The Court of Appeal issued an important and interesting judgment on 12th December 2022 dealing with the issue of execution of a judgment obtained against debtors.
The background to the case in Ulster Bank Ireland Limited and Promontoria (Oyster) DAC and Timothy Quirke and Joan Quirke was that the Quirkes had borrowed money from the Ulster Bank and were unable to repay the loan.
Ulster Bank obtained liberty to enter judgment against the borrowers on 29th May 2008 in the sum of €73,784.32 and judgment was issued on 27th March 2009 in the sum of €77,889.07 together with costs.
Nothing further happened until 26th February 2021 when an application was made by Promontoria to issue execution proceedings on foot of the judgment previously obtained. Promontoria was concerned that it needed to be in a position to issue an action on the judgment in advance of 27th March 2022 or it would be in difficulty with the Statute of Limitations.
The Quirkes argued that the 12 year period set down in the Statute of Limitations for the execution of a judgment expired in October 2020 at the latest.
However, the High Court judge rejected this argument and accepted the reasons put forward by Ulster Bank for the delay in execution of the judgment in the lead up to the global transfer of loans by Ulster Bank to Promontoria (Oyster) DAC.
The High Court handed down judgment in this matter on 19th March 2021 and granted Promontoria leave to execute the Judgment. This decision was appealed to the Court of Appeal.
Court of Appeal
The appellants identified six issues which fall for determination in the appeal by the Court of Appeal. The Court of Appeal in their judgment dealt in detail with all issues raised and the decision is one that is worth reading.
The Court of Appeal found that the High Court judge erred in accepting an explanation for non-execution of the Judgment from Promontoria that only explained a very short period at the end of the period of inactivity of between 10 and 12 years.
No reasons were offered for a period of 7 years and 9 months after the judgment was obtained in the first instance.
Smyth v Tunney
The Supreme Court decision in Smyth v Tunney is authority for the proposition that reasons must be given to the court as to why execution of the judgment was not executed. The reasons do not have to be especially strong, but some reason is required.
As already discussed above, it is settled since Smyth v. Tunney that reasons must be given to the court, on an application under O.42, r.24 as to why judgment was not executed.
The reason or reasons do not have to be especially strong, but some reason is required. While Smyth v Tunney may not have made it absolutely clear, the reasons must, at least in a general way, explain the lapse in time in taking steps to execute judgment, commencing from the date of the judgment.
No reason at all was provided for the failure by Ulster Bank to take any steps to enforce the Judgment in the first six years after judgment was granted, and in the period thereafter up to the date of execution of the global deed of transfer, such as to satisfy the test in Smyth v Tunney.
Acceptable reasons were not put forward by Ulster Bank or Promontoria as to why no action had been taken to execute the judgment obtained in March 2009. Therefore, the Court of Appeal held that the lenders were out of time and too late to do so now, pursuant to the Statute of Limitations and overturned the decision of the High Court to grant an order for execution of the 2009 judgment.