Execution and Enforcement of Judgments
– Galway Solicitor’s Bar Association CPD
April 20131
By Tomás Keys BL
1.0
Introduction
1.1
The purpose of this paper is to outline the different remedies that are available to a
Judgment Creditor to help them recover monies once they have obtained a money Judgment
against a Judgment Debtor.
1.2
The remedies available to a Judgment Creditor differ depending on the jurisdiction of the
Court involved. The paper will focus upon the most common methods of execution.
1.3
The Paper will not deal with bankruptcy or orders for possession on foot of legal mortgages
as there have been other recent papers dedicated to this area and presented to this
audience in the past few months.
2.0
The Sheriff
2.1
The concept of a Sheriff derives from Norman times where the Sheriff represented the Royal
Authority in a shire or locality. The office of Sheriff was first codified in the Sheriffs Act 1215
(17 John) Magna Carta. While there have been many legislative reforms in the intervening
800 years, the Statute Law Revision Act 2007 retained portions of the Sheriffs Act 1215.
2.2
After the foundation of the State the offices of Sheriff and Under-Sheriff were retained in
the Enforcement of Court Orders Act 1926. Section 3(1) of the Act states that all execution
orders of the High Court shall be executed by the Under-Sheriff. Section 3(2) allows for the
Under-Sheriff to execute all execution orders of the Courts of limited jurisdiction (i.e. Circuit
Court and District Court)
2.3
The two types of Sheriff who practitioners will be most familiar with are the Sheriff and the
Revenue Sheriff. Outside of Dublin and Cork the duties of the Sheriff are normally performed
by the County Registrar. In Dublin and Cork the office of Sheriff is a standalone office. It
should be noted that the Law Reform Commission in its 1988 report recommended that the
duties of the Sheriff should be transferred from the County Registrars to the office of a
standalone Sheriff as is the case in Dublin and Cork.2 This recommendation was again
1
The opinions expressed are the authors own and encompass his knowledge of the law as it stands on 25 April
2013. This paper is for CPD and training purposes only and does not constitute legal advice.
2
Law Reform Commission Report on Debt Collection LRC 27-1988 at paragraph 24
referred to in the Law Reform Commissions Report in 2010. The Revenue Sheriff is usually a
solicitor who is engaged by the Revenue on private or contractual basis.
2.4
In the High Court, the orders that the Sheriff has authority to execute are as follows:
a) An order of fieri facias (“Fi Fa”) pursuant to Order 42 Rule 1 of the RSC.
b) An order of vendito exponas pursuant to Order 43 Rule 1 of the RSC
c) An order for possession pursuant to Order 47 of the RSC
d) An Order for delivery pursuant to Order 48 of the RSC
2.5
The order of Fi Fa is the order directing the Sheriff to seize the goods of a Judgment Debtor
once Judgment has been obtained against that person and any stay on execution has expired
and the Judgment Debtor has not paid the Judgment amount. Once an order of Fi Fa has
issued the Sheriff or an authorised officer employed by the Sheriff has a duty to execute the
order as soon as is reasonably practicable. The Sheriff has a duty to seize goods which may
be sold to realise monies that would be sufficient enough to meet the Judgment amount.
However, the Sheriff cannot leave the Judgment Debtor without the necessities of life. The
Sheriff cannot seize any goods used in the Judgment Debtors business and the Sheriff must
be satisfied that the goods belong to the Judgment Debtor. If the Sheriff is unsuccessful in
seizing any goods he/she will return the Fi Fa marked Nulla Bona. A Fi Fa marked Nulla Bona
is sometimes a pre-requisite or a required proof necessary for a Judgment Creditor if they
are to seek other execution reliefs from the Court.
2.6
If a Sheriff has successfully seized goods upon the order of Fi Fa and he/she has not sold the
goods to help satisfy the Judgment debt, the Judgment Creditor can issue an order of
vendito exponas which directs the Sheriff to sell the goods at the best price. Such an order
can only be issued in the High Court but it is not used too often.
2.7
If the Plaintiff has secured an order for possession, the order is directed to the Sheriff
directing him/her to enter the property for the purpose of securing possession of same.
2.8
An Order for delivery is for the recovery of property other than money or land. The order will
usually issue if the Defendant has failed to deliver the goods after a specified period of time.
Such period of time is usually contained in the Judgment order.
2.9
In the Circuit Court, the orders that the Sheriff has authority to execute are as follows:
a) An order for the payment of money pursuant to Order 36 Rule 1 of the CCR.
b) An order for possession pursuant to Order 36 Rule 2 of the CCR.
c) An order for recovery of property other than money or land pursuant to Order 36 Rule 6
of the CCR.
2.10
Once a Plaintiff has obtained a money Judgment in the Circuit Court and the stay on
execution has expired and the Judgment Debtor has failed to pay the Judgment amount, the
Plaintiff can issue an execution order to the Sheriff directing the Sheriff to seize the goods of
the Judgment Debtor. The form directing the Sheriff for seizure can be found at Form 20 of
the CCR. The procedure and duties of the Sheriff are similar to those expected of him/her
when acting on foot of a High Court order.
2.11
Once a Plaintiff has obtained an order for possession in the Circuit Court and the stay on
execution has expired, the Plaintiff can issue an execution order for possession to the Sheriff
directing the Sheriff to enter the property. The form directing the Sheriff for seizure of
property can be found at Form 23 of the CCR.
2.12
Once a Plaintiff has obtained an execution order for recovery of property other than money
or land in the Circuit Court and the stay on execution has expired, the Plaintiff can issue an
execution order for possession against goods or against a specific chattel to the Sheriff
directing the Sheriff to seize same. The forms directing the Sheriff for seizure of property can
be found at Forms 21 and 22, respectively of the CCR.
2.13
In the District Court, the Court’s order or decree is sent to the Sheriff directly for execution.
3.0
Instalment Orders
3.1
The Enforcement of Court Orders Acts (1926-2009) provide a mechanism whereby a
Judgment Creditor can seek to have a Judgment Debtor who has failed to pay the Judgment
amount, as directed by the Court, attend the District Court for cross examination as to
his/her means with the intention of obtaining an instalment order from the Court that the
Judgment Creditor pay a certain amount on a weekly / monthly basis to the Judgment
Creditor. Ultimately, if the Judgment Debtor fails to comply with the instalment order the
Judgment Creditor can seek to get an order of attachment and committal.
3.2
It should be noted that instalment orders cannot be made against body corporates or their
directors. There is no monetary limit as to the Judgment debt. In theory, a Plaintiff who has
obtained a Judgment in the Commercial Division of the High Court could apply to the District
Court for an instalment order. However, it is more common for Plaintiff’s in such cases to
utilise other means of execution which will be discussed below.
3.3
The procedure is governed by Order 53 of the District Court Rules. The first step is for the
Judgment Creditor to serve the Summons upon the Judgment Debtor at least 14 days before
the return date or if served by registered post at least 21 days before the return date. The
proofs necessary in Court on the day are a copy of the Judgment, a certificate signed by the
Creditor setting out the amount outstanding and evidence that the Judgment Debtor is
ordinarily resident in the District Court area where the examination is to take place.
3.4
The Judgment Debtor will be required to deliver a statement of means which includes a list
of his/her assets and liabilities along with his/her income and expenditure. The Judgment
Debtor will also be required to list any dependents he/she may have.
3.5
The District Court Judge hearing the matter has a wide discretion when he/she determines
whether an instalment order should be made in the first place and if he/she decides to make
such an order, what the quantum should be and at what intervals (weekly/monthly). The
procedure is a very widely invoked procedure throughout Ireland. The Law Reform
Commission reported that 9,271 instalment orders were made in 2008.3
3.6
If the Judgment Debtor fails or refuses to maintain the payment schedule as ordered by the
District Court Judge then the Judgment Creditor can seek an order of attachment and
committal against the non-co-operating Judgment Debtor.
3.7
The test that the District Court Judge will use in determining whether the Debtor should be
arrested and imprisoned is the criminal standard and the Judge must be satisfied that the
default of payment was due to the Debtor’s wilful refusal or neglect.
3.8
In the case of McCann v The Judge of Monaghan District Court [2009] 4 IR 200, Laffoy J found
that the regime that existed at that time was unconstitutional due in part to the Judgment
Debtor not being informed of the consequences of non-appearance at a hearing where she
was summoned to attend in default of maintaining the instalment order and the lack of
access to legal aid at the hearing. The Rules have subsequently been amended by the
introduction of the Enforcement of Court Orders (Amendment) Act 2009. Applications can
now be made for legal aid at these hearings.
4.0
Judgment Mortgages
4.1
Another very common method of executing upon Judgments is by way of registering the
Judgment as a mortgage on property which the Judgment Debtor has an interest in. Money
Judgments of the High Court and Circuit Court can be registered as Judgment Mortgages.
Section 24 of the Courts Act 1981 also allows for a decree by the District Court of a
liquidated sum to be registered as a Judgment mortgage.
4.2
The first step to take once Judgment has been obtained is for a Judgment Creditor to register
the Judgment with the Property Registration Authority. It should be noted that the
registration of a Judgment can take place even if a stay of execution has not expired.
However, no further steps can be taken to execute upon the Judgment until the stay on
execution has expired.
4.3
Since the commencement of Section 116 of the Land and Conveyancing Law Reform Act
2009, the method by which a Judgment can be registered as a burden against the property
has been simplified.
4.4
Section 117 of the 2009 Act states that the Judgment Creditor can charge the Judgment
Debtor’s interest in land with the Judgment debt. This would allow the costs portion of the
order to also be charged but this must be ascertained. If it is not, parties tend to waive the
costs portion when registering the Judgment mortgage. The form/affidavit by which the
Judgment can be registered as a charge on the interest of land is available from the Property
Registration Authority.
4.5
Once the Judgment mortgage has been registered and any stay on execution of the
Judgment has expired, a party may apply to the Circuit Court or the High Court to seek to
3
LRC CP 56-2009
have the mortgage well charged which is commonly referred to as a mortgage suit. The
purpose of seeking a well charging order is to get an order for vacant possession and sale
which is a Court managed sale for the purpose of discharging the Judgment debt.
4.6
The only limitation on the Circuit Court jurisdiction is the rateable value of the property
which the Judgment Creditor is seeking to have well charged. If the rateable value exceeds
€254 then the proceedings must be instituted in the High Court. However, if the rateable
value is less than €254, but the Judgment amount is higher than the Circuit Court
jurisdiction, a party can still institute well charging proceedings in the Circuit Court.
4.7
The procedure in the Circuit Court is governed by Order 5B of the CCR. The proceedings are
commenced by way of Civil Bill for Well-Charging Relief. The Civil Bill should set out the
specific reliefs sought, the grounds upon which it is being sought and the Jurisdiction upon
which it is claimed. The application must be grounded on Affidavit. A Defendant who wishes
to defend the proceedings must lodge an appearance and set out their defence to the relief
claimed on Affidavit.
4.8
The Civil Bill is made returnable before the County Registrar at first instance. The County
Registrar can only grant the relief sought if the matter is uncontested. If an appearance has
been entered but no replying affidavit filed the County Registrar may adjourn the matter in
his/her list and direct that a replying affidavit be filed and served on the Plaintiff. Once all
affidavits have been lodged, the County Registrar will transfer the matter to the Judge’s list if
the replying affidavit shows a prima facie Defence. However, if no defence is shown then the
County Registrar can grant the well charging order and any other appropriate ancillary
reliefs.
4.9
In the High Court, the well charging relief is usually brought by way of Special Summons. The
Special Indorsement of Claim in the Special Summons will set out, in sufficient detail, the
basis for the claim. It should include the Judgment amount, the date Judgment was granted,
the length of stay on execution (if any) and the reliefs sought. The Special Summons will be
grounded on Affidavit which should contain the relevant facts in greater detail.
4.10
Special Summons are given a return date before the Master of the High Court. The role of
the Master is to ensure the papers are in order and that the matter is ready for hearing
before transferring the matter to a Judge of the High Court for hearing. Even if there is no
replying affidavit filed or the replying affidavit of the Defendant does not disclose a Defence,
the Master does not have the power to make a well charging order unless it is on the
consent of both parties. In all other cases the Master must transfer the matter to the Judge’s
list once he is satisfied that the case is ready for hearing.
4.11
When the matter appears before Judge of the High Court it is listed in the Chancery Special
Summons list which usually sits on a Monday at 11:45. If the matter can be dealt with in a
short length of time the Judge will usually deal with it on a Monday. If, however, the matter
will take more than 20 minutes due to lengthy affidavits and/or legal submissions the Judge
may transfer the matter to the regular Chancery list for the setting of hearing date. If the
Judge grants the well charging relief and other relevant ancillary reliefs, the costs will usually
be measured at the Circuit Court level if it appears to the Judge that the case could have
been dealt with in the Circuit Court (i.e. the property, the subject matter of the proceedings
is a residential property).
4.12
Once the Plaintiff gets a well charging relief the sale of the property is managed by the Court
through the Examiners office and it can take quite some time (in excess of 2 years on
occasion).
5.0
Charging of Shares
5.1
If the Judgment Debtor owns shares in a company, the Judgment Creditor can apply to the
Court to have the shares (public or private) charged with the Judgment amount. Such
applications can only be made in the High Court.
5.2
The procedure for the charging of shares is governed by Order 46 Rule 1 which was
amended in 2007 and the application is brought pursuant to either Section 23 of the Debtors
Ireland Act 1840 or Section 132 of the Common Law procedure Amendment Act (Ireland)
1853.
5.3
The rules governing the procedure were amended in 2007 following the decision of Laffoy J
in Honniball v Cunningham [2010] 2 IR 1. The new procedure is to apply ex parte at first
instance for the relief and such application must be grounded on affidavit which will
included evidence of, inter alia, the date of the Judgment, the amount of the Judgment, the
failure to discharge the amount by the Judgment Debtor and the ownership interest that the
Judgment Debtor has in the shares (a CRO printout should be exhibited).
5.4
If the Court is satisfied that the order should be made then the Court will set a date at which
the Judgment Creditor can show cause why the order should not be made absolute.
5.5
It is open to a party to seek an ancillary order that the making of the charging order be
notified to the CRO and that the CRO place a notice on the public record of the company
that the shares owned by the Judgment Debtor have been charged.
5.6
A copy of the perfected order which had been granted ex parte should be served on the
company and the Judgment Debtor.
5.7
Order 46 Rule 2 of the RSC also allows for the Judgment Creditor to apply to the Court to
have the shares of a company owned by the Judgment Debtor transferred to the Sheriff. The
procedure is brought pursuant to Section 133 of the Common Law Procedure Amendment
Act (Ireland) 1853. Such an application must be brought on notice to the Judgment Debtor
and anybody else affected by the order (including the company).
6.0
Garnishee Order
6.1
The purpose of an order of garnishment or a garnishee order is to allow for a debt which is
owed to a Judgment Debtor from a third party to be paid to the Judgment Creditor.
6.2
The procedure is governed in the High Court by Order 45 of the RSC and in the Circuit Court
by Order 38 of the CCR. The procedure is commenced by way of ex parte motion whereupon
the Judgment Creditor seeks to have the debts of a third party (known as the garnishee) in
favour of a Judgment Debtor attached to the Judgment Creditor.
6.3
The Court must be satisfied that the Sheriff has not been able to recover any goods and
therefore a copy of the Fi Fa marked Nulla Bona should be exhibited. If the Court is satisfied
that the Judgment Debtor has not discharged the Judgment amount and also that the third
party has a debt in favour of the Judgment Debtor which is within the jurisdiction then the
Court will at first instance make an order nisi attaching the debts of the garnishee.
6.4
The Judgment Creditor must then serve the order nisi on the garnishee and the Judgment
Debtor. The matter will be assigned a return date by the Central Office of the High Court or
the Circuit Court office as the case may be. On that date the garnishee and/or the Judgment
Debtor is given an opportunity to show cause why the order should not be made absolute. It
should be noted that the burden lies on the garnishee and/or the Judgment Debtor why the
order should not be made absolute. The Judgment Debtor cannot re-litigate the original case
where Judgment was granted at the garnishee show cause hearing. If there is to be any
contest it is usually from the garnishee who could argue that they do not owe any money to
the Judgment Debtor or that the money owed is not subject to garnishment.
6.5
The general rule is that garnishment or attachment of debts can only apply to present debts
and it would, therefore, appear that future earnings cannot be garnished. However, Order
38 Rule 10 of the RCC states:
“If the sum attached is shown to be due in respect of salary or wages and the Judge
is satisfied that its attachment, in whole or in part, will not leave a sufficient amount
to the Judgment Debtor to maintain himself and those dependent upon him, the
order may be set aside, or may be varied so as to apply only to the balance of such
wages or salary after deduction of an amount sufficient in the opinion of the Judge
for the maintenance of the Debtor and his dependants.”
It could be argued that the Rule assumes that wages can be garnished and in effect future
earnings would fall into this category. However, there is no decision of the Irish Superior
Courts on this point and it is quite likely that if a Circuit Court Judge were to make such a
garnishment order on wages it would be overturned on appeal. The Law Reform Commission
recently called for a mechanism to attach the wages/earnings in its report on debt
enforcement.4
6.6
The most common form of garnishment is over a bank account or over a Judgment amount
which the Judgment Debtor is due from a third party in separate proceedings.
7.0
Discovery in Aid of Execution
7.1
Order 42 Rule 36 of the RSC allows for a Judgment Creditor to apply to Court under the
Debtors Act (Ireland) 1872 for an order of discovery in aid of execution. The purpose of the
order is to allow a Judgment Creditor cross examine a Judgment Debtor as to the Judgment
4
LRC CP 100-2010 at para 5.68
Debtors ability to pay the Judgment debt. Unlike the instalment order mechanism referred
to above the Judgment Creditor can also seek to have a director of a body corporate to
swear an affidavit of means of the company and to appear in Court for the purposes of cross
examination.
7.2
Judgment Creditors usually employ this method if they are of the view that the Judgment
Debtor has not been forthcoming with information about his/her means to meet the
Judgment debt. Sometimes it has also been employed as a tactic to force some form
movement from the Judgment Debtor in relation to the discharging the Judgment debt.
7.3
At first instance, the application is made ex parte in the High Court for the order of discovery
in aid of execution. If the Judgment debt was granted at the conclusion of Commercial Court
proceedings then the application is made before the listing Judge of the Commercial List and
if he/she grants the order, he/she will set a date for the cross examination. In other High
Court matters the application is made ex parte for leave to cross examine. Once the Judge
grants the order, a further ex parte application will need to be made before the Master of
the High Court for the setting of a date for cross examination. Apart from Commercial Court
cases, all other cross examinations granted under this order are heard before the Master of
the High Court.
7.4
In the case of Moorview Developments Ltd & Ors v First Active Plc [2011] IEHC 117, Clarke J,
delivering Judgment in the High Court, stated that he was satisfied that a Judge of the High
Court had the jurisdiction to order that the Judgment Debtor swear an affidavit of means
when making an order for the cross examination of the Judgment Debtor as it would allow
for the hearing to be more focused.
8.0
Appointment of a Receiver by way of Equitable Execution
8.1
If a Judgment Creditor is unable to recover monies by any of the “legal” enforcement
methods outlined above there is also a discretionary method by which they can seek to
recover. As its name suggests, the appointment of a receiver by way of equitable execution
finds its origins in Equity. The usual equitable maxims would apply.
8.2
Order 45 Rule 9 of the RSC and Order 39 of the CCR govern the method by which a party can
apply to the Court to have a receiver appointed by equitable execution. The wording of the
Order 45 Rule 9 sets out what a Court must consider before making such an order: “the
Court in determining whether it is just or convenient that such appointment should be made
shall have regard to the amount of the debt claimed by the applicant, to the amount which
may probably be obtained by the receiver, and to the probable costs of his appointment, and
may, if it shall so think fit…”
8.3
The application would normally be brought if the Judgment Debtor has an equitable interest
in some asset but not a legal interest. Therefore the normal methods of execution would not
be possible. The application is brought ex parte at first instance. The moving party should
exhibit the Fi Fa marked Nulla Bona and set out the reasons why equitable execution is the
only remedy available to the Judgment Creditor to seek to recover upon the Judgment
amount. A letter or exhibit from the proposed equitable receiver agreeing to his/her
appointment should also be exhibited or filed as the case may be. If the Court is satisfied to
make the appointment then leave will be given to the Judgment Debtor to set aside the
appointment.
8.4
In the case of EBS Building Society v Heffernon [2012] IEHC 399, McGovern J set aside the
appointment of a receiver by way of equitable execution over the pension fund of the
Judgment Debtor on the basis that there was not full and frank disclosure in the grounding
affidavit at the ex parte stage and on the basis that due to the Revenue and pension rules,
the Judgment Debtor did not have an interest in the pension fund which was attachable.
8.5
In very rare circumstances a Court may grant the order if the Sheriff has not been sent out,
but only if same were impossible and there was a fear that assets may be dissipated before
the Sheriff is sent out.