The Court of Appeal has dismissed Cabot Financial (Ireland) Limited’s appeal over its attempt to enforce a 2010 judgment against a borrower, leaving in place the High Court’s refusal to grant permission to execute it. The judgment records a dissent from Butler J, who considered that the delay had been sufficiently explained.
Cabot applied in May 2021 for leave under Order 42, rule 24 of the Rules of the Superior Courts to execute a judgment obtained by ACC Bank plc on 15 November 2010. The application came ten years and six months after the judgment, and more than four years after the ordinary six-year period for execution without leave had expired. Cabot had acquired the debt through transfers from ACC to Rabobank and then to Cabot, and was substituted for ACC in the proceedings in October 2021.
The judgment arose from a €300,000 loan made in 2005 to the first and third defendants to buy residential investment property in County Mayo. A receiver appointed over that property sold it in 2015 for €50,000. After receivership costs, less than €8,000 remained to reduce the amount due. ACC had also registered judgment mortgages against the borrower’s properties, including a folio containing his family home, where a prior charge ranked ahead of ACC’s interest.
The borrower was adjudicated bankrupt in October 2017 and discharged in 2020. The judgment explains that the bankruptcy did not legally prevent a secured creditor from enforcing a judgment mortgage. Cabot relied in part on an asserted belief that the bankruptcy had stayed enforcement. The High Court, McDonald J., refused leave in [2022] IEHC 92, finding that the bankruptcy, the prior charge and the transfers of the debt did not plausibly explain the lapse of time.
On appeal, Butler J. disagreed with the approach to the required explanation. She considered that the creditor needed to explain why it had not executed within the initial six years, but did not have to account for every part of that period. She also said a belief about the bankruptcy could explain inaction even though it was legally mistaken. In her view, the judgment mortgages, receiver sale, bankruptcy and debt transfers together provided a sufficient explanation to engage the court’s discretion. She did not go on to assess whether the borrower’s claimed prejudice justified refusing leave.
The court’s majority reached the opposite conclusion and dismissed the appeal. The High Court refusal therefore stands, and Cabot was not granted leave in this application to execute the judgment. Butler J agreed with Donnelly J’s view on appeal costs, as recorded in the judgment.