High Court allows Danske Bank to attach lesser judgment debt to satisfy unsatisfied commercial judgment against same defendant.

Neutral Citation: [2015] IEHC 130

Record No. 2013 176 S

THE HIGH COURT

(Commercial List 2013 No. 23 COM)

BETWEEN:

DANSKE BANK A/S (Trading as Danske Bank)

Plaintiff

-AND-

JOHN MEAGHER

Defendant

Record No. 2014 356 SP

THE HIGH COURT

BETWEEN:

HEALTH SERVICE EXECUTIVE

Applicant

-AND-

JOHN MEAGHER and DUBLIN CITY COUNCIL and DANSKE BANK A/S (TRADING AS DANSKE BANK)

Respondents

Judgment delivered by Mr. Justice Moriarty on Tuesday 10th February 2015

A. Overview

1. In seeking to convey even the most rudimentary overview of this protracted and convoluted matter, it should be stated at the

outset that the two main building blocks by way of prior litigation that have given rise to it are, firstly a summary and unsatisfied

Commercial Court Judgment of Kelly J. of the 25th February, 2013 and costs in favour of Danske Bank, ("the Plaintiff') against Mr. John

Meagher ("the Defendant") in the sum of €6,984,826.48. Secondly, a Judgment of Hogan J. in favour of the said Mr. Meagher of the

14th March, 2014 against the Health Service Executive, following a fragmented nine day hearing between March and July, 2013 in the

sum of €106,640.36, inclusive of substantial interest, and with a discounted proportion of total costs incurred by Mr. Meagher only

being allowed. It is as to who should benefit from that €106,640.36 award that Danske Bank, with its entirely unsatisfied default

judgment, and Mr. Meagher, or more particularly his solicitors, Messrs. C.C.K. Law Firm, to whom he has assigned any entitlements he

may establish, have staked their competing claims.

2. The final substantive involvement of Kelly J. in the matter was to make an Order of the 13th May 2013, in the context of

attachment of the lesser Judgment to answer the greater, following a hearing at which neither Mr. Meagher nor his legal

representatives were in attendance, but the full meaning and effect of that Order is in dispute, with the representatives of both

Danske Bank and Mr. Meagher contending for opposing constructions favourable to each, and Danske Bank alternatively contending

for an amendment in their favour, if necessary to resolve any ambiguity. Even though the sum now in issue is only a tiny proportion of

the Bank's Judgment, the matter has been contested with an intensity and occasional prolixity that hovers towards Jarndyce

proportions. Indeed I am the seventh High Court judge to address the matters in issue, in addition to which two Supreme Court

hearings and determinations have already been made.

B. Litigation history

A brief precis of the notable profusion of proceedings which have been borne upon the present issues in contention, along with the

principal outcomes which transpired, is apposite.

2005

3. On the 9th March 2005, Mr. Meagher instituted the Summary Summons proceedings which ultimately culminated in his 2014

Judgment from Hogan J. for €106,640.36 against the Health Service Executive, primarily relating to services rendered in relation to

accommodation of asylum seekers in Dublin.

2013

4. On the 18th January 2013, the Summary Summons was issued in proceedings taken by Danske Bank against Mr. Meagher. The

present application derives from the High Court Order of Kelly J. of the 25th of February 2013 in which a sum of€6,984,826.48 was

awarded in summary judgment to the Plaintiffs for a breach of contract entered into between the parties. That Order in full may be

stated at this juncture:

"IT IS ORDERED pursuant to Order 45 Rule 1 of the Rules of the Superior Courts that the said sum of £70,000.00 be and the same

is hereby attached without further Motion to answer an Order made in the High Court on 25 February 2013 ordering payment by the

Defendant to the Plaintiff in the sum of £6,984,826.48.

And IT IS ORDERED that the Garnishee, Dublin City Council, do appear before this Court on Monday the 17th day of June 2013 at 2

o'clock in the afternoon to show cause why it should not pay to the Plaintiff the said sum of £70,000.00 due to the Defendant - this

Order nisi to be served on the said Garnishee and on the Defendant.

And in so far as there are other monies which may become due arising out of the proceedings which are alluded to in the Notice of

Motion,

IT IS ORDERED pursuant to Order 45 Rule 9 of the Rules of the Superior Courts that Ian Bell Solicitor of MacCarthy Johnston

Solicitors be appointed Receiver by way of equitable execution (without salary or security) entitled to receive, on behalf of the

Plaintiff, all sums that may be due the Defendant from Dublin City Council whether comprised of existing debts or any Judgment that

the Defendant may obtain in proceedings entitled John Meagher trading as Sancta Maria Hostel v Dublin City Council and Northern

Area Health Board, High Court Record Number 2005 No.336S."

The Plaintiffs Motion seeks to amend the Order to the following formula:

"IT IS ORDERED pursuant to Order 45 Rule 9 of the Rules of the Superior Courts that Ian Bell Solicitor of MacCarthy Johnston

Solicitors be appointed receiver by way of equitable execution (without salary or security) entitled to receive, on behalf of the

Plaintiff, all sums that maybe due to the Defendant from Dublin City Council whether comprised of existing debts or any judgment

that the Defendant may obtain, or has obtained, in the proceedings entitled John Meagher trading as Santa Maria Hostel v Dublin

City Council and Northern Area Health Board, High Court Record 2005 No. 336S."

5. On the 12th March 2013 the hearing began before Hogan J. in the Meagher proceedings. On the 13th of May 2013 Kelly J. made

the attachment Order which is at the heart of the present proceedings, including the appointment of Mr. Ian Bell, Solicitor to Danske

Bank, as receiver by way of equitable execution as aforesaid. In proceedings entitled Martin Ferris v John Meagher & Echoforde Ltd

dated the 31st of July 2013, Birmingham J. awarded a prohibitory injunetion to the plaintiffs which prevented the defendant from

interfering with the process of repossessing the plaintiff’s properties.

6. On the 17th July 2013 a notice of motion seeking relief pursuant to section 3 of the Legal Practitioners (Ireland) Act, 1876 brought

by solicitors representing Mr. Meagher was adjourned with a return date of22nd July 2013. On the 25th July 2013, the final day of

hearing in the Meagher proceedings was heard before Hogan J. Then on the 4th of October 2013, Peart J. refused the defendant's

application to set aside the judgment which was awarded on the 25th of February 2013. An application was then made by counsel for

Mr. Meagher for a stay pending an appeal to be heard by the Supreme Court. This application was refused by the Supreme Court

(Fennelly J.), with the substantive appeal against the Judgment of Peart J. deferred to full hearing. On the 1st November 2013, the

defendant was awarded the sum of €106,640.36 in damages by Hogan J. in an action for a breach of covenant brought against the

HSE which was entitled John Meagher t/a Sancta Maria Hostel v Dublin City Council and Northern Area Health Board The judgment of

Hogan J. was delivered in draft form on this date. On the 19th December 2013, Counsel for Mr. Meagher applied to the High Court to

have the judgment reopened, which application was adjourned.

2014

7. On the 7th March 2014, the motion brought pursuant to Section 3 of the Legal Practitioners (Ireland) Act, 1876, by Mr. Meagher's

Solicitors came before Hogan J. Concurrently, the hearing of the application to have the judgment in the 'Meagher proceedings' re-

opened came before Hogan J., and necessitated a reserved judgment. Furthermore, on the same date, the costs applications in those

proceedings were reserved by Hogan J. On the 14th March, 2014, the decisions in relation to the re​ opening application and the costs

applications were made by Hogan J., along with the Order made in the Meagher proceedings. On the 28th May, 2014, the written

judgment in relation to the Motion pursuant to section 3 of the 1876 Act was delivered, ruling against the solicitors representing Mr.

Meagher. Further, on the 5th June, 2014, the Order of Hogan J. in the Meagher proceedings was perfected. The Defendant appealed

the decision of Peart J. of 4th October 2013 to the Supreme Court. This appeal was dismissed by Laffoy J. on the 1st of April 2014.

8. On the 8th July 2014, Hogan J. issued his Order in relation to the section 3 Motion hearing. This Order was subsequently perfected

on 22nd July 2014. In August 2014, DCC and the HSE refused to discharge the sum of €106,640.36 to the Defendant believing that

there remained confusion as to whether he was entitled to receive such monies. On the 17th September, 2014, the HSE issued a

Special Summons in the interpleader proceedings. By Order of the 18th September, 2014, McCarthy J. granted the Plaintiff ex-parte

leave to serve proceedings upon CCK Solicitors for Mr. Meagher. On the 24th September, 2014, Barr J. transferred the matter to the

Commercial Court List on the 30th September 2014, and granted an injunction restraining Mr. Meagher from enforcing judgment

against the HSE until after 30th September, 2014.

9. On the 7th October Danske Bank issued a Notice of Motion to vary the Order of Kelly J. of the 13th May 2013. On the 30th October

2014, the hearing of the interpleader motion, along with that motion came before this Court. Thus the hearing for resolution of the

conflicting claims to the benefit of the judgment award by Hogan J. then came on for hearing on that date with appearances on

behalf of Danske Bank, Mr. Meagher, the Health Service Executive and Dublin City Council. Following some argument as to the

sequence in which the competing applications should be heard, I took the view that the matter in its totality should be opened by Mr.

Fanning, B.L. on behalf of Danske Bank, and the hearing proceeded for most of the day, with Judgment being reserved at its

conclusion, and provision made for written submissions to be furnished.

C. The parties' arguments

10. The Plaintiffs case, briefly stated, is that its Receiver Order, as granted by Kelly J. on the 13th May, 2013, prima facie entitles

the Bank to all proceeds of the litigation between the Defendant and Dublin City Council. These proceeds, it may be recalled, total

€106,640.36. Alternatively, the Plaintiff argues that the Receiver Order should be amended to ensure that any award payable by the

Health Service Executive to the defendant will be applied towards discharging the Defendant's debts to the Plaintiff. These arguments

are supported by the following points:

a. that the scope and intention of the third Order is clearly discernible from the initial condition which precedes it which states:-

"in so far as there are other monies which may become due arising out of the proceedings alluded to in the Notice of Motion. "

b. The ordinary and intended meaning of the words specifying the scope of the Order is centred upon the following section of the

Kelly Order:-

"...and be entitled to receive, on behalf of the Plaintiff: (a) all sums that may be due to the Defendant from Dublin City Council

whether comprised of existing debts or (b) any judgment that the Defendant may obtain in proceedings entitled John Meagher

trading as Sancta Maria Hostel v Dublin City Council and Northern Area Health Board."

The Plaintiffs case is that the phrase "from Dublin City Council" conditions only the first element (a). Therefore, upon this reading, the

second element ofthe clause, (b), is not qualified in this manner and clearly captures "any judgment" arising from the litigation,

whether from Dublin City Council or the Health Service Executive.

11. If the Plaintiffs interpretation of the Order is deemed more persuasive, it would appear that the monies are caught by the Order

and the monies must be paid to Danske. The Plaintiffs motion to vary and the Health Service Executive's interpleader action then

become moot.

12. In contrast, the Defendant argues that on its face, the Receiver Order captures only awards made against Dublin City Council but

not awards that are made against the Health Service Executive, and further that this interpretation is pursuant to the clear and literal

reading of the Order of Kelly J. In addition, the Defendant argues that the High Court does not possess jurisdiction to amend the

Receiver Order so that it will capture monies due from the Health Service Executive. In particular, the Defendant raises the argument

that the clause "from Dublin City Council" effectively conditions the entire "Kelly Order".

The interpleader application

13. The interpleader motion has effectively been usurped by the Plaintiffs motion to vary the Order. The decision on the Motion to

vary would seem likely to obviate the need to determine the interpleader.

14. The Health Service Executive's main points of argument have been stated by counsel during the hearing of this matter, and

reference is also made to the affidavit of Padraig Rehill, Hospital Manager of Cherry Orchard Hospital, Ballyfermot. Essentially, the

Health Service Executive argues that the judgment of Hogan J. was awarded in favour of Mr. Meagher and that the Heallth Service

Executive has no entitlement to such monies but does, however, claim indemnity from Dublin City Council in relation to the said award.

In effect, Dublin City Council's position is that it will abide by an Order of this Court, which will deal with this matter finally.

D. Varying the Order

15. Delany and McGrath have dealt with this issue in their Civil Procedure in the Civil Courts (3rd Ed) of 2012. They state, at page

789, that in addition to Order 28 of the Rules of the Superior Courts, the courts possess a recognised right at common law to a "wider

and more fundamental jurisdiction" which enables the court to amend an Order previously made and perfected.1 Attention must also

be drawn to the caveat issued by O'Higgins J. in Limerick VEC v Carr.2 Having reviewed the authorities pertaining to this issue,

O'Higgins J. stated:

"In the light of these authorities it seems clear that there is a power in the court above and beyond the provisions of

the slip rule to amend an order of a court. However, such power is to be exercised sparingly and only when the court

finds that the judgment as drawn up does not correctly state what the court actually decided or intended. Apart from

that, the court does not have jurisdiction to interfere with an order of the court which correctly expressed the decision

of the court and which was not appealed."3

It would appear from the foregoing, that a crucial prerequisite is that the original Order does not adequately reflect the clear intention

of the ruling judge. Unless that element is present, it would appear that the court should be cautious in amending a final Order of the

High Court.

16. This issue was also analysed in detail by the Supreme Court in Belville Holdings Ltd v Revenue Commissioners.4 In this case, the

appellant company appealed to the Supreme Court against a previous Order made in that case on the grounds that the learned trial

judge had erred in law in acting ultra vires that court's jurisdiction. In the case before the learned trial judge, it was argued that the

required facts to allow for such a discretion in amending the previous court Order were not present. On appeal to the Supreme Court,

it was held by a panel comprising Finlay CJ, Blayney J. and Denham J. (as she then was) in allowing the appeal, that there is, inter

alia, a wide and fundamental jurisdiction in a court to amend an order which it has previously made, even though that Order was final

and had been perfected. However, when an Order had been made and was deemed to be final, it ought only to be altered in special or

unusual circumstances.

17. Moreover, the Supreme Court in Belville approved the dicta of Romer J. in Ainsworth v Wilding, in which it was stated that the only

cases in which an Order can be amended are the following:

"(1) Where there has been an accidental slip in the judgment as drawn up, in which case the court has power to rectify

it under Order 28, rule 11;

(2) When the court itself finds that the judgment as drawn up does not correctly state what the court actually decided

and intended."5

These principles are well-established in Irish law. In the more recent decision of MeG v W (No. 2) Denham J. stressed that the

fundamental concern when applying these stated principles is to interpret the Order's intended meaning and to implement its

intention. 6

E. Decision

18. The crucial issue for decision is the interpretation of the Order of Kelly J. I have considered carefully the form of the Order, the

entirety of the factual circumstances surrounding it, and the oral and written submissions made. In the ultimate, I am left in no

realistic doubt that the interpretation contended for on behalf of Danske Bank is the correct one, and I find accordingly. I accept that

the clear intention of Kelly J. was to ensure that the Bank would be the beneficiary of the entire proceeds of Mr. Meagher's litigation

against Dublin City Council and the Health Service Executive, and that the Bank, in bringing its Motion and expressing the reliefs

sought, were seeking to attach the €70,000.00, which Dublin City Council had agreed to pay to Mr. Meagher on foot of that

settlement, and also to appoint a Receiver in respect of any other monies owed to Mr. Meagher by Dublin City Council and any

proceeds of his litigation, whether obtained from an Order against Dublin City Council or the Health Service Executive.

19. What tenable rationale could have motivated Kelly J. to have intended that the amount of the lesser Judgment should inure to Mr.

Meagher's benefit? It was Kelly J. who had ordered the major default Judgment in favour of the Bank against Mr. Meagher, and he also

had acceded to the Bank's attachment Motion in the absence of any appearance or submissions by or on behalf of Mr. Meagher. Yet

Mr. Meagher now invites this Court to find that the effect and intent of the "Kelly Order" was to enrich him as the beneficiary of the

amount of the lesser Judgment. It appears to me that the overall intent of the Order was demonstrably clear, even if the form in

which it was drawn imported some limited element of ambivalence. If this were of such a degree as to be capable of remedy only by

the amendment proposed on behalf of the Bank, I would accede to such a course, and believe the authorities referred to above would

have entitled such a course, but I believe the position is in any event sufficiently clear to preclude the necessity for this. What took

place was a quintessential instance of a Judgment creditor moving to attach a lesser entitlement that had accrued to its debtor, and

the understandable emphasis in the Affidavit filed by the Bank's Solicitor, Mr. Ian Bell, on the nexus with their initial judgment,

whereby Mr. Meagher's entitlement on foot of his judgment related to the very properties that the Bank had financed by unpaid loans

that became the subject of the Bank's Judgment, only goes to emphasise the link between both proceedings, and the Bank's

understandable intent to recoup even a small portion of its unsatisfied Judgment.

20. Further, while not a matter of interpretation per se, what is the Court to infer from what appears the utter unpreparedness of Mr.

Meagher's legal advisors to accompany their colleagues in having this matter mentioned before Kelly J. in a context of seeking any

necessary clarification? It was he who had granted the major default Judgment, then latterly made the Attachment Order, and he of

course was the Judge in charge of the Commercial Court, and had been since its 2004 inception. It is difficult to divine a cogent

reason for this reluctance, or indeed for what might be viewed as the unhelpful militancy shown on behalf of Mr. Meagher in the latter

procedural stages, other than as surmised in the written and oral submissions made on behalf of the Bank. Given the clear view I have

formed on the substantive matter, I have not found it necessary to consider every point made in the course of the hearing and

submissions, but it is appropriate to state that I have no hesitation in rejecting the allegation of collusion made on behalf of Mr.

Meagher against opposing parties. On even the most favourable view of what transpired from his standpoint, what emerges falls very

short of "an agreement between two persons or more to defraud another of his or her rights, or to obtain something prohibited by

law." Further, whilst not on the authorities of itself determinative, I incline towards the view advocated on behalf of the Bank that the

contentious portion of the "Kelly Order", dealing as it did with the substantively interlocutory relief of attachment, was not of such

finality as should impede any necessary amendment of the Order.

21. In all the circumstances, I find in favour of the Bank. Given the overlapping Health Service Executive application, and the other

appearances at the hearing of both matters, it would seem prudent to defer the final form of Orders, and matters of costs, for a short

period until the parties have had an opportunity to consider this Judgment.

1. Cregan v Rafter [1940] Ir. Jur. Rep. 80.

2. [2001] 3 I.R. 480.

3. [2001] 3 I.R. 480, 489.

4. [1994] 1 I.L.R.M. 29.

5. [1896] 1 Ch. 673, 677.

6. [2000] 4 I.R. 514, 527-28.