Supreme Court: Farmer loses appeal against appointment of receiver over payments from EU



Supreme Court
Supreme Court

A farmer who has had a receiver appointed over his payments from the EU under the Farm Single Payment Scheme since 2011 and its successor, the Basic Payment Scheme, since 2015 has lost his appeal to the Supreme Court.

Finding that the farmer had not shown evidence of how the appointment of the receiver was unjust, Mr Justice John MacMenamin dismissed the appeal.

Background

In December 2007, ACC Loan Management Limited DAC advanced “a large sum of money” to Mark Rickard and his brother, Gerard Rickard. The Rickard brothers were involved in tillage farming, and at the time the loan was taken out, it was represented that the farm was generating over €750,000 a year by the sale of crops. The repayments to ACC ceased, and the Rickard brothers failed to fulfil pledges of co-operation in repayment of the debt.

In 2010, ACC issued a summary summons for the sum of €1,064,747.66. in February 2011, the High Court made an order by consent granting the judgment to SCC against the brothers.

The 2011 Order

As of October 2011, the judgment remained entirely undischarged. The properties available for execution comprised of approximately 215 acres of farmland and farm building, which the bank said would still result in a shortfall on the debt due if sold. It was submitted that Mark Rickard received €162,656 under the EU Farm Single Payment Scheme (SPS), and that the payments under the scheme did not represent his sole source of income.

In the High Court, Mr Justice Peter Kelly directed that a receiver by way of equitable execution be appointed in respect of such payments which Mark Rickard was due to receive from the Department of Agriculture, Fisheries & Food under the SPS.

Between October 2011 and June 2015, ACC received  €525,877.40 pursuant to the 2011 order.

The 2015 order

In March 2015, the Department of Agriculture, Fisheries & Food informed ACC that the SPS had ceased and been replaced by the EU Basic Payment Scheme (BPS), and that the Department considered it no longer had a sound legal basis to continue to transfer funds to ACC.

In the High Court in July 2015, ACC sought a variation of the 2011 Order. At this stage, Mark Rickard did not suggest that the appointment of the receiver had any serious effect on his finances or those of his family – he did however depose that payments previously made to him under the SPS, and now under the BPS, were payments from the European Commission for the support of farm incomes and production throughout the European Union. He contended that these payments were in the nature of, or akin to, emoluments or earnings and ought not to be the subject of an order appointing a receiver by way of equitable execution.

While noting a “divergence” of judicial opinion regarding the circumstances in which a receiver could be appointed, Mr Justice Brian McGovern varied the 2011 Order with one which provided that, from that date onwards, the receiver would be appointed over such payments as Mark Rickard might henceforth receive from the Department under the BPS.

Court of Appeal

Mr Rickard brought an appeal against the 2015 judgment and order to the Court of Appeal, in which he submitted that Mr Justice McGovern had erred in relying upon and following O’Connell v An Bord Pleanala [2007] IEHC 79, and that he should have followed National Irish Bank v Graham [1994] 1 IR 215; Honniball v Conningham [2010] 2 IR 1; and Flanagan v Crosbie [2014] 1 IR 576 – judgments which said that a receiver might only be appointed over equitable interests in property. 

Having considered legal authorities which were not cited to the court in National Irish Bank v Graham [1994] 1 IR 215, including a number of “persuasive English authorities”, the judges of the Court of Appeal concluded that “when exercising the statutory jurisdiction conferred by s.28(8) of the Judicature Act 1877, the courts, acting in accordance with the Rules of Court in the 21st Century, are not precluded from appointing a receiver by way of equitable execution, even where what is sought to be executed against is a legal interest in the property of a judgment debtor”.

Dismissing the appeal in two judgments, the Court also concluded that “the law permitted that a receiver be appointed over the sums to which the appellant would have been entitled under the BPS Scheme”.

Supreme Court

Mr Rickard applied for leave to appeal to the Supreme Court, in which he that:

  • The established position reflected in Graham was that the appointment of receivers was confined only to cases where a judgment debtor held an equitable interest in property which will not be reached by legal process;
  • The law provided that a receiver could not be appointed over future payments;
  • The developments in English law took place against the background of the UK Supreme Court of Judicature Act 1925, and later legislation;
  • The established case law related to more substantial choses in action than the “inchoate” chose in action here;
  • Future payments under the BPS should be excluded as a matter of policy;
  • It was necessary that Mr Rickard should have pursued other legal remedies under the Enforcement of Court Orders Act, as a pre-requirement to application to appoint a receiver.

Delivering the judgment of the Court, Mr Justice MacMenamin said the starting point for consideration was Section 28(8) of the Supreme Court of Judicature (Ireland) Act 1877, which provides:

“… 28(8) 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; …” (Emphasis added)

Order 50, Rule 6(1) of the Rules of the Superior Courts 1986, as amended, repeats the phraseology of s.28(8) in almost precisely the same terms. It provides that a court may grant a mandamus or injunction, or appoint a receiver by an interlocutory order in all cases in which it appears to the court to be “just or convenient” to do so.

Mr Justice MacMenamin said that what would be ‘just or convenient” in any one case, remained a matter for the Court to determine on the facts of each case. It was an “evidence based” approach, and that a Court would then be placed in a situation to determine whether or not a receiver should be appointed.

In Mr Rickard’s case (in which Mr Rickard had never furnished a statement of affairs), Mr Justice MacMenamin said there was no evidence before the Court that the appointment of the receiver would be unjust “in the sense of the provision and the Rules”.

Upholding the judgments of the Court of Appeal on the grounds set out in the judgment, Mr Justice MacMenamin dismissed the appeal.

  • by Seosamh Gráinséir for Irish Legal News

© Irish Legal News Ltd 2019



Other judgments by Mr Justice John MacMenamin