The High Court has allowed an appeal against an order appointing a receiver over planning bonds connected to a housing development in Portlaoise, holding that the developer had no entitlement to receive money under them.
Mr Justice Charleton gave written reasons on 14 November 2012 for a decision delivered earlier that week. The appeal concerned an order made by the Circuit Court on 15 December 2011 appointing a receiver by way of equitable execution over the proceeds of two bonds involving Four Seasons Homes (Kilkenny) Limited, Allied Irish Banks PLC and Laois County Council.
Eugene Lacey Tarmacadam Limited had been subcontracted to construct roads for the development. The judgment says the contract price was about €60,000, of which two €10,000 instalments had been paid. After the balance remained outstanding, the plaintiff company obtained a Circuit Court judgment for €38,100 on 11 April 2011. An attempt to seize goods to satisfy that judgment was unsuccessful.
The receiver order targeted bonds provided in connection with planning permission for a 65-home estate. The order described bonds executed in July 2000 and September 2004, for £90,000 and €100,000 respectively. In discussing their background, the judgment says the bonds were for £80,000 and €100,000. They were intended to allow the council to draw funds to complete public areas if the development was left unfinished.
Justice Charleton said the developer could never receive the bond proceeds or recover the premium paid to secure the council’s entitlement. The estate was understood to have been completed. The court’s reasoning did not depend on a finding that it was incomplete: the right to draw on the bonds belonged solely to the council, not the developer.
The judgment cited the principle that a receiver should not be appointed where there is nothing for the receiver to recover. It also referred to authority concerning money collected for a third party, while leaving open whether a receiver might be appointed in an appropriate case where there was an undertaking to account for money due to another.
The High Court allowed the appeal from the Circuit Court order. The judgment does not state that the underlying €38,100 debt was paid or otherwise discharged; it addresses the attempt to enforce it through a receiver over these bonds.