt bound by stare decisis to refuse the application to appoint a receiver by way of equitable execution over future salary or other emoluments. He did so despite noting that from the standpoint of first principles, tradition apart, there seems no reason in principle why an order for the appointment of a receiver by way of equitable execution could not be made in respect of legal as well as equitable interests.

14

14. Counsel for the second defendant has, in furtherance of her argument, drawn an analogy with the principles as set out in bankruptcy. She says that the right of a bankrupt to bring personal...

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