The recent Supreme Court decision of ACC Loan Management DAC v Rickard & Anor has confirmed that the Court can appoint a receiver (an individual appointed by a Court to handle money or property during a lawsuit) by way of equitable execution over the basic farm payment as a means to enforce a judgment debt.
Equitable execution is a form of enforcement of a debt. It allows a creditor to obtain payment when the debtor’s interest in an asset is such that ordinary execution will not touch it (e.g. where the interest is equitable).
Previous Court decisions had indicated that in relation to equitable execution, receivers may only be appointed over equitable interests in property rather than legal interests.
In 2010, ACC Loan Management DAC (‘ACC’) issued a summary summons for the sum of €1,064,747.66 against the defendants, Gerard and Mark Rickard on foot of an unpaid loan.
In early 2011, the High Court made an order (“2011 Order”) granting judgment to ACC against the Rickards. As the debt remained unpaid, Mr Justice Peter Kelly in the High Court, directed that a receiver could be appointed by way of equitable execution in respect of the Single Farm Payment (“SPS”) which Mark Rickard was receiving. The SPS was a payment for farmers under the EU Common Agricultural policy.
In 2015, the SPS payments were stopped and replaced by the Basic Payment Scheme (“BPS”). At this point ACC had to apply to the High Court to vary the 2011 Order to allow for the change to the format of the farm payments. Mr Rickard challenged this variation on the grounds that the BPS payment was comparable to earnings and should not be subject to an order appointing a receiver by equitable execution. The High Court amended the 2011 Order and confirmed that the payments could continue.
Mr Rickard appealed this 2015 variation Order to the Court of Appeal and the Court of Appeal upheld the Order of the High Court, noting that whilst the BPS payment was a legal interest, it remained an entitlement upon which a receiver could be appointed. The Court concluded that “…the courts…are not precluded from appointing a receiver by way of equitable execution, even when what is sought to be executed against is a legal interest in the property of a judgment debtor.”
Mr Rickard appealed the Court of Appeal decision to the Supreme Court on the grounds that the decision did not favour the established legal position that the appointment of receivers was limited only to cases where a debtor held an equitable interest in property which would not be reached by legal process. He also contended that the law provided that a receiver could not be appointed over future payments.
In delivering his judgment, Mr Justice MacMenamin referenced S28(8) of the Supreme Court Adjudicator (Ireland) Act 1877 which provides “a mandamus or an injunction may be granted or a receiver appointed by an interlocutory order of the Court in all cases in which it shall appear to the Court to be just or convenient that such order should be made and any such order may be made either unconditionally or upon such terms and conditions as the Court shall think just.” He emphasised that in defining what is “just or convenient”, the Court would look to the facts of each case.
Furthermore, Mr Justice MacMenamin held that in this case there was no evidence before the Court that the appointment of a receiver could be unjust “in the sense of the provision and the Rules”. It is worth noting that Mr Rickard had failed to provide a statement of affairs, so had not shown that he could potentially be prejudiced by the appointment of a receiver.
Mr Justice MacMenamin upheld the judgment of the Court of Appeal and dismissed Mr Rickard’s appeal.
This judgment has provided clarity on the issue of appointing a receiver by means of equitable execution over legal interests and in particular over future farm payments. This important decision has demonstrated that the Courts have a wide discretion to appoint a receiver by way of equitable execution to enforce a judgment debt.
For more information on this topic, please contact:
Eileen Lynch, Associate Solicitor.