Issuing execution after periods of inactivity – unexplained delay prejudicial to execution of a judgment

The Commercial Court (the Court) has recently delivered judgment in ACC Bank plc v Joyce and Ors [2022] IEHC 92. The judgment dealt with an application for leave to issue execution brought pursuant to O.42, r.24 of the Rules of the Superior Courts (RSC).The judgment which the plaintiff had obtained against one of the defendants (Mr O'Meachair) was over six years old and in such circumstances, an application for leave to issue execution must be brought in order to enforce a judgment debt. Absent any explanation for the lapse in time, McDonald J felt compelled to refuse the application. The case underscores the importance of issuing execution in a timely manner and demonstrates that where there is a delay in issuing execution that goes beyond the six-year period, it is critical that a court application for leave to issue execution is accompanied by an explanation for the delay. 

Discussion 

ACC Bank plc (ACC Bank) obtained a judgment against Mr O'Meachair in the amount of €271,637.31 on 15 November 2010. Cabot Financial (Ireland) Ltd (Cabot) were subsequently assigned both the legal and beneficial ownership of debts and rights. There was a delay in issuing execution that went beyond the six-year timeframe thus requiring Cabot to obtain leave from the Court to issue execution. On 22 October 2021, McDonald J adjourned Cabot's application to give it an opportunity to put further evidence before the Court regarding the lapse in time and to provide Mr O'Meachair with an opportunity to put forward further evidence with respect to any prejudice arising from the delay. On 16 December 2021, a further hearing took place in which both Cabot and Mr O'Meachair put forward additional evidence. Mr O'Meachair submitted that based on the period of time since the original 2010 judgment was delivered, he believed that it was not going to be enforced. 

In considering the application, McDonald J referred to the Court of Appeal judgment in KBC Bank plc v Beades [2021] IECA 41 which confirmed that "O.42, r.24 is a discretionary order  and reasons  must  be  given  for  the  lapse  of  time  since the  judgment  or order  during  which execution  did  not  occur".  The reason put forward by Cabot for seeking leave under O.42, r.24 was its desire to issue well charging proceedings. McDonald J went on to highlight that the reasons which had been given by Mr Webb of Cabot (Mr Webb) at paras. 11-13 of his affidavit did not explain the lapse of time. 

Although he had been adjudicated bankrupt in October 2017, the Court pointed out that bankruptcy was not an impediment to enforcing the judgment mortgage against Mr O'Meachair's properties. In any event, it is a recognised principle that the holder of a judgment mortgage will be regarded as a secured creditor within the meaning of s.3 of the Bankruptcy Act 1988. McDonald J confirmed that Mr Webb's attempt to rely on the bankruptcy of Mr O'Meachair did not provide "any plausible reason for the lapse of time". The Court also noted that there was no explanation as to why no action had been taken following the judgment at the time when it became evident that the proceeds from the realisation of the lands in question would not be sufficient to satisfy the judgment debt in full. 

The Court rejected the submission that the transmission of interest explained the lapse of time. In this respect, the Court stated that no detail had been put forward to explain why the transmission of interest had an effect on matters. Moreover, it was commented that there was nothing during the period of transmission which would have precluded an application being made to issue execution after the six-year period. Citing the recent judgment of Allen J in Irish Nationwide Building Society v Heagney [2022] IEHC 12, it was confirmed that "an  application  by  an  assignee  of  a  judgment  debt  is  to  be  approached  on the  same  basis  as  an  application  by  the  party  originally  entitled  to  execute  the judgment".  

Conclusion 

The Court concluded that Cabot had failed to provide any reason for the lapse of time despite having had an opportunity to do so at a hearing in October 2021. In the absence of an explanation for the inactivity on Cabot's part or on the part of ACC Bank as its predecessor in title, the Court felt compelled to refuse the application. The judgment demonstrates that when bringing an application for leave to issue execution, it is imperative that it be accompanied by a reason for the delay, though the reason need not be unusual or special in any way, there is nonetheless a requirement that it be provided. 

For further information, please contact Enda Hurley, partner, Orla Clayton , Knowledge lawyer or any member of ALG's Disputes & Investigations team.

Date published: 24 March 2022