The High Court said a Circuit Court garnishee order served first on an insurer took priority over a later order concerning the same damages fund, despite the later claimant having obtained her judgment earlier.
In a judgment delivered on 27 June 2007, Mr Justice Michael Peart considered competing enforcement efforts by Nora Gallagher and Aileen Dignam against Jennifer Mahon. Gallagher held a High Court judgment for €107,075.95 from February 2005. Dignam obtained a Circuit Court judgment for €34,589 plus interest in January 2006. Neither judgment had been paid.
Mahon’s damages action settled on 16 May 2007 for about €40,000, including special damages. The judgment said roughly €38,000 represented general damages and was available for attachment. The fund was insufficient to satisfy both creditors.
Dignam obtained a conditional garnishee order in the Circuit Court on 18 May. Notice was immediately given to Hibernian General Insurance Company, its solicitors and Mahon’s solicitors. On 24 May, the Circuit Court made that order absolute after Hibernian did not show cause.
Gallagher obtained a conditional order from the High Court on 21 May. It was made absolute on 24 May, after the Circuit Court order had already become absolute. Hibernian undertook not to pay out the money pending further argument about which order took precedence.
Gallagher’s counsel argued that her client’s earlier judgment, which had been registered and published, should rank ahead of Dignam’s. She also relied on an analogy with judgment mortgages and submitted that Dignam should have searched the judgments office. Dignam’s counsel argued that service of the Circuit Court conditional order attached the fund and that Gallagher could reach only any remaining balance.
Justice Peart rejected the claim that the earlier judgment or its registration gave Gallagher priority over this particular fund. He said a judgment alone created no interest in a debtor’s assets before enforcement steps were taken, and found the judgment-mortgage analogy misplaced. He also found no obligation on Dignam to search for other judgments; the relevant concern would be an existing claim over the fund, such as an earlier garnishee order.
The judge concluded that service of Dignam’s conditional order prevented Hibernian from paying the fund to another party, and that once the order became absolute the insurer had to comply with it. He said Gallagher’s later High Court order did not displace the Circuit Court order.
The court did not state a final operative order in the judgment. Justice Peart said Gallagher’s absolute order should be set aside or amended so it applied only to any balance left after Dignam’s judgment was satisfied. He said he would make the appropriate order after hearing what was urged for Gallagher, noting that only a very small sum would remain.