Supreme Court Decision in ACC Loan Management DAC Case in Sight

We don’t often comment on legal cases but there is a judgement due to be given by the Supreme Court next week which could have long lasting consequences for various groups as well as litigation into the future.  You should keep an eye out for the judgement when it is issued. 

The case is ACC Loan Management DAC V Rickard & Ors and is a long running case.  Briefly, the back ground to the case is that ACC got a judgement against borrowers and in 2011 succeeded in getting a receiver by equitable execution appointed over Single Farm Payments.  Following changes in the farm support payments structure, the appointment of the receiver was challenged.  ACC succeeded in the High Court and again in the Court of Appeal. 

The Supreme Court will now give its decision on the continued appointment of a receiver by equitable execution over Basic Farm Payments.  The main question in this case will be whether or not the Basic Farm Payments are future income payments.  If these payments are deemed to be future income the existing case law says that a receiver cannot be appointed over income. 

There should be answers to other technical questions about the Courts’ power to appoint a receiver over equitable or legal interests.

For details on the sitting see below link:

Enforcement Powers Seminar

Our Director of Restructuring Services, Barry Donohue will be discussing and presenting a seminar on enforcement powers together with Cork County Sherriff, Sinead McNamara on the 1 May 2019 in UCC’s recently renovated Cork University Business School (CUBS) historic building in the heart of Cork’s Business District at 1, Lapps Quay, Cork.

Barry has over 30 years’ experience working with financial institutions, regulatory bodies, creditors and Revenue authorities on enforcement and restructuring assignments. He is currently trustee in bankruptcy over a number of Irish-based bankruptcies.

Employment Law Updates

The Employment (Miscellaneous Provisions) Act 2018 came into force on the 4 March 2019. The primary purpose of the Act is to limit the use of zero hour contracts and provide better protection to employees on casual contracts. You can check out the key changes on the DEASP website by clicking the link below:



Are you ready for PAYE Modernisation?

From 1 January 2019 Revenue will be rolling out a new real-time system which will completely change the way PAYE currently operates. The importance of understanding and correctly adopting the new system cannot be underestimated as non-compliance or continuous errors will likely result in Revenue intervention.

What is the aim of the new system?

  • Improve the streamlining of current business processes
  • Reduce the administrative burden currently experienced by employers to meet their PAYE reporting obligations.
  • Ensure Revenue, employers and employees have the most accurate, up to date information relating to pay and statutory payroll deductions so that the right amount of tax is being deducted at the right time from the right employees.

What is changing?

  1. Employers will have to report payroll information to Revenue on or before making a payment to an employee.
  2. P60s, P45s, P30s, P35s and End of Year Returns will be abolished.
  3. The current tax credit certificate (P2C) is being replaced by a Revenue Payroll Notification (RPN) which will provide employers with all necessary information regarding tax credits and cut-off.
  4. An “Employment Identifier” will be used to distinguish between multiple employments of an employee with the same employer and different periods of employment with the same employer.
  5. An “Employer Reference Number” must be reported to Revenue for every payment made to an employee who has not provided a PPSN.
  6. Revenue will issue monthly statements to employers which will show a summary of total liability.

Getting PAYE Modernisation ready!

Employers should: –

  1. Register all their employees with Revenue
  2. Have the right PPS numbers for all employees
  3. Have up to date tax credit certificates for all employees
  4. Complete the P45 process for any employees no longer employed with them
  5. Have adequate controls in place to ensure benefits/notional pay are being accurately calculated during the year
  6. Have their ROS digital certificate ready for the 1 January 2019.

Anything else to note?

  1. It is not recommended to have a net pay arrangement with employees. We have no option but to use the credits and cut off provided to us by Revenue, and therefore employers with net pay arrangements can be exposed to an additional liability due to reallocation of credits by the employee.
  2. Grossing up of drawings to repay overdrawn directors’ loans will result in us having to amend prior periods rather than filing a supplementary return (which previously was the option selected) and will inevitably increase the risk of interest and penalties on late filing plus will draw attention to the BIK that was deemed to be provided to the director when they received the interest free loan.

If you have any queries or concerns with respect to the new PAYE Modernisation system, or should you require assistance with your payroll, then please call us on 021-4810035.


Enforcement by Equitable Execution


Equitable Execution is a process whereby a judgement creditor can apply to the court to have a receiver appointed over an asset (or income from the asset) that is not capable of being caught by another form of enforcement.  The remedy has not been explored too much but can provide an economic route for recovery where a creditor believes that a debtor has some valuable asset or income that can be enforced over.  The general view up to recently has been as follows: –

  • The asset has to be an equitable interest; as opposed to a legal interest.
  • A receiver could only be appointed over an equitable interest such as a stream of income that may not be due at the time.

There have been some recent decisions which have improved the options for the procedure and have also extended its scope to include legal interests. 

Case Law

The relevant case law in this country has been conservative but one case in recent years has given indications that equitable execution could be a route to consider for creditors with a judgement. 

The case involved is known as “ACC Loan Management V Rickard” and was initially heard in 2011 when ACC obtained an order for equitable execution over a single farm payment entitlement payable to the Rickards.  In early 2015, the single farm payment structure was changed and the new entitlement, known as the Basic Farm Payment, was announced.  Because of the change in the entitlement, ACC applied to court for confirmation that the basic farm payment could continue to be the subject of equitable execution and in mid-2015, the High Court confirmed that the equitable execution could continue.  The Rickards appealed to the Court of Appeal and the Court of Appeal found in favour of ACC Loan Management in its attempts to maintain the appoint of a receiver over basic farm payments. 

A key finding was that the Court of Appeal found that although the Basic Farm Payment was a legal interest, it was an entitlement over which a receiver could be appointed.  The interest did not have to be equitable only.   The decision very much followed a line identified in a UK case (Munib Masri/Consolidated Contractors International Company Sal and Consolidated Contractors (Oil & Gas) SAL [2008] EWCA Civ 3030) where the decision to appoint a receiver by equitable execution over a share of income stream from an oil field in Yemen was upheld by the UK Court of Appeal.

One of the judges involved in hearing the case  referred to the Masri judgement extensively and Finlay Geoghegan J agreed “both with the analysis and conclusion, and similarly am of the view that in 2015 or 2017 there is no reason why the Court should not exercise a power to appoint a receiver by way of equitable execution over future receipts from a defined asset.”. 

The Masri case looked at the appointment of a receiver by equitable execution – over an asset or income derived from that asset based overseas.  The respondents/defendants had tried to claim that the UK Court could not appoint a receiver by equitable execution to an overseas asset.  The UK Court of Appeal decided that it could do so and that if it was permissible in the foreign jurisdiction for the judgement debtor to comply with the Receiver’s requests then the debtor should. 

Following on that interpretation, it seems that a UK Court would likely be supportive of an equitable execution over income from legal interests in the UK. 

Historically, equitable execution has not been allowed where an asset could be recovered under some other debt collection process.  In a Supreme Court decision from 1994 (Irish National Bank V Gallagher), Irish National Bank applied to appoint a receiver by equitable execution over a herd of cattle, but the Court refused because the bank had the ability to enforce its judgement by getting the sheriff to execute over the herd.  The bank had not taken that step. 

Another leading case is Honnibal V Cunningham (High Court) where some key points were made: –

  • There is a duty on the part of the plaintiff creditors to give full information where the application is made on an ex parte basis
  • The judgement creditor can pursue more than one route of recovery
  • The equitable remedy is only available where the judgment debtor has only an [equitable] interest in property against which the judgment creditor seeks recourse

Prior to the Court of Appeal decision in the Rickard case, attempts to appoint a receiver by equitable execution over:

  • A pension
  • Rental income from apartments
  • Emoluments for a statutory position

had not succeeded although there had been successful appointments over single farm payments as well as contractual amounts due to a debtor from a local authority.  Some of these routes may be more likely now than in the past.

In the Rickard case, some practical guidance points were helpfully set out in the second judgement given by Hedigan J: –

  • The court has jurisdiction to appoint a receiver to receive future debts as well as debts due or accruing.
  • A receiver may not be appointed over future wages or salary.
  • The court must consider whether it is just and convenient to do so. In this respect, the court should have regard to the amount of the debt, the amount that may probably be obtained by the receiver and the costs of the appointment of a receiver.
  • Are there special circumstances in the particular case that make the usual process of execution or attachment unavailable?
  • Is there some hindrance arising from the nature of the property which prevents the judgment creditor from obtaining execution at law which the appointment of a receiver can overcome?
  • There should be no way of getting at the fund other than by the appointment of a receiver.
  • It is not execution that is granted but equitable relief where there is no remedy by execution at law.
  • The remedy is discretionary.

On the basis of the above it seems likely that any form of asset (or the income derived from it) not capable of being attached in some way is amenable to equitable execution. 

Where now?

The Rickard case has not gone away.  An appeal was successfully listed before the Supreme Court and that judgement is expected before Christmas although possibly after the second Basic Farm Payment has been issued. This judgement could change in a material way the ability of creditors to recover from debtors where they have a judgement.  Equally, the Supreme Court may rein in the room for enforcement created by the High Court and Court of Appeal.

A key point is the ability of equitable receivership to bite on assets and businesses that might not always be reflected on a balance sheet, particularly where a business generates significant cash flow which funds lifestyles. 

Barry Donohue
Director of Insolvency and Corporate Restructuring
October 2018