The Court of Appeal has dismissed Tim Sheahan’s appeal against an order appointing a receiver over Basic Payment Scheme payments due to him from the Department of Agriculture, Food and the Marine. The court held that his contractual promise to pass the payments to Sheahan Farming Limited did not remove his own interest in them or prevent the receiver’s appointment.
The appeal concerned an unpaid judgment debt of €2,606,806.15, entered by consent in January 2016 in favour of Allied Irish Banks plc, AIB Mortgage Bank and Everyday Finance DAC. By the time of the High Court hearing, about €2.4 million remained outstanding. The banks said other recovery efforts faced practical difficulties, including access problems affecting land held as security.
Sheahan argued that the payments belonged beneficially to Sheahan Farming, under agreements providing for the company to claim and use farm payments. The Court of Appeal noted that he had applied for the 2017 payment in his personal capacity and that the Department confirmed the application was made by him. It also observed that the High Court had not decided whether the land lease was valid, and that the banks did not ask the appeal court to find it invalid.
The court said the lease created a contractual obligation for Sheahan to pay the company, but did not assign the payments or make him a trustee of the money. The obligation to the company was a debt he owed, as was his obligation to the banks under the judgment. The court said a receiver may be appointed over future Basic Payment Scheme receipts where the legal requirements are met and appointment is just or convenient.
Sheahan and the company argued that diverting the payments could seriously harm the farming business and affect payments to his brother, John Sheahan, and related company Farmco Agri Trading Limited. The court found the claimed prejudice was not substantiated by evidence. It noted that Sheahan Farming farmed about 1,200 acres, while the payments at issue related to 126 acres, and that no evidence showed the order would cause undue hardship to Sheahan personally.
The court concluded that the High Court was entitled to make the receiver’s appointment absolute and to refuse a stay. It dismissed the appeal. The judgment set out a provisional view that appeal costs should follow the event, with Sheahan to pay the respondents’ costs unless a different order was sought within 14 days.