The High Court refused Allied Irish Banks plc’s application to make an attachment order over €665,000 in settlement funds absolute, but agreed to appoint a receiver over proceeds from the sale of apartments in Croatia, subject to conditions protecting the apartments’ joint owners.
In a judgment delivered on 14 February 2018, Mr Justice Max Barrett said PTM (Castleblaney) Limited had an interest in the settlement funds but was not a party to the debt proceedings and had not been heard. The court also found that the funds were held under a solicitor’s undertaking to AIB until the bank and its clients reached an agreement about their disposal. That undertaking remained in force, and the funds could not properly be treated as a debt currently payable to the three defendants.
AIB had obtained a €2.4 million-plus consent judgment against brothers Paul, Thomas and Michael McGuigan in December 2015 over a breached loan agreement. The judgment’s operation was stayed for three months. The court heard that AIB had received no payment since judgment. A conditional garnishee order over the settlement funds was made on AIB’s ex parte application in May 2017. The current hearing was the second stage, at which the court considered whether to make that order absolute.
The settlement arose from separate litigation involving the defendants, PTM, Fowler Construction Limited and CS Pringle Limited. The agreed settlement was €850,000 plus costs. The court noted that the solicitors’ 2015 undertaking covered €665,000 and had been given on behalf of all four clients, including PTM. AIB’s alternative request for a receiver over those funds was also refused. The judge said AIB had agreed to the arrangement, there was no evidence of a risk that the solicitors would dissipate the money, and PTM’s interest remained unaddressed.
AIB also sought a receiver over proceeds from apartments in Croatia owned jointly by two of the brothers and their wives. The judge said there was no evidence that ordinary enforcement methods had been tried or were likely to fail. However, he considered the proceeds vulnerable to dissipation and that an exceptional circumstance justified appointing a receiver.
The order is conditional on AIB providing, within two weeks, evidence of the likely proceeds and receiver costs. The court will then decide whether the appointment should continue; alternatively, AIB may choose to absorb the receivership costs. AIB must also undertake to pay 50% of the proceeds from each relevant apartment sale to its joint owner, as applicable.