The High Court has discharged an order appointing a receiver over two pension funds, finding that the lender’s ex parte application had given a misleading account of what it knew about the funds. The court also concluded that the funds were not amenable to attachment by appointing a receiver by way of equitable execution.
EBS Building Society had obtained judgment by consent against Thomas (otherwise Tom) Hefferon and Michael Kearns in May 2011 for €7,231,891.59, together with costs of €167. In March 2012, on an application made without the defendants being present, the High Court appointed an accountant as receiver over their pension funds. The defendants then applied to discharge that order.
The lender’s affidavit supporting the receiver application described the omission of the pensions from the defendants’ earlier statements of affairs as “serious non-disclosure”. The court noted, however, that the defendants’ solicitors had told the lender in July 2011 that both men belonged to occupational pension schemes. The lender did not seek further details at that time, and the pensions were later listed in affidavits of discovery.
The judge found that the funds had not been included in the statements of affairs, but said the reasons for that omission had been adequately explained at the hearing. Given the lender’s knowledge, its characterisation of the omission as serious and its suggestion that the defendants had deliberately excluded the pensions presented less than the full picture. The judge found those assertions misleading and calculated to influence the court. Applying the principles governing disclosure on ex parte applications, he discharged the receiver order on that ground.
The court also considered whether the pension funds or future payments from them could be reached through equitable execution. The funds were held in irrevocable trusts under pension deeds, and the deeds prohibited assignment of benefits. Under their terms, the defendants had no legal or beneficial ownership of the fund assets before age 70; even at retirement, a pension depended on agreement with the trustees. The judge distinguished authorities involving future income and trusts where a debtor could revoke the trust, finding those circumstances materially different. He concluded that these funds were not amenable to attachment by appointing a receiver.
The order made on 13 March 2012 was discharged on the defendants’ motion. Because of that decision, the court said it was unnecessary to make an order on separate motions brought by the defendants’ spouses. The judgment did not determine those motions on their merits.