On 9 May 2019 a five Judge Supreme Court handed down a judgment in the case of ACC Loan Management Limited DAC -v- Mark Rickard and Gerard Rickard [2017/146]. The Supreme Court had to make a decision on an appeal from a decision of the Court of Appeal by Mark Rickard.

The background to the matter is as follows:

  • In December 2007 ACC advanced a loan facility to Mark Rickard and his brother Gerard Rickard.

  • In December 2010 ACC initiated summary judgment proceedings. Neither Mark or Gerard Rickard denied that they had borrowed the money from ACC or that repayments had ceased.

  • In February 2011 the High Court made an order, on consent, granting judgment in favour of ACC in the sum of €1,064,747.66.

  • ACC sought to enforce its judgment and the properties available for execution principally comprised of agricultural lands. ACC’s view was that even following the sale of the secured assets there would be a shortfall on the debt due.

  • In October 2011 ACC applied to the High Court to appoint a Receiver  by way of equitable execution (“Receiver”) over the EU Farm Single Payment Scheme (“SPS”) due to Mark Rickard arguing that because of the extent of the debts due and because of the nature of the assets which were immediately available to discharge or reduce the debt it was necessary to proceed to appoint a Receiver over the payments to be made under the SPS. The evidence before the High Court was that the payments due under the SPS did not represent Mark Rickard’s sole source of income. The High Court granted the application. Mark Rickard did not make any application to vary or discharge the Order.

  • In March 2015 the Department of Agriculture contacted ACC’s Solicitors advising that the SPS had ceased and had been replaced by the EU Basic Payment Scheme (“BPS”) and the Department considered that it could no longer continue to transfer the funds, due to Mark Rickard, to ACC. ACC then brought an application to the High Court to vary the order obtained in 2011 so that the Receiver could be appointed over the BPS. Mr Rickard argued that the payments were akin to earnings and ought not be the subject of an order appointing a Receiver.  The High Court rejected Mr Rickard’s arguments and made an Order allowing the Receiver to be appointed over payments received on foot of BPS.

  • Mr Rickard then appealed this decision to the Court of Appeal which was heard in July 2017. He argued that a Receiver could only be appointed over an equitable interest in property. The Court of Appeal dismissed the appeal and held that the Court is not precluded from appointing a Receiver even where what is sought to be executed against is a legal interest in the property of a judgment debtor.

  • Mr Rickard appealed to the Supreme Court and argued that the Court of Appeal decision did not reflect the established position that the appointment of a Receiver was confined only to cases where a judgment debtor held an equitable interest in property which would not be reached by legal process and that the law provided that a Receiver could not be appointed over future payments. He further argued that future payments under the BPS should be excluded as a matter of policy and that ACC should have pursued other legal remedies as a pre-requirement to an application to appoint a Receiver.

The Supreme Court stated that issues of general public importance arose as to the extent of the power of a Receiver to collect monies over both equitable and legal interests and whether payments made to farmers under the BPS were in the nature of a salary, thereby raising questions as to whether a Receiver could be appointed over such payments.

The Supreme Court had reference to Section 28 (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.”

The Supreme Court held that the BPS in this case did not consist of future earnings. The Court held that the BPS was not a salary for work done but was in the nature of a grant or entitlement and emphasised that one of the factors to which a Court must have significant regard is whether such appointment would have a prejudicial effect on third parties or their interests.

The Supreme Court placed significant importance on the fact that Mr Rickard made no complaint about the effect of the first Order, made in 2011, over the SPS and did not dispose anything about the effect those previous deductions had on him.  The Court held that in the circumstances the appointment of a Receiver in the instant case was warranted and justifiable.

The Supreme Court emphasised that what will be determined as “just or convenient” in any case remains a matter for a Court to determine on the facts of each case and that the Courts must be vigilant to ensure that the position of a judgment debtor is not rendered unsustainable by the making of such an order and that the onus was on a judgment debtor to place full and candid evidence before the Court as to the effect which the appointment of a Receiver will have on him/her.

This judgment gives some finality and clarity on the question of appointing a Receiver by way of equitable execution over farm payments. It also clarifies that farm payments are not to be equated as a salary but rather an entitlement.

The judgment further confirms that if the Court considers it just or convenient to appoint a Receiver over certain EU payments then the Court is entitled to do so.

Breda Sheahan is an Associate in FitzGerald Legal & Advisory, 6 Lapps Quay, Cork.

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